Gravity Reports Second Quarter of 2025 Results and Business Update

Rhea-AI Summary

Gravity (NASDAQ:GRVY) reported strong Q2 2025 financial results with total revenues of KRW 170,740 million (US$ 126.1M), up 24.2% QoQ and 38.9% YoY. The company's mobile game segment showed remarkable growth, with revenues increasing 24.7% QoQ to KRW 144,003 million, driven by successful launches of Ragnarok M: Classic and Ragnarok X: Next Generation in various regions.

Operating profit reached KRW 19,670 million, though declining 20.5% QoQ but increasing 31.2% YoY. Net profit was KRW 13,245 million, down 39.9% QoQ but up 5.4% YoY. The company maintains strong liquidity with KRW 576,840 million in cash and equivalents.

The quarter saw multiple successful game launches across regions and platforms, with significant expansion plans including new Ragnarok titles scheduled for release in various markets through 2025.

Positive

• Total revenue grew 38.9% year-over-year to KRW 170.7B (US$126.1M)
• Mobile game revenue increased 45.4% YoY to KRW 144B (US$106.4M)
• Operating profit up 31.2% year-over-year
• Strong liquidity position with KRW 576.8B (US$426.2M) in cash
• Multiple successful game launches and global market expansion
• Diverse game portfolio with 15+ titles in development or recent launch

Negative

• Operating profit decreased 20.5% quarter-over-quarter
• Net profit declined 39.9% from previous quarter
• Operating expenses increased 46.6% QoQ due to higher advertising costs
• Decreased revenues from existing games like Ragnarok Origin in multiple regions

Insights

Financial Analyst

Gravity reports 38.9% YoY revenue growth driven by mobile games, despite 39.9% QoQ profit decline amid higher marketing expenses.

Gravity's Q2 2025 results present a mixed financial picture with impressive KRW 170.7 billion ($126.1 million) in revenue, jumping 38.9% year-over-year and 24.2% quarter-over-quarter. The revenue growth is primarily fueled by their mobile segment, which surged 45.4% YoY to KRW 144 billion, now representing 84% of total revenue.

Despite strong top-line growth, profitability metrics show concerning sequential declines. Net profit attributable to the parent company fell 39.9% QoQ to KRW 13.2 billion ($9.8 million), though it still managed a modest 5.4% YoY increase. This profit compression stems from two key factors: a 30.4% QoQ increase in cost of revenue due to higher commissions paid for mobile game services, and a substantial 46.6% QoQ jump in operating expenses driven by increased advertising for multiple game launches.

The company's expansion strategy is clearly reflected in these numbers – aggressively investing in marketing to support an ambitious global rollout schedule spanning multiple games and regions. The most significant revenue contributors include new launches of Ragnarok M: Classic in Taiwan/Hong Kong/Macau and Ragnarok X: Next Generation in the Americas and select European markets. These investments have pressured margins but expanded the company's global footprint substantially.

Gravity maintains a remarkably strong balance sheet with KRW 576.8 billion ($426.2 million) in cash and equivalents, providing substantial resources for continued expansion. The company has positioned itself for potential future growth with at least 10 more game launches planned through the end of 2025 across various markets, including China, which could represent significant revenue opportunities if successful.

Gaming Industry Expert

Gravity's Q2 results highlight a strategic pivot toward global expansion and platform diversification that's beginning to bear fruit. The company's release calendar reveals an aggressive multi-region approach, with 17 different game launches mentioned across various stages of deployment.

What's particularly notable is Gravity's market penetration strategy. Rather than pursuing simultaneous global releases, they're executing carefully sequenced regional rollouts tailored to specific markets. For instance, Ragnarok X: Next Generation launched in North/South America in May, with Europe/Middle East/Africa planned for October. This phased approach allows for localization refinements and server stability management, crucial for maintaining player satisfaction during launch periods.

