NCSoft FY2024 Q1 Earnings Release

May, 2024 Q1 2024 Earnings Release
May 10, 2024 NCSOFT IR

2
The financial results for Q1 2024 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
5. Strategies for Sales Growth

4
1. Financial Highlights
Quarterly Performance
(Unit : KRW MN)
Sales totaled KRW 397.9 billion, down 9% qoq and 17% yoy
Operating profit was KRW 25.7 billion, an increase of 568% qoq but a decrease of 68% yoy
81,628
35,275 16,527 3,853
25,723
1Q 23 2Q 23 3Q 23 4Q 23 1Q 24
Operating Profit
↑ 568% QoQ
↓ 68% YoY
↓ 9% QoQ
↓ 17% YoY
478,770 440,246 423,108 437,709 397,911
1Q 23 2Q 23 3Q 23 4Q 23 1Q 24
Sales
↑ 127% QoQ
↓ 50% YoY
Turned to Profit QoQ
↓ 45% YoY
141,299
39,102 46,194
-20,368
78,365
1Q 23 2Q 23 3Q 23 4Q 23 1Q 24
Pre -tax Income
114,178
30,542 44,004 25,190 57,122
1Q 23 2Q 23 3Q 23 4Q 23 1Q 24
Net Income

5
Mobile game sales amounted to KRW 249.4 billion, down 17% qoq , due to the high base established by Lineage 2M and Lineage W.
Mobile games generated 63% of total sales
PC online games posted KRW 91.5 billion in sales, up 4% qoq , lifted by various updates. PC online games accounted for 23% of total sales
2. Sales Breakdown (by Game)
Mobile Games
(Unit : KRW MN)
PC Online Games
(Unit : KRW MN)
130,148 127,753 119,614 118,600 105,125
73,059 62,008 54,926 72,869
55,872
122,557
102,825
90,077 98,555
82,857
5,022
4,274
9,232
8,874
5,582
330,786
296,860
273,848
298,899
249,436
1Q 23 2Q 23 3Q 23 4Q 23 1Q 24
Lineage M Lineage 2M Lineage W Blade & Soul 2
24,506 24,314 26,402 21,324 24,250
21,476 22,965 20,527 22,310 23,460
17,618 15,816 19,257 15,203 14,256
7,342 5,815 6,034
5,016 4,120
20,442 19,248 20,977
23,860 25,370
91,384 88,158 93,196 87,712 91,456
1Q 23 2Q 23 3Q 23 4Q 23 1Q 24
Lineage Lineage 2 AION Blade & Soul Guild Wars 2 Total
* Not including other mobile games * Not including other PC online games

6
2. Sales Breakdown (by Region)
Korea sales posted KRW 259.4 billion, representing a 9% decline qoq
Overseas and royalty sales dropped 10% qoq to KRW 138.5 billion, accounting for 35% of total sales
1Q 23 2Q 23 3Q 23 4Q 23 1Q 24
Total 478,770 440,246 423,108 437,709 397,911
Royalty 42,314 36,276 35,289 30,578 32,686
NA/EU 33,344 31,414 33,073 37,937 36,637
Asia 99,396 87,444 78,376 84,691 69,164
Korea 303,716 285,112 276,370 284,504 259,424
478,770 440,246 423,108 437,709 397,911
Sales by Region
(Unit : KRW MN)

7
1Q 23 2Q 23 3Q 23 4Q 23 1Q 24
Total 397,142 404,971 406,581 433,856 372,188
Variables & Others 152,499 156,363 151,379 162,546 134,740
D&A 27,907 27,871 29,285 26,803 27,767
Marketing 4,856 12,226 27,658 40,304 6,901
Labor 211,879 208,512 198,258 204,203 202,780
397,142 404,971 406,581 433,856
372,188
Total operating expenses reported KRW 372.2 billion, down 14% qoq and 6% yoy
Labor cost was KRW 202.8 billion, declining 1% qoq and 4% yoy
Marketing expenses dropped 83% qoq to KRW 6.9 billion, driven by efforts to optimize marketing spending including reduced ad campaigns
for major game updates and new title releases in Korea
Variables and other costs dropped 17% qoq to KRW 134.7 billion, on decreased distribution fees due to a decline in mobile game sales
3. Cost Breakdown
Cost Breakdown
(Unit : KRW MN)

8
FY 2023 1Q 24
Liabilities
I. Current Liabilities 614,287 516,794
Borrowings 239,954 129,980
Account payables 78,084 122,704
Lease liabilities 39,958 45,485
Current tax liabilities 1,537 1,469
Other current liabilities 254,754 217,157
Other provisions – –
II. Non -current Liabilities 526,484 513,590
Debentures and borrowings 169,691 169,714
Defined benefit obligations 5,819 947
Long -term employee benefits 23,075 23,911
Lease liabilities 192,673 182,998
Others 135,227 136,019
Total Liabilities 1,140,772 1,030,384
Shareholders Equity
Capital Stock 10,977 10,977
Other Paid -in Capital (189,424) (189,424)
Other Components of Equity (44,503) (29,085)
Retained Earnings 3,472,647 3,469,396
Non -controlling Interest 3,332 3,361
Total Stockholders Equity 3,253,029 3,265,224
Total Liabilities and
Shareholders Equity 4,393,800 4,295,608
Statement of Financial Position
4. Consolidated Financial Statements
(Unit : KRW MN)
FY 2023 1Q 24
Assets
I. Current Assets 2,336,839 2,140,938
Cash and cash equivalents 365,200 233,803
Short -term financial instruments 1,167,467 1,104,482
Account receivables 132,703 133,831
Other receivables 39,637 25,733
Short -term investment assets 585,401 595,275
Others 46,431 47,813
II. Non -current Assets 2,056,962 2,154,671
Long -term loans 7,347 7,534
Other receivables 21,281 22,110
Long -term investment assets 640,388 782,587
Investment stock in
associated companies 24,887 24,162
Investment property 88,900 88,531
Tangible assets 1,000,513 983,105
Intangible assets 96,109 96,556
Others 177,537 150,086
Total Assets 4,393,800 4,295,608

9
1Q 23 2Q 23 3Q 23 4Q 23 1Q 24
Sales 478,770 440,246 423,108 437,709 397,911
Operating Expenses 397,142 404,971 406,581 433,856 372,188
Operating Income 81,628 35,275 16,527 3,853 25,723
Non -operating Income 59,671 3,827 29,667 (24,221) 52,642
Pre -tax Income 141,299 39,102 46,194 (20,368) 78,365
Income Tax 27,121 8,561 2,190 (45,558) 21,244
Net Income 114,178 30,542 44,004 25,190 57,122
Equity Attribution to the
Owners of the Parent Company 113,697 29,878 43,611 24,953 57,176
Non -controlling Interest 481 664 393 237 (55)
4. Consolidated Financial Statements
Income Statement
(Unit : KRW MN)

10
5. Strategies for Sales Growth
Stabilizing legacy IPs
Expanding the global presence of legacy IPs
Launch B&S 2 in China, Lineage 2M in Southeast Asia, and TL globally
Strengthen global partnerships
Developing new genre games based on legacy IPs
Launch 3 new genre games based on existing IPs
Diversifying product offerings with new IPs
Launch Battle Crush, BSS, Project G, AION 2, LLL, and more
1
2
3
4
Pursuing business opportunities with PURPLE
Aim to release 3rd party AAA -level games on PURPLE within this year
5