Seoul, Nov. 12, 2024 (GLOBE NEWSWIRE) -- GRAVITY Co., Ltd. (NasdaqGM: GRVY) (“Gravity” or “Company”), a developer and publisher of online and mobile games based in South Korea, today announced its unaudited financial results for the third quarter ended September 30, 2024, prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board and business updates.

THIRD QUARTER 2024 HIGHLIGHTS

• Total revenues were KRW 128,376 million (US$ 97,629 thousand), representing a 4.4% increase from the second quarter ended June 30, 2024 (“QoQ”) and a 27.1% decrease from the third quarter ended September 30, 2023 (“YoY”).
• Operating profit was KRW 27,576 million (US$ 20,971 thousand), representing an 84.0% increase QoQ and a 27.3% decrease YoY.
• Profit before income tax expenses was KRW 28,415 million (US$ 21,609 thousand), representing a 41.7% increase QoQ and a 31.0% decrease YoY.
• Net profit attributable to parent company was KRW 22,385 million (US$ 17,023 thousand), representing a 78.1% increase QoQ and a 22.7% decrease YoY.

REVIEW OF THIRD QUARTER 2024 FINANCIAL RESULTS

Revenues

Online game revenues for the third quarter of 2024 were KRW 19,657 million (US$ 14,949 thousand), representing a 1.1% increase QoQ from KRW 19,445 million and a 13.5% increase YoY from KRW 17,316 million. The increase QoQ was mainly attributable to increased revenues from Ragnarok Landverse in Thailand and Ragnarok Online in China. The increase YoY was also mainly due to increased revenues from Ragnarok Landverse in Thailand and Ragnarok Online in China. Such increase QoQ and YoY was partially offset by decreased revenue from Ragnarok Online in Thailand.

Mobile game revenues were KRW 102,524 million (US$ 77,969 thousand) for the third quarter of 2024, representing a 3.5% increase QoQ from KRW 99,019 million and a 34.1% decrease YoY from KRW 155,467 million. The increase QoQ was resulted increase revenue from Ragnarok: Rebirth in Southeast Asia and THE RAGNAROK which was launched in Korea on September 9, 2024. Such increase was partially offset by decreased revenues from Ragnarok Origin in North, Central and South America and Southeast Asia. The decrease YoY was mainly due to decreased revenues from Ragnarok Origin in Southeast Asia, Taiwan, Hong Kong and Macau. This decrease was partially offset by increased revenues from Ragnarok Origin in North, Central and South America and THE RAGNAROK (Ragnarok: Novice Hearts) in Taiwan, Hong Kong and Macau.

Other revenues were KRW 6,195 million (US$ 4,711 thousand) for the third quarter of 2024, representing a 37.6% increase QoQ from KRW 4,503 million and an 84.3% increase YoY from KRW 3,362 million.

Cost of Revenue

Cost of revenue was KRW 76,261 million (US$ 57,996 thousand) for the third quarter of 2024, representing a 0.3% increase QoQ from KRW 76,006 million and a 35.3% decrease YoY from KRW 117,834 million. The increase QoQ was mainly due to increase of salaries and amortization expense on intangible asset. The decrease YoY was primarily due to decreased commission paid for mobile game services related to Ragnarok Origin in Southeast Asia, Taiwan, Hong Kong and Macau.

Operating Expenses

Operating expenses were KRW 24,539 million (US$ 18,662 thousand) for the third quarter of 2024, representing a 23.2% decrease QoQ from KRW 31,972 million and a 20.3% increase YoY from KRW 20,394 million. The decrease QoQ was mainly due to decreased advertising expenses for mobile game services related to THE RAGNAROK (Ragnarok: Novice Hearts) in Taiwan, Hong Kong and Macau, and commission paid. The increase YoY was mainly due to increased advertising expenses for mobile game services related to the launch of THE RAGNAROK in Korea on September 9, 2024 and the launch of Mirren: Millennium Tour in Korea on August 20, 2024.

Profit Before Income Tax Expenses

Profit before income tax expenses was KRW 28,415 million (US$ 21,609 thousand) for the third quarter of 2024 compared with profit before income tax expense of KRW 20,057 million for the second quarter of 2024 and profit before income tax expenses of KRW 41,208 million for the third quarter of 2023.

Net Profit

As a result of the foregoing factors, Gravity recorded a net profit attributable to parent company of KRW 22,385 million (US$ 17,023 thousand) for the third quarter of 2024 compared with net profit attributable to parent company of KRW 12,569 million for the second quarter of 2024 and a net profit attributable to parent company of KRW 28,961 million for the third quarter of 2023.

Liquidity

The balance of cash and cash equivalents and short-term financial instruments was KRW 513,993 million (US$ 390,887 thousand) as of September 30, 2024.