The company is also diversifying beyond its traditional MMORPG focus, expanding into idle games (Poring Rush, Ragnarok Idle Adventure Plus), puzzle RPGs (Ragnarok Crush), and even blockchain gaming (Ragnarok Landverse). This genre expansion helps mitigate risk while addressing different player preferences and time commitment levels.

Most significantly, Gravity has secured an ISBN for Ragnarok: The Promised Adventure in China, with an October launch date. The Chinese market represents a massive potential revenue stream, though regulatory approval processes there are notoriously stringent. Successfully navigating this regulatory environment signals strong government relations and compliance capabilities.

The company's multi-platform strategy is equally impressive – extending beyond mobile to include PC cross-play options for several titles, WeChat Mini Programs integration in China, and even LINE platform distribution. This approach maximizes accessibility across different user bases and creates multiple revenue streams from the same IP.

While marketing expenses have increased substantially, these investments appear strategic rather than desperate, laying groundwork for multiple revenue-generating launches in H2 2025 and beyond.

Seoul, South Korea, Aug. 08, 2025 (GLOBE NEWSWIRE) -- GRAVITY Co., Ltd. (NasdaqGM: GRVY) (“Gravity” or “Company”), a developer and publisher of online and mobile games based in South Korea, today announced its unaudited financial results for the second quarter ended June 30, 2025, prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board and business updates.

SECOND QUARTER 2025 HIGHLIGHTS

• Total revenues were KRW 170,740 million (US$ 126,147 thousand), representing a 24.2% increase from the first quarter ended March 31, 2025 (“QoQ”) and a 38.9% increase from the second quarter ended June 30, 2024 (“YoY”).

• Operating profit was KRW 19,670 million (US$ 14,533 thousand), representing a 20.5% decrease QoQ and a 31.2% increase YoY.

• Profit before income tax expense was KRW 18,706 million (US$ 13,821 thousand), representing a 34.2% decrease QoQ and a 6.7% decrease YoY.

• Net profit attributable to parent company was KRW 13,245 million (US$ 9,786 thousand), representing a 39.9% decrease QoQ and a 5.4% increase YoY.

REVIEW OF SECOND QUARTER 2025 FINANCIAL RESULTS

Revenues

Online game revenues for the second quarter of 2025 were KRW 21,971 million (US$ 16,233 thousand), representing a 16.8% increase QoQ from KRW 18,806 million and a 13.0% increase YoY from KRW 19,445 million. The increase QoQ was mainly attributable to initial revenue from Ragnarok Online America Latina launched in Latin America on May 28, 2025. The increase YoY was also mainly due to initial revenue from Ragnarok Online America Latina launched in Latin America on May 28, 2025.

Mobile game revenues were KRW 144,003 million (US$ 106,393 thousand) for the second quarter of 2025, representing a 24.7% increase QoQ from KRW 115,486 million and a 45.4% increase YoY from KRW 99,019 million. The increase QoQ was resulted by initial revenues from Ragnarok M: Classic launched in Taiwan, Hong Kong and Macau on April 16, 2025 and Ragnarok X: Next Generation launched in North, Central and South America, Oceania, England, Portugal, Spain and Ireland on May 8, 2025. Such increase was partially offset by decreased revenues from Ragnarok: Rebirth in Taiwan, Hong Kong and Macau, Ragnarok Origin in Southeast Asia, Taiwan, Hong Kong and Macau and THE RAGNAROK in Southeast Asia. The increase YoY was mainly due to initial revenues from Ragnarok M: Classic launched in Taiwan, Hong Kong and Macau on April 16, 2025 and Southeast Asia on February 14, 2025, increased revenue from Ragnarok Idle Adventure Plus launched in Global except Taiwan, Hong Kong, Macau, China, Korea and Japan on February 20, 2025 and initial revenue from Ragnarok X: Next Generation launched in North, Central and South America, Oceania, England, Portugal, Spain and Ireland on May 8, 2025. This increase was partially offset by decreased revenues from Ragnarok Origin in North, Central and South America and Southeast Asia.

