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Gravity (NASDAQ: GRVY) 2025 revenue rises to W560.5B as net income falls

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6-K

Rhea-AI Filing Summary

Gravity Co., Ltd. reports audited consolidated results for the years ended December 31, 2025 and 2024, showing growth in sales but lower profit. Revenue rose to W560.5 billion in 2025 from W500.8 billion in 2024, driven mainly by mobile games at W455.2 billion and online games at W90.3 billion.

Despite higher revenue, operating profit decreased to W79.0 billion from W86.2 billion as selling, general and administrative expenses increased. Profit for the year declined to W67.3 billion from W84.9 billion, and basic and diluted earnings per share fell to W9,709 from W12,221. The independent auditor issued an unqualified opinion under Korean IFRS.

Positive

  • None.

Negative

  • None.

Insights

Revenue grew double digits, but margins compressed and net profit declined.

Gravity delivered higher scale in 2025 with revenue of W560.5 billion, up from W500.8 billion, largely on stronger mobile game sales. Online and mobile titles together remain the core economic engine, with mobile contributing over four times online revenue.

However, operating profit slipped to W79.0 billion from W86.2 billion as selling, general and administrative expenses rose to W117.3 billion. Net profit fell to W67.3 billion from W84.9 billion, and earnings per share dropped to W9,709 from W12,221, indicating margin pressure even as top-line expanded.

The balance sheet stayed strong, with total assets of W742.7 billion, equity of W637.4 billion, and cash and cash equivalents of W203.6 billion. Future disclosures in company filings may clarify whether recent expense levels represent a new run-rate or reflect specific growth initiatives.

Total revenue W560,547,445 thousand Year ended December 31, 2025
Total revenue prior year W500,845,120 thousand Year ended December 31, 2024
Profit for the year W67,309,329 thousand Year ended December 31, 2025
Profit for the year prior W84,902,208 thousand Year ended December 31, 2024
Basic EPS W9,709 Attributable to owners, 2025
Total assets W742,661,863 thousand As of December 31, 2025
Total equity W637,366,761 thousand As of December 31, 2025
Cash and cash equivalents W203,599,414 thousand As of December 31, 2025
Korean IFRS financial
"in accordance with International Financial Reporting Standards as adopted by the Republic of Korea (Korean IFRS)."
micro-transaction revenue financial
"The Group recognizes micro-transaction revenue of online and mobile games when the Group satisfies its performance obligations."
deferred revenue financial
"The Group defers the revenue for remaining period of estimated user life cycle at the end of the reporting period."
Cash a company has already received for goods or services it has promised but not yet delivered; it's recorded as a liability because the company still owes that product, service, or future revenue recognition. For investors, deferred revenue signals upcoming work or deliveries that will convert into reported sales over time and affects short-term obligations, cash flow quality, and how quickly a firm can grow recognized revenue—think of it like prepaid subscriptions or gift cards a business must honor later.
expected credit losses financial
"The Group recognizes loss allowances for expected credit losses(“ECLs”) on financial assets measured at amortized cost;"
right-of-use assets financial
"The Group recognizes a right-of-use asset and a lease liability at the lease commencement date."
Right-of-use assets are the rights a company gains to use a physical space or equipment under a lease agreement. They are recorded as assets on the company's balance sheet, reflecting the value of future benefits from the leased item. For investors, these assets provide a clearer picture of a company's obligations and resources related to leasing arrangements, helping to assess its financial health and operational commitments.
non-controlling interests financial
"Total comprehensive income (loss) attributable to: Owners of the Parent Company … Non-controlling interests"
An ownership stake in a subsidiary held by outside shareholders rather than the parent company, representing the portion of that subsidiary’s assets and profits the parent does not control. For investors, it shows what part of consolidated earnings and equity belongs to others — like a roommate who owns part of a house — which affects how much value and profit per share are truly attributable to the parent company’s shareholders.
Form 6-K: How Foreign Companies Report to the SEC →

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of April 2026
Commission File Number 000-51138

GRAVITY Co., Ltd.
———————————————————————————————————————
(Translation of registrant’s name into English)

15F, 396 World Cup buk-ro, Mapo-gu, Seoul 03925, Korea
———————————————————————————————————————
(Address of principal executive office)


Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:  [x] Form 20-F    [ ] Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  [ ]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  [ ]






Samil PricewaterhouseCoopers, our independent auditor for the fiscal year ended December 31, 2025 and December 31, 2024 for our consolidated financial statements in conformity with International Financial Reporting Standards as adopted by the Republic of Korea, or Korean IFRS, have conducted audits and expressed opinions with regards to the consolidated statements of financial position of Gravity Co., Ltd. (the “Company”) and its subsidiaries as of December 31, 2025 and December 31, 2024 and the related consolidated statements of comprehensive income, changes in equity, and cash flows for the year ended at December 31, 2025 and December 31, 2024, expressed in Korean Won.

Samil PricewaterhouseCoopers, our independent auditor for the fiscal year ended December 31, 2025 and December 31, 2024 has also conducted audits and expressed opinions with regards to the separate statements of financial position of the Company as of December 31, 2025 and December 31, 2024 and the related separate statements of comprehensive income, changes in equity, and cash flows for the year then ended at December 31, 2025 and December 31, 2024 expressed in Korean Won.

The audited consolidated financial statements and the audited separate financial statements are attached hereto as Exhibit 99.1 and Exhibit 99.2, respectively, and are incorporated herein by reference.




