Seoul, Korea, May 09, 2024 (GLOBE NEWSWIRE) -- GRAVITY Co., Ltd. (NasdaqGM: GRVY) (“Gravity” or “Company”), a developer and publisher of online and mobile games based in South Korea, today announced its unaudited financial results for the first quarter ended March 31, 2024, prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board and business updates.

FIRST QUARTER 2024 HIGHLIGHTS

• Total revenues were KRW 119,779 million (US$ 88,917 thousand), representing a 17.7% decrease from the fourth quarter ended December 31, 2023 (“QoQ”) and a 27.4% decrease from the first quarter ended March 31, 2023 (“YoY”).
• Operating profit was KRW 26,869 million (US$ 19,946 thousand), representing an 1.7% increase QoQ and a 38% decrease YoY.
• Profit before income tax expenses was KRW 32,498 million (US$ 24,125 thousand), representing a 24.2% increase QoQ and a 29.7% decrease YoY.
• Net profit attributable to parent company was KRW 26,866 million (US$ 19,944 thousand), representing a 24.5% increase QoQ and a 26.3% decrease YoY.

REVIEW OF FIRST QUARTER 2024 FINANCIAL RESULTS

Revenues

Online game revenues for the first quarter of 2024 were KRW 18,065 million (US$ 13,410 thousand), representing a 24.7% decrease QoQ from KRW 23,980 million and a 20.4% decrease YoY from KRW 22,696 million. The decrease QoQ was mainly attributable to decreased revenues from Ragnarok Online in Thailand and Taiwan. Such decrease was partially offset by increased revenue from Ragnarok Online in Japan. The decrease YoY was largely due to decreased revenues from Ragnarok Online in Thailand and Taiwan.

Mobile game revenues were KRW 98,548 million (US$ 73,157 thousand) for the first quarter of 2024, representing a 15.4% decrease QoQ from KRW 116,456 million and a 29.1% decrease YoY from KRW 138,994 million. The decrease QoQ resulted primarily decreased revenues from Ragnarok Origin in Southeast Asia. Such decrease was partially offset by increased revenues from Ragnarok Origin in North, Central and South America which was launched on February 28, 2024, and Ragnarok Idle Adventure in Thailand which was launched on January 18, 2024. The decrease YoY was due to decreased revenues from Ragnarok Origin in Taiwan, Hong Kong and Macau and Ragnarok X: Next Generation in Korea. This decrease was partially offset by increased revenues from Ragnarok Origin in Southeast Asia and North, Central and South America.

Other revenues were KRW 3,166 million (US$ 2,350 thousand) for the first quarter of 2024, representing a 37.8% decrease QoQ from KRW 5,094 million and a 2.8% decrease YoY from KRW 3,257 million.

Cost of Revenue

Cost of revenue was KRW 73,628 million (US$ 54,657 thousand) for the first quarter of 2024, representing a 21.1% decrease QoQ from KRW 93,330 million and a 30.2% decrease YoY from KRW 105,485 million. The decrease QoQ was mainly due to decreased commission paid for mobile game services related to Ragnarok Origin in Southeast Asia. The decrease YoY was primarily due to decreased commission paid for mobile game services related to Ragnarok Origin in Taiwan, Hong Kong and Macau, and Ragnarok X: Next Generation in Korea.

Operating Expenses

Operating expenses were KRW 19,282 million (US$ 14,314 thousand) for the first quarter of 2024, representing a 25.2% decrease QoQ from KRW 25,769 million and a 19.4% increase YoY from KRW 16,144 million. The decrease QoQ was mainly due to decreased commission paid for payment gateway fees for Ragnarok Online in Thailand and Taiwan, impairment loss on intangible assets, and advertising expenses for Ragnarok Begins in Korea and G-STAR 2023. The increase YoY was mainly due to increased advertising expenses for Ragnarok Idle Adventure in Thailand.

Profit Before Income Tax Expenses

Profit before income tax expenses was KRW 32,498 million (US$ 24,125 thousand) for the first quarter of 2024 compared with profit before income tax expense of KRW 26,168 million for the fourth quarter of 2023 and profit before income tax expenses of KRW 46,226 million for the first quarter of 2023.

Net Profit

As a result of the foregoing factors, Gravity recorded a net profit attributable to parent company of KRW 26,866 million (US$ 19,944 thousand) for the first quarter of 2024 compared with net profit attributable to parent company of KRW 21,576 million for the fourth quarter of 2023 and a net profit attributable to parent company of KRW 36,466 million for the first quarter of 2023.

Liquidity

The balance of cash and cash equivalents and short-term financial instruments was KRW 484,526 million (US$ 359,686 thousand) as of March 31, 2024.

Note: For convenience purposes only, the KRW amounts have been expressed in U.S. dollars at the exchange rate of KRW 1,347.08 to US$ 1.00, the noon buying rate in effect on March 29, 2024 as quoted by the Federal Reserve Bank of New York.

