NEXON (3659) Q1 2025 earnings summary

Executive summary

• Q1 revenue grew 5.1% year-over-year to JPY 113.9 billion, with operating income up 43% to JPY 41.6 billion, driven by strong performances from Dungeon & Fighter, MapleStory, and new launches like Khazan and Mabinogi Mobile; net income fell 27% due to FX and impairment losses.

• Major franchises Dungeon & Fighter, MapleStory, and FC delivered significant growth, with record-high metrics in Korea and strong initial results for new titles.

• New games Khazan and Mabinogi Mobile launched successfully, receiving high critical acclaim and topping charts in Korea.

• Strategic partnerships, especially with Tencent, are advancing, including new content and pre-registrations for key titles in China.

• Maintains a robust cash position of approximately JPY 600 billion, supporting stability and future growth.

Financial highlights

• Q1 revenue: JPY 113.9 billion, up 5.1% year-over-year; operating income: JPY 41.6 billion, up 43%; net income: JPY 26.3 billion, down 27% due to FX loss of JPY 4.2 billion and a JPY 1.6 billion impairment loss.

• Earnings per share: JPY 32.12, down from JPY 42.77 in Q1 2024.

• Cash and cash equivalents rose to JPY 340.9 billion as of March 31, 2025.

• Operating margin improved to 36.5% due to franchise performance and cost control.

• Gross profit increased to JPY 74.7 billion from JPY 67.9 billion year-over-year.

Outlook and guidance

• Q2 revenue expected between JPY 99.6–110.3 billion, a 19–10% decrease as reported, or -9% to +1% on constant currency year-over-year; FX expected to negatively impact Q2 revenue by roughly 10%.

• Q2 operating income guidance: JPY 22.5–31.1 billion, a 50–30% decrease as reported; net income for Q2 projected at JPY 16.8–23.3 billion, a 58–42% decrease.

• For the six months ending June 30, 2025, revenue is forecasted at JPY 213.6–224.2 billion (down 7.5%–2.9% year-over-year), with operating profit of JPY 64.1–72.7 billion.

• Dungeon & Fighter franchise revenue expected to decline ~40% year-over-year due to tough comparison with last year’s mobile launch; MapleStory expected to accelerate growth to ~20% year-over-year in Q2.

• Mabinogi Mobile to contribute significantly in Q2, though momentum expected to normalize post-launch.