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: April 10, 2026



Exhibit Index


Exhibit No.
Description
99. 1
The Company’s Korean IFRS Consolidated financial statements as of and for the years ended December 31, 2025 and December 31, 2024 and the independent auditor’s report
99. 2
The Company’s Korean IFRS Separate financial statements as of and for the years ended December 31, 2025 and December 31, 2024 and the independent auditor’s report








GRAVITY CO., LTD. and Subsidiaries

Consolidated Financial Statements

For the Years Ended December 31, 2025 and 2024

(With Independent Auditor’s Report Thereon)
    






Contents



Page

Independent Auditor’s Report    1
Consolidated Financial Statements
Consolidated Statements of Financial Position    3
Consolidated Statements of Comprehensive Income    5
Consolidated Statements of Changes in Equity    6
Consolidated Statements of Cash Flows    7
Notes to the Consolidated Financial Statements    8













Independent Auditor’s Report
English Translation of a Report Originally Issued in Korean

To the Board of Directors and Shareholders of Gravity Co., Ltd.:

Opinion
We have audited the consolidated financial statements of Gravity Co., Ltd. and its subsidiaries (collectively referred to as the ”Group”), which comprise the consolidated statements of financial position as at December 31, 2025 and 2024, and the consolidated statements of comprehensive income, consolidated statements of changes in equity and consolidated statements of cash flows for the years then ended, and notes to the consolidated financial statements, including material accounting policy information.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2025 and 2024, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with International Financial Reporting Standards as adopted by the Republic of Korea (Korean IFRS).
Basis for Opinion
We conducted our audit in accordance with Korean Standards on Auditing. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the ethical requirements of the Republic of Korea that are relevant to our audit of the consolidated financial statements and we have fulfilled our other ethical responsibilities in accordance with the ethical requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Other Matter
Auditing standards and their application in practice vary among countries. The procedures and practices used in the Republic of Korea to audit such consolidated financial statements may differ from those generally accepted and applied in other countries.
Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with Korean IFRS, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations.
Those charged with governance are responsible for overseeing the Group’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Korean Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
1

As part of an audit in accordance with Korean Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
∙Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
∙Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.
∙Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
∙Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.
∙Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
∙Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Samil PricewaterhouseCoopers


Seoul, Korea
March 19, 2026
This report is effective as of March 19, 2026, the audit report date. Certain subsequent events or circumstances, which may occur between the audit report date and the time of reading this report, could have a material impact on the accompanying consolidated financial statements and notes thereto. Accordingly, the readers of the audit report should understand that there is a possibility that the above audit report may have to be revised to reflect the impact of such subsequent events or circumstances, if any.



2
GRAVITY CO., LTD. and Subsidiaries
Consolidated Statements of Financial Position

As of December 31, 2025 and 2024


(In thousands of won)
Notes

December 31, 2025


December 31, 2024


Assets

Current assets
Cash and cash equivalents5,6,23W203,599,414  228,898,026 
Short-term financial instruments
623415,033,514 324,304,040 
Accounts receivable, net6,7,14,2356,318,021 81,152,458 
Other receivables, net6,7,232,904,339 1,572,182 
Prepaid expenses1413,765,956 8,115,292 
Other current financial assets6234,332,769 6,601,519 
Other current assets2,558,461 2,966,272 
698,512,474
653,609,789 
Non-current assets
Property and equipment, net82210,770,421 9,957,086 
Intangible assets, net97,156,933 7,056,548 
Other non-current financial assets6233,811,881 1,766,588 
Other non-current assets
10
15,201,009 8,451,443 
Deferred tax assets197,209,145 5,617,488 

44,149,389
32,849,153 
Total assets
W
742,661,863
686,458,942 




See accompanying notes to the consolidated financial statements.
3

GRAVITY CO., LTD. and Subsidiaries
Consolidated Statements of Financial Position, Continued

As of December 31, 2025 and 2024

(In thousands of won)
NotesDecember 31, 2025December 31, 2024

Liabilities
Current liabilities
Accounts payable
623W61,926,877 67,929,911 

Deferred revenue
1421,500,469 26,760,732 

Withholdings1,654,977 1,587,759 

Accrued expenses 6232,596,933 2,651,426 

Income tax payable
19
4,633,281 6,507,227 

Other current liabilities62,2233,717,779 3,211,752 

96,030,316 108,648,807 
Non-current liabilities
Long-term accounts payable623622,745 220,108 
Long-term deferred revenue14409,752 2,571,862 
Other non-current liabilities62,2236,495,937 5,361,025 
Deferred tax liabilities
19
1,736,352 1,293,681 
9,264,786 9,446,676 
Total liabilities
W105,295,102 118,095,483 

Equity
Equity attributable to owners of the Parent Company
Share capital
1133,474,450 3,474,450 
Capital surplus
1326,979,361 26,979,361 
Other components of equity
1325,523,046 23,800,551 
Retained earnings
13580,881,573 513,417,859 
Non-controlling interest
508,331 691,238 
Total equity
637,366,761 568,363,459 
Total liabilities and equity
W742,661,863 686,458,942 




See accompanying notes to the consolidated financial statements.
4

GRAVITY CO., LTD. and Subsidiaries
Consolidated Statements of Comprehensive Income

For the years ended December 31, 2025 and 2024
(In thousands of won, except per share amounts)Notes20252024
Revenues 142,425
  Online games
W
90,338,734  76,989,131 
  Mobile games 455,234,899 405,675,976 
 Other revenue
14,973,812 18,180,013 
560,547,445 500,845,120 
Cost of revenues 15364,267,566 306,903,066 
Gross profit196,279,879 193,942,054 
Selling, general and administrative expenses
1,516117,250,377 107,753,364 
Operating profit 2479,029,502 86,188,690 
Non-operating income and expenses
Finance income
61724,598,991 30,888,989 
Finance costs
617(11,056,235)(9,925,670)
Other non-operating income
18312,765 788,898 
Other non-operating expenses
18(1,946,360)(1,593,873)
Profit before income tax expense90,938,663 106,347,034 
Income tax expense 1923,629,334 21,444,826 
Profit for the yearW67,309,329  84,902,208 
Profit (loss) attributable to:
Owners of the Parent CompanyW67,463,714 84,919,277 
Non-controlling interests(154,385)(17,069)
Other comprehensive income
Items that are or may be reclassified subsequently to profit or loss


1,670,895 19,825,684 
Foreign currency translation adjustments
1,705,016 
19,768,017
Non-controlling interest in foreign currency translation adjustment
(34,121)57,667 
Items that will not be reclassified to profit or loss
23,076 23,954 
Remeasurement of defined benefit liabilities
17,478 15,999 
Non-controlling interest in remeasurement of defined benefit liabilities
5,598 7,955 
Total comprehensive income for the year
W
69,003,300 104,751,846 
Total comprehensive income (loss) attributable to:
Owners of the Parent Company
W69,186,208 104,703,293 
Non-controlling interests
(182,908)48,553 
Earnings per share attributable to the equity holders of the Parent Company
Basic earnings per share (in won)
20W9,709 12,221 
Diluted earnings per share (in won)
20W9,709 12,221 



