Kakao Games (293490) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue declined 31.1% year-over-year and 7.8% quarter-over-quarter, mainly due to weak new title performance and legacy title erosion.

• Operating loss for Q1 2025 was KRW 12.4 billion, with continued losses from the previous quarter.

• Net loss attributable to owners was KRW 23.0 billion, reflecting ongoing challenges and a base effect from a one-off asset impairment in 4Q24.

• Group reorganized to focus on global PC, console, and mobile games, investing in global business capabilities and human resources.

• Major subsidiaries include Kakao Games Europe B.V., Lionheart Studio, XL Games, Ocean Drive Studio, and MetaBora, with ongoing global expansion and new title launches.

Financial highlights

• Q1 2025 consolidated revenue was KRW 122.9 billion, down 31% year-over-year and 8% quarter-over-quarter.

• Operating loss for Q1 was KRW 12.4 billion.

• PC game revenue rose 72% year-over-year and 30% quarter-over-quarter to KRW 26.8 billion, driven by PUBG and Path of Exile.

• Mobile revenue fell 41% year-over-year and 15% quarter-over-quarter to KRW 96.1 billion due to competition and legacy title declines.

• Operating expense decreased 18% year-over-year and 1% quarter-over-quarter to KRW 135.3 billion.

Outlook and guidance

• Revenue and margin expected to remain subdued in the first half due to lack of AAA titles; growth anticipated in the second half with new releases like Goddess Order and Chrono Odyssey.

• Profitability improvement targeted from the second half of 2025, with tangible results expected by early next year.

• Ongoing divestiture of non-core businesses, including the planned sale of the golf business (Kakao VX), expected to complete in 2025.