NCSoft FY2023 Q4 Earnings Release

Feb, 2024 Q4 2023 Earnings Release
February 8, 2024 NCSOFT IR

2
The financial results for Q4 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

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

4
Full year 2023 sales recorded KRW 1,779.8 billion (YoY -31%), and operating profit was KRW 137.3 billion (YoY -75%)
1. Financial Highlights (Yearly)
Performance of Past 3 Years
(Unit : KRW MN)
2,308,817
375,213 491,328 395,735
2,571,792
559,006 609,051
435,990
1,779,833
137,284 206,228 213,914
Sales Operating Profit Pre-tax Income Net Income
2021 2022 2023
↓ 75% YoY
↓31% YoY
↓ 66% YoY ↓ 51% YoY

5
1. Financial Highlights (Quarterly)
47,432
81,628
35,275 16,527 3,853
4Q 22 1Q 23 2Q 23 3Q 23 4Q 23
Operating Profit
↓ 77% QoQ
↓ 92% YoY
↑ 3% QoQ
↓ 20% YoY
Quarterly Performance
(Unit : KRW MN)
547,948 478,770 440,246 423,108 437,709
4Q 22 1Q 23 2Q 23 3Q 23 4Q 23
Sales
↓ 43% QoQ
TTP YoY
TTR QoQ
RR YoY
-37,555
141,299
39,102 46,194
-20,368
4Q 22 1Q 23 2Q 23 3Q 23 4Q 23
Pre -tax Income
Sales posted KRW 437.7 billion, up by 3% qoq and down by 20% yoy
Operating profit came in at KRW 3.9 billion, a decline of 77% qoq and 92% yoy
-33,097
114,178
30,542 44,004 25,190
4Q 22 1Q 23 2Q 23 3Q 23 4Q 23
Net Income

6
Q4 mobile game sales recorded KRW 298.9 billion, up by 9% qoq , driven by the solid performance of Lineage 2M and Lineage W
For the full year of 2023, mobile game sales decreased by 38% yoy to KRW 1,200.4 billion, representing 67% of total sales
PC game sales for Q4 was KRW 92.3 billion, down by 1% qoq , while the full -year figure was KRW 365.1 billion, down by 6% yoy ,
accounting for 21% of total sales
2. Sales Breakdown (by Platform)
Quarterly
(Unit : KRW MN)
Yearly
(Unit : KRW MN)
381,036 330,786 296,860 273,848 298,899
104,353
91,384
88,158 93,196 92,320
38,894
42,314
36,276 35,289 30,578
23,665
14,286
18,951 20,774 15,912
547,948
478,770
440,246 423,108 437,709
4Q 22 1Q 23 2Q 23 3Q 23 4Q 23
Mobile PC Royalty Others
1,610,516
1,934,292
1,200,394
426,064
390,366
365,059
172,353
157,009
144,457
99,885
90,126
69,923
2,308,817
2,571,792
1,779,833
2021 2022 2023
Mobile PC Royalty Others

7
4Q 22 1Q 23 2Q 23 3Q 23 4Q 23
Total 547,948 478,770 440,246 423,108 437,709
Royalty 38,894 42,314 36,276 35,289 30,578
NA/EU 42,924 33,344 31,414 33,073 37,937
Asia 129,081 99,396 87,444 78,376 84,691
Korea 337,049 303,716 285,112 276,370 284,504
547,948
478,770 440,246 423,108 437,709
2. Sales Breakdown (by Region)
Q4 Korea and Asia sales increased by 3% and 8% qoq respectively, backed by the growth of mobile game sales
Q4 NA/EU sales grew by 15% qoq due to strong sales of GW2
Overseas and royalty sales generated 35% of total sales for both Q4 and the full year of 2023
2021 2022 2023
Total 2,308,817 2,571,792 1,779,833
Royalty 172,353 157,009 144,457
NA/EU 114,296 164,950 135,767
Asia 446,993 625,217 349,907
Korea 1,575,176 1,624,616 1,149,702
2,308,817
2,571,792
1,779,833
Quarterly
(Unit : KRW MN)
Yearly
(Unit : KRW MN)