Note: For convenience purposes only, the KRW amounts have been expressed in U.S. dollars at the exchange rate of KRW 1,314.94 to US$ 1.00, the noon buying rate in effect on September 30, 2024 as quoted by the Federal Reserve Bank of New York.

GRAVITY BUSINESS UPDATES

Ragnarok Online IP-based Games

• THE RAGNAROK, an MMORPG Mobile and PC game

THE RAGNAROK was officially launched in Korea on September 9, 2024 and in Southeast Asia on October 31, 2024.

• Ragnarok X: Next Generation, an MMORPG Mobile and PC game

Ragnarok X: Next Generation was officially launched in China on September 13, 2024 with preparations underway for its launch in Japan on November 20, 2024, and North, Central and South America and Europe within 2025.

• Ragnarok: Rebirth an MMORPG Mobile game

Ragnarok: Rebirth was officially launched in Taiwan, Hong Kong and Macau on October 31, 2024.

• Ragnarok V: Returns, a 3D MMORPG Mobile and PC game

Ragnarok V: Returns will be launched in Singapore and Malaysia in the fourth quarter of 2024.

• Ragnarok M: Classic, an MMORPG Mobile and PC game

Ragnarok M: Classic, the new sequel game of Ragnarok M: Eternal Love, is underway for its launch in Southeast Asia in the first half of 2025.

• Ragnarok Origin, an MMORPG Mobile and PC game

Ragnarok Origin is on the way to be launched in Europe in the first half of 2025.

• Ragnarok Crush, a Puzzle and Tower Defense Mobile game

Ragnarok Crush will be launched in Global in the first half of 2025.

• Ragnarok 3, an MMORPG Mobile and PC game

Ragnarok 3, the new sequel game of Ragnarok Online, is being prepared to be launched in Global within 2025.

• PROJECT ABYSS, an MMOARPG Mobile game

PROJECT ABYSS is underway of its development.

Other IP-based games

• TOKYO PSYCHODEMIC, a 2D Cinematic Profiling Adventure PC and Console game

TOKYO PSYCHODEMIC will be launched in Global on November 28, 2024.

• KAMiBAKO, a World Craft RPG PC and Console game

KAMiBAKO aims to be launched in Global in the first half of 2025.

• Gunbound an MMO Turn-Based Artillery PC game

Gunbound will be launched in Southeast Asia and Latin America in the first half of 2025.

• Snow Brothers 2 Special, an Action and Platformer PC and Console game

Snow Brothers 2 Special will be launched in Global in the first half of 2025.

Investor Presentation

Gravity issued an investor presentation. The presentation contains the Company’s recent business updates, results of the third quarter in 2024 and Gravity’s business plan. The presentation can be found on the Company’s website under the IR Archives section at https://www.gravity.co.kr/en/ir/updates. Korean and Japanese versions of the presentation are also provided on the website.

About GRAVITY Co., Ltd. ---------------------------------------------------

Gravity is a developer and publisher of online and mobile games. Gravity's principal product, Ragnarok Online, is a popular online game in many markets, including Japan and Taiwan, and is currently commercially offered in 91 regions. For more information about Gravity, please visit http://www.gravity.co.kr.

Forward-Looking Statements:

Certain statements in this press release may include, in addition to historical information, “forward-looking statements” within the meaning of the “safe-harbor” provisions of the U.S. Private Securities Litigation Reform Act 1995. Forward-looking statements can generally be identified by the use of forward-looking terminology, such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe”, “project,” or “continue” or the negative thereof or other similar words, although not all forward-looking statements contain these words. Investors should consider the information contained in our submissions and filings with the United States Securities and Exchange Commission (the “SEC”), including our annual report for the fiscal year ended December 31, 2023 on Form 20-F, together with such other documents that we may submit to or file with the SEC from time to time, on Form 6-K. The forward-looking statements speak only as of this press release and we assume no duty to update them to reflect new, changing or unanticipated events or circumstances.

Contact:

Mr. Heung Gon Kim
Chief Financial Officer
Gravity Co., Ltd.
Email: kheung@gravity.co.kr

Ms. Jin Lee
Ms. Yujin Oh
IR Unit
Gravity Co., Ltd.
Email: ir@gravity.co.kr
Telephone: +82-2-2132-7800

GRAVITY Co., Ltd.
Consolidated Statements of Financial Position

(In millions of KRW and thousands of US$)

