KRAFTON (259960) Q2 2024 earnings summary

Executive summary

• Achieved record half-year revenue of ₩1.3729 trillion and operating profit of ₩642.6 billion in 1H24, driven by strong PUBG IP performance and new content releases.

• Q2 2024 revenue reached ₩707 billion, up 6.2% quarter-over-quarter and 82.7% year-over-year; operating profit was ₩332.1 billion, up 7.0% quarter-over-quarter and 152.6% year-over-year.

• Net profit for Q2 2024 was ₩341.4 billion, down 2.1% quarter-over-quarter but up 165.7% year-over-year, supported by FX-related gains.

• Strategic focus on expanding creative capabilities, launching new titles (Dark and Darker Mobile, inZOI), and investing in 11 game studios to secure a robust pipeline.

• Significant user engagement and positive feedback for PUBG's in-game and out-game content, reinforcing its position in the gaming community.

Financial highlights

• 1H24 revenue increased 48.3% year-over-year; 2Q24 revenue up 82.7% year-over-year and 6.2% quarter-over-quarter.

• 1H24 operating profit rose 55.0% year-over-year to ₩642.6 billion; 2Q24 operating profit up 152.6% year-over-year.

• 1H24 net profit surged 74.4% year-over-year to ₩690.0 billion; 2Q24 net profit up 165.7% year-over-year.

• Adjusted EBITDA for 1H24 was ₩772.5 billion, up 58.7% year-over-year; 2Q24 Adjusted EBITDA margin at 55.7%.

• Operating expenses in 1H24 increased 42.8% year-over-year, mainly due to higher personnel, commissions, and marketing.

Outlook and guidance

• Plans to maintain high traffic and growth in the second half through collaborations (e.g., Lamborghini) and in-game updates.

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

• inZOI aims to become a long-term IP in the life simulation genre, targeting both existing and new global audiences.

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

• Focus on sustainable growth leveraging PUBG IP and securing new global IPs.