See accompanying notes to the consolidated financial statements.
5
GRAVITY CO., LTD. and Subsidiaries
Consolidated Statements of Changes in Equity

For the years ended December 31, 2025 and 2024


(In thousands of won)
Equity attributable to owners of the Parent Company
Notes
Share
capital
Capital
surplus
Other components of equityRetained earningsSub totalNon-controlling interests
Total equity
Balance at January 1, 2024W3,474,450 27,098,264 4,016,535 428,498,582 463,087,831 640,131 463,727,962 
Profit for the year
- - - 84,919,277 84,919,277 (17,069)84,902,208 
Remeasurements of defined benefit liabilities
- - 15,999 - 15,999 7,955 23,954 
Foreign currency translation adjustments
- - 19,768,017 - 19,768,017 57,667 19,825,684 
Transactions with Owners:
Capital contribution from non-controlling interests
- (13,001)- - (13,001)(3,008)(16,009)
Transactions with non-controlling interests
- (105,902)- - (105,902)5,562 (100,340)
Balance at December 31, 2024W3,474,450 26,979,361 23,800,551 513,417,859 567,672,221 691,238 568,363,459 
Balance at January 1, 2025W3,474,450 26,979,361 23,800,551 513,417,859 

567,672,221 691,238 568,363,459 
Total comprehensive income:

Profit for the year
- - - 67,463,714 

67,463,714 (154,385)67,309,329 
Remeasurements of defined benefit liabilities
- - 17,479 - 17,479 5,598 23,077 
Foreign currency translation adjustments

- - 1,705,016 - 1,705,016 (34,120)
1,670,896
Balance at December 31, 2025W3,474,450 26,979,361 25,523,046 580,881,573 636,858,430 508,331 637,366,761 



See accompanying notes to the consolidated financial statements.
6
GRAVITY CO., LTD. and Subsidiaries
Consolidated Statements of Cash Flow

For the years ended December 31, 2025 and 2024
(In thousands of won)Notes20252024
Cash flows from operating activities







Profit for the year


W
67,309,329 


84,902,208 
Adjustments
21


24,140,164 


14,492,995 
Changes in operating assets and liabilities
21


(5,376,285)


(3,821,168)
Interest received



16,550,426 


15,053,915 
Interest paid



(271,969)


(130,027)
Income taxes paid



(26,259,448)


(31,942,749)
Net cash provided by operating activities



76,092,217 


78,555,174 







Cash flows from investing activities






Decrease in other current financial asset



8,333 


6,667 
Proceeds from disposal of property and equipment
8


1,503


6,673 
Decrease in other non-current financial assets



44,211 


8,496　
Increase in short-term financial instruments



(89,633,165)


(42,264,550)
Purchase of property and equipment
8


(1,055,422)


(613,947)
Purchase of intangible assets
9


(5,266,047)


(4,147,357)
  Increase in other non-current financial assets



(751,076)


(30,374)
Net cash used in investing activities



(96,651,663)


(47,034,392)







Cash flows from financing activities






Repayment of lease liabilities
22


(4,514,664)(4,525,288)
Cost of issuing shares of subsidiaries



- (16,009)
Acquisition of non-controlling interests



- (100,339)
Net cash used in financing activities



(4,514,664)


(4,641,636)







Effects of exchange rate changes on cash and cash equivalents


(224,502)


17,937,065 
Net increase (decrease) in cash and cash equivalents



(25,298,612)


44,816,211 
Cash and cash equivalents at beginning of the year



228,898,026 


184,081,815 
Cash and cash equivalents at end of the year


W
203,599,414 


228,898,026 


See accompanying notes to the consolidated financial statements.
    
7
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
1. General Information
(1) The Parent Company
GRAVITY CO., LTD. (“the Parent Company”) was incorporated on April 4, 2000, to engage in developing and publishing online and mobile games, and other related business. The Parent Company’s headquarter is located at 15F, 396 World Cup buk-ro, Mapo-gu, Seoul, Korea. The Parent Company’s principal game product, “Ragnarok”, a massive multi-player online role-playing game, was commercially launched in August 2002, and currently operated internationally in 91 markets. The Parent Company also operates many other games.
On February 8, 2005, the Parent Company listed its shares on the Nasdaq Stock Market in the United States, and issued 1,400,000 shares of common stocks in the form of American Depositary shares (“ADSs”) under the symbol “GRVY”.
As of December 31, 2025, the Parent Company’s total paid-in capital amounts to W3,474,450 thousand. The Parent Company’s major shareholders and their respective percentage of ownership as of December 31, 2025 are as follows:

Number of shares

Ownership (%)
GungHo Online Entertainment, Inc.

4,121,737
59.31
Others

2,827,163
40.69

6,948,900
100.00
(2) Consolidated subsidiaries
Details of the consolidated subsidiaries as of December 31, 2025 and 2024 are as follows:




Percentage of ownership (%)
Subsidiaries
Location
Main business
Fiscal
year end
December 31, 2025

December 31, 2024
Gravity Interactive, Inc.
USA

Online and mobile game services
December

100
100
Gravity NeoCyon, Inc. (*)
Korea

Mobile Game Development and Service

December

100
100
Gravity Communications Co., Ltd.
Taiwan

Online and mobile game services
December

100
100
PT. Gravity Game Link.
Indonesia

Online and mobile game services

December

70
70
Gravity Game Tech Co., Ltd.
Thailand

Online and mobile game services

December

100
100
Gravity Game Arise Co., Ltd.
Japan

Online and mobile game services

December

100
100
Gravity Game Hub PTE., Ltd.
Singapore

Online and mobile game services

December

100
100
Gravity Game Vision Limited.
Hong Kong

Online and mobile game services

December

100
100
Gravity Game Unite SDN. BHD.
Malaysia

Online and mobile game services

December

100
-

(*) Gravity Game Unite SDN. BHD was established in March 2025 and was included as a subsidiary for the year ended December 31, 2025.
8
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
1. General Information, Continued
(3) Condensed financial information of subsidiaries as of and for the years ended December 31, 2025 and 2024 are as follows:
(In thousands of won)

2025
Subsidiaries
Total
assets(*)

Total
liabilities(*)

Revenues(*)


Profit (loss)
for the period(*)
Gravity Interactive, Inc.
W42,811,520 

29,821,998 

193,942,577 


2,016,809 
Gravity NeoCyon, Inc.


