Nexon Announces First Quarter 2016 Financial Results
Solid Performance, Revenues Up 11% Year-over-Year Strengthen Relationships with Prominent Game Developers
TOKYO – May 12, 2016 – NEXON Co., Ltd. (“Nexon”) (3659.TO), a worldwide leader in free-to-play online and mobile games, today announced financial results for its first quarter ended March 31, 2016.
“We’re pleased to have delivered another quarter of strong results that exceeded our expectations. This quarter, we continued to execute well across several key markets, including China, where positive results were driven by the February Lunar New Year season, which continued into March, and Korea, where we saw better-than-expected performance from key PC and mobile titles,” said Owen Mahoney, President and Chief Executive Officer of Nexon. “During the quarter, we also deepened our commitment to partnering with world-class developers with our acquisition of Big Huge Games, the developer of DomiNations, a critically-acclaimed title with over 20 million downloads worldwide. With this acquisition, Nexon solidifies relationship with them for long-term comprehensive service of the title and established another strong development foothold in the West. In addition, we made an equity investment in NAT Games, a talented game development studio known for its mobile blockbuster RPG, HIT, which we’re preparing for a launch in the global market. Going forward, we will continue to seek more opportunities to work with leading game developers and IP holders around the world.”
First Quarter 2016 Highlights:
- First quarter revenues were 57.5 billion yen, up 11% year-over-year.
- Performance exceeded our outlook, with double-digit as-reported revenue growth despite strong Japanese yen appreciation against the Korean won, Chinese yuan and U.S. dollar.
- Outperformance was driven primarily by higher-than-expected sales fromDungeon&Fighter in China.
- Operating income was 3.7 billion yen and net loss attributable to owners of the parent was 6.3 billion yen, both below our outlook due to impairment loss.
- Operating income underperformance was primarily due to the impairment loss on gloops’ goodwill of 22.6 billion yen.
- Excluding the one-time impairment loss on gloops’ goodwill, operating income would have been 26.3 billion yen, exceeding our outlook.
- Lower than expected net income attributable to owners of the parent was primarily due to the impairment loss in addition to FX loss in foreign currency-denominated cash deposits and account receivables.
Second Quarter 2016 Outlook:
- Expect second quarter 2016 revenues in the range of 37.5 to 40.3 billion yen.
- Expect PC online game revenues in the range of 28.4 to 30.2 billion yen.
- Expect mobile game revenues in the range of 9.1 to 10.1 billion yen.
- Expect operating income in the range of 11.5 to 13.9 billion yen.
- Expect net income attributable to owners of the parent in the range of 10.3 to 12.3 billion yen.
Conference Call and Replay:
Nexon management will host two conference calls to discuss Nexon’s financial results and outlook. A conference call for foreign investors, analysts and the media, which will be conducted in English, will be held at 10：00 p.m. JST / 9:00 a.m. EDT / 3:00 p.m. CEST on the same day. Each conference call will consist of brief remarks made by management team followed by a Q&A session.
A replay of the call will be available about 30 minutes after the conclusion of the conference call and can be accessed until May 19, 2016. A transcript of the call will be available within several days on Nexon’s Investor Relations website.
For additional information regarding Nexon’s first quarter 2016 financial results, please visit the Investor Relations section of Nexon’s website at http://ir.nexon.co.jp/en/.
This press release is prepared to offer reference information about Nexon to investors and is intended to generally provide investors and analysts with financial and operational information about Nexon, but not to solicit or recommend any sale or purchase of stock or other securities of Nexon.
About NEXON Co., Ltd. http://company.nexon.co.jp/
NEXON Co., Ltd. (“Nexon”) (3659.TO) is a worldwide leader in free-to-play online and mobile games. Founded in Korea in 1994, Nexon developed one of the world’s first graphics-based massively multiplayer online games. Nexon also pioneered the concept of microtransactions and the free-to-play business model, setting a new standard in which play is free, and users have the option to purchase in-game items to enhance their experience. Nexon currently services nearly 100 titles in more than 190 countries. The Company is headquartered in Tokyo, Japan and its shares are listed on the Tokyo Stock Exchange.