KRAFTON FY2024 Q3 Earnings Release

Nov, 2024 3Q 2024 Earnings Results
2024. 11. 07

Financial statements included in this document are consolidated results of KRAFTON, Inc. (the “Company”) and its subsidiariesand have been prepared in accordance with K -IFRS.
Financial results and operational performance included herein have been prepared for investors’ convenience only and have not been audited by an independent auditor; as such,
certain part (s) of this presentation are subject to change, upon completion of the audit review.
Company makes no representations as to the accuracy or completeness of the information herein, nor does the Company assume any d uty to update any information, given that this
presentation has been prepared based on currently available data.
Company shall not have any liability for any loss arising from any use of this presentation or its contents or otherwise arising in connection with this presentation, as this should not
be construed to be related to any investment decision making and shall not be used for any legal proceedings.
Disclaimer
2

3Q24
Results at
a Glance
Revenue
AI
Investment
Cumulative Investment from 2021 to Sept 2024
KRW 1,000+ bn3Q 2024 Revenue
KRW 719.3bn
Meaningful Traffic and Monetization Across All
Core PUBG IP Products
Record High Quarterly Revenue for
Three Consecutive Quarters
3Q 2024 Operating Profit KRW 324.4bn
71.4% Growth YoY Driven by Strong Revenue Growth,
Outperforming Annual OP of FY23 in Three Quarters
Secure AI Talent and R&D of Foundation Technologies
Operating
Profit
3
KRW 2 tn 92.2 bn
’23년 연간 3Q24 누적
KRW 1 tn 910.6 bn
’23년 연간 3Q24 누적
KRW 967.0 bn
KRW 768.0 bn
FY2023 3Q24 YTD
3Q24 YTD FY2023

4
PUBG IP Franchise
4
Growth as a Global IP Franchise Continuing Strong Live Service Updates
• Progressive Weapon Skin Seasonal Events
• Seasonal Workshop Supercar Collaborations
• Premium IP & K-Pop Artist Collaborations
• Gunplay Updates and New In -game Features
• Robust Matchmaking and Anti- Cheat
• Map Updates and Preparing Transition to UE5
Lamborghini Collaboration
Ocean Odyssey Themed Mode
New Gameplay with Themed Modes and Enhancing Revenue Efficiency through Elaborate Monetization
major IN -GAME UPDATES major Out Lgame updates
Themed Modes and monetization strong Global traffic
• Version Updates and Shop/Pass Items
based on New Themed Modes
• Monetization Strategy Considering
User and Regional Preferences
• Providing Fresh Gameplay through Modes
such as World of Wonder and Metro Royale
• Focusing on New Mobile Gaming Markets
including the MENA Region
Scaling -up Live Service
and Exploring New Content
Supported by High Global Traffic

5
New Games
5
Eschatology Entertainment
Pipeline Expansion as a Global Game Company with Diverse Genres, Scales, and Platforms
• Developed by KRAFTON
• Platform: PC, Console
• Genre: Life Simulation
• Steam Wishlist #12
• Application of AI technology
and user generated content
• Developed by Unknown Worlds
• Platform: PC, Console
• Genre: Open-Water Survival Adventure
• Partnership with Xbox Game Pass
• Co-op multiplayer and new world
• Developed by PUBG Studios
• Platform: PC
• Genre: 5 vs 5 Top- down PvP Shooter
• Demo revealed at G -Star 2024
• Fast -paced shooting and unique art
• Developed by 5minLab
• Multiplatform
• Genre: Frontier Life Simulation
• Mobile demo at G -Star 2024
• Live service game with strengthened
multiplayer elements
Adrenaline rush lab

6
Investment, 2PP / India
Investment Future Growth and Securing Unique IP Localized Content for BGMI and 3 rd Party Publishing
Active Mid to Long Term Investmentand India Expansion Strategy
6
Wolf Haus Games Day 4 Night
5 11
13
2022 20233Q24
Number of Investments
Palworld
Development of Palworld
Mobile by KRAFTON
Reinterpreting the Core Fun
of the Original PC Game
Bollywood Actress
Collaboration
BGMI Esports Archery King
India
YTD
IP License Agreement Minority Investment
Minority Investment
Dev Team with Film/Gaming
Industry Backgrounds
Action Simulation (PC/Console)
ROFN
1)on Publishing Veteran Western Dev Team
Action Adventure RPG
(PC/Console)
ROFN on Publishing
World of Wonder
Updates Cookie Run India
Artist Co
-marketing
Bgmi local content for india publishing
1) Right of First Negotiation

