[NX] Nexon Q2 2013 Financial Highlights: Revenues Up 52%; Nexon America Plummets
Continued high growth in mobile and Japanese revenue due to the company’s 2012 acquisition of Gloops continues to power Nexon Co. Ltd. (JP:3659) to strong financial results. A weakening Japanese Yen (JPY) has helped as-reported nominal numbers as well. Nexon America’s decline has accelerated due to disappointing results from Combat Arms and MapleStory, despite strong performances by Mabinogi, Dragon Nest and Vindictus.
Nexon also announced today that the nine year old Korean service of Mabinogi surpassed 100,000 concurrent users recently, a new record for the game.
- Finance performance exceeded even high end of forecast range.
- Revenue was 80.99 billion JPY ($837.35 million), up 52.2% year-over-year (YoY).
- Operating income was 34.14 billion JPY ($352.99 million), up 22.5% YoY.
- Net income was 26.67 billion JPY ($275.77 million), up 40% YoY.
- Operating income margin was 42%.
- Chinese revenue contributed 42% of the total, down from 47% last year. Overall Chinese revenue grew by 44% YoY, fueled by strong performances by Dungeon Fighter Online and Counter-Strike Online. Vindictus is also showing steady growth in the region. Cyphers will launch in China in the fourth quarter of this year.
- Favorable performances by Dungeon Fighter Online, FIFA Online 3 and Sudden Attack pushed revenue from this region up 30% YoY despite very disappointing results from MapleStory. Korea contributed 23% of total revenue, down from 27% last year and the releases of Dota 2 and Counter-Strike Online 2 later this year are expected to help growth along with existing titles.
- With financial data being included from Gloops this year but not last year (before the acquisition), as well as high growth by Gloops, Nexon’s Japanese revenue rose 227%. YoY Japan contributed 26% of overall revenue, way up from 12% last year. Revenue from most of Nexon Japan’s largest PC titles declined YoY.
- The North American market continues to decline for Nexon, and that decline has accelerated. Poor performance from MapleStory and Combat Arms could not be reversed by relatively strong performances from Mabinogi, Vindictus and Dragon Nest. North American revenue was 1.4 billion JPY ($14.47 million), 4% of total (down from 7% last year). Segment loss was 446 million JPY ($4.61 million), up 85% from a year prior.
- Europe and other markets continue to show relatively low growth rates. Revenues increased 10% YoY with particular mention going to the performance of Mabinogi in Taiwan which saw double-digit revenue growth YoY.
- Nexon’s Monthly Active Users (MAUs) was 71.0 million, down from 77.4 million year earlier and down from 71.5 million last quarter.
- Pay Rate (percentage of users using cash in Nexon games) was 10.2%, down from 10.3% last year and 11.5% last quarter.
- Average Revenue Per Paying User (ARPPU) was 2,181 JPY ($22.55), up from 1,521 JPY ($15..73) last year but down from 2,532 JPY ($25.08) last quarter.