KRAFTON (259960) Q3 2024 earnings summary

Executive summary

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

• Operating profit for Q3 was KRW 324.4 billion, up 71.4% year-on-year, surpassing the annual operating profit of FY23 within three quarters.

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

Financial highlights

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

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

• Console revenue in Q3 was KRW 11.8 billion, up 35% quarter-on-quarter and nearly flat year-on-year.

• Adjusted EBITDA after SBC was KRW 365.4 billion, up 85% year-on-year but down 7.3% sequentially.

• Net profit margin dropped to 16.9%, down 31.4 points sequentially and 30.1 points year-on-year.

Outlook and guidance

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

• Ongoing investment in AI talent and foundational technologies to support future growth.

• Strategic expansion in India through localized content and third-party publishing partnerships, with Cookie Run set for release by year-end.

• Marketing and labor costs are projected to remain similar in Q4, with ongoing investment in talent to support long-term creative growth.