14,586,231 


3,380,018 18,287,248 487,256 
Gravity Communications Co., Ltd.


33,271,379 


8,164,808 45,735,096 5,846,620 
PT. Gravity Game Link.


2,429,974 


735,538 2,961,141 (514,617)
Gravity Game Tech Co., Ltd.


66,438,880 


12,474,843 46,040,690 9,776,017 
Gravity Game Arise Co., Ltd.


11,527,830 


5,729,683 14,995,225 (2,513,369)
Gravity Game Hub PTE., Ltd.


52,912,619 


9,761,767 74,135,929 1,346,603 
Gravity Game Vision Limited


51,911,717 


19,013,461 94,875,222 11,296,112 
Gravity Game Unite SDN. BHD.


945,080 


431,236 28,194 (265,995)

(*1) Amounts before eliminating intercompany transactions.

(In thousands of won)

2024
Subsidiaries
Total
assets(*)

Total
liabilities(*)

Revenues(*)


Profit (loss)
for the period(*)
Gravity Interactive, Inc.
W28,078,172 

16,855,468 

39,938,248 


73,691 
Gravity NeoCyon, Inc.

15,000,011 4,281,053 20,315,748 1,771,492 
Gravity Communications Co., Ltd.

27,121,263 6,687,225 35,188,837 1,754,375 
PT. Gravity Game Link.

2,693,086 366,844 1,475,922 (50,963)
Gravity Game Tech Co., Ltd.

72,122,833 23,779,945 48,771,433 6,860,364 
Gravity Game Arise Co., Ltd.

7,712,161 1,192,327 5,574,326 (6,237,282)
Gravity Game Hub PTE., Ltd.

68,727,648 13,683,947 89,256,880 13,815,260 
Gravity Game Vision Limited.

72,467,900 26,755,643 160,067,411 21,945,899 

(*1) Amounts before eliminating intercompany transactions.
9
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
2. Basis of Presentation
The consolidated financial statements have been prepared in accordance with Korean International Financial Reporting Standards (“K-IFRS”), as prescribed in the Act on External Audits of Stock Companies, Etc. in the Republic of Korea. The accompanying consolidated financial statements have been restructured and translated into English from the Korean language financial statements.
Certain information attached to the Korean language financial statements, but not required for a fair presentation of the Gravity Co., Ltd. and its subsidiaries (the "Group") financial position, financial performance or cash flows, is not presented in the accompanying consolidated financial statements.
These consolidated financial statements were authorized for issuance by the Board of Directors on March 6, 2026, and are expected to be submitted for approval at the shareholders’ meeting to be held on March 27, 2026.

(1) Basis of measurement
The consolidated financial statements have been prepared on the historical cost basis.
(2) Use of judgments and estimates
The preparation of the consolidated financial statements in conformity with K-IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
The estimates and assumptions that have significant risk of affecting the carrying amounts of assets and liabilities for the reporting period are as follows: 
(a) Deferred revenue
The Group sells virtual currency and paid content that game users can use in mobile games. To recognize revenue generated from game users' microtransactions, the Group estimates and applies the game users' life cycle. The game user life cycle is calculated for game users with a payment history by averaging the connection period from the date of the first payment to the date of the last connection of the relevant game users.
The Group considers a user to be an active user if the period between the game user's most recent connection date and the end of the reporting period is equal to or shorter than the expected game user's life cycle. Within the life cycle estimated in this manner, the Group estimates deferred revenue by classifying items held by active users as of the end of the reporting period by their attributes. To estimate the expected period of use, the Group analyzes behavioral patterns such as game users' payments and connections to estimate the period of use, and periodically reviews whether there are changes in these estimates.
10
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
3. New Standards and Interpretations Adopted During the Year and Resulting Changes in Accounting Policies
The Group has applied the following standards and amendments for the first time for the annual reporting period commencing on January 1, 2025.
(1) Amendments to K-IFRS No. 1021 ‘The Effects of Changes in Foreign Exchange Rates’ - Lack of Exchangeability.
It requires an entity to assess the exchangeability of a currency and, if it is not exchangeable into another currency, to estimate the spot exchange rate and disclose relevant information. The amendments to these standards do not have a material impact on the financial statements.
4. Significant Accounting Policies
The principal accounting policies applied in the preparation of these consolidated financial statements in accordance with the K-IFRS are set out below. These policies have been consistently applied to all years presented, except if mentioned otherwise in Note 3.
(1) Consolidation
The Group has prepared the consolidated financial statements in accordance with K-IFRS No. 1110 Consolidated Financial Statements.
Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are consolidated from the date on which control is obtained by the Group. They are deconsolidated from the date on which control ceases.
The acquisition method of accounting is used to account for business combinations by the Group. The consideration transferred is measured at the fair values of the assets transferred, and identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group recognizes any non-controlling interest in the acquired entity on an acquisition-by-acquisition basis at the non-controlling interest’s proportionate share of the acquired entity’s net identifiable assets. Acquisition-related costs are expensed as incurred.
The excess of consideration transferred, amount of any non-controlling interest in the acquired entity and acquisition-date fair value of any previous equity interest in the acquired entity over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is recognized directly in the profit as a bargain purchase.
Intercompany transactions, balances and unrealized gains on transactions between consolidated companies are eliminated. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.
11
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
4. Significant Accounting Policies, Continued
(2) Segment reporting
Information of each operating segment is reported in a manner consistent with the internal business segment reporting provided to the chief operating decision-maker (Note 24). The chief operating decision-maker is responsible for allocating resources and assessing performance of the operating segments.
(3) Cash and Cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with financial institutions, and other short-term investments with original maturities of three months or less that are readily convertible to known amounts of cash.
(4) Financial Assets
(a) Classification
At initial recognition, the Group classifies its financial assets in the following measurement categories:
measured at fair value through profit or loss;
measured at fair value through other comprehensive income; and
measured at amortized cost.
The classification depends on the Group’s business model for managing the financial assets and the contractual terms of the cash flows.