8
2021 2022 2023
Total 1,933,604 2,012,786 1,642,549
Variables & Others 707,939 870,691 622,787
D&A 93,596 106,010 111,866
Marketing 282,590 188,639 85,044
Labor 849,479 847,446 822,852
1,933,604 2,012,786
1,642,549
4Q 22 1Q 23 2Q 23 3Q 23 4Q 23
Total 500,516 397,142 404,971 406,581 433,856
Variables & Others 193,844 152,499 156,363 151,379 162,546
D&A 25,953 27,907 27,871 29,285 26,803
Marketing 48,096 4,856 12,226 27,658 40,304
Labor 232,623 211,879 208,512 198,258 204,203
500,516
397,142 404,971 406,581 433,856
2023 operating expenses totaled KRW 1,642.5 billion, down by 18% yoy , while Q4 recorded KRW 433.9 billion, a decline of 13% yoy
In 2023, labor cost dropped by 3% yoy to KRW 822.9 billion, while marketing expenses fell by 55% yoy to KRW 85 billion,
due to company -wide efforts to drive cost efficiency. Q4 labor cost and marketing expenses also decreased yoy
3. Cost Breakdown
Quarterly
(Unit : KRW MN)
Yearly
(Unit : KRW MN)

9
FY 2022 FY 2023
Liabilities
I. Current Liabilities 515,349 614,287
Borrowings – 239,954
Account payables 86,555 78,084
Lease liabilities 35,287 39,958
Current tax liabilities 85,537 1,537
Other current liabilities 307,190 254,754
Other provisions 779 –
II. Non -current Liabilities 723,735 526,484
Debentures and borrowings 409,384 169,691
Defined benefit obligations 5,728 5,819
Long -term employee benefits 19,444 23,075
Lease liabilities 176,522 192,673
Others 112,657 135,227
Total Liabilities 1,239,084 1,140,772
Shareholders Equity
Capital Stock 10,977 10,977
Other Paid -in Capital (189,424) (189,424)
Other Components of Equity (34,751) (44,503)
Retained Earnings 3,409,409 3,472,647
Non -controlling Interest 2,338 3,332
Total Stockholders Equity 3,198,549 3,253,029
Total Liabilities and
Shareholders Equity 4,437,632 4,393,800
Statement of Financial Position
4. Consolidated Financial Statements
(Unit : KRW MN)
FY 2022 FY 2023
Assets
I. Current Assets 2,691,080 2,336,839
Cash and cash equivalents 285,574 365,200
Short -term financial instruments 1,088,608 1,167,467
Account receivables 175,463 132,703
Other receivables 43,894 39,637
Short -term investment assets 1,054,472 585,401
Others 43,068 46,431
II. Non -current Assets 1,746,552 2,056,962
Long -term loans 7,437 7,347
Other receivables 23,262 21,281
Long -term investment assets 504,265 640,388
Investment stock in
associated companies 26,240 24,887
Investment property 90,227 88,900
Tangible assets 930,207 1,000,513
Intangible assets 43,399 96,109
Others 121,517 177,537
Total Assets 4,437,632 4,393,800

10
4Q 22 1Q 23 2Q 23 3Q 23 4Q 23
Sales 547,948 478,770 440,246 423,108 437,709
Operating Expenses 500,516 397,142 404,971 406,581 433,856
Operating Income 47,432 81,628 35,275 16,527 3,853
Non -operating Income (84,987) 59,671 3,827 29,667 (24,221)
Pre -tax Income (37,555) 141,299 39,102 46,194 (20,368)
Income Tax (4,458) 27,121 8,561 2,190 (45,558)
Net Income (33,097) 114,178 30,542 44,004 25,190
Equity Attribution to the
Owners of the
Parent Company
(33,615) 113,697 29,878 43,611 24,953
Non -controlling Interest 518 481 664 393 237
4. Consolidated Financial Statements
Income Statement
(Unit : KRW MN)
FY 2022 FY 2023
2,571,792 1,779,833
2,012,786 1,642,549
559,006 137,284
50,045 68,945
609,051 206,228
173,061 (7,686)
435,990 213,914
435,715 212,139
276 1,775