7
3Q24 Financial Results

3Q Earnings Summary
(Unit: KRW bn) 3Q 20232Q 20243Q 2024 QoQYoY
Revenue
450.3 707.0 719.3 1.7% 59.7%
PC 121.3191.3274.343.4%126.1%
Mobile 309.1499.9425.4-14.9% 37.6%
Console
12.0 8.8 11.8 34.9% – 1.7%
Others
7.9 7.0 7.8 11.3% – 1.3%
Operating Expenses
261.0 374.9 394.9 5.3% 51.3%
Operating Profit
189.3 332.1 324.4 – 2.3% 71.4%
% margin 42.0% 47.0% 45.1% -1.9%p 3.1%p
Adj. EBITDA 1) 197.3 394.0 365.4 – 7.3% 85.2%
% margin 43.8% 55.7% 50.8% -4.9%p 7.0%p
Net Profit 211.6 341.4 121.4 -64.5% -42.6%
% margin 47.0% 48.3% 16.9% -31.4%p -30.1%p
Operating Profit Revenue Net Profit
8
(Unit: KRW bn)
(Unit: KRW bn)
(Unit: KRW bn)
71.4% YoY increase due to strong revenue growth
Revenue
Record high quarterly revenues for three consecutive quarters
based on PUBG IP, increased 1.7% QoQ and 59.7% YoY
Operating Profit
450.3 534.6 665.9
707.0
719.3
3Q23
4Q231Q242Q243Q24
189.3
164.3 310.5
332.1
324.4
3Q23
4Q231Q242Q243Q24
211.6
(13.2) 348.6
341.4 121.4
3Q23 4Q231Q242Q243Q24
KRW 324.4bn KRW 719.3bn
1) Adj. EBITDA = EBITDA + Share -based Payment Expenses

17.6%25.8%
32.9%
29.6%
39.8%
61.2129.5
131.1
121.3274.3
3.2 5.0
11.7
12.011.8
3Q20
3Q21 3Q22 3Q23 3Q24
PC 콘솔
121.3 167.1 243.7
191.3 274.3
309.1
342.7 402.3
499.9 425.4
12.0 17.4 11.5
8.8
11.8
7.9 7.4 8.5
7.0
7.8
3Q23
4Q231Q242Q243Q24
PC 모바일 콘솔 기타
Revenue
Quarterly Revenue Breakdown (by Platform) 3분기 PC/Console Revenue
9
450.3 534.6 707.0
665.9
719.3
3Q Revenue Trend
(Unit: KRW bn) (Unit: KRW bn) (Unit: KRW bn)
64.4 134.5
133.3
142.8
286.1
3Q24 KRW 274.3bn
(QoQ 43.4% ↑, YoY 126.1% ↑)
3Q24 KRW 425.4bn (QoQ 14.9% ↓, YoY 37.6% ↑)
3Q24 KRW 118bn (QoQ 34.9% ↑, YoY 1.7% ↓)
(Unit: KRW bn) 3Q 20232Q 20243Q 2024 QoQYoY
Revenue
450.3 707.0 719.3 1.7% 59.7%
PC
121.3 191.3
274.343.4%
126.1%
Mobile
309.1 499.9
425.4-
14.9% 37.6%
Console
12.0 8.8 11.8 34.9% – 1.7%
Others
7.9 7.0 7.8 11.3% – 1.3%
366.8 521.8
433.7 450.3
719.3
3Q20
3Q21 3Q22 3Q23 3Q24
Revenue Breakdown
PC
Mobile
Console

191.4 336.4
358.8
350.9
(19.7)
28.3 42.1
35.2
14.5
3Q23 4Q231Q242Q243Q24
Operating Expenses
Operating Profit Adj. EBITDA
197.3 219.7
394.0
3)
10
365.4 378.5
Operating Expenses
(Unit: KRW bn)
(Unit: KRW bn)
(Unit: KRW bn)
217.0
(Unit: KRW bn) 3Q 20232Q 20243Q 2024 QoQYoY
Operating Expenses
261.0 374.9 394.9 5.3% 51.3%
Personnel
102.3 129.6 133.1 2.7% 30.1%
Platform Fees / Cost of Revenue
1) 59.9 77.5 101.1 30.4% 68.6%
Paid Commissions
64.9 76.4 80.4 5.2% 24.0%
Marketing
18.1 21.2 29.9 40.8% 65.7%
Share -based Payment Expenses
(19.8) 35.2 14.5 -58.9% n/m
Others
35.6 35.0 35.9 2.6% 0.8%
Operating Profit
189.3 332.1 324.4 – 2.3% 71.4%
% margin 42.0% 47.0% 45.1% -1.9%p 3.1%p
Adj. EBITDA 2) 197.3 394.0 365.4 – 7.3% 85.2%
% margin 43.8% 55.7% 50.8% -4.9%p 7.0%p
3Q24 KRW 394.9bn (QoQ 5.3% ↑, YoY 51.3% ↑)
Increased 5.3% QoQ and 51.3% YoY due to
rise in platform fees / cost of revenue and marketing expenses
Operating Profit
3Q24 KRW 324.4bn (QoQ 2.3% ↓, YoY 71.4% ↑)
Declined 2.3% QoQ and increased 71.4% YoY due to
revenue growth despite the rise in expenses
189.3
164.3 310.5
332.1
324.4
3Q23
4Q231Q242Q243Q24
261.0 370.2
355.4 374.9
394.9
3Q23
4Q231Q242Q243Q24
Operating Expenses & Profit
1) Platform fees / Cost of Revenue consist of Steam, market commissions, etc.
2) Adj. EBITDA = EBITDA + Share -based Payment Expenses 3) Reversal of Share
-based Payment Expenses

