KRAFTON (259960) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue reached KRW 719.3 billion, marking a record for three consecutive quarters, driven by PUBG IP and effective monetization strategies.

• Operating profit for Q3 was KRW 324.4 billion, up 71.4% year-over-year, surpassing the previous year's total within three quarters.

• Net profit for Q3 was KRW 121.4 billion, down 65% year-over-year and 64.5% sequentially, mainly due to foreign exchange losses.

• Achieved cumulative revenue of KRW 2,092.2 billion for 2024 Q3, with 93% from overseas markets.

• Focused on expanding core IP, especially PUBG, and diversifying through new projects and investments in AI, blockchain, media, and education.

Financial highlights

• Q3 PC revenue hit KRW 274.3 billion, up 126% year-over-year and 43% quarter-on-quarter, the highest since PUBG PC's launch.

• Q3 mobile revenue was KRW 425.4 billion, up 38% year-over-year but down 15% quarter-on-quarter.

• Console revenue reached KRW 11.8 billion, up 35% quarter-on-quarter but nearly flat year-over-year.

• Cumulative revenue for 2024 Q3: KRW 2,092.2 billion, operating income: KRW 967.0 billion, net income: KRW 811.4 billion, basic EPS: KRW 17,790.

• Cash and cash equivalents at Q3 end: KRW 746.1 billion.

Outlook and guidance

• Management expects continued traffic growth for PUBG IP, supported by a robust content pipeline, new modes, map updates, and collaborations.

• Plans to expand PUBG IP into a franchise across multiple platforms and genres, targeting further growth in India and emerging markets.

• Continued investment in AI, aiming to introduce co-playable AI characters and foundational technologies.

• Marketing and labor costs are projected to remain similar to Q3 levels in Q4, with ongoing investment in talent.

• New business initiatives in blockchain, media, and education expected to contribute from 2025.