Studio Dragon (253450) Q4 2024 earnings summary

Executive summary

• Achieved a significant turnaround in 2024, with annual revenue of KRW 5.2314 trillion (up 19.8% YoY) and operating profit of KRW 104.5 billion, driven by profitability focus and strategic business execution.

• Entertainment division posted revenue of KRW 3.78 trillion and operating profit of KRW 21.3 billion; commerce division delivered KRW 1.4514 trillion in revenue and KRW 83.2 billion in operating profit.

• 2024 saw record-breaking ancillary revenue and international recognition for new titles, with several dramas achieving top viewership and awards.

• Revenue and operating profit declined YoY for some segments due to a reduced content lineup, but cost efficiency measures and strong new IPs helped mitigate the impact and return to profitability in Q4.

• Marked rapid growth in mobile live commerce, with transaction volume rising from KRW 140 billion in 2022 to KRW 320 billion in 2023, targeting KRW 870 billion by 2026.

Financial highlights

• Studio Dragon reported annual revenue of KRW 550.1 billion and operating profit of KRW 36.4 billion, despite a 40% YoY decline in annual lineup.

• Q4 revenue for Studio Dragon was KRW 130.6 billion with operating profit of KRW 5.4 billion, returning to profitability.

• TVING posted revenue of KRW 122.7 billion with an operating loss of KRW 14 million.

• Fifth Season Q4 revenue was KRW 602.7 billion, with operating profit impacted by impairment losses of KRW 24.7 billion.

• Net profit margin improved by 2%p and cash ratio by 62%p YoY, indicating stronger financial solvency.

Outlook and guidance

• 2025 will focus on profit growth through improved content, global expansion, digital platform reinforcement, and mobile live commerce.

• TVING aims for 15 million global subscribers by 2027, leveraging the merger with Wavve and international expansion.

• Studio Dragon plans to diversify platforms, enhance hit ratio, and expand globally, with a focus on cost-plus models and mid-week dramas to optimize costs.

• 2025 will see a total lineup increase to 25 titles, with new formats and global projects in the US and Japan.

• 1Q25 aims to strengthen genre diversity and clarify growth strategy, focusing on lineup reconstruction, content quality, and global business expansion.