Shift Up FY2024 Q3 Earnings Release

2024. 11. 12
3Q 2024 Results

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Disclaimer
This material is not intended to be a solicitation of investment by investors, but rather to enhance investors’ understanding
and provide information that may be useful in making investment decisions .
Although this material has been prepared on an objective basis, certain plans, estimates, projections, forecasts and other
matters may contain expressions of subjective judgment and may differ from actual results in the future, and we cannot
guarantee the accuracy and completeness of the financial and operating results described .
Please also note that we do not undertake any obligation to update the facts as of the date hereof .
Accordingly, this material should not be used for any legal purpose and should not be relied upon by investors as to the
outcome of their investment, and we do not accept any responsibility or liability for any investment results arising from
reliance on the information provided in this material .

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Contents
01. ’24 3Q Highlight
02. Results Overview
03. Revenue
04. Operating Costs
05. Operating Profit & Net Profit
06. Q&A
Appendix
· Financial Statements

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01. ’24 3Q Highlight
Industry -leading
profitability maintained
Revenue 58 bn KRW
Operating Profit 36 bn
OP margin 61%
User
Engagement
1 Profitability 2
Global
Footprint
3

Stable user traffic
Launch within 2025
under review for both IP
Nikke new market entry
and Stellar Blade platform
expansion prepared
Note : 2024 result is based on preliminary financial information

Continued IP popularity

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02. Financial Results
3Q ‘24 Results 사업현황
Note : 2024 result is based on preliminary financial information
3Q ‘24 revenue 58 bn KRW, operating profit 36 bn KRW, net profit 24 bn KRW
Category 3Q23 4Q23 1Q24 2Q24 3Q24
Diff.
YoY QoQ
Revenue 38,091 45,818 37,376 65,202 58,018 52.3% -11.0%
GoV : Nikke 38,416 45,410 36,471 38,467 34,231 -10.9% -11.0%
Stellar Blade – – – 25,863 22,584 – -12.7%
Others (325) 408 905 871 1,202 469.5% 38.0%
Operating Expense 21,951 13,431 11,440 20,195 22,441 2.2% 11.1%
Operating Profit 16,140 32,387 25,935 45,007 35,577 120.4% -21.0%
OPM 42.4% 70.7% 69.4% 69.0% 61.3% 18.9% -7.7%
Non -operating P&L 1,973 (1,335) 3,287 2,113 (3,754) -290.2% -277.6%
Net Profit before
corporate tax 18,113 31,052 29,222 47,120 31,824 75.7% -32.5%
Net profit 23,936 32,618 24,700 40,260 23,484 -1.9% -41.7%
NPM 62.8% 71.2% 66.1% 61.7% 40.5% -22.4% -21.3%
(Unit: M KRW,%)

Note : 2024 result is based on preliminary financial information
03. Operating Revenue
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3Q ‘24 revenue 58 bn KRW (QoQ -11.0%, YoY 52.3%) / EBITDA 37 bn (QoQ -20.0%, YoY 120.2%)
• maintaining stable user traffic (MAU) with 2nd anniversary event ahead
• operating revenue recognized from 3Q sales profit settlement
(Unit: M KRW) Revenue EBITDA (Unit: M KRW, %)
3Q ‘24 Results
43.9%
72.4% 71.6% 70.6% 63.5%
16,735
33,160 26,769
46,045
36,852
3Q23 4Q23 1Q24 2Q24 3Q24
34,231 38,354 36,471 38,467 34,231 38,354 45,410 36,471 38,467 34,231
38,416 45,410
36,471 38,467 34,231
25,863
22,584
3Q23 4Q23 1Q24 2Q24 3Q24
GoV: Nikke Stellar Blade Others
38,091
45,818
37,376
65,202
58,018

Note : 1 Includes wage, incentives, retirement pay, compensation related to stock option; 2 Includes transaction fee, etc.; 3 Incl ude s amortization, rent, other costs
04. Operating Expense
Category 3Q23 4Q23 1Q24 2Q24 3Q24
Diff.
YoY QoQ
Total # of employees 287 289 296 309 314 9.4% 1.6%
Development 253 257 265 276 278 9.9% 0.7%
Directors / Non -dev. 34 32 31 33 36 5.9% 9.1%
※ # of Employees (quarterly) (Unit: Headcount, %)
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Category 3Q23 4Q23 1Q24 2Q24 3Q24
Diff.
YoY QoQ
Operating Expense 21,951 13,431 11,440 20,195 22,441 2.2% 11.1%
Labor Cost 1 18,992 10,933 9,123 17,199 19,083 0.5% 11.0%
Variable Cost 2 1,443 877 686 890 833 -42.3% -6.4%
Fixed Cost 3 1,515 1,621 1,631 2,107 2,525 66.6% 19.8%
(Unit: M KRW, %)
3Q ‘24 Results
3Q ‘24 operating expense 22 bn KRW (QoQ 11.1%, YoY 2.2%)
• Labor cost increased by 11.0% QoQ, reaching 19 bn KRW, due to Stella Blade release and performance incentives

