Nexon's First Quarter Financials Are Up 11% Year-Over-Year

May 12, 2016 Matt Chelen Comments

Nexon released their first quarter financials today. The outlook is positive as first quarter revenues are up 11% year-over-year at a total of 57.5 billion yen. As usual, this is contributed largely to how well Dungeon Fighter Online performed in China.

The full results and second quarter predictions are as follows.

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 from Dungeon&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.