Categories: Wire Stories

Nexon Releases Earnings for First Quarter 2021

Revenues Up 7% on a Year-Over-Year Basis

Growth Driven by Strength of Existing Virtual Worlds

TOKYO–(BUSINESS WIRE)–NEXON Co., Ltd. (Nexon) (3659.TO), a global leader in Virtual Worlds, today announced the financial results for its first quarter ended March 31, 2021.

�Nexon delivered another strong quarter with revenue growth and multiple regions performing close to or above the high end of our guidance,” said Owen Mahoney, President and CEO of Nexon.

“The past 18 months offer a clear affirmation of our strategy for focusing on fewer projects that deliver bigger results. This includes doubling down on online-multiplayer Virtual Worlds, expansion onto mobile and consoles, leveraging our IP with geographic market expansion and development of new Virtual Worlds.”

First Quarter 2021 Highlights:

  • Nexon group revenues were ¥88.3 billion, up 7% year-over-year on an as-reported basis and up 3% year-over-year on a constant currency1 basis – within the range of our outlook
  • Operating income was ¥43.3 billion – exceeded our outlook. This was primarily due to lower-than-planned costs including payment gateway fees and marketing costs
  • Net income2 was ¥46.0 billion – exceeded our outlook primarily driven by an ¥18.1 billion FX gain related to the depreciation of both the Korean Won and Japanese yen against the U.S. dollar during the quarter and its corresponding impact on U.S. dollar-denominated cash deposits
  • By region, revenues from China, North America and Europe, and Rest of World3 each exceeded our expectations. Revenues from Japan were in the range of our outlook and Korea was below our expectations
  • In Korea, revenues were below our outlook primarily due to lower-than-expected performances of MapleStory and KartRider Rush+. MapleStory’s revenue grew year-over-year driven by the well-received Winter update while its revenue was below our outlook. On a year-over-year basis, revenues increased by 26% on an as-reported basis and by 21% on a constant currency1 basis
  • Also in Korea, PC4 revenues grew by 21%. Mobile revenues increased by 42% year-over-year driven by contributions from The Kingdom of the Winds: Yeon, KartRider Rush+ and FIFA MOBILE5, as well as MapleStory M which grew 69%, partially offset by a year-over-year decrease in V4. FIFA ONLINE 4’s6 PC and mobile revenues combined grew year-over-year driven by the well-received Lunar New Year package offerings and promotions. Revenues from Dungeon&Fighter and Sudden Attack grew by 13% and 56% year-over-year, respectively
  • In China, revenues exceeded our outlook due to Dungeon&Fighter which was slightly above our expectations. However on a year-over-year basis, revenues decreased by 23% on an as-reported basis and by 26% on a constant currency1 basis
  • Revenues from Japan more than doubled year-over-year driven by contributions from FIFA MOBILE 5, V4, TRAHA, as well as Blue Archive, which launched on February 4th
  • Revenues from North America and Europe increased by 16% primarily driven by MapleStory and MapleStory M, which grew by 136% and 78% year-over-year, respectively
  • Revenues from Rest of World3 increased by 10% primarily driven by MapleStory which grew 90% year-over-year

Other Highlights:

  • In April, Nexon announced development of OVERKILL, a new Virtual World offering an alternative perspective on Nexon’s blockbuster Dungeon&Fighter franchise
  • Also in April, Nexon’s board approved the purchase of 1,717 bitcoins for approximately $100 million, representing less than 2% of total cash and cash equivalents on hand7. We believe bitcoin offers long-term stability and liquidity while maintaining the value of Nexon’s cash for future investments
  • In March, Nexon disclosed the names of four publicly traded companies related to a previously announced initiative to invest in companies which sustain strong global IP: Hasbro, Inc., BANDAI NAMCO Holdings Inc., KONAMI HOLDINGS CORPORATION and SEGA SAMMY HOLDINGS INC. Other investments related to this initiative did not meet the disclosure threshold8
  • Also in March, veteran global entertainment executive Kevin A. Mayer was elected to Nexon’s board of directors9

Second Quarter 2021 Outlook:

  • Expect group revenues to be in the range of ¥54.5 to ¥59.6 billion, representing a 16% to 8% decrease year-over-year on an as-reported basis and a 23% to 16% decrease year-over-year on a constant currency1 basis
  • Expect operating income to be in the range of ¥12.0 to ¥16.4 billion
  • Expect net income2 to be in the range of ¥9.0 to ¥12.3 billion
  • Forex sensitivity10: Every one Japanese yen move against the U.S. dollar would have the following impact on our financials for Q2 2021
    • Revenues: ¥0.51 billion
    • Operating Income:
Alex

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