Net Profit
Net Profit
Profit before Income Tax Net Profit
11
Non-Operating Profit
(Unit: KRW bn) (Unit: KRW bn)
3Q24 KRW 121.4bn (QoQ 64.5 ↓, YoY 42.6% ↓)
Declined 64.5% QoQ and 165.7% YoY due to FX related losses
(Unit: KRW bn) 3Q 20232Q 20243Q 2024 QoQYoY
Non -Operating Profit
91.2 126.0 (127.7) T/D 1) T/D 1)
Non -Operating Income 103.3 144.1 (21.5) T/D 1) T/D 1)
Other Income 94.7 134.8 (28.3) T/D 1) T/D 1)
Finance Income 8.6 9.3 6.8 -26.7% -20.5%
Non -Operating Expense
12.1 18.1 106.2 485.5% 779.2%
Other Expenses
9.8 15.7 103.8 561.0% 963.1%
Finance Expenses
2.3 2.4 2.4 -2.7% 2.3%
Profit Before Income Tax
280.4 458.1 196.7 -57.1% -29.9%
Income Tax
68.8 116.7 75.4 -35.4% 9.4%
Net Profit 211.6 341.4 121.4 -64.5% -42.6%
% Margin 47.0% 48.3% 16.9% -31.4%p -30.1%p
91.2
(138.0) 154.8
126.0
(127.7) 3Q23 4Q231Q242Q243Q24
280.4
26.3 465.3
458.1 196.7
3Q23 4Q231Q242Q243Q24
211.6
(13.2) 348.6
341.4 121.4
3Q23 4Q231Q242Q243Q24
(Unit: KRW bn)
1) T/D: Turned to Deficit

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CFO
Dongkeun Bae
Head of Deep Learning
Kangwook Lee

Consolidated Income Statement
13
Consolidated Statement of Financial Position
( KRW bn) 20233Q 2024
Assets
Current Assets 3,964.4 4,494.2
Cash and Cash Equivalents
1) 3,061.4 3,442.8
Others 903.0 1,051.4
Non -current Assets
2,476.0 2,783.2
Property and equipment
257.0 246.5
Intangibles
607.8 608.7
Investment in Associates
571.3 723.1
Others
1,039.9 1,204.9
Total Assets
6,440.4 7,277.4
Liabilities
Current Liabilities 520.7 647.6
Non -current Liabilities
360.9 371.1
Total Liabilities
881.6 1,018.7
Equity
Shareholders’ equity
5,554.4 6,256.8
Paid -in Capital
4.9 4.9
Capital Surplus 1,472.0 1,478.3
Other Components of Equity
182.5 184.2
Retained Earnings
3,895.0 4,589.4
Non -controlling Interests
4.4 1.9
Total Equity
5,558.8 6,258.7
(KRW bn) 2023
2024
3Q 4Q 1Q2Q 3Q
Revenue
450.3 534.6 665.9 707.0 719.3
Operating Costs 261.0 370.2 355.4 374.9 394.9
Operating Profits
189.3 164.4 310.5 332.1 324.4
Adj. EBITDA 217.0 191.4 336.4 358.8 350.9
Adj. EBITDA
1) 197.3 219.7 378.5 394.0 365.4
Non -Operating Profit
91.2 (138.1) 154.8 126.0 (127.7)
Other Income
94.7 182.8 180.7 134.8 (28.3)
Other Expenses
9.8 326.3 32.5 15.7 103.8
Finance Income
8.6 7.8 8.9 9.3 6.8
Finance Expenses
2.3 2.4 2.3 2.4 2.4
Profit Before Income Tax
280.4 26.3 465.3 458.1 196.7
Income Tax
68.8 39.5 116.7 116.7 75.3
Net Profit
211.6 (13.2) 348.6 341.4 121.4
Summary of Financial Statements
1) Including FVPL (Fair Value through Profit or Loss)

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WHY We believe gameswill become the world’s most powerful medium.
HOW
Based on our creativity, steadfast dedication toward new challenges and
technological development ,
Wh at
Our Vision