• Gravity Reports Thrid Quarter of 2024 Results and Business Update

    Source: Nasdaq GlobeNewswire / 12 Nov 2024 05:00:00   America/Chicago

    Seoul, Nov. 12, 2024 (GLOBE NEWSWIRE) -- GRAVITY Co., Ltd. (NasdaqGM: GRVY) (“Gravity” or “Company”), a developer and publisher of online and mobile games based in South Korea, today announced its unaudited financial results for the third quarter ended September 30, 2024, prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board and business updates.

    THIRD QUARTER 2024 HIGHLIGHTS

    • Total revenues were KRW 128,376 million (US$ 97,629 thousand), representing a 4.4% increase from the second quarter ended June 30, 2024 (“QoQ”) and a 27.1% decrease from the third quarter ended September 30, 2023 (“YoY”).
    • Operating profit was KRW 27,576 million (US$ 20,971 thousand), representing an 84.0% increase QoQ and a 27.3% decrease YoY.
    • Profit before income tax expenses was KRW 28,415 million (US$ 21,609 thousand), representing a 41.7% increase QoQ and a 31.0% decrease YoY.
    • Net profit attributable to parent company was KRW 22,385 million (US$ 17,023 thousand), representing a 78.1% increase QoQ and a 22.7% decrease YoY.


    REVIEW OF THIRD QUARTER 2024 FINANCIAL RESULTS

    Revenues

    Online game revenues for the third quarter of 2024 were KRW 19,657 million (US$ 14,949 thousand), representing a 1.1% increase QoQ from KRW 19,445 million and a 13.5% increase YoY from KRW 17,316 million. The increase QoQ was mainly attributable to increased revenues from Ragnarok Landverse in Thailand and Ragnarok Online in China. The increase YoY was also mainly due to increased revenues from Ragnarok Landverse in Thailand and Ragnarok Online in China. Such increase QoQ and YoY was partially offset by decreased revenue from Ragnarok Online in Thailand.

    Mobile game revenues were KRW 102,524 million (US$ 77,969 thousand) for the third quarter of 2024, representing a 3.5% increase QoQ from KRW 99,019 million and a 34.1% decrease YoY from KRW 155,467 million. The increase QoQ was resulted increase revenue from Ragnarok: Rebirth in Southeast Asia and THE RAGNAROK which was launched in Korea on September 9, 2024. Such increase was partially offset by decreased revenues from Ragnarok Origin in North, Central and South America and Southeast Asia. The decrease YoY was mainly due to decreased revenues from Ragnarok Origin in Southeast Asia, Taiwan, Hong Kong and Macau. This decrease was partially offset by increased revenues from Ragnarok Origin in North, Central and South America and THE RAGNAROK (Ragnarok: Novice Hearts) in Taiwan, Hong Kong and Macau.

    Other revenues were KRW 6,195 million (US$ 4,711 thousand) for the third quarter of 2024, representing a 37.6% increase QoQ from KRW 4,503 million and an 84.3% increase YoY from KRW 3,362 million.

    Cost of Revenue

    Cost of revenue was KRW 76,261 million (US$ 57,996 thousand) for the third quarter of 2024, representing a 0.3% increase QoQ from KRW 76,006 million and a 35.3% decrease YoY from KRW 117,834 million. The increase QoQ was mainly due to increase of salaries and amortization expense on intangible asset. The decrease YoY was primarily due to decreased commission paid for mobile game services related to Ragnarok Origin in Southeast Asia, Taiwan, Hong Kong and Macau.

    Operating Expenses

    Operating expenses were KRW 24,539 million (US$ 18,662 thousand) for the third quarter of 2024, representing a 23.2% decrease QoQ from KRW 31,972 million and a 20.3% increase YoY from KRW 20,394 million. The decrease QoQ was mainly due to decreased advertising expenses for mobile game services related to THE RAGNAROK (Ragnarok: Novice Hearts) in Taiwan, Hong Kong and Macau, and commission paid. The increase YoY was mainly due to increased advertising expenses for mobile game services related to the launch of THE RAGNAROK in Korea on September 9, 2024 and the launch of Mirren: Millennium Tour in Korea on August 20, 2024.

    Profit Before Income Tax Expenses

    Profit before income tax expenses was KRW 28,415 million (US$ 21,609 thousand) for the third quarter of 2024 compared with profit before income tax expense of KRW 20,057 million for the second quarter of 2024 and profit before income tax expenses of KRW 41,208 million for the third quarter of 2023.

    Net Profit

    As a result of the foregoing factors, Gravity recorded a net profit attributable to parent company of KRW 22,385 million (US$ 17,023 thousand) for the third quarter of 2024 compared with net profit attributable to parent company of KRW 12,569 million for the second quarter of 2024 and a net profit attributable to parent company of KRW 28,961 million for the third quarter of 2023.

    Liquidity

    The balance of cash and cash equivalents and short-term financial instruments was KRW 513,993 million (US$ 390,887 thousand) as of September 30, 2024.

