Netmarble (251270) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue reached KRW 623.9 billion, up 6.6% YoY but down 3.9% QoQ, with EBITDA at KRW 81.6 billion, up 91.1% YoY and 11.2% QoQ, and an EBITDA margin of 13.1%.

• Operating profit was KRW 49.7 billion and net profit was KRW 80.2 billion, rebounding from a prior loss due to the absence of impairment losses and higher equity method gains.

• Mobile games accounted for 92.2% of sales, with strong overseas performance and new title launches, notably 'RF Online Next' and 'Solo Leveling: ARISE'.

• Revenue growth was driven by the launch of RF ONLINE NEXT and a rebound in Solo Leveling: ARISE.

• The company continues to expand globally, leveraging a diversified game portfolio and strategic acquisitions.

Financial highlights

• Operating expenses in Q1 were KRW 574.2 billion, down 6.5% QoQ and up 1.3% YoY.

• Marketing expenses totaled KRW 114.2 billion, down 5.2% QoQ but up 12.5% YoY.

• Personnel expenses were KRW 172.1 billion, down 3.7% QoQ and 4.1% YoY due to headcount reduction.

• Commissions were KRW 219.1 billion, down 5.4% QoQ and 3.6% YoY, reflecting increased in-house IP revenue.

• Basic EPS was KRW 922, up from KRW 313 in Q1 2024.

Outlook and guidance

• Multiple new titles are scheduled for release in Q2 and the second half of 2025, including Seven Knights Re:BIRTH, Game of Thrones: Kingsroad, The King of Fighters AFK, and The Seven Deadly Sins: Origin.

• Gradual improvement in quarterly performance is expected as new games launch and cost optimization continues.

• The company expects continued growth driven by global expansion, new game launches, and ongoing investment in AI and blockchain technologies.

• The mobile game market is projected to grow at a 5% CAGR globally, with Asia maintaining a dominant share.