NCSoft FY2023 Q3 Earnings Release

Nov, 2023 Q3 2023 Earnings Release
NCSOFT IR
November 9, 2023

The financial results for Q3 2023 have been prepared on an unaudited basis and may be
subject to change during an independent auditing process.
Please note that NCSOFT will not be responsible for individual investment decisions based on
this material.
※ Key Consolidated Subsidiaries (based on K -IFRS):
NCSOFT Corporation(HQ, KOR), NC West Holdings(100%, USA),
NC America(100%, USA), NC Europe(100%, GBR), NC Japan(100%, JPN),
NC Taiwan(100%, TWN), NCSOFT Service(100%, KOR), NC Dinos(100%, KOR),
NC ITS(100%, KOR), Ntreev Soft(98%, KOR), This Game Studio(40%, CAN),
NC Vietnam Visual Studio(100%, VNM)

Disclaimer

Contents
I. Consolidated Earnings
1. Financial Highlights
2. Sales Breakdown
3. Cost Breakdown
II. Appendix
4. Consolidated Financial Statements

Sales totaled KRW 423.1 billion, down 4% qoq and 30% yoy
Operating profit posted KRW 16.5 billion, down 53% qoq and 89% yoy
1. Financial Highlights
144,422
47,432 81,628
35,275 16,527
3Q 22 4Q 22 1Q 23 2Q 23 3Q 23
Operating Profit
↓ 53% QoQ
↓ 89% YoY
↓ 4% QoQ
↓ 30% YoY
Q3 Performance
(Unit: KRW MN)
604,232 547,948 478,770 440,246 423,108
3Q 22 4Q 22 1Q 23 2Q 23 3Q 23
Sales
↑ 44% QoQ
↓ 76% YoY
↑ 18% QoQ
↓ 82% YoY
250,365
-37,555
141,299
39,102 46,194
3Q 22 4Q 22 1Q 23 2Q 23 3Q 23
Pre -tax Income
182,077
-33,097
114,178
30,542 44,004
3Q 22 4Q 22 1Q 23 2Q 23 3Q 23
Net Income

Mobile game sales posted KRW 273.8 billion, down 8% qoq
Legacy PC online games posted KRW 93.2 billion, up 6% qoq with various content updates and expansion pack launching effect
2. Sales Breakdown (by Game)
25,467 29,317 24,506 24,314 26,402
23,355 24,620
21,476 22,965 20,527
17,511 20,474
17,618 15,816 19,257
5,926
7,239
7,342 5,815 6,034
24,822
22,704
20,442 19,248 20,977
97,081 104,353
91,384 88,158 93,196
3Q 22 4Q 22 1Q 23 2Q 23 3Q 23
Lineage Lineage 2 AION Blade & Soul Guild Wars 2
* Not including other mobile games * Not including other PC online games
Mobile Games
(Unit: KRW MN)
PC Online Games
(Unit: KRW MN)
146,533 112,824 130,148 127,753 119,614
85,578
82,299 73,059 62,008 54,926
8,087
9,057 5,022 4,274 9,232
197,145
176,855 122,557 102,825 90,077
437,343
381,036
330,786
296,860 273,848
3Q 22 4Q 22 1Q 23 2Q 23 3Q 23
Lineage M Lineage 2M Blade & Soul 2 Lineage W

3Q 22 4Q 22 1Q 23 2Q 23 3Q 23
Total 604,232 547,948 478,770 440,246 423,108
Royalty 43,287 38,894 42,314 36,276 35,289
NA/EU 44,799 42,924 33,344 31,414 33,073
Asia 140,787 129,081 99,396 87,444 78,376
Korea 375,359 337,049 303,716 285,112 276,370
604,232
547,948
478,770 440,246 423,108
2. Sales Breakdown (by Region)
Korea sales posted 276.4 billion won, down 3% qoq
Overseas and royalty sales posted 146.7 billion won, down 5% qoq , representing 35% of total sales
Sales by Region
(Unit: KRW MN)

3Q 22 4Q 22 1Q 23 2Q 23 3Q 23
Total 459,810 500,516 397,142 404,971 406,581
Variables & Others 204,546 193,844 152,499 156,363 151,379
D&A 26,711 25,953 27,907 27,871 29,285
Marketing 38,872 48,096 4,856 12,226 27,658
Labor 189,681 232,623 211,879 208,512 198,258
459,810 500,516
397,142 404,971 406,581
Total operating expenses totaled KRW 406.6 billion, similar to the previous quarter, and down 12% yoy
Labor cost was KRW 198.3 billion, a decline of 5% qoq with reduction in welfare expenses
Marketing expenses increased by 126% qoq , driven by advertising for the launch of new titles and expansion pack on a domestic and
overseas basis, but decreased by 29% yoy as a result of enhanced marketing efficiency
3. Cost Breakdown
Cost Breakdown
(Unit: KRW MN)

FY 2022 3Q 23
Liabilities
I. Current Liabilities 515,349 638,305
Borrowings – 239,914
Account payables 86,555 81,195
Lease liabilities 35,287 36,776
Current tax liabilities 85,537 2,071
Other current liabilities 307,190 278,349
Other provisions 779 –
II. Non -current Liabilities 723,735 535,542
Debentures and borrowings 409,384 169,657
Defined benefit obligations 5,728 5,142
Long -term employee benefits 19,444 21,989
Lease liabilities 176,522 198,735
Others 112,657 140,019
Total Liabilities 1,239,084 1,173,847
Shareholders Equity
I. Capital Stock 10,977 10,977
II. Other Paid -in Capital (189,424) (189,424)
III. Other Components ofEquity (34,751) (116,533)
IV. Retained Earnings 3,409,409 3,452,494
V. Non -controlling Interest 2,338 3,177
Total Stockholders Equity 3,198,549 3,160,692
Total Liabilities and Shareholders Equity 4,437,632 4,334,539
Statement of Financial Position
4. Consolidated Financial Statements
(Unit : KRW MN)
FY 2022 3Q 23
Assets
I. Current Assets 2,691,080 2,385,256
Cash and cash equivalents 285,574 362,346
Short -term financial instruments 1,088,608 1,081,598
Account receivables 175,463 179,151
Other receivables 43,894 36,708
Short -term investment assets 1,054,472 683,904
Others 43,068 41,549
II. Non -current Assets 1,746,552 1,949,283
Long -term loans 7,437 7,892
Other receivables 23,262 23,646
Long -term investment assets 504,265 530,325
Investment stock in associated companies 26,240 24,345
Investment property 90,227 89,269
Tangible assets 930,207 1,028,739
Intangible assets 43,399 121,507
Others 121,517 123,559
Total Assets 4,437,632 4,334,539

3Q 22 4Q 22 1Q 23 2Q 23 3Q 23
Sales 604,232 547,948 478,770 440,246 423,108
Operating Expenses 459,810 500,516 397,142 404,971 406,581
Operating Income 144,422 47,432 81,628 35,275 16,527
Non -operating Income 105,942 (84,987) 59,671 3,827 29,667
Pre -tax Income 250,365 (37,555) 141,299 39,102 46,194
Income Tax 68,288 (4,458) 27,121 8,561 2,190
Net Income 182,077 (33,097) 114,178 30,542 44,004
Equity Attribution to the
Owners of the Parent Company 181,815 (33,615) 113,697 29,878 43,611
Non -controlling Interest 262 518 481 664 393
4. Consolidated Financial Statements
Income Statement (Unit: KRW MN)