    Note: For convenience purposes only, the KRW amounts have been expressed in U.S. dollars at the exchange rate of KRW 1,314.94 to US$ 1.00, the noon buying rate in effect on September 30, 2024 as quoted by the Federal Reserve Bank of New York.


    GRAVITY BUSINESS UPDATES

    Ragnarok Online IP-based Games

    • THE RAGNAROK, an MMORPG Mobile and PC game

    THE RAGNAROK was officially launched in Korea on September 9, 2024 and in Southeast Asia on October 31, 2024.

    • Ragnarok X: Next Generation, an MMORPG Mobile and PC game

    Ragnarok X: Next Generation was officially launched in China on September 13, 2024 with preparations underway for its launch in Japan on November 20, 2024, and North, Central and South America and Europe within 2025.

    • Ragnarok: Rebirth an MMORPG Mobile game

    Ragnarok: Rebirth was officially launched in Taiwan, Hong Kong and Macau on October 31, 2024.

    • Ragnarok V: Returns, a 3D MMORPG Mobile and PC game

    Ragnarok V: Returns will be launched in Singapore and Malaysia in the fourth quarter of 2024.

    • Ragnarok M: Classic, an MMORPG Mobile and PC game

    Ragnarok M: Classic, the new sequel game of Ragnarok M: Eternal Love, is underway for its launch in Southeast Asia in the first half of 2025.

    • Ragnarok Origin, an MMORPG Mobile and PC game

    Ragnarok Origin is on the way to be launched in Europe in the first half of 2025.

    • Ragnarok Crush, a Puzzle and Tower Defense Mobile game

    Ragnarok Crush will be launched in Global in the first half of 2025.

    • Ragnarok 3, an MMORPG Mobile and PC game

    Ragnarok 3, the new sequel game of Ragnarok Online, is being prepared to be launched in Global within 2025.

    • PROJECT ABYSS, an MMOARPG Mobile game

    PROJECT ABYSS is underway of its development.


    Other IP-based games

    • TOKYO PSYCHODEMIC, a 2D Cinematic Profiling Adventure PC and Console game

    TOKYO PSYCHODEMIC will be launched in Global on November 28, 2024.

    • KAMiBAKO, a World Craft RPG PC and Console game

    KAMiBAKO aims to be launched in Global in the first half of 2025.

    • Gunbound an MMO Turn-Based Artillery PC game

    Gunbound will be launched in Southeast Asia and Latin America in the first half of 2025.

    • Snow Brothers 2 Special, an Action and Platformer PC and Console game

    Snow Brothers 2 Special will be launched in Global in the first half of 2025.


    Investor Presentation

    Gravity issued an investor presentation. The presentation contains the Company’s recent business updates, results of the third quarter in 2024 and Gravity’s business plan. The presentation can be found on the Company’s website under the IR Archives section at https://www.gravity.co.kr/en/ir/updates. Korean and Japanese versions of the presentation are also provided on the website.


    About GRAVITY Co., Ltd. ---------------------------------------------------

    Gravity is a developer and publisher of online and mobile games. Gravity's principal product, Ragnarok Online, is a popular online game in many markets, including Japan and Taiwan, and is currently commercially offered in 91 regions. For more information about Gravity, please visit http://www.gravity.co.kr.


    Forward-Looking Statements:

    Certain statements in this press release may include, in addition to historical information, “forward-looking statements” within the meaning of the “safe-harbor” provisions of the U.S. Private Securities Litigation Reform Act 1995. Forward-looking statements can generally be identified by the use of forward-looking terminology, such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe”, “project,” or “continue” or the negative thereof or other similar words, although not all forward-looking statements contain these words. Investors should consider the information contained in our submissions and filings with the United States Securities and Exchange Commission (the “SEC”), including our annual report for the fiscal year ended December 31, 2023 on Form 20-F, together with such other documents that we may submit to or file with the SEC from time to time, on Form 6-K. The forward-looking statements speak only as of this press release and we assume no duty to update them to reflect new, changing or unanticipated events or circumstances.


    Contact:

    Mr. Heung Gon Kim
    Chief Financial Officer
    Gravity Co., Ltd.
    Email: kheung@gravity.co.kr

    Ms. Jin Lee
    Ms. Yujin Oh
    IR Unit
    Gravity Co., Ltd.
    Email: ir@gravity.co.kr
    Telephone: +82-2-2132-7800

    GRAVITY Co., Ltd.
    Consolidated Statements of Financial Position

    (In millions of KRW and thousands of US$)

