NHN (181710) Q2 2025 earnings summary

Executive summary

• Q2 consolidated revenue reached KRW 604.9 billion, up 0.9% YoY and 0.8% QoQ, with operating profit at KRW 21.9 billion, down 23% YoY and 20.7% QoQ.

• Net profit was KRW 11.2 billion, returning to profitability due to reduced valuation losses and lower corporate tax expenses.

• Interim financial statements for the six months ended June 30, 2025, were reviewed and found to be in accordance with K-IFRS 1034, with no material misstatements identified.

• The company operates primarily in game development and services, with a diversified portfolio of subsidiaries and investments.

Financial highlights

• Q2 operating profit margin was 3.6%, down 1.1pp YoY and 1.0pp QoQ.

• Operating expenses rose 2.1% YoY and 1.8% QoQ to KRW 583 billion.

• Game revenue was KRW 114.9 billion, up 8% YoY, down 3.9% QoQ; payment revenue was KRW 309.4 billion, up 7.8% YoY and 6.6% QoQ; technology revenue was KRW 104.5 billion, up 6.6% YoY, down 1.1% QoQ; other revenue was KRW 96.5 billion, down 25% YoY and 7.7% QoQ.

• Labor costs decreased 5% QoQ; advertising and marketing expenses increased 15.2% QoQ due to new game launches.

• Revenue for the six months ended June 30, 2025, was ₩187.2 billion, down slightly from ₩188.1 billion YoY; operating income for the period was ₩43.2 billion, up from ₩37.1 billion YoY.

Outlook and guidance

• New shareholder return policy from 2026: 15% of previous year's consolidated EBITDA allocated to shareholder returns, including dividends and buybacks, with at least 50% of shares repurchased to be canceled within the same year.

• In 2025, 3% of total shares (about 1.01 million) will be repurchased and fully retired, with 534,200 shares already bought as of August 12.

• Abyss Dia to launch in Japan, with global rollout planned six months later; Darkest Bays official launch set for later this year after enhancements; Project STAR launch rescheduled to first half of next year.

• NHN Cloud expects KRW 300 billion revenue from government GPU project; additional government AI projects to generate KRW 12 billion.

• The company continues to monitor the impact of new and revised accounting standards, with no significant expected effects on future financial statements.