Netmarble (251270) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue was KRW 647.3 billion, down 17.2% quarter-over-quarter but up 2.6% year-over-year, with EBITDA at KRW 102.8 billion, down 32% QoQ and up 319.6% YoY, reflecting the absence of major new launches.

• Operating income was KRW 65.5 billion and net income KRW 20.6 billion, both lower than the previous quarter due to one-off gains in Q2.

• EBITDA margin stood at 15.9%.

• The company maintains a strong global presence with a diversified portfolio of mobile and online games, leveraging both proprietary and third-party IPs.

Financial highlights

• Operating expenses decreased 13.3% QoQ and 10.8% YoY to KRW 581.8 billion.

• Royalty costs fell 14.5% QoQ and 5.9% YoY; personnel expenses dropped 2% QoQ and 0.8% YoY; marketing expenses declined 27.2% QoQ and 28.3% YoY.

• Cash and cash equivalents at the end of Q3 stood at KRW 529 billion.

• Total assets were KRW 7,986 billion, with total equity at KRW 5,268 billion and total liabilities at KRW 2,718 billion.

• EBITDA margin was 15.9%; operating margin 10.1%; net margin 3.5%.

Segment performance

• Top revenue contributors: Solo Leveling: Arise 13%, Marvel Contest of Champions 8%, Jackpot World 8%, Lotsa Slots 7%, Cash Frenzy 7%, Raven 2 6%.

• Regional revenue: North America 43%, Korea 23%, Europe 13%, Southeast Asia 8%, Japan 7%, others 6%. Overseas revenue rose to 77%.

• Genre mix: Casual 39%, RPG 38%, MMORPG 15%, others 8%.

• Mobile games accounted for 92.08% of Q3 2024 revenue, with online games at 1.13% and other revenue at 6.79%.