For financial assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income. For investments in debt instruments, this will depend on the business model in which the investment is held. The Group reclassifies debt investments when, and only when its business model for managing those assets changes.
For investments in equity instruments that are not held for trading, this will depend on whether the Group has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income. Changes in fair value of equity instruments not elected as equity investment at fair value through other comprehensive income will be recognized in profit or loss.
(b) Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, for a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.
Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest.
12
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
4. Significant Accounting Policies, Continued
(4) Financial Assets, Continued
(b) Measurement, Continued
(i) Debt instruments
Subsequent measurement of debt instruments depends on the Group’s business model for managing the asset and the cash flow characteristics of the asset. The Group classifies its debt instruments into one of the following three measurement categories:
Amortized cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. A gain or loss on a debt investment that is subsequently measured at amortized cost and is not part of a hedging relationship is recognized in profit or loss when the asset is derecognized or impaired. Interest income from these financial assets is included in ‘finance income’ using the effective interest rate method.
Fair value through other comprehensive income: Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash flows represent solely payments of principal and interest, are measured at fair value through other comprehensive income. Movements in the carrying amount are taken through other comprehensive income, except for the recognition of impairment loss (reversal of impairment loss), interest income and foreign exchange gains and losses which are recognized in profit or loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss. Interest income from these financial assets is included in ‘finance income’ using the effective interest rate method. Foreign exchange gains and losses are presented in ‘finance income or costs’ and impairment losses are presented in ‘other non-operating expenses’.
Fair value through profit or loss: Assets that do not meet the criteria for amortized cost or fair value through other comprehensive income are measured at fair value through profit or loss. A gain or loss on a debt investment that is subsequently measured at fair value through profit or loss and is not part of a hedging relationship is recognized in profit or loss and presented net in the statement of profit or loss within ‘finance income or costs’ in the year in which it arises.
13
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
4. Significant Accounting Policies, Continued
(4) Financial Assets, Continued
(b) Measurement, Continued
(ii) Equity instruments
The Group subsequently measures all equity investments at fair value. Where the Group’s management has elected to present fair value gains and losses on equity investments, which are held for long-term investment or strategic purpose, in other comprehensive income. There is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment.
Changes in the fair value of financial assets at fair value through profit or loss are recognized in ‘other non-operating income or expenses’ in the statement of profit or loss as applicable. Impairment loss (reversal of impairment loss) on equity investments measured at fair value through other comprehensive income are not reported separately from other changes in fair value.
(c) Impairment
The Group recognizes loss allowances for expected credit losses(“ECLs”) on:
financial assets measured at amortized cost;
debt investments measured at fair value through other comprehensive income; and
contract assets under K-IFRS No. 1115.
The Group measures loss allowances at an amount equal to lifetime ECLs, except for the following, which are measured at 12-month ECLs:
debt securities that are determined to have low credit risk at the reporting date; and
other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.
Loss allowances for accounts and other receivables (including lease receivables) and contract assets are always measured at an amount equal to lifetime ECLs.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group’s historical experience and informed credit assessment, that includes forward-looking information.
14
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
4. Significant Accounting Policies, Continued
(4) Financial Assets, Continued
(c) Impairment, Continued
The Group considers a financial asset to be in default when:
the debtor is unlikely to pay its obligations to the Group in full, without recourse by the Group to actions such as realizing security (if any is held); or
the financial asset is more than 90 days past due.
Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.
12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).
The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk.
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Group expects to receive). ECLs are discounted at the effective interest rate of the financial asset.
At each reporting date, the Group assesses whether financial assets carried at amortized cost and debt securities at fair value through other comprehensive income are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.
Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets. For debt securities at fair value through other comprehensive income, the loss allowance is charged to profit or loss.
15
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
4. Significant Accounting Policies, Continued
(4) Financial Assets, Continued
(d) Recognition and Derecognition
Regular way purchases and sales of financial assets are recognized or derecognized on trade-date, the date on which the Group commits to purchase or sell the asset. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.
If a transfer does not result in derecognition because the Group has retained substantially all the risks and rewards of ownership of the transferred asset, the Group continues to recognize the transferred asset in its entirety and recognizes a financial liability for the consideration received.
(e) Offsetting of financial instruments
Financial assets and liabilities are offset and the net amount reported in the consolidated statements of financial position where there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the assets and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Group or the counterparty.
(5) Accounts receivable
Account receivable are recognized initially at the amount of consideration that is unconditional, unless they contain significant financing components in which case they are recognized at fair value. Account receivable are subsequently measured at amortized cost using the effective interest method, less loss allowance.
(6) Property and Equipment
Property and equipment are initially measured at cost. The cost of property and equipment includes expenditures arising directly from the construction or acquisition of the asset, any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management, and the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located.
16
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
4. Significant Accounting Policies, Continued
(6) Property and Equipment, Continued
Property and equipment, subsequently, are carried at cost less accumulated depreciation and accumulated impairment losses.
Subsequent costs are recognized in the carrying amount of property and equipment at cost or, if appropriate, as a separate item if it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be reliably measured.
Depreciation of all property and equipment, except for land, is calculated using the straight-line method to allocate their cost or revalued amounts, net of their residual values, over their estimated useful lives as follows:
Estimated Useful Lives
Computer and other equipment4 years
Furniture and fixture4 years
Vehicles4 years
Leasehold improvements(*)
Right-of-use assets(*)