Other revenues were KRW 4,766 million (US$ 3,521 thousand) for the second quarter of 2025, representing a 50.3% increase QoQ from KRW 3,172 million and a 5.8% increase YoY from KRW 4,503 million.

Cost of Revenue

Cost of revenue was KRW 114,006 million (US$ 84,231 thousand) for the second quarter of 2025, representing a 30.4% increase QoQ from KRW 87,458 million and a 50.0% increase YoY from KRW 76,006 million. The increase QoQ was mainly due to commission paid for mobile game services related to Ragnarok M: Classic in Taiwan, Hong Kong and Macau and Ragnarok X: Next Generation in North, Central and South America, Oceania, England, Portugal, Spain and Ireland. The increase YoY was primarily due to increased commission paid for mobile game services related to Ragnarok M: Classic in Southeast Asia, Taiwan, Hong Kong and Macau, Ragnarok Idle Adventure Plus in Global except Taiwan, Hong Kong, Macau, China, Korea and Japan and Ragnarok X: Next Generation in North, Central and South America, Oceania, England, Portugal, Spain and Ireland.

Operating Expenses

Operating expenses were KRW 37,064 million (US$ 27,383 thousand) for the second quarter of 2025, representing a 46.6% increase QoQ from KRW 25,276 million and a 15.9% increase YoY from KRW 31,972 million. The increase QoQ was mainly due to increased advertising expenses for Ragnarok Online America Latina in Latin America, Nobunaga's Ambition: The Road to the World (Tentative English Title) in Japan, Ragnarok Idle Adventure Plus in Taiwan, Hong Kong and Macau and Ragnarok: Back to Glory in Korea. The increase YoY was also mainly due to increased advertising expenses for Ragnarok Online America Latina in Latin America, Ragnarok Idle Adventure Plus in Global, Taiwan, Hong Kong and Macau, Nobunaga's Ambition: The Road to the World (Tentative English Title) in Japan and Ragnarok: Back to Glory in Korea.

Profit Before Income Tax Expense

Profit before income tax expense was KRW 18,706 million (US$ 13,821 thousand) for the second quarter of 2025 compared with profit before income tax expense of KRW 28,450 million for the first quarter of 2025 and profit before income tax expense
 of KRW 20,057 million for the second quarter of 2024.

Net Profit

As a result of the foregoing factors, Gravity recorded a net profit attributable to parent company of KRW 13,245 million (US$ 9,786 thousand) for the second quarter of 2025 compared with net profit attributable to parent company of KRW 22,038 million for the first quarter of 2025 and a net profit attributable to parent company of KRW 12,569 million for the second quarter of 2024.

Liquidity

The balance of cash and cash equivalents and short-term financial instruments was KRW 576,840 million (US$ 426,184 thousand) as of June 30, 2025.

Note: For convenience purposes only, the KRW amounts have been expressed in U.S. dollars at the exchange rate of KRW 1,353.50 to US$ 1.00, the noon buying rate in effect on June 30, 2025 as quoted by the Federal Reserve Bank of New York.

GRAVITY BUSINESS UPDATES

Ragnarok Online IP-based Games

• Ragnarok: The Promised Adventure (Tentative English Title), an Idle MMORPG Mobile and WeChat Mini Programs game

Ragnarok: The Promised Adventure (Tentative English Title, Chinese title: 仙境传说之约定好的冒险) officially received an ISBN from Chinese government on May 21, 2025 and will be launched in China on October 1, 2025.

• Ragnarok X: Next Generation, an MMORPG Mobile and PC game

Ragnarok X: Next Generation was officially launched in North, Central and South America, Oceania, England, Portugal, Spain and Ireland on May 8, 2025 and will be launched in Europe (except England, Portugal, Spain and Ireland), Middle East, Africa and South Asia in October 2025.

• Ragnarok Online America Latina, an MMORPG PC game

Ragnarok Online America Latina was officially launched in Latin America on May 28, 2025.

