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Nexon Announces First Quarter 2017 Financial Results

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Record High Quarterly Revenues, Operating Income and Net Income Since 2011 IPO Underscore Nexon’s Core Capability in Live Operations that Grows Games for Years

NEXON Co., Ltd. (“Nexon”) (3659.TO), a global leader in online games for PC and mobile, today announced financial results for its first quarter ended March 31, 2017.

“Nexon posted record-breaking results in the first quarter – including the highest quarterly revenue, operating income and net income1 since our IPO in 2011,” said Owen Mahoney, President and Chief Executive Officer of Nexon. “Our results were driven by an exceptionally strong performance in China and solid progress in Japan thanks to mobile games like HIT and HIDE AND FIRE. Our strategy of reinvesting recurring revenues from sustained hits to fund exciting new properties is proving a big success, and we have a diversified and robust pipeline ready to launch in Q2 and the back half of 2017.”

Mahoney continued, “We also recently announced that DomiNations, a mobile game launched worldwide in 2015, surpassed lifetime revenue of more than US$100 million. In addition, we hosted our 11th Nexon Developers Conference in April, one of the largest conferences for game developers in Korea. The event drew nearly 20,000 participants, including developers from around the world, and included discussions on topics ranging from art, game development and marketing to career development.”

First Quarter 2017 Highlights:

  • First quarter revenues were 74.8 billion yen, up 30% year-over-year on an as-reported basis, exceeding our outlook due to the exceptionally strong performance of Dungeon&Fighter in China with successful Lunar New Year update and item sales in March.
  • Operating income was 39.8 billion yen, exceeding our outlook primarily due to the outperformance of our high-margin China business. This was partially offset by a 2.7 billion yen impairment loss on items including subsidiaries’ goodwill and game IPs.
  • Net income1 was 19.9 billion yen, below our outlook due to 15.9 billion yen FX loss on U.S. dollar-denominated cash deposits and accounts receivable.

Second Quarter 2017 Outlook:
Nexon expects:

  • Second quarter 2017 revenues in the range of 41.3 to 44.8 billion yen.
    • PC online game revenues in the range of 30.3 to 32.6 billion yen.
    • Mobile game revenues in the range of 11.0 to 12.2 billion yen.
  • Operating income in the range of 11.2 to 14.0 billion yen.
  • Net income1 in the range of 10.4 to 12.8 billion yen.

1 Net income refers to net income attributable to owners of the parent company, as stated in Nexon’s consolidated financial results.

Conference Call and Replay:

Nexon management will host a conference call for investors, analysts and the media to discuss the company’s financial results and outlook. The conference call will be held at 6:00 p.m. Japan Standard Time (JST) / 5:00 a.m. Eastern Daylight Time (EDT), and will be simultaneously conducted in Japanese and English. It will consist of brief remarks made by the management team followed by a Q&A session.

Conference Call (Japanese & English)
Time:                                  May 12 at 6:00 p.m. JST / 5:00 a.m. EDT

For English Speakers
Telephone Number:               +81-3-4570-1816 (Japan), +1-646-502-5131 (USA),
+44-20-7660-2114 (UK), +852-306-00227 (Hong Kong),
+65-642-98366 (Singapore), +82-234-831-910 (South Korea)
Pass Code:                           762735#

For Japanese Speakers
Telephone Number:               +81-3-4570-1817 (Japan)
Pass Code:                           668613#

Conference Call Replay
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, 2017. Webcast replay and the transcript of the call (English only) will be available within several days on Nexon’s Investor Relations website.

Conference Call Replay (English)
Replay Telephone Number:    +81-3-4570-2856 (Japan)
Reference Number:               221272#

Conference Call Replay (Japanese)
Replay Telephone Number:    +81-3-4570-4130 (Japan)
Reference Number:               221270#

For additional information regarding Nexon’s first quarter 2017 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.

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