(*) The Group depreciates Right-of-use asset and the Leasehold improvements from the commencement date and the available date to the earlier date between the end of the lease term and the expiration date of Right-of-use asset’s useful life using the straight-line method.
Depreciation methods, useful lives, and residual values are reviewed at the end of each reporting date and adjusted, if appropriate. The change is accounted for as a change in an accounting estimate.
(7) Intangible Assets
Intangible assets, except for goodwill, are initially recognized at its historical cost, and carried at cost less accumulated amortization and accumulated impairment losses.
The Group amortizes intangible assets with a limited useful life using the straight-line method over the following periods:
Estimated Useful Lives
Software1~3 years
Industrial property rights10 years
Other intangible assets1~5 years
Expenditure on research activities is recognized in profit or loss as incurred. Development expenditure is capitalized only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable and the Group intends to and has sufficient resources to complete development and to use or sell the asset. Other development expenditure is recognized in profit or loss as incurred.
17
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
4. Significant Accounting Policies, Continued
(7) Intangible Assets, Continued
The Group entered into a game licensing agreement with a number of third parties to gain exclusive rights to the games developed by those companies. The license fee payments are recognized as other intangible assets and amortized over the term of the contract using the straight-line method.
(8) Impairment of Non-financial Assets
At each reporting date, the Group reviews the carrying amounts of its non-financial assets (other than contract assets, incremental costs of obtaining a contract, costs to fulfil a contract, employee benefit related assets and deferred tax assets) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill and intangible assets that have indefinite useful lives or that are not yet available for use, irrespective of whether there is any indication of impairment, are tested for impairment annually by comparing their recoverable amounts to their carrying amounts.
The recoverable amount of an asset or cash generating unit (“CGU”) is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using an adjusted discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognized in profit or loss if the carrying amount of an asset or CGU exceeds its recoverable amount.
(9) Leases
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group uses the definition of a lease in K-IFRS No. 1116.

(a) As a lessee
At commencement or on modification of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of its relative stand-alone prices. However, the Group has elected not to separate non-lease components and account for the lease and non-lease components as a single lease component by class of underlying asset.
The Group determines the lease term as the non-cancellable period of a lease, together with both (a) periods covered by an option to extend the lease if the lessee is reasonably certain to exercise that option; and (b) periods covered by an option to terminate the lease if the lessee is reasonably certain not to exercise that option. When the lessee and the lessor each has the right to terminate the lease without permission from the other party, the Group should consider a termination penalty in determining the period for which the contract is enforceable.
18
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
4. Significant Accounting Policies, Continued
(9) Leases, Continued
(a) As a lessee, Continued
The Group recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain re-measurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.
The Group determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased.