• Ragnarok Idle Adventure Plus, a Vertical Idle MMORPG Mobile game

Ragnarok Idle Adventure Plus was officially launched in Taiwan, Hong Kong and Macau on May 21, 2025 and will be launched in Korea on August 28, 2025.

• Poring Rush, an Idle RPG Mobile game

Poring Rush was officially launched in Korea on June 12, 2025.

• Ragnarok Zero, an MMORPG PC game

Ragnarok Zero was officially launched in Taiwan, Hong Kong and Macau on July 3, 2025.

• Ragnarok: Twilight, an Idle MMOARPG Mobile game

Ragnarok: Twilight was officially launched in Taiwan, Hong Kong and Macau on July 3, 2025. It will be launched in China on August 15, 2025 and is underway for its launch in Southeast Asia in the second half of 2025.

• Ragnarok Crush, a Strategy Action Puzzle RPG Mobile game

Ragnarok Crush was officially launched in Global except China and Japan on July 17, 2025.

• Ragnarok V: Returns, a 3D MMORPG Mobile and PC game

Ragnarok V: Returns was officially launched in Global on August 7, 2025.

• Ragnarok M: Classic, an MMORPG Mobile and PC game

Ragnarok M: Classic will be launched in North and South America, Europe, Middle East and Africa on September 3, 2025.

• Ragnarok: The New World, an MMORPG Mobile and PC game

Ragnarok: The New World is planned to be launched in Taiwan, Hong Kong and Macau in the fourth quarter of 2025.

• PROJECT ABYSS, an MMOARPG Mobile and PC game

PROJECT ABYSS is underway for its launch in Southeast Asia in the fourth quarter of 2025.

• Ragnarok Libre, a Time Effective MMORPG Line game

Ragnarok Libre will be launched in Global except Korea, China and Japan on August 11, 2025.

• I'm the Hero of This Ragnarok! (Tentative English Title), an SLG Simulation Mobile game

I'm the Hero of This Ragnarok! (Tentative English Title) is scheduled to be launched in Korea in September 2025.

Ragnarok Online IP-based Blockchain Game

• Ragnarok Landverse, an MMORPG Blockchain and PC game

Ragnarok Landverse will be launched in North and South America in the fourth quarter of 2025.

Other IP-based games

• Gunbound, an MMO Turn-based Artillery PC game

Gunbound was officially launched in Southeast Asia and Latin America on June 10, 2025.

• Nobunaga's Ambition: The Road to the World (Tentative English Title), an MMO History Strategy Simulation Mobile game

Nobunaga's Ambition: The Road to the World (Tentative English Title) was officially launched in Japan on June 18, 2025.

• Dragonica Origin, an MMORPG PC game

Dragonica Origin was officially launched in Southeast Asia on July 16, 2025.

• Meow Star Acres 2, a Farm Simulation Mobile game

Meow Star Acres 2 will be launched in Global in the fourth quarter of 2025.

• Schop Hero, a New Fresh Whole Digging Puzzle RPG Mobile game

Schop Hero will be launched in Japan in the third quarter of 2025.

• Chess Rumble, a Collectible Tactical RPG Mobile game

Chess Rumble is planned to be launched in Global except Korea and Japan in the third quarter of 2025.

Investor Presentation

Gravity issued an investor presentation. The presentation contains the Company’s recent business updates, results of the second quarter in 2025 and Gravity’s business plan. The presentation can be found on the Company’s website under the IR Archives section at https://www.gravity.co.kr/en/ir/updates. Korean and Japanese versions of the presentation are also provided on the website.

About GRAVITY Co., Ltd. ---------------------------------------------------

Gravity is a developer and publisher of online and mobile games. Gravity's principal product, Ragnarok Online, is a popular online game in many markets, including Japan and Taiwan, and is currently commercially offered in 91 markets. For more information about Gravity, please visit http://www.gravity.co.kr.

