KRAFTON (259960) Q2 2024 earnings summary

Executive summary

• Achieved record half-year revenue of ₩1,372.9 billion and operating profit of ₩642.6 billion, driven by strong PUBG IP performance, mobile growth, and new content releases.

• Q2 revenue reached ₩707.0 billion, up 6.2% QoQ and 82.7% YoY, with operating profit at ₩332.1 billion, up 7.0% QoQ and 152.6% YoY.

• Net profit for H1 2024 was ₩690.0 billion, up 74.4% YoY, with Q2 net profit at ₩341.4 billion, up 165.7% YoY.

• Mobile games contributed 65.7% of revenue, PC 31.7%, and console 1.5%, with 94% of revenue from overseas markets.

• Continued investment in 11 game studios, AI-driven gameplay, and global expansion, including new titles and business lines.

Financial highlights

• Q2 PC revenue was ₩191.3 billion, up 64% YoY; Q2 mobile revenue surged 104% YoY and 24% QoQ to ₩499.9 billion.

• Console revenue for Q2 was ₩20.2 billion, down 24% sequentially and 54% YoY.

• 1H24 net profit surged 74.4% YoY to ₩690.0 billion; basic EPS was ₩15,070.

• Labor costs rose 7% QoQ and 26% YoY to ₩129.6 billion due to hiring for new game development.

• Cash and cash equivalents at end-2Q24 totaled ₩3,333.2 billion.

Outlook and guidance

• Expect continued growth in Q3, with July metrics for PUBG PC and mobile showing historical highs in traffic and monetization.

• Plans for 1-2 new game launches in 2H24, including AI-driven titles and global expansion, especially in India.

• Continued investment in in-house development, 2nd party publishing, and M&A to diversify the portfolio.

• Targeting growth in eSports and media content leveraging core IP.

• Robust pipeline of collaborations and new IP investments planned for the next year.