1. NHN Q1 2025 Earnings: Key Highlights
NHN reported consolidated revenue of KRW 604.9 billion, operating profit of KRW 21.9 billion, and net income of KRW 9 billion for Q1 2025. These figures fell short of market consensus by 2.9%, 20.0%, and 38.8%, respectively.
2. Analyzing the Underperformance
2.1 Struggling Games Business: The slowdown in the PC online gaming market, intensifying competition, and delays in new game releases are key factors behind the gaming business’s underperformance. While new titles like ‘Darkest Days’ are in the pipeline, their impact wasn’t reflected in the Q1 results.
2.2 Increased Expenses: Increased investments in new businesses like cloud, AI, and commerce, coupled with rising labor and marketing costs, have contributed to a higher overall cost burden.
2.3 Exchange Rate Volatility: With a significant portion of its business overseas, NHN is highly susceptible to exchange rate fluctuations. Recent volatility may have negatively impacted profitability.
3. Future Outlook and Investment Strategies
3.1 Short-Term Outlook: Performance in the coming quarters will be crucial. Investors should focus on the success of new game releases and the company’s cost optimization efforts.
3.2 Long-Term Outlook: The growth potential of NHN’s cloud, commerce, and Payco businesses remains promising. Synergies through AI integration are also anticipated.
3.3 Investor Action Plan: Rather than focusing on short-term results, investors should monitor the company’s long-term business portfolio transformation and cost efficiency initiatives. Key factors to watch include the performance of new game releases and growth momentum in the cloud business.