Lease payments included in the measurement of the lease liability comprise the following:
•fixed payments, including in-substance fixed payments;
•variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
•amounts expected to be payable under a residual value guarantee; and
•the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Group is reasonably certain not to terminate early.
The lease liability is measured at amortized cost using the effective interest method. It is re-measured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee, if the Group changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.
19
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
4. Significant Accounting Policies, Continued
(9) Leases, Continued
(a) As a lessee, Continued
When the lease liability is re-measured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The Group presents right-of-use assets that do not meet the definition of investment property in ‘Property and equipment’ and lease liabilities in ‘Other current liabilities’ and ‘Other non-current liabilities’ in the consolidated statement of financial position.
The Group has elected not to recognize right-of-use assets and lease liabilities for leases of low-value assets and short-term leases. The Group recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.
(b) As a lessor
At inception or on modification of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices.
When the Group acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating lease.
To classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then it is an operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset.
When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Group applies the exemption described above, then it classifies the sub-lease as an operating lease.
If an arrangement contains lease and non-lease components, then the Group applies K-IFRS No. 1115 to allocate the consideration in the contract.
The Group applies the de-recognition and impairment requirements in K-IFRS No. 1109 to the net investment in the lease. The Group further regularly reviews estimated unguaranteed residual values used in calculating the gross investment in the lease.
The Group recognizes lease payments received under operating leases as income on a straight-line basis over the lease term as part of ‘non-operating income’.
20
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
4. Significant Accounting Policies, Continued
(10) Financial Liabilities
(a) Classification and measurement
The Group’s financial liabilities at fair value through profit or loss are financial instruments held for trading. A financial liability is held for trading if it is incurred principally for the purpose of repurchasing in the near term. A derivative that is not designated as a hedging instruments and an embedded derivative that is separated are also classified as held for trading.
The Group classifies non-derivative financial liabilities, except for financial liabilities at fair value through profit or loss, financial guarantee contracts and financial liabilities that arise when a transfer of financial assets does not qualify for de-recognition, as financial liabilities carried at amortized cost and present as ‘accounts payable’, ‘other current liabilities’ and ‘other non-current liabilities’ in the consolidated statement of financial position.
(b) De-recognition
Financial liabilities are removed from the consolidated statement of financial position when it is extinguished; for example, when the obligation specified in the contract is discharged or cancelled or expired or when the terms of an existing financial liability are substantially modified. The difference between the carrying amount of a financial liability extinguished or transferred to another party and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.
(11) Provisions and Contingent Liabilities
Provisions are recognized when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated.
Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value reflects current market assessments of the time value of money and the risks specific to the liability.
In addition, when there is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity or a present obligation that arises from past events but is not recognized because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation or the amount of the obligation cannot be measured with sufficient reliability, a disclosure regarding the contingent liabilities is made in the notes to the financial statements.
21
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
4. Significant Accounting Policies, Continued
(12) Foreign Currency Translation
(a) Functional and presentation currency
Items included in the consolidated financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which each entity operates (the “functional currency”). The consolidated financial statements are presented in Korean won, which is the Parent Company’s functional and presentation currency.
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the exchange rate at the reporting date are generally recognized in profit or loss. They are recognized in other comprehensive income if they relate to qualifying cash flow hedges and qualifying effective portion of net investment hedges in a foreign operation.
Exchange differences arising on non-monetary financial assets and liabilities such as equity instruments at fair value through profit or loss and equity instruments at fair value through other comprehensive income are recognized in profit or loss and other comprehensive income, respectively, as part of the fair value gain or loss.
(13) Statement of cash flows
The Group has elected to present cash flows from operating activities using the indirect method. Cash flows denominated in a foreign currency are reported using average exchange rate.
(14) Revenues from contracts with customers
The Group engages in game licensing, IP licensing and game publishing businesses.
Revenue is measured at the fair value of the consideration received or receivable for the sale of goods or rendering of services arising from the normal course of the business. Amounts recognized as revenue are net of value added taxes, returns, rebates and discounts.
22
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
4. Significant Accounting Policies, Continued
(14) Revenues from contracts with customers, Continued
(a) Revenue from micro-transaction and subscription
The Group recognizes micro-transaction revenue of online and mobile games when the Group satisfies its performance obligations.
Whether the performance obligations are satisfied depends on the natures of virtual currency and in-game virtual items. Items are categorized into consumable, periodic, and permanent in-game virtual items.
Consumable in-game virtual items are items that are consumed by the specific action of a game user, and periodic in-game virtual items are items that can be used repeatedly during a specified effective period. Permanent in-game virtual items are items that can be used by game users repeatedly without an effective period.
The accounting policy on revenue recognition is described below in relation to micro-transaction revenue from the sales of virtual currency and items.
(i) Online Games
The specific method of recognizing and deferring revenue for virtual currency and consumable, periodic, and permanent items purchased with virtual currency is as follows.
At the end of the reporting period, the Group defers the total amount of remaining virtual currency.
For consumable in-game virtual items, the related revenue is recognized when the in-game virtual item is consumed. The Group defers the revenue for remaining amounts of virtual items owned by active paying users within the estimated user life cycle at the end of the reporting period.
For periodic in-game virtual items, the related revenue is recognized ratably over the effective period. The Group defers the revenue for remaining effective period.
For permanent in-game virtual items, revenue is recognized ratably over the estimated user life cycle. The Group defers the revenue for remaining period of estimated user life cycle at the end of the reporting period.
(ii) Mobile Games
The specific method of recognizing and deferring revenue for virtual currency and consumable, periodic, and permanent items purchased with virtual currency is as follows.
Mobile game users purchase virtual currency that can be used to purchase in-game items. The Group has no refund obligation after the game users purchase virtual currency.
At the end of the reporting period, the Group defers the revenue for the remaining virtual currency possessed by active paying users.
23
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
4. Significant Accounting Policies, Continued
(14) Revenues from contracts with customers, Continued
(a) Revenue from micro-transaction and subscription, Continued
(ii) Mobile Games, Continued
For consumable in-game virtual items, revenue is recognized when the in-game virtual item is consumed. The Group defers the revenue for remaining virtual items possessed by active users within the estimated user life cycle at the end of the reporting period.
For periodic in-game virtual items with effective period, revenue is recognized ratably over the effective period. The Group defers the revenue for remaining effective period.
For permanent in-game virtual items, revenue is recognized ratably over the estimated user life cycle. The Group defers the revenue for remaining period of estimated user life cycle at the end of the reporting period.
(b) Royalties and License Fees
In connection with the Group’s online and mobile games, the Group enters into license agreements in connection with the right to access the intellectual property, such as game character images and stories. The Group believes that the agreement is a promise to provide a right to the customer to access the related IP because the Group will undertake activities that significantly affect the intellectual property to which the customer has rights, the rights granted by the license directly expose the customer to any positive or negative effects of the Group’s activities, and those activities do not result in the transfer of a good or a service to the customer as those activities occur. Therefore, the Group’s performance obligations in connection with these agreements are satisfied over time.
Since the nature of the license promise is to provide customers with access to the intellectual property of the Group during the license period, the Group's performance obligation corresponds to the performance obligation satisfied over time, and revenue is recognized over the license period. The Group recognizes revenue for the license fee through the straight-line method during the contract period, and for the running royalty revenue, the revenue is recognized on an accrual basis at the time the revenue distribution is established in accordance with the terms of the contract. When the running royalty revenue based on the contractual royalty rate and the actual revenue of the licensee exceeds the ratably recognized minimum guarantee, the excess amount is then recognized as revenue and accounts receivable.
(c) Other revenue
Other revenue consists of revenue from sales of console games, game character merchandise, animation and other services, including website development and operation services for third parties. Revenues from development and operation services for third parties are recognized over time by measuring progress towards complete satisfaction of a performance obligation.
24
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
4. Significant Accounting Policies, Continued
(14) Revenues from contracts with customers, Continued
(d) Incremental costs of obtaining contract
The Group pays platform processing fees to operate mobile games on third party platforms. These fees are charged based on the game users’ purchases in cash and considered as incremental cost of obtaining contracts with customers and therefore capitalized. The Group presents these costs as prepaid expense and amortizes them to costs of revenue at the same time when the related revenue of the services provided to the game users are recognized.
(15) Current and Deferred Tax
The tax expense for the period consists of current and deferred tax. Current and deferred tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. The tax expense is measured at the amount expected to be paid to the taxation authorities, using the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation, and considers whether it is probable that a taxation authority will accept an uncertain tax treatment. The Group measures its tax balances either based on the most likely amount or the expected value, depending on which method provides a better prediction of the resolution of the uncertainty.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.
Deferred tax assets are recognized only if it is probable that future taxable amounts will be available to utilize those temporary differences and tax credit.
The Group recognizes a deferred tax liability for all taxable temporary differences associated with investments in subsidiaries, associates, and interests in joint arrangements, except to the extent that the Group is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. In addition, the Group recognizes a deferred tax asset for all deductible temporary differences arising from such investments to the extent that it is probable the temporary difference will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilized.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis.
25
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
4. Significant Accounting Policies, Continued
(16) Employee Benefits
(a) Short-term employee benefits
Short-term employee benefits are employee benefits that are due to be settled within 12 months after the end of the period in which the employees render related services. When an employee has rendered a service to the Group during an accounting period, the Group recognizes the undiscounted amount of short-term employee benefits expected to be paid in exchange for that service.
(b) Post-employment benefits
The Group’s retirement pension plans are divided into defined contribution plans and defined benefit plans.
The Group has a defined contribution pension plan with the related contribution to the pension plan recorded as severance benefit expenses for the employees with service period over a year. The Group recognizes provision for severance benefits for the employees with service period less than a year.
A defined benefit plan is a pension plan that is not a defined contribution plan. Generally, post-employment benefits are payable after the completion of employment, and the benefit amount depends on the employee’s age, periods of service or salary levels. The liability recognized in the statement of financial position in respect of defined benefit pension plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms approximating to the terms of the related obligation. Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly in other comprehensive income. Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognized immediately in profit or loss as past service costs.
26
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
4. Significant Accounting Policies, Continued
(17) Standards issued but not yet effective
A number of new standards are effective for annual periods beginning after January 1, 2025 and earlier application is permitted; however, the Group has not early adopted the new or amended standards in preparing these consolidated financial statements.
The following new and amended standards and interpretations are not expected to have a significant impact on the Group’s consolidated financial statements.
•Classification and Measurement of Financial Instruments (Amendment to K-IFRS 1109 ‘Financial Instruments’ and K-IFRS 1107 ‘Financial Instruments: Disclosures’)
•Annual Improvements to IFRS Accounting Standards
-K-IFRS 1101 ‘First-time adoption of International Financial Reporting Standards’;
-K-IFRS 1107 ‘Financial instruments: Disclosures’;
-K-IFRS 1109 ‘Financial instruments’;
-K-IFRS 1110 ‘Consolidated Financial Statements’ ; and
-K-IFRS 1007 ‘Statement of cash flows’
•K-IFRS 1118 Presentation and Disclosure in Financial Statements

