NC (036570) Q3 2024 earnings summary

Executive summary

• Q3 2024 sales reached ₩401.9 billion (KRW 401.9 billion), up 9% sequentially but down 5% year-over-year, with an operating loss of ₩14.3 billion and a net loss of ₩26.5 billion.

• Mobile game sales rose 16% QOQ, led by a 49% QOQ surge in Lineage M, while PC game sales fell 6% QOQ.

• The company is undergoing major restructuring, including project shutdowns, voluntary resignations, and a shift to a studio-based development system to address high fixed costs.

• 2024 YTD revenue reached ₩1,168.7 billion, with 33% from overseas markets including Asia, North America, and Europe.

• The company is expanding globally, diversifying platforms, and investing in R&D and AI for future growth.

Financial highlights

• Operating costs increased 16% QOQ and 2% YOY to ₩416.2 billion, with labor costs up 7% QOQ and marketing costs up 180% QOQ to ₩48.7 billion.

• Pre-tax loss was ₩32 billion, mainly due to foreign currency losses from a weak dollar.

• Depreciation decreased 5% QOQ and 9% YOY to ₩26.5 billion.

• 2024 YTD (Jan–Sep) consolidated revenue: ₩1,168.7 billion, down from ₩1,779.8 billion YoY; operating income for 9M 2024: ₩20.3 billion, sharply down from ₩137.3 billion YoY.

• Cash and cash equivalents at Q3-end: ₩949.4 billion.

Outlook and guidance

• Journey of Monarch is expected to launch in Q4 2024, with five new titles planned for 2025, including AION 2, LLL, TACTAN, Breakers, and a new genre title targeting global audiences.

• The company aims to complete restructuring by Q4 2024 and implement a new cost structure in 2025.

• One-off costs from restructuring are expected in Q4 2024.

• Continued focus on global expansion, platform diversification, and AI-driven productivity.

• Ongoing investments in R&D and ESG initiatives to support long-term growth.