Kakao Games (293490) investor relations material

Executive summary

• Q2 2026 revenue was KRW 75 billion, down 35% year-over-year and 10% sequentially, with an operating loss of KRW 23 billion; loss narrowed QoQ due to lower one-off expenses and cost savings.

• New management team, including co-CEOs and CFO, emphasized transparent communication and a focus on shareholder value.

• Operates as a comprehensive game company, developing and publishing PC/console and mobile games globally through subsidiaries and partnerships.

• Major titles include 'Kakao Battleground', 'Path of Exile', 'Odin: Valhalla Rising', and 'Uma Musume Pretty Derby'.

• The company expects Q2 and Q3 to be the trough, with a rebound in revenue anticipated from Q4 2026 as new game titles launch.

Financial highlights

• 2026 H1 consolidated revenue: KRW 157.9 billion, down from KRW 465.0 billion in 2025 H1 and KRW 627.2 billion in 2024 H1.

• Operating loss: KRW -48.5 billion (2026 H1), compared to KRW -39.6 billion (2025 H1) and KRW 19.1 billion profit (2024 H1).

• PC game revenue was KRW 22.3 billion, up KRW 7.5 billion year-over-year but down KRW 5.6 billion sequentially.

• Mobile game revenue declined 48% year-over-year and 4% sequentially to KRW 52.7 billion, mainly due to legacy title erosion and transfer of servicing rights.

• Operating expenses fell 21% year-over-year and 10% sequentially to KRW 98 billion, with labor costs rising due to one-off retirement costs.

Outlook and guidance

• Revenue recovery is expected from Q4 2026, driven by the launch of at least five new titles by Q1 2027.

• Pipeline includes major releases in late 2026 and 2027, such as Realm of Dokkaebi, ArcheAge Chronicle, and Chrono Odyssey.

• Management targets a profit turnaround by Q1 2027, with conservative assumptions on rollout milestones and business efficiency.

• Marketing spend will increase in the second half ahead of major title releases.

• Focus on expanding global publishing, launching new titles across genres and platforms.