Gravity (GRVY) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached KRW 123 billion, up 2.7% QoQ but down 48.5% YoY; operating profit was KRW 15 billion, down 44.2% QoQ and 71.6% YoY.

• Net profit attributable to parent was KRW 12.6 billion, down 53.2% QoQ and 72.1% YoY.

• Profitability declined due to increased advertising expenses for new game launches, despite market share gains for Ragnarok Origin in the Americas.

• Mobile game revenue remained stable QoQ but fell sharply YoY due to declines in Southeast Asia and Korea.

• Significant launches and expansions of Ragnarok IP-based games in multiple regions.

Financial highlights

• Gross profit for Q2 2024 was KRW 47.0 billion, with a gross margin of 38.2%.

• SG&A expenses rose sharply to KRW 28.1 billion in Q2 2024, reflecting higher marketing costs.

• Online game revenue grew 7.6% QoQ and 14.2% YoY, driven by Ragnarok Online in Thailand.

• Other revenue rose 42.2% QoQ and 41.5% YoY.

• Cash and cash equivalents increased to KRW 585.1 billion as of Q2 2024.

Outlook and guidance

• Multiple major Ragnarok titles planned for launch in China, Japan, Europe, Korea, and Southeast Asia through 2024 and 2025.

• Expansion of Ragnarok IP across new platforms and regions, with additional launches in China, Japan, and Southeast Asia.

• Focus on global market growth and diversification through new genres and platforms, including blockchain and console games.

• Expansion into non-gaming businesses such as Ragnarok Golf Monsters in Taiwan.