KRAFTON (259960) Q2 2026 earnings summary

Executive summary

• First half 2026 revenue reached KRW 2,661.6 billion, with operating profit of KRW 972.5 billion and net profit of KRW 484.2 billion, driven by PUBG franchise growth and Subnautica 2's successful early access launch.

• Subnautica 2 sold over five million units within 22 days, expanding the user base and ranking among top-selling global titles in 2026.

• The company expanded its global IP portfolio, with major investments in ADK Group and Eleventh Hour Games, and ongoing expansion in India and Japan.

• Five new titles targeting launch by 2027 will be unveiled at Gamescom, including new PUBG projects and diverse genres.

• Strategic focus on scaling up key franchises, leveraging AI, and expanding advertising and content synergies.

Financial highlights

• Q2 2026 revenue was KRW 1.29 trillion, up 94.9% year-over-year but down 5.9% sequentially; first half revenue was KRW 2,661.6 billion, up 73% year-over-year.

• Operating profit for H1 2026 was KRW 972.5 billion, representing 92% of FY2025's total; net profit was KRW 484.2 billion, up 25% year-over-year.

• PUBG franchise revenue grew 25% year-over-year, with PC revenue up 155% year-over-year in Q2, surpassing KRW 500 billion in a single quarter for the first time.

• Subnautica 2 drove significant sales, also boosting legacy Subnautica titles by KRW 42 billion.

• Operating expenses for H1 2026 rose 102.8% year-over-year to KRW 1.7 trillion, mainly due to ADK inclusion and higher platform fees.

Outlook and guidance

• Q3 will focus on expanding the mobile UGC ecosystem, upgrading creation tools, and launching major global IP collaborations.

• Five new titles will be showcased at Gamescom, with launches targeted by 2027.

• Continued investment in AI and Physical AI, with plans to scale up research and talent recruitment.

• Strategic focus remains on scaling up key franchises and expanding advertising and content synergies, especially in India and Japan.