Kakao Games (293490) Q4 2024 earnings summary

Executive summary

• Q4 2024 consolidated revenue declined 21.4% year-over-year and 17.4% quarter-over-quarter to KRW 160.1 billion; full-year revenue fell 13.7% year-over-year to KRW 738.8 billion.

• Operating loss for Q4 was KRW 6.3 billion, turning to a deficit from 15.1 billion in Q4 2023; full-year operating profit was KRW 6.5 billion, down 92% year-over-year.

• Strategic focus on global expansion, selective investment in AAA PC and console games, and divestment of non-core assets to improve fundamentals.

• Major live titles performed well, but overall results were impacted by deferred revenue recognition and legacy title declines.

• Revenue declined due to lack of new game launches and continued decrease in non-game business performance.

Financial highlights

• PC game revenue in Q4 was KRW 20.6 billion, down 39.6% quarter-over-quarter despite 57.3% year-over-year traffic growth for PUBG: Battlegrounds.

• Mobile game revenue in Q4 was KRW 109.2 billion, down 30.4% year-over-year and 14% quarter-over-quarter, with Odin maintaining strong engagement.

• Other revenue (including Kakao VX) in Q4 was KRW 30.3 billion, down 10% year-over-year and 8% quarter-over-quarter.

• 4Q24 net income was -102.3 billion Won, with a significant one-off loss on investment assets due to year-end impairment review.

• Operating expenses decreased 11.7% year-over-year and 11.6% quarter-over-quarter to KRW 166.3 billion in Q4.

Outlook and guidance

• New AAA PC and console titles to be revealed throughout 2025, with global CBTs and marketing campaigns planned.

• Major new mobile titles, including Guardis Order (Q3) and Project Q (Q4), expected to drive earnings rebound in the second half of 2025.

• Strategic marketing spend to increase in 2025, aligned with AAA game launches, but kept at around 10% of annual revenue.

• New game launches are scheduled for 2025 and beyond, including global and regional titles across multiple genres and platforms.