KRAFTON (259960) Q2 2025 earnings summary

Executive summary

• Achieved record-high first-half revenue of KRW 1,536.2 billion and operating profit of KRW 703.3 billion, with 95% of revenue from overseas markets and mobile accounting for 62.5% of sales.

• Net profit for H1 2025 was KRW 387.0 billion, with Q2 net profit dropping sharply to KRW 15.5 billion due to FX-related losses.

• Focused on expanding global publishing, securing new IPs, and strengthening internal development capabilities, with 13 games in development.

• Notable success with inZOI, which sold over 1 million units and became the fastest-selling package game in Korean gaming history, and strong PUBG franchise performance.

• Significant investments in new studios and IPs, including acquisitions of Eleventh Hour Games, Last Epoch IP, Nautilus Mobile, JOFSOFT, and increased stakes in Neptune and ADK Holdings.

Financial highlights

• H1 2025 revenue: KRW 1,536.2 billion (up 11.9% YoY); Q2 revenue: KRW 662.0 billion (down 6.4% YoY, down 24.3% QoQ).

• H1 2025 operating profit: KRW 703.3 billion (up 9.5% YoY); Q2 operating profit: KRW 246.0 billion (down 25.9% YoY, down 46.2% QoQ).

• H1 2025 net profit: KRW 387.0 billion (down 43.9% YoY); Q2 net profit: KRW 15.5 billion (down 95.4% YoY, down 95.8% QoQ).

• Adj. EBITDA for H1 2025: KRW 801.4 billion (up 3.7% YoY); Q2 Adj. EBITDA: KRW 296.3 billion (down 24.8% YoY, down 41.3% QoQ).

• Cash and cash equivalents at period end: KRW 585.9 billion.

Outlook and guidance

• Targeting KRW 7 trillion revenue and doubling corporate value by FY2029, with PUBG IP aiming for KRW 4 trillion and new IPs for KRW 3 trillion in five years.

• Plans to maintain annual growth through content updates, marketing, new IP launches, and global expansion.

• Continued investment in AI, deep learning, and content diversification, with premium content and collaborations expected to drive engagement.

• Subnautica 2 early access launch targeted for 2026 after leadership changes and development delays.

• New shareholder return program and buybacks to be announced early next year.