NEXON (3659) Q3 2024 earnings summary

Executive summary

• Q3 2024 delivered record revenue of JPY 135.6 billion, up 13% year-over-year, and record operating income of JPY 51.5 billion, up 11% year-over-year, despite FX headwinds.

• Growth was driven by strong performance in key franchises, especially Dungeon & Fighter Mobile in China and new IP The First Descendant, with 75% of its revenue from Western markets.

• Horizontal and vertical growth strategies, including new IP launches and expansion of existing franchises, contributed to performance.

• Operating profit for the nine months ended September 2024 declined 3.3% year-over-year to JPY 125.9 billion, with profit attributable to owners of parent down 8.6% to JPY 102.8 billion.

• A JPY 20 billion share repurchase was authorized, and the year-end dividend forecast was doubled, reflecting confidence in long-term growth.

Financial highlights

• Q3 2024 revenue rose 13% year-over-year to JPY 135.6 billion; operating income was JPY 51.5 billion, up 11% year-over-year.

• Net income for Q3 was JPY 27 billion, down 23% year-over-year, mainly due to a JPY 19.6 billion FX loss on cash deposits.

• Mobile revenue surged 89% year-over-year, while PC revenue declined 18% year-over-year.

• Basic earnings per share for Q3 2024 was JPY 32.55, down from JPY 41.28 in Q3 2023.

• Cash and cash equivalents at quarter-end were JPY 296.9 billion, up from JPY 280.5 billion at FY2023 year-end.

Outlook and guidance

• Q4 2024 group revenues expected between JPY 83.8–94.2 billion, representing a 1% decrease to 12% increase year-over-year.

• Combined revenues of the three biggest franchises projected to rise 14–28% year-over-year.

• Q4 operating income forecasted between a loss of JPY 1.3 billion and a profit of JPY 7.2 billion, impacted by a JPY 6.5 billion prepaid royalty impairment.

• FY2024 revenue forecast is JPY 450,296–461,204 million (up 6.4–8.9% year-over-year); operating profit expected at JPY 124,562–133,072 million (down 7.6–1.2%).

• Profit attributable to owners of parent forecast at JPY 103,288–108,964 million (up 46.3–54.3% year-over-year).