Perfect World (002624) Q3 2024 earnings summary

Executive summary

• Q3 revenue was ¥1.313bn, down 24.36% YoY; net loss attributable to shareholders was ¥211.95m and adjusted net loss was ¥212.91m.

• 9M revenue fell 34.26% YoY to ¥4.073bn; net loss attributable to shareholders was ¥388.81m, while adjusted net loss was ¥448.32m.

• Results reflected business restructuring costs and losses, weaker-than-expected game and film projects, and lower revenue from existing games and film releases.

Financial highlights

• 9M operating revenue fell 34.26% YoY; operating costs declined 35.41% as revenue decreased.

• 9M attributable net loss was ¥388.81m versus net income of ¥614.71m a year earlier; adjusted loss was ¥448.32m versus adjusted net income of ¥458.00m.

• 9M operating cash flow was a ¥105.39m outflow, versus a ¥611.15m inflow in the prior-year period; cash and cash equivalents fell ¥377.25m.

• Investing cash flow increased, driven mainly by proceeds from the disposal of the U.S. Universal film library assets, net of external investment; financing cash flow was a ¥1.308bn outflow.

Outlook and guidance

• Game development, testing and launch preparations continue for Zhuxian World and Aihuan; Zhuxian World began a player test on Oct. 18, and Aihuan opened recruitment for its “Singularity Test.”

• Film strategy remains focused on higher quality and lower volume, adapting to market changes and controlling project investment risk.