Gravity Reports Second Quarter of 2018 Results

Gravity (NASDAQCM:GRVY), a developer and publisher of online and mobile games based in South Korea announced its unaudited financial results for the second quarter ended June 30, 2018.

The company reported revenues of US$56,000 which represented a five percent decrease from the previous quarter ended March 31, 2018. It was noted that this revenue was 133.2 percent up on a year-over-year basis.

As quoted in the press release:

SECOND QUARTER 2018 HIGHLIGHTS

• Operating profit was KRW 8,323 million (US$ 7,486 thousand), representing a 72.7% increase QoQ and a 90.3% increase YoY.
• Profit before income tax expenses was KRW 8,642 million (US$ 7,773 thousand), representing a 68.9% increase QoQ and a 89.5% increase YoY.
• Net profit attributable to parent company was KRW 6,615 million (US$ 5,949 thousand), representing a 86.4% increase QoQ and a 86.1% increase YoY.

REVIEW OF SECOND QUARTER 2018 FINANCIAL RESULTS

Revenues

Subscription revenues for the second quarter of 2018 were KRW 6,116 million (US$ 5,501 thousand), representing a 31.3% decrease QoQ from KRW 8,896 million and a 37.5% decrease YoY from KRW 9,786 million. The decrease QoQ was mainly attributable to decreased revenues from Ragnarok Online in Korea and Taiwan, and Ragnarok Prequel in Taiwan. The decrease YoY was largely due to decreased revenues from Ragnarok Prequel and Ragnarok Online in Taiwan and the United States and Canada and Dragonica in Taiwan.

Royalty and license fee revenues for the second quarter of 2018 were KRW 3,209 million (US$ 2,886 thousand), representing a 30.5% decrease QoQ from KRW 4,619 million and a 9.5% decrease YoY from KRW 3,546 million. The decrease QoQ was primarily due to the decreased revenue of Ragnarok Online in Japan. The decrease YoY resulted mainly from decreased revenues from Ragnarok Online in Indonesia, Japan and Thailand.

Mobile game and application revenues were KRW 51,789 million (US$ 46,581 thousand) for the second quarter of 2018, representing a 0.8% increase QoQ from KRW 51,396 million and a 323.1% increase YoY from KRW 12,239 million. The QoQ increase was mainly due to increased revenue from Ragnarok M in Korea, which was launched on March 14, 2018. This increase was partially offset by decreased revenues from Ragnarok M in Taiwan and RO: Idle Poring in global markets except for China and Japan and Ragnarok R in Taiwan and Korea. The increase YoY was primarily due to revenue contribution of Ragnarok M in Korea and Taiwan and RO: Idle Poring in global markets except for China and Japan, which partially offset by decreased revenues from Ragnarok R in Taiwan, Korea, and Thailand.

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