NHN (181710) Q2 2024 earnings summary

Executive summary

• Q2 2024 consolidated revenue was KRW 599.4 billion, up 8.7% YoY but down 0.8% QoQ, with operating profit at KRW 28.5 billion, up 36.3% YoY and 4.4% QoQ; net profit was KRW 4.6 billion, a 70% YoY decrease but a return to profit from Q1 loss.

• H1 2024 revenue reached ₩1,203.8 billion, up 9.5% YoY, with operating profit at ₩55.8 billion, a 39.4% increase YoY.

• Main business segments are payment/advertising (48.5% of sales), games (19.4%), and other (32.1%).

• Domestic sales accounted for 77.8% of total revenue, with Japan and other overseas markets contributing 13.8% and 8.4%, respectively.

Financial highlights

• Q2 operating profit margin improved to 4.8%, up 1 percentage point YoY; net profit margin turned positive at 0.8%.

• Payment and advertisement revenue was KRW 295.8 billion in Q2, up 14.7% YoY and 2.6% QoQ.

• Tech business revenue was KRW 98 billion in Q2, up 4.7% YoY and 3% QoQ; excluding divestitures, up 20.3% YoY.

• Content revenue was KRW 53.4 billion in Q2, up 5.8% YoY and 18.7% QoQ.

• Cash and cash equivalents at June 30, 2024, stood at ₩672.0 billion.

Outlook and guidance

• Public sector cloud revenue expected to grow in H2 as government cloud budgets have doubled YoY and projects are progressing.

• Private sector demand for local cloud services rising due to global provider issues and price hikes.

• Game pipeline includes multiple launches in late 2024 and 2025, targeting global and Web3 markets.

• The company plans to launch over 30 original webtoon titles in 2024 and continue expanding its global content platform.

• Ongoing investments in AI, cloud, and fintech are highlighted.