Perfect World (002624) Q4 2024 earnings summary

Executive summary

• FY24 revenue fell 28.5% YoY to RMB5.57bn; net loss attributable to shareholders was RMB1.288bn, versus net income of RMB491.5m in FY23.

• Losses reflected project closures and impairments, weaker operating-game and film revenue, investment losses, and upfront launch marketing for Zhuxian World; restructuring and cost reductions are intended to support recovery.

Financial highlights

• FY24 revenue was RMB5.570bn, down 28.5% YoY; net loss attributable to shareholders was RMB1.288bn and adjusted net loss was RMB1.313bn.

• Q4 revenue was RMB1.498bn; net loss attributable to shareholders was RMB898.7m and adjusted net loss was RMB864.4m.

• FY24 total net loss was RMB1.400bn; operating loss was RMB1.129bn, compared with operating income of RMB895.5m in FY23.

• Operating cash flow was RMB576.5m, down 24.32% YoY; investing cash flow was RMB1.153bn and financing cash flow was negative RMB1.653bn.

Outlook and guidance

• 2025 priorities include focusing development and testing on Zhuxian 2, Neverness to Everness and Code Z, while exploring new projects with smaller, lighter investment.

• Overseas publishing plans include Persona 5: The Phantom X; Neverness to Everness is planned for PC, mobile and console worldwide, with domestic and overseas tests expected.

• Plans call for reducing overall film investment, controlling project risk and expanding short-form drama; management also aims to tighten budgeting, project reviews and investment oversight.

• Management expects personnel and rent savings from restructuring to become more visible in subsequent periods; FY24 savings were offset by severance and one-time lease-exit costs.