NCSoft FY2024 Q2 Earnings Release

Aug, 2024 Q2 2024 Earnings Release
August 5, 2024 NCSOFT IR

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The financial results for Q2 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), This Game Studio(40%, CAN), NC Vietnam Visual Studio(100%, VNM)

Disclaimer

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

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1. Financial Highlights
Quarterly Performance
(Unit : KRW MN)
Sales totaled KRW 368.9 billion, down 7% qoq and 16% yoy
Operating profit was KRW 8.8 billion, a decrease of 66% qoq and 75% yoy
35,275
16,527
3,853
25,723
8,844
2Q 23 3Q 23 4Q 23 1Q 24 2Q 24
Operating Profit
↓ 66% QoQ
↓ 75% YoY
↓ 7% QoQ
↓ 16% YoY
440,246 423,108 437,709 397,911 368,869
2Q 23 3Q 23 4Q 23 1Q 24 2Q 24
Sales
↑ 24% QoQ
↑ 133% YoY
↑ 8% QoQ
↑117% YoY 39,102 46,194
-20,368
78,365 84,912
2Q 23 3Q 23 4Q 23 1Q 24 2Q 24
Pre -tax Income
30,542 44,004 25,190
57,122 71,107
2Q 23 3Q 23 4Q 23 1Q 24 2Q 24
Net Income

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Mobile games sales amounted to KRW 218.2 billion, down 13% qoq , due to adjustments in business activities.
Mobile games generated 59% of total sales
Legacy PC online games posted KRW 86.2 billion in sales, down 6% qoq . 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)
127,753 119,614 118,600 105,125 106,974
62,008 54,926 72,869
55,872 42,289
102,825
90,077
98,555
82,857
65,472
4,274
9,232
8,874
5,582
3,493
296,860
273,848
298,899
249,436
218,228
2Q 23 3Q 23 4Q 23 1Q 24 2Q 24
Lineage M Lineage 2M Lineage W Blade & Soul 2
24,314 26,402 21,324 24,250 24,554
22,965 20,527 22,310 23,460 21,221
15,816 19,257 15,203 14,256 13,113
5,815 6,034
5,016 4,120 3,832
19,248 20,977
23,860 25,370 23,480
88,158 93,196 87,712 91,456 86,200
2Q 23 3Q 23 4Q 23 1Q 24 2Q 24
Lineage Lineage 2 AION Blade & Soul Guild Wars 2 Total
* Not including other mobile games * Not including other PC online games

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2. Sales Breakdown (by Region)
Korea sales posted KRW 240.3 billion, representing a 7% qoq decline
Overseas and royalty sales dropped 7% qoq to KRW 128.5 billion, accounting for 35% of total sales
2Q 23 3Q 23 4Q 23 1Q 24 2Q 24
Total 440,246 423,108 437,709 397,911 368,869
Royalty 36,276 35,289 30,578 32,686 37,668
NA/EU 31,414 33,073 37,937 36,637 33,950
Asia 87,444 78,376 84,691 69,164 56,926
Korea 285,112 276,370 284,504 259,424 240,324
440,246 423,108 437,709 397,911 368,869
Sales by Region
(Unit : KRW MN)

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2Q 23 3Q 23 4Q 23 1Q 24 2Q 24
Total 404,971 406,581 433,856 372,188 360,025
Variables & Others 156,363 151,379 162,546 134,740 126,795
D&A 27,871 29,285 26,803 27,767 27,879
Marketing 12,226 27,658 40,304 6,901 17,378
Labor 208,512 198,258 204,203 202,780 187,973
404,971 406,581 433,856
372,188 360,025
Total operating expenses reported KRW 360 billion, down 3% qoq and 11% yoy
Labor cost was KRW 188 billion, declining 7% qoq and 10% yoy on the reduction of long -term incentive reserves
Marketing expenses increased 152% qoq to KRW 17.4 billion, due to large -scale game updates and advertising for the new titles
Variables and other costs dropped 6% qoq to KRW 126.8 billion on decreased distribution fees due to a decline in mobile game sales
3. Cost Breakdown
Cost Breakdown
(Unit : KRW MN)

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FY 2023 2Q 24
Liabilities
I. Current Liabilities 614,287 447,191
Borrowings 239,954 129,999
Account payables 78,084 76,034
Lease liabilities 39,958 48,324
Current tax liabilities 1,537 970
Other current liabilities 254,754 191,864
Other provisions – –
II. Non -current Liabilities 526,484 504,192
Debentures and borrowings 169,691 169,738
Defined benefit obligations 5,819 1,010
Long -term employee benefits 23,075 24,845
Lease liabilities 192,673 172,725
Others 135,227 135,874
Total Liabilities 1,140,772 951,383
Shareholders Equity
Capital Stock 10,977 10,977
Other Paid -in Capital (189,424) (258,128)
Other Components of Equity (44,503) (71,155)
Retained Earnings 3,472,647 3,529,795
Non -controlling Interest 3,332 4,275
Total Stockholders Equity 3,253,029 3,215,765
Total Liabilities and
Shareholders Equity 4,393,800 4,167,147
Statement of Financial Position
4. Consolidated Financial Statements
(Unit : KRW MN)
FY 2023 2Q 24
Assets
I. Current Assets 2,336,839 2,001,832
Cash and cash equivalents 365,200 254,991
Short -term financial instruments 1,167,467 935,461
Account receivables 132,703 139,805
Other receivables 39,637 37,908
Short -term investment assets 585,401 589,543
Others 46,431 44,123
II. Non -current Assets 2,056,962 2,165,316
Long -term loans 7,347 7,746
Other receivables 21,281 22,136
Long -term investment assets 640,388 787,882
Investment stock in
associated companies 24,887 22,576
Investment property 88,900 88,162
Tangible assets 1,000,513 995,404
Intangible assets 96,109 100,397
Others 177,537 141,013
Total Assets 4,393,800 4,167,147

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2Q 23 3Q 23 4Q 23 1Q 24 2Q 24
Sales 440,246 423,108 437,709 397,911 368,869
Operating Expenses 404,971 406,581 433,856 372,188 360,025
Operating Income 35,275 16,527 3,853 25,723 8,844
Non -operating Income 3,827 29,667 (24,221) 52,642 76,069
Pre -tax Income 39,102 46,194 (20,368) 78,365 84,912
Income Tax 8,561 2,190 (45,558) 21,244 13,806
Net Income 30,542 44,004 25,190 57,122 71,107
Equity Attribution to the
Owners of the Parent Company 29,878 43,611 24,953 57,176 70,994
Non -controlling Interest 664 393 237 (55) 112
4. Consolidated Financial Statements
Income Statement
(Unit : KRW MN)