GRAVITY Co., Ltd. Q3 2024 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, 2024. The filing was submitted on November 12, 2024, in accordance with International Financial Reporting Standards (IFRS).
Key Financial Metrics
| Metric | Q3 2024 (KRW) | Q3 2024 (USD) | QoQ Change | YoY Change |
|---|---|---|---|---|
| Total Revenue | 128,376 million | 97,629 thousand | +4.4% | -27.1% |
| Operating Profit | 27,576 million | 20,971 thousand | +84.0% | -27.3% |
| Profit Before Tax | 28,415 million | 21,609 thousand | +41.7% | -31.0% |
| Net Profit (Parent) | 22,385 million | 17,023 thousand | +78.1% | -22.7% |
| Cash & Short-term Instruments | 513,993 million | 390,887 thousand | N/A | N/A |
Revenue Breakdown: Online games revenue was KRW 19,657 million (+1.1% QoQ, +13.5% YoY). Mobile games revenue was KRW 102,524 million (+3.5% QoQ, -34.1% YoY). Other revenue was KRW 6,195 million (+37.6% QoQ, +84.3% YoY).
Costs and Expenses: Cost of revenue was KRW 76,261 million (+0.3% QoQ, -35.3% YoY). Operating expenses were KRW 24,539 million (-23.2% QoQ, +20.3% YoY).
Material Changes vs. Prior Period
- Quarter-over-Quarter Improvement: Operating profit surged 84.0% and net profit increased 78.1% compared to Q2 2024. This was driven by a 23.2% reduction in operating expenses, primarily due to decreased advertising costs for "THE RAGNAROK" in Taiwan, Hong Kong, and Macau, and lower commissions.
- Year-over-Year Decline: Total revenue fell 27.1% and net profit dropped 22.7% compared to Q3 2023. The decline was largely attributed to a 34.1% drop in mobile game revenue, specifically from "Ragnarok Origin" in Southeast Asia, Taiwan, Hong Kong, and Macau.
- Cost Efficiency: Cost of revenue decreased 35.3% YoY, mainly due to reduced commissions paid for mobile game services related to "Ragnarok Origin."
Guidance, Outlook, and Business Updates
Management highlighted several strategic launches and upcoming releases:
- Recent Launches: "THE RAGNAROK" launched in Korea (Sept 9) and Southeast Asia (Oct 31). "Ragnarok X: Next Generation" launched in China (Sept 13) with a Japan launch scheduled for November 20, 2024.
- Upcoming Releases: "Ragnarok V: Returns" (Singapore/Malaysia, Q4 2024); "TOKYO PSYCHODEMIC" (Global, Nov 28, 2024); "Ragnarok M: Classic," "Ragnarok Origin," "Gunbound," "Snow Brothers 2 Special," and "Ragnarok Crush" (various regions, H1 2025).
- Development: "PROJECT ABYSS" is currently in development.
Risks and Contingencies: The filing includes standard forward-looking statements regarding future launches and financial performance, noting that actual results may differ due to market conditions and other factors. No specific material contingencies or legal proceedings were detailed in this summary text.
Investor Verification Checklist
- Verify the sustainability of the 84% QoQ operating profit increase given the 27% YoY revenue decline.
- Monitor the performance of "THE RAGNAROK" and "Ragnarok X: Next Generation" following their recent launches in Q3/Q4 2024.
- Assess the impact of the 34% YoY decline in mobile game revenue from "Ragnarok Origin" on future quarters.
- Review the full investor presentation linked in the filing for detailed regional breakdowns and long-term business plans.
- Confirm the exchange rate impact (KRW 1,314.94 to USD 1.00) on reported USD figures.