		As of
		31-Dec-23								30-Sep-24
		KRW				US$				KRW				US$
		(audited)				(unaudited)				(unaudited)				(unaudited)
Assets
Current assets:
Cash and cash equivalents			184,082				139,993				200,677				152,613
Short-term financial instruments			277,215				210,820				313,316				238,274
Accounts receivable, net			71,213				54,157				66,385				50,485
Other receivables, net			3,637				2,766				473				360
Prepaid expenses			2,994				2,277				4,894				3,722
Other current financial assets			4,439				3,376				5,884				4,475
Other current assets			3,319				2,524				3,921				2,982
Total current assets			546,899				415,913				595,550				452,911
Property and equipment, net			10,151				7,720				7,230				5,498
Intangible assets, net			6,370				4,844				5,827				4,431
Deferred tax assets			5,952				4,526				5,542				4,215
Other non-current financial assets			1,824				1,387				1,624				1,235
Other non-current assets			6,985				5,312				8,562				6,510
Total assets			578,181				439,702				624,335				474,800
Liabilities and Equity
Current liabilities:
Accounts payable			61,778				46,982				49,951				37,987
Deferred revenue			18,093				13,760				17,902				13,614
Withholdings			3,072				2,336				3,595				2,734
Accrued expense			2,313				1,759				2,945				2,240
Income tax payable			16,927				12,873				5,873				4,466
Other current liabilities			4,251				3,233				2,777				2,112
Total current liabilities			106,434				80,943				83,043				63,153
Long-term account payables			677				515				898				683
Long-term deferred revenue			1,785				1,357				2,652				2,017
Other non-current liabilities			3,175				2,415				2,332				1,774
Deferred tax liabilities			2,382				1,811				2,383				1,812
Total liabilities			114,453				87,041				91,308				69,439
Share capital			3,474				2,642				3,474				2,642
Capital surplus			27,098				20,608				26,979				20,517
Other components of equity			4,016				3,054				11,606				8,826
Retained earnings			428,499				325,870				490,318				372,882
Equity attributable to owners of the Parent Company			463,087				352,174				532,377				404,867
Non-controlling interest			641				487				650				494
Total equity			463,728				352,661				533,027				405,361
Total liabilities and equity			578,181				439,702				624,335				474,800

* For convenience purposes only, the KRW amounts are expressed in U.S. dollars at the rate of KRW 1,314.94 to US$ 1.00, the noon buying rate in effect on September 30, 2024 as quoted by the Federal Reserve Bank of New York.

GRAVITY Co., Ltd.
Consolidated Statements of Comprehensive Income

(In millions of KRW and thousands of US$ except for share and ADS data)

		Three months ended												Nine months ended
		30-Jun-24			30-Sep-23			30-Sep-24						30-Sep-23			30-Sep-24
		(KRW)			(KRW)			(KRW)			(US$)			(KRW)			(KRW)			(US$)
		(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)
Revenues:
Online games			19,445			17,316			19,657			14,949			57,037			57,167			43,475
Mobile games			99,019			155,467			102,524			77,969			513,148			300,090			228,216
Other revenue			4,503			3,362			6,195			4,711			9,801			13,865			10,544
Total net revenue			122,967			176,145			128,376			97,629			579,986			371,122			282,235
Cost of revenue			76,006			117,834			76,261			57,996			391,628			225,895			171,791
Gross profit			46,961			58,311			52,115			39,633			188,358			145,227			110,444
Operating expenses:
Selling, general and administrative expenses			28,108			17,190			20,325			15,457			45,490			64,181			48,809
Research and			4,286			3,964			3,706			2,818			9,738			11,594			8,817
Others, net			(422)			(760)			508			387			(806)			18			14
Total operating			31,972			20,394			24,539			18,662			54,422			75,793			57,640
Operating profit			14,989			37,917			27,576			20,971			133,936			69,434			52,804
Finance income(costs):
Finance income			8,867			7,059			5,924			4,505			16,733			21,088			16,037
Finance costs			(3,799)			(3,768)			(5,085)			(3,867)			(8,138)			(9,552)			(7,264)
Profit before income tax			20,057			41,208			28,415			21,609			142,531			80,970			61,577
Income tax expense			7,476			12,223			6,080			4,624			32,092			19,172			14,580
Profit for the year			12,581			28,985			22,335			16,985			110,439			61,798			46,997
Profit attributable to:
Non-controlling interest			12			24			(50)			(38)			(4)			(21)			(15)
Owners of Parent			12,569			28,961			22,385			17,023			110,443			61,819			47,012
Earnings per share
- Basic and diluted			1,809			4,168			3,221			2.45			15,894			8,896			6.77
Weighted average number of shares outstanding
- Basic and diluted			6,948,900			6,948,900			6,948,900			6,948,900			6,948,900			6,948,900			6,948,900
Earnings per ADS
- Basic and diluted			1,809			4,168			3,221			2.45			15,894			8,896			6.77

* For convenience, the KRW amounts are expressed in U.S. dollars at the rate of KRW 1,314.94 to US$1.00, the noon buying rate in effect on September 30, 2024 as quoted by the Federal Reserve Bank of New York.
(1) Each ADS represents one common share.