      As of
      31-Dec-23  30-Sep-24
      KRW  US$  KRW  US$
      (audited)  (unaudited)  (unaudited)  (unaudited)
    Assets               
    Current assets:               
    Cash and cash equivalents           184,082         139,993         200,677         152,613
    Short-term financial instruments           277,215         210,820         313,316         238,274
    Accounts receivable, net             71,213           54,157           66,385           50,485
    Other receivables, net               3,637             2,766                473                360
    Prepaid expenses               2,994             2,277             4,894             3,722
    Other current financial assets               4,439             3,376             5,884             4,475
    Other current assets               3,319             2,524             3,921             2,982
    Total current assets           546,899         415,913         595,550         452,911
    Property and equipment, net             10,151             7,720             7,230             5,498
    Intangible assets, net               6,370             4,844             5,827             4,431
    Deferred tax assets               5,952             4,526             5,542             4,215
    Other non-current financial assets               1,824             1,387             1,624             1,235
    Other non-current assets               6,985             5,312             8,562             6,510
    Total assets           578,181         439,702         624,335         474,800
    Liabilities and Equity               
    Current liabilities:               
    Accounts payable             61,778           46,982           49,951           37,987
    Deferred revenue             18,093           13,760           17,902           13,614
    Withholdings               3,072             2,336             3,595             2,734
    Accrued expense               2,313             1,759             2,945             2,240
    Income tax payable             16,927           12,873             5,873             4,466
    Other current liabilities               4,251             3,233             2,777             2,112
    Total current liabilities           106,434           80,943           83,043           63,153
    Long-term account payables                  677                515                898                683
    Long-term deferred revenue               1,785             1,357             2,652             2,017
    Other non-current liabilities               3,175             2,415             2,332             1,774
    Deferred tax liabilities               2,382             1,811             2,383             1,812
    Total liabilities           114,453           87,041           91,308           69,439
    Share capital               3,474             2,642             3,474             2,642
    Capital surplus             27,098           20,608           26,979           20,517
    Other components of equity               4,016             3,054           11,606             8,826
    Retained earnings           428,499         325,870         490,318         372,882
    Equity attributable to owners of the Parent Company           463,087         352,174         532,377         404,867
    Non-controlling interest                  641                487                650                494
    Total equity           463,728         352,661         533,027         405,361
    Total liabilities and equity           578,181         439,702         624,335         474,800

    * For convenience purposes only, the KRW amounts are expressed in U.S. dollars at the rate of KRW 1,314.94 to US$ 1.00, the noon buying rate in effect on September 30, 2024 as quoted by the Federal Reserve Bank of New York.

    GRAVITY Co., Ltd.
    Consolidated Statements of Comprehensive Income

    (In millions of KRW and thousands of US$ except for share and ADS data)

       Three months ended Nine months ended
      30-Jun-2430-Sep-2330-Sep-24 30-Sep-23 30-Sep-24
      (KRW) (KRW) (KRW) (US$) (KRW) (KRW) (US$)
      (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
    Revenues:                     
    Online games  19,445  17,316  19,657  14,949  57,037  57,167  43,475
    Mobile games  99,019  155,467  102,524  77,969  513,148  300,090  228,216
    Other revenue  4,503  3,362  6,195  4,711  9,801  13,865  10,544
    Total net revenue  122,967  176,145  128,376  97,629  579,986  371,122  282,235
    Cost of revenue  76,006  117,834  76,261  57,996  391,628  225,895  171,791
    Gross profit  46,961  58,311  52,115  39,633  188,358  145,227  110,444
    Operating expenses:                     
    Selling, general and administrative expenses  28,108  17,190  20,325  15,457  45,490  64,181  48,809
    Research and   4,286  3,964  3,706  2,818  9,738  11,594  8,817
    Others, net                 (422)                 (760)  508  387                   (806)  18  14
    Total operating   31,972  20,394  24,539  18,662  54,422  75,793  57,640
    Operating profit  14,989  37,917  27,576  20,971  133,936  69,434  52,804
    Finance income(costs):                     
    Finance income  8,867  7,059  5,924  4,505  16,733  21,088  16,037
    Finance costs             (3,799)             (3,768)             (5,085)             (3,867)               (8,138)             (9,552)            (7,264)
    Profit before income tax  20,057  41,208  28,415  21,609  142,531  80,970  61,577
    Income tax expense  7,476  12,223  6,080  4,624  32,092  19,172  14,580
    Profit for the year  12,581  28,985  22,335  16,985  110,439  61,798  46,997
    Profit attributable to:                     
    Non-controlling interest                     12                      24                    (50)                   (38)                       (4)                  (21)                 (15)
    Owners of Parent   12,569  28,961  22,385  17,023  110,443  61,819  47,012
    Earnings per share                     
    - Basic and diluted  1,809  4,168  3,221  2.45  15,894  8,896  6.77
    Weighted average number of shares outstanding                     
    - Basic and diluted  6,948,900  6,948,900  6,948,900  6,948,900  6,948,900  6,948,900  6,948,900
    Earnings per ADS                     
    - Basic and diluted  1,809  4,168  3,221  2.45  15,894  8,896  6.77
                          

    * For convenience, the KRW amounts are expressed in U.S. dollars at the rate of KRW 1,314.94 to US$1.00, the noon buying rate in effect on September 30, 2024 as quoted by the Federal Reserve Bank of New York.
    (1) Each ADS represents one common share.


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