Note : 2024 result is based on preliminary financial information
05. Operating Profit / Net Profit
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(Unit: M KRW, %)
3Q ‘24 Results
3Q ’24 operating profit 36 bn KRW (QoQ -21.0%, YoY 120.4%) / net profit 24 bn (QoQ -41.7%, YoY -1.9%)
• Non -operating P&L reaching -4 bn KRW due to FX loss and one -time costs regarding IPO
Category 3Q23 4Q23 1Q24 2Q24 3Q24
Diff.
YoY QoQ
Operating Profit 16,140 32,387 25,935 45,007 35,577 120.4% -21.0%
OPM 42.4% 70.7% 69.4% 69.0% 61.3% 18.9% -7.7%
Non -operating P&L 1,973 (1,335) 3,287 2,113 (3,754) -290.2% -277.6%
Net Profit before
corporate tax 18,113 31,052 29,222 47,120 31,824 75.7% -32.5%
Corporate tax (5,823) (1,567) 4,523 6,859 8,340 -243.2% 21.6%
Net Profit 23,936 32,618 24,700 40,260 23,484 -1.9% -41.7%
NPM 62.8% 71.2% 66.1% 61.7% 40.5% -22.4% -21.3%

06. Q&A

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Q.1 : What are the reasons behind underwhelming results of in 3Q ‘24, and what are the improvement measures?
A.1 : In 3Q ‘24, the global result of reached 34.2 billion KRW, a decrease of 11%p QoQ, which was 38.5 billion KRW. We were able to maintain
stable user traffic through the July summer event and the August collaboration event, ahead of the 2nd Anniversa ry event.
Yet , the result of the collaboration event was somewhat underwhelming. We identified that the collaboration charact ers did not fully
resonate with our users. For the 2025 collaboration events, we will closely incorporate user feedback on the collaboration co ndu cted in 2024.
Q.2 : What is the expected performance and results of in 4Q ’24?
A.2 : For the 4Q of 2024, we have planned events such as the 2nd Anniversary event and winter event. The new characters (incl udi ng 2 pickup characters)
and 2 skin gacha released as part of the ongoing 2nd anniversary event are receiving a great response from the users (In the first week of the 2nd
Anniversary event launch, we achieved the highest iOS market revenue rankings: No. 1 in Korea, No. 2 in Japan, and No. 1 in T aiw an.)
Since the 2nd Anniversary event will feature more substantial content compared to the previous 1st Anniversary event, we are exp ecting to achieve results
similar to or better than last year’s performance
Q.3 : When would enter the new market and what are the expected results there?
A.3 : We are closely collaborating with a global publisher experienced in local services in China, and are considering a release during 1 sthalf of 2025.
By thoroughly analyzing the release cases and recent successes of other subculture games, we are preparing a differentiated s tra tegy and marketing plan
to ensure that can achieve stable and long -term success in the new market

06. Q&A
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Q.1 : How were the results of in 3Q ‘24 and what are the expectations until the end of this year?
A.1 : After its release as a PS5 exclusive title in April, sales continued at a stabilized level through the 3Q. To enhance t he IP value and maintain momentum,
we have been consistently releasing content patches and updates, which has helped sustain the game’s popularity. With the add ition of the
DLC and ongoing marketing activities, we plan to maintain the IP’s popularity until the platform expansion
Q.2: When is the expected date of platform expansion of and what are the expected results?
A.2 : The release is being considered within 2025. Considering recent trends such as Steam’s expanding market share in the AAA game se ctor and the global
success of , we expect the performance on PC to exceed that on consoles.

06. Q&A
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Q.1 : What are items included in ‘others’ revenue, and are there any plans for business diversification such as merchandising pr oducts or animation?
A.1 : Most of our ‘others’ operating revenue is composed of merchandising and IP royalty income. We are actively pursuing various I P-related ventures
to enhance the value of our intellectual properties, including not only merchandising but also new game development and adapt ati ons for motion
picture. (We plan to finalize a service contract based on the IP with Com2us in Q4 2024)
Q.2 : What is the incentive/compensation structure for employees such as bonus?
A.2 : We place great importance on offering competitive incentives to our developers, who are the core asset of the company, in order to reliably
develop high -quality games. Our incentives are provided based on a systematic plan, taking into account the recent performance of each IP, such as
successful launches and milestone achievements.

Q.3 : Any updates on ?
A.3 : We are currently developing with the goal of launching it after 2027. We are considering communicating with us ers and the
market in the first half of next year to share specific details about .

Appendix: Financial Statements (Condensed)
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Balance sheet Income statement
Category 3Q23 4Q23 1Q24 2Q24 3Q24
Revenue 38,091 45,818 37,376 65,202 58,018
Operating Expense 21,951 13,431 11,440 20,195 22,441
Operating Profit 16,140 32,387 25,935 45,007 35,577
Non -operating
Revenue 3,512 488 3,643 2,843 3,640
Non -operating
Expense 1,539 1,823 356 730 7,394
Net Profit before
Corporate Tax 18,113 31,052 29,222 47,120 31,824
Corporate Tax (5,823) (1,567) 4,523 6,859 8,340
Net Profit 23,936 32,618 24,700 40,260 23,484
(Unit: M KRW) (U nit: M KRW )
Note : 2024 result is based on preliminary financial information
Category 2023 3Q24
Assets 203,918 732,292
Current Assets 177,201 707,202
Non -current Assets 26,717 25,089
Liabilities 22,860 26,037
Current Liabilities 11,199 16,028
Non -current Liabilities 11,661 10,009
Stockholders’ Equity 181,058 706,255
Capital Stock 9,916 11,667
Capital Surplus 87,670 529,652
Retained Earnings 71,097 159,541
Other Comprehensive
Income (53) (53)
Capital Adjustment 12,428 5,448
Total Equity & Liabilities 203,918 732,292
3Q ‘24 Results