GRAVITY Co., Ltd. Q3 2025 Financial Summary
Business Context and Reporting Period
GRAVITY Co., Ltd. (Nasdaq: GRVY), a South Korean developer and publisher of online and mobile games, reported unaudited financial results for the third quarter ended September 30, 2025. The filing was submitted on November 7, 2025, in accordance with International Financial Reporting Standards (IFRS).
Key Financial Metrics
| Metric | Q3 2025 (KRW) | Q3 2025 (USD) | QoQ Change | YoY Change |
|---|---|---|---|---|
| Total Revenue | 138,894 million | $98,883 thousand | -18.7% | +8.2% |
| Operating Profit | 21,276 million | $15,147 thousand | +8.2% | -22.8% |
| Profit Before Tax | 27,207 million | $19,369 thousand | +45.4% | -4.3% |
| Net Profit (Parent) | 19,869 million | $14,145 thousand | +50.0% | -11.2% |
| Cash & Short-term Instruments | 609,927 million | $434,226 thousand | N/A | N/A |
Revenue Breakdown: Online game revenues increased 18.2% QoQ to KRW 25,968 million, driven by new launches. Mobile game revenues decreased 23.9% QoQ to KRW 109,571 million due to declines in legacy titles, partially offset by new regional launches. Other revenues fell 29.6% QoQ.
Costs and Expenses: Cost of revenue decreased 22.3% QoQ to KRW 88,542 million. Operating expenses decreased 21.6% QoQ to KRW 29,076 million, primarily due to reduced advertising and R&D spend.
Material Changes vs. Prior Period
- Quarter-over-Quarter: Total revenue declined 18.7% primarily due to a significant drop in mobile game revenue from Ragnarok M: Classic in Southeast Asia and Taiwan/HK/Macau. However, operating profit and net profit improved significantly (8.2% and 50.0% respectively) due to a sharper reduction in costs and operating expenses.
- Year-over-Year: Total revenue grew 8.2% driven by new game launches in Latin America and Taiwan/HK/Macau. However, operating profit and net profit declined 22.8% and 11.2% respectively, attributed to higher commission costs and increased advertising expenses for new titles compared to the prior year.
Outlook, Guidance, and Business Updates
Management highlighted a robust pipeline of new game launches and expansions:
- Recent Launches: Ragnarok M: Classic Global (Sept 2025), Ragnarok: Twilight (China/SE Asia), Ragnarok: The Promised Adventure (China), and Aeruta (Global PC).
- Upcoming Launches (Late 2025): Ragnarok: Back to Glory (China, Q4), Ragnarok Landverse Genesis America (Dec 11), and the Game of LIFE for Nintendo Switch (Asia, Dec 18).
- 2026 Pipeline: Global launch of Ragnarok 3, European expansion of Ragnarok X: Next Generation, and launches of Ragnarok: The New World and Ragnarok Abyss.
Liquidity: The company maintains a strong cash position with KRW 609,927 million in cash and short-term financial instruments as of September 30, 2025.
Risks: The filing includes standard forward-looking statement disclaimers regarding the uncertainty of future game performance, regulatory approvals (e.g., ISBNs in China), and market conditions.
Investor Verification Checklist
- Verify the sustainability of the QoQ revenue decline in mobile games versus the cost-cutting measures that drove profit growth.
- Monitor the performance of newly launched titles (Ragnarok M: Classic Global, Ragnarok: Twilight) to confirm they offset legacy title declines.
- Track the regulatory approval status and launch timelines for China-specific titles, which represent a significant market opportunity.
- Review the full investor presentation linked in the filing for detailed regional revenue breakdowns and specific game performance metrics.