Date: Wednesday, August 5, 2026, 16:00
Attendees: CEO Kim Byung-kyu, CFO Do Ki-wook
Agenda: Netmarble Q2 2026 Earnings and Future Strategy

■ Summary of Netmarble Q2 2026 Earnings and Status

▣ Q2 2026 Earnings Summary

- Q2 2026 Revenue: ₩749.2 billion (+4.4% YoY, +15% QoQ)

ㄴ Driven by revenue growth in existing titles and the launch of new games (The Seven Deadly Sins: Origin, Sol: Enchantment)

ㄴ Top-grossing games: Marvel Contest of Champions (9%), The Seven Deadly Sins: Origin (7%), Latcha Slot (7%), etc

- Q2 2026 Operating Profit: ₩80.1 billion; Net Profit: ₩203.9 billion

ㄴ Net profit reflects gains from the sale of G-Tower, among other factors

▣ Q2 2026 Expense Summary

- Q2 2026 Operating Expenses: ₩669.1 billion (+8.5% YoY, +11.8% QoQ)

- Marketing Expenses: ₩183.5 billion (+35.5% YoY, +9.1% QoQ)

ㄴ Increased QoQ due to new game launches (Mongil: STAR DIVE, Sol: Enchantment)

- Labor Costs: ₩182.5 billion (+4.3% YoY, +8.9% QoQ)

ㄴ Increased QoQ due to the full-quarter impact of salary raises

- Commission Fees: ₩235.6 billion (-2.8% YoY, +17.3% QoQ)

ㄴ Commission rates rose QoQ due to an increased share of revenue from third-party IP games

▣ New Game Lineup

- Three new titles scheduled for release in H2 2026

ㄴ 'Solo Leveling: Karma' (Roguelite action RPG, PC/Mobile)

ㄴ 'Shangri-La Frontier: Seven Best Species' (Collectible RPG, PC/Mobile)

ㄴ 'Project Aegis' (PC/Mobile)

■ Q&A

Given the recent stock price decline and market concerns, there seems to be significant anxiety regarding growth potential. As Netmarble has historically driven growth through a high-volume release strategy, could you share information on the status of new game development, the number of games expected for 2027, and the pipeline beyond 2026.

CEO Kim Byung-kyu = I do not believe that discussing the status and outlook for 2027 on this call would meet market expectations. First, I think it is better to explain why we adjusted our H2 lineup.

We proactively adjusted the lineup because we believe it is necessary to set strict launch criteria and manage the resources required for new launches more efficiently. Furthermore, we are taking these measures to target the expansion of the Product Life Cycle (PLC) for our live-service games.

As you are well aware, while our past strategy of capturing growth through high-volume releases was effective, it carried the underlying concern that the life cycles of our launched games were relatively short. We share these concerns. We believe that fundamentally improving our internal structure in this area is what will ultimately meet market expectations.

Therefore, I want to emphasize that our main strategy for the second half of the year is to maintain a tighter new game lineup while focusing on extending the PLC of our existing live games.

One of the criticisms Netmarble has faced is that while we are adept at launching many games, the operational life cycle of individual titles is short. However, looking at a game like 'The Seven Deadly Sins: Grand Cross,' which is over seven years old, it has generated over ₩100 billion in annual revenue since 2024 and continues to show a growth trajectory.

In the mobile game market, a seven-year-old title continuing to grow at a ₩100 billion scale signifies strong potential in terms of PLC. We aim to apply this know-how to other games to gradually increase their life cycles and revenue.

While this means we are focusing on this strategy for the second half, the planned regional expansions have either already been implemented in Q3 and Q4 or will be rolled out sequentially. I do not believe this will lead to the revenue decline the market fears.

Regarding the new game lineup you asked about, I fully understand the interest, and we will arrange a separate session to discuss that in detail.

Regarding expenses, how much progress has been made on the recent reduction in market commission fees, and what is the target by year-end? Also, if possible, please provide guidance on marketing expenses for the second half.

CFO Do Ki-wook = This question was also raised last quarter, and I will reiterate that the situation has not changed significantly. The actual impact will be minimal through this year, and while we expect to see full effects starting next year, it is difficult to provide specific figures at this time. We expect to see meaningful results starting next year.

Regarding marketing expenses, both the absolute amount and the proportion increased in the first half due to new game launches. We expect the absolute amount to converge toward our typical quarterly expenditure levels in the second half.