Business Context and Reporting Period
GRAVITY Co., Ltd. (NasdaqCM: GRVY), a South Korean developer and publisher of online and mobile games, reported preliminary financial results for the fourth quarter ended December 31, 2017. The filing was submitted on February 2, 2018.
Key Financial Metrics
| Metric | Q4 2017 | Q3 2017 | Q4 2016 |
|---|---|---|---|
| Revenues (KRW millions) | 67,521 | 23,723 | 17,500 |
| Operating Income (KRW millions) | 3,216 | 3,422 | 1,944 |
| Cash and Short-term Instruments (KRW millions) | 61,595 | 50,819 | N/A |
Liquidity: Cash and cash equivalents increased 21.2% quarter-over-quarter to KRW 61,595 million as of December 31, 2017.
Material Changes
- Revenue Growth: Revenues surged 184.6% quarter-over-quarter (QoQ) and 285.6% year-over-year (YoY).
- Operating Income: Operating income decreased 6.0% QoQ but increased 65.4% YoY.
- Liquidity: Significant improvement in cash position with a 21.2% QoQ increase.
Outlook, Management Commentary, and Risks
Business Updates:
- Ragnarok Online: Re-launched in Singapore and Malaysia (Nov 2017) and Thailand, Indonesia, and Philippines (2016-2017). A new version, Ragnarok Zero, launched in Korea on December 27, 2017, with plans for global expansion in 2018.
- Ragnarok M: Ranked first in Apple App Store and Google Play in Taiwan, Hong Kong, and Macau at its peak. Planned launch in Korea for March 2018 with further global expansion expected in 2018.
- RO: Idle Poring: Launched in Korea on January 30, 2018, and offered globally excluding Japan and China.
Risks: The filing notes that preliminary financial information is forward-looking and subject to risks, uncertainties, and possible adjustments. Standard forward-looking statement disclaimers apply regarding future events and circumstances.
Investor Verification Checklist
- Verify the final audited figures for Q4 2017, as current data is preliminary and subject to adjustment.
- Confirm the specific launch dates and market performance of Ragnarok M in Korea (planned March 2018).
- Monitor the expansion timeline for Ragnarok Zero in international markets beyond Korea.
- Review the full annual report on Form 20-F for comprehensive risk factors and detailed financial statements.