Forward-Looking Statements:

Certain statements in this press release may include, in addition to historical information, “forward-looking statements” within the meaning of the “safe-harbor” provisions of the U.S. Private Securities Litigation Reform Act 1995. Forward-looking statements can generally be identified by the use of forward-looking terminology, such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe”, “project,” or “continue” or the negative thereof or other similar words, although not all forward-looking statements contain these words. Investors should consider the information contained in our submissions and filings with the United States Securities and Exchange Commission (the “SEC”), including our annual report for the fiscal year ended December 31, 2024 on Form 20-F, together with such other documents that we may submit to or file with the SEC from time to time, on Form 6-K. The forward-looking statements speak only as of this press release and we assume no duty to update them to reflect new, changing or unanticipated events or circumstances.

Contact:

Mr. Heung Gon Kim
Chief Financial Officer
Gravity Co., Ltd.
Email: kheung@gravity.co.kr

Ms. Jin Lee
Ms. Yujin Oh
IR Unit
Gravity Co., Ltd.
Email: ir@gravity.co.kr
Telephone: +82-2-2132-7800

GRAVITY Co., Ltd.
Consolidated Statements of Financial Position

(In millions of KRW and thousands of US$)

		As of
		31-Dec-24								30-Jun-25
		KRW				US$				KRW				US$
		(audited)				(unaudited)				(unaudited)				(unaudited)
Assets
Current assets:
Cash and cash equivalents			228,898				169,116				215,441				159,173
Short-term financial instruments			324,304				239,604				361,399				267,011
Accounts receivable, net			81,152				59,957				81,368				60,117
Other receivables, net			1,572				1,161				1,948				1,439
Prepaid expenses			8,115				5,996				17,768				13,127
Other current financial assets			6,602				4,878				4,759				3,516
Other current assets			2,967				2,192				3,975				2,937
Total current assets			653,610				482,904				686,658				507,320
Property and equipment, net			9,957				7,356				10,703				7,908
Intangible assets, net			7,057				5,214				8,941				6,606
Deferred tax assets			5,617				4,150				6,498				4,801
Other non-current financial assets			1,767				1,306				1,686				1,246
Other non-current assets			8,451				6,245				7,966				5,885
Total assets			686,459				507,175				722,452				533,766
Liabilities and Equity
Current liabilities:
Accounts payable			67,930				50,188				82,024				60,601
Deferred revenue			26,761				19,772				20,868				15,418
Withholdings			1,588				1,173				1,599				1,181
Accrued expense			2,651				1,959				2,181				1,611
Income tax payable			6,507				4,808				7,667				5,665
Other current liabilities			3,212				2,373				3,653				2,699
Total current liabilities			108,649				80,273				117,992				87,175
Long-term account payables			220				163				623				460
Long-term deferred revenue			2,572				1,900				880				650
Other non-current liabilities			5,361				3,961				5,262				3,889
Deferred tax liabilities			1,294				956				1,290				953
Total liabilities			118,096				87,253				126,047				93,127
Share capital			3,474				2,567				3,474				2,567
Capital surplus			26,979				19,933				26,979				19,933
Other components of equity			23,801				17,585				16,601				12,265
Retained earnings			513,418				379,326				548,701				405,394
Equity attributable to owners of the Parent Company			567,672				419,411				595,755				440,159
Non-controlling interest			691				511				650				480
Total equity			568,363				419,922				596,405				440,639
Total liabilities and equity			686,459				507,175				722,452				533,766

* For convenience purposes only, the KRW amounts are expressed in U.S. dollars at the rate of KRW 1,353.50 to US$ 1.00, the noon buying rate in effect on June 30, 2025 as quoted by the Federal Reserve Bank of New York.

