Kakao Games’ Critical Q2 Earnings Call: What’s at Stake?

On August 6, 2025, Kakao Games will hold its conference call (IR) to announce its Q2 results and outline its future business direction. This event is incredibly important as it offers a chance to address the market’s hopes and fears following the Q1 announcement and will set the tone for the stock’s future trajectory.

Why the Q2 IR is Crucial: Overcoming the Shadow of Q1

First, it’s essential to recall the Q1 performance. In Q1 2025, Kakao Games reported a consolidated revenue decrease and an operating loss, largely due to the discontinuation of its golf business and the sale of its wireless communications division. While this was a temporary impact aimed at improving financial structure, the sluggish performance of the PC games division also hindered growth.

However, there were positive signs, such as the solid performance of the mobile games division and efforts in overseas expansion. Therefore, this Q2 IR is a critical test to prove how much the core ‘gaming business’ competitiveness has strengthened and how robust the financial structure has become after shedding non-core assets.

4 Key Points to Watch in the August 6th IR

So, what should investors focus on during this IR? We’ve summarized the four key points.

  • 1. Q2 Performance: The First Sign of a Rebound?

    The most important factor is undoubtedly the Q2 results. Beating market expectations for revenue and operating profit is the first prerequisite for a stock rebound. The performance of the following items is particularly crucial:

    • PC Games Division: Has it recovered from the Q1 slump and returned to a growth trajectory?
    • Mobile Games Division: Did key titles like ‘Odin: Valhalla Rising,’ ‘ArcheAge War,’ and ‘R.O.M’ continue their strong performance?
    • Overseas Revenue: Has overseas market growth been demonstrated with concrete numbers?

  • 2. Future Growth Strategy: What is the ‘Next Odin’?

    The company must present a long-term growth vision that goes beyond short-term results. The market will critically assess the feasibility and competitiveness of its new game launch plans, specific overseas expansion strategies, and investment plans for future technologies (like AI).

  • 3. Financial Health Improvement: The Results of Divesting Non-Core Assets

    The effects of the business divestments must be shown in quantitative terms. Disclosing improved financial metrics like the debt-to-equity ratio and current ratio, along with a clear plan on how the proceeds will be utilized, is key to boosting investor confidence.

  • 4. Risk Management: Navigating Regulation and Competition

    The company must present specific countermeasures for unavoidable risks such as intensifying competition in the gaming market and regulations on probability-based items. Explaining the impact of macroeconomic variables like interest rates and currency fluctuations, and their corresponding contingency plans, can reduce uncertainty for investors.

Investor Action Plan: Analyzing Kakao Games Stock Scenarios

Depending on the IR results, Kakao Games’ stock is likely to experience significant short-term volatility. Investors should prepare a strategy considering the following two scenarios:

  • πŸ“ˆ Bullish Scenario: If Q2 results exceed market consensus and a concrete, convincing future growth strategy is presented, the stock is likely to gain upward momentum.
  • πŸ“‰ Bearish Scenario: If the poor performance continues or the growth plan fails to meet market expectations, increasing uncertainty, the downward pressure on the stock could intensify.

Therefore, investors should meticulously analyze the IR presentation and closely monitor market reactions, especially trading trends among foreign investors. It is also advisable to consider macroeconomic indicators such as U.S. and South Korean government bond yields and benchmark interest rates to make a comprehensive investment decision.