GRAVITY BUSINESS UPDATES

Ragnarok Online IP-based Games

• Ragnarok Online, an MMORPG PC game

Ragnarok Online aims to be officially launched in China in the first half of 2024 as it received an International Standard Book Number ("ISBN") code from the Chinese government in February 2024, followed by Ragnarok Origin and Ragnarok X: Next Generation in August 2023 and December 2023, respectively.

• Ragnarok Origin, an MMORPG mobile and PC game

Ragnarok Origin was launched in China on March 26, 2024 and North, Central, and South America in February 28, 2024.

• Ragnarok X: Next Generation, an MMORPG mobile game

Ragnarok X: Next Generation aims to be launched in China in the second half of 2024, with preparations underway for its launch in Japan.

• Ragnarok: Rebirth, an MMORPG mobile game

Ragnarok: Rebirth aims to be launched in Southeast Asia in June 2024.

• Ragnarok: Novice Hearts (tentative title), an MMORPG mobile game

Ragnarok: Novice Hearts (tentative title) aims to be launched in Taiwan, Hong Kong and Macau in June 2024.

• Other Ragnarok Online IP-based games

Ragnarok Monster's Marble, a 3D Casual Board Game, is scheduled to be launched in 2024.

Ragnarok in Wonderland, a Casual Healing Tycoon mobile game, is scheduled to be launched in Korea in the second half of 2024.

Ragnarok Landverse, an MMORPG Blockchain PC game based on P2E systems, is aiming to be launched in Thailand in June 2024.

Ragnarok Monster World, a Real-Time Strategy Blockchain PC (Window Client) and mobile game, is scheduled to be launched in Thailand in the second half of 2024.

Other IP-based games

• Generation Zombie, a Turn-based Survival Horror Card mobile game

Generation Zombie was launched in Global on March 13, 2024. The game is published by Gravity Interactive, Inc., Gravity's wholly-owned subsidiary in the US.

• TOKYO PSYCHODEMIC, a 2D Cinematic Profiling Adventure PC and console game

TOKYO PSYCHODEMIC will launch in Japan on May 30, 2024. The game is developed by Gravity Game Arise Co., Ltd. ("GGA"), Gravity's wholly-owned subsidiary in Japan, and will be published in Japan by GGA. And Gravity will publish the game in the rest of the global regions excluding Japan in the second half of 2024.

Expansion of Ragnarok IP-business

Ragnarok Golf Monsters is an indoor-screen golf brand based on the Ragnarok monster characters. Gravity Communications Co., Ltd. is aiming to launch the first facility of Ragnarok Golf Monsters in Taipei, Taiwan in 2024.

Investor Presentation

Gravity issued an investor presentation. The presentation contains the Company’s recent business updates, results of the first quarter in 2024 and Gravity’s business plan. The presentation can be found on the Company’s website under the IR Archives section at https://www.gravity.co.kr/en/ir/updates. Korean and Japanese versions of the presentation are also provided on the website.

About GRAVITY Co., Ltd. ---------------------------------------------------
Gravity is a developer and publisher of online and mobile games. Gravity's principal product, Ragnarok Online, is a popular online game in many markets, including Japan and Taiwan, and is currently commercially offered in 91 markets. For more information about Gravity, please visit http://www.gravity.co.kr.

Forward-Looking Statements:

Certain statements in this press release may include, in addition to historical information, “forward-looking statements” within the meaning of the “safe-harbor” provisions of the U.S. Private Securities Litigation Reform Act 1995. Forward-looking statements can generally be identified by the use of forward-looking terminology, such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe”, “project,” or “continue” or the negative thereof or other similar words, although not all forward-looking statements contain these words. Investors should consider the information contained in our submissions and filings with the United States Securities and Exchange Commission (the “SEC”), including our annual report for the fiscal year ended December 31, 2023 on Form 20-F, together with such other documents that we may submit to or file with the SEC from time to time, on Form 6-K. The forward-looking statements speak only as of this press release and we assume no duty to update them to reflect new, changing or unanticipated events or circumstances.

Contact:

Mr. Heung Gon Kim
Chief Financial Officer
Gravity Co., Ltd.
Email: kheung@gravity.co.kr

Ms. Jin Lee
Ms. Shin Choi
IR Unit
Gravity Co., Ltd.
Email: ir@gravity.co.kr
Telephone: +82-2-2132-7800

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GRAVITY Co., Ltd.
Consolidated Statements of Financial Position

(In millions of KRW and thousands of US$)

* For convenience purposes only, the KRW amounts are expressed in U.S. dollars at the rate of KRW 1,347.08 to US$ 1.00, the noon buying rate in effect on March 29, 2024 as quoted by the Federal Reserve Bank of New York.

GRAVITY Co., Ltd.
Consolidated Statements of Comprehensive Income

(In millions of KRW and thousands of US$ except for share and ADS data)

* For convenience, the KRW amounts are expressed in U.S. dollars at the rate of KRW 1,347.08 to US$1.00, the noon buying rate in effect on March 29, 2024 as quoted by the Federal Reserve Bank of New York.
(1) Each ADS represents one common share.