Studio Dragon (253450) Q3 2025 earnings summary

Executive summary

• Q3 2025 saw consolidated sales of KRW 1.2456 trillion and operating profit of KRW 17.6 billion, both up 11% year-over-year, while Studio Dragon posted KRW 136.5 billion in revenue and KRW 10.5 billion in operating profit, turning positive from a loss in 3Q24.

• Growth was driven by expanded content lineup, robust overseas sales, improved viewership metrics, and a focus on company-wide profit enhancement.

• Profit declined sequentially from Q2 due to delayed media platform turnaround and timing differences in music artist activities, but improved slightly year-over-year.

• The company maintained a strong content pipeline, with notable global hits and expansion into new markets, including the U.S. and Japan.

• Ongoing topline and profitability improvements are expected in Q4 and beyond through new and library IP sales across diversified platforms.

Financial highlights

• Q3 sales: KRW 1.2456 trillion; operating profit: KRW 17.6 billion (both up 11% YoY); Studio Dragon revenue: KRW 136.5 billion (up 51.1% YoY), operating profit: KRW 10.5 billion (turned positive); TVING revenue: KRW 98.8 billion, operating loss: KRW 16.1 billion; Fifth Season revenue: KRW 199.7 billion, operating loss: KRW 2.1 billion.

• Overseas revenue surged 112.3% YoY, driven by global pre-sales and expanded original content.

• 1st Window revenue increased 73.7% YoY, reflecting strong TV and OTT original performance.

• Gross margin for the first nine months of 2025 was 9.1%, reflecting increased production costs and a less favorable sales mix.

• Cash and cash equivalents at period-end were KRW 58.9 billion, down from KRW 178.2 billion at the end of 2024.

Outlook and guidance

• Q4 to feature anticipated drama releases (Typhoon Family, Pro Bono, EXchange 4, Dear X) expected to boost channel competitiveness and subscriber growth.

• TVING aims to reach breakeven with new originals and advertising models.

• Studio Dragon expects improved Q4 results with profit recognition from Dear X and other pre-sold titles, targeting V-shaped growth and ongoing expansion of production slate into 2026.

• Music segment anticipates improved performance in Q4, driven by expanded tours and new artist launches.

• Continued focus on expanding global IP and original content for OTT platforms is anticipated to support long-term revenue growth.