1. What Happened? Earnings Summary

Studio Dragon reported Q2 2025 revenue of KRW 114.5 billion (beating expectations), but operating profit plummeted to KRW -2.9 billion (a significant loss). While the revenue figures are positive, the profitability decline is a serious concern.

2. Why the Downturn? Analyzing the Results

The primary factors contributing to the decline are continued high content production and investment costs coupled with underperforming new releases. Intensified competition in the global OTT market has also impacted profitability.

3. What’s Next? Investment Strategy

Downward pressure on the stock price is expected in the short term, suggesting a cautious approach. Long-term, focus on Studio Dragon’s content production capabilities and global expansion strategy, while closely monitoring profitability improvements. The current investment recommendation is “HOLD.”

4. Investor Action Plan

  • Monitor profitability improvement strategies and cost reduction efforts.
  • Assess the upcoming drama lineup for the second half of 2025 and beyond.
  • Analyze global market performance and revenue contribution.
  • Evaluate the company’s content strategy for differentiation within the competitive landscape.

Table. Financial Performance Trend (Last 5 Quarters)

(Table content same as original input)