GRAVITY Co., Ltd.
Consolidated Statements of Comprehensive Income

(In millions of KRW and thousands of US$ except for share and ADS data)

		Three months ended												Six months ended
		31-Mar-25			30-Jun-24			30-Jun-25						30-Jun-24			30-Jun-25
		(KRW)			(KRW)			(KRW)			(US$)			(KRW)			(KRW)			(US$)
		(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)
Revenues:
Online games			18,806			19,445			21,971			16,233			37,510			40,777			30,127
Mobile games			115,486			99,019			144,003			106,393			197,567			259,489			191,717
Other revenue			3,172			4,503			4,766			3,521			7,669			7,938			5,865
Total net revenue			137,464			122,967			170,740			126,147			242,746			308,204			227,709
Cost of revenue			87,458			76,006			114,006			84,231			149,634			201,464			148,847
Gross profit			50,006			46,961			56,734			41,916			93,112			106,740			78,862
Operating expenses:
Selling, general and administrative expenses			21,859			28,108			33,509			24,757			43,855			55,368			40,907
Research and development			3,431			4,286			3,291			2,431			7,887			6,722			4,966
Others, net			(14)			(422)			264			195			(488)			250			185
Total operating expenses			25,276			31,972			37,064			27,383			51,254			62,340			46,058
Operating profit			24,730			14,989			19,670			14,533			41,858			44,400			32,804
Finance income(costs):
Finance income			10,717			8,867			2,651			1,959			15,164			13,368			9,877
Finance costs			(6,997)			(3,799)			(3,615)			(2,671)			(4,467)			(10,612)			(7,840)
Profit before income tax			28,450			20,057			18,706			13,821			52,555			47,156			34,841
Income tax expense			6,372			7,476			5,486			4,053			13,091			11,858			8,761
Profit for the year			22,078			12,581			13,220			9,768			39,464			35,298			26,080
Profit attributable to:
Non-controlling interest			40			12			(25)			(18)			29			15			12
Owners of Parent company			22,038			12,569			13,245			9,786			39,435			35,283			26,068
Earnings per share
- Basic and diluted			3,171			1,809			1,906			1.41			5,675			5,077			3.75
Weighted average number of shares outstanding
- Basic and diluted			6,948,900			6,948,900			6,948,900			6,948,900			6,948,900			6,948,900			6,948,900
Earnings per ADS
- Basic and diluted			3,171			1,809			1,906			1.41			5,675			5,077			3.75

* For convenience, the KRW amounts are expressed in U.S. dollars at the rate of KRW 1,353.50 to US$1.00, the noon buying rate in effect on June 30, 2025 as quoted by the Federal Reserve Bank of New York.
(1) Each ADS represents one common share.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	GRAVITY CO., LTD.
	By:	/s/ Heung Gon Kim
	Name:	Heung Gon Kim
	Title:	Chief Financial Officer

Date: August 8, 2025

FAQ

What were Gravity's (GRVY) Q2 2025 revenue and profit numbers?

Gravity reported total revenues of KRW 170,740M (US$126.1M), up 38.9% YoY, with net profit of KRW 13,245M (US$9.8M), up 5.4% YoY.

How did Gravity's mobile gaming segment perform in Q2 2025?

Mobile game revenues reached KRW 144,003M (US$106.4M), increasing 24.7% QoQ and 45.4% YoY, driven by new launches of Ragnarok M: Classic and Ragnarok X: Next Generation.

What new games did GRVY launch in Q2 2025?

Key launches included Ragnarok X: Next Generation in Americas and select European countries, Ragnarok Online America Latina in Latin America, and Ragnarok M: Classic in Taiwan, Hong Kong, and Macau.

What is Gravity's cash position as of Q2 2025?

Gravity maintained KRW 576,840M (US$426.2M) in cash and cash equivalents and short-term financial instruments as of June 30, 2025.

What are GRVY's major upcoming game releases?

Key upcoming releases include Ragnarok: The Promised Adventure in China (Oct 2025), Ragnarok M: Classic in Americas/Europe (Sept 2025), and Ragnarok: The New World in Taiwan, Hong Kong, and Macau (Q4 2025).