5. Cash and cash equivalents
(1) Cash and cash equivalents as of December 31, 2025 and 2024 are as follows:
(In thousands of won)
December 31, 2025
December 31, 2024
Demand deposits, etc.W203,599,414 228,898,026 
(2) The Group does not have any restricted cash and cash equivalents as of December 31, 2025 and 2024.
27
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
6. Financial Instruments by Category

(1) Carrying amounts of financial instruments by category as of December 31, 2025 and 2024 are as follows:
(In thousands of won)


December 31, 2025
December 31, 2024
Financial assets at amortized cost
Cash and cash equivalents

W
203,599,414
　

228,898,026
Short-term financial instruments


415,033,514
　

324,304,040
Accounts receivable, net


56,318,021
　

81,152,458
Other receivables, net


531,784
　

15,557
Other current financial assets(*1)


4,332,769
　

6,601,519
Other non-current financial assets(*2)


3,211,881
　

1,766,588
Financial assets at fair value through profit or loss






Non-current financial assets measured at fair value (*3)


600,000


-


W
683,627,383
　

642,738,188
Since the carrying amount is a reasonable approximation of fair value, it has been excluded from the fair value disclosure.

(*1) Other current financial assets consist of accrued income and deposits.
(*2) Other non-current financial assets consist of deposits.
(*3) Long-term financial assets measured at fair value consist of convertible bonds and are included in other non-current financial assets.


(In thousands of won)December 31, 2025December 31, 2024
Financial liabilities at amortized cost
Accounts payable

W
56,061,346
　
63,327,918
Long-term accounts payable


622,745

220,108
Accrued expenses(*1)


385,363

312,563
Other financial liabilities



　

lease liabilities(*2)


8,311,560

7,121,523


W
65,381,014
　
70,982,112
Since the carrying amount is a reasonable approximation of fair value, it has been excluded from the fair value disclosure.

(*1) Annual leave allowance, bonus accruals, etc. that should be paid to employees are excluded.
(*2) Lease liabilities were excluded from fair value disclosures in accordance with K-IFRS No. 1107 'Financial Instruments: Disclosures.'
28
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
6. Financial Instruments by Category, Continued
(2) Net income(expenses) from financial instruments for the years ended December 31, 2025 and 2024 are as follows:
(In thousands of won)20252024
Financial assets at amortized cost

　
Interest income
W
15,821,425 　17,058,776 
Differences in foreign currency
(4,218,327)　5,813,143 

11,603,098 22,871,919 
Financial assets at fair value through profit or loss
Interest income
633 - 
W
11,603,731 　22,871,919 

(In thousands of won)20252024
Financial liabilities at amortized cost

Differences in foreign currency
W
2,220,834 　(1,773,223)
Other financial liabilities

 Interest expense
(281,809)(135,377)
W
1,939,025 　(1,908,600)

(3) Fair value hierarchy
Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:
•Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
•Level 2: all inputs other than quoted prices included in level 1 that are observable (either directly that is, prices, or indirectly that is, derived from prices) for the assets or liabilities;
•Level 3: unobservable inputs for the assets or liabilities.
The fair value of financial instruments traded in an active market is determined based on the quoted market price as of the end of the reporting period. If the quoted prices are readily and regularly available through exchanges, sellers, brokers, industry groups, rating agencies or regulators and such prices represent actual market transactions that occur regularly between independent parties, they are considered active markets. These products are included in Level 1.
The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. These valuation techniques use as much market observable information as possible and use the least amount of company-specific information. At this time, if all the significant input variables required to measure the fair value of a instrument are observable, the instrument is included in Level 2.
If more than one significant input variable is not based on observable market information, the item is included in Level 3.
29
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
6. Financial Instruments by Category, Continued
(3) Fair value hierarchy, Continued
The valuation techniques used to measure the fair value of a financial instrument include:
- Market price or dealer price of a similar financial instrument
- The fair value of derivative instruments is determined by discounting the amount to present value using the prevailing exchange rate as of the end of the reporting period
For the other financial instruments, the Group applied other valuation techniques such as discounted cash flow, etc.

The following table presents the amounts by fair value hierarchy as of the end of the current reporting period

Level 1
Level 2
Level 3Total
Fair value measurements
Long-term financial assets measured at fair value- - 600,000 600,000 

7. Accounts and Other Receivables
(1) Accounts and other receivables as of December 31, 2025 and 2024 are as follows:
(In thousands of won)

December 31, 2025

December 31, 2024


Accounts
receivables

Other receivables

Accounts
receivables

Other receivables
Non-related party

W
55,399,927 2,904,557 78,368,067 1,577,283 
Related party


1,537,483 - 3,334,062 - 
Less: Loss allowance

(619,389)(218)　(549,671)(5,101)
Accounts and other receivables, net

W
56,318,021 2,904,339 　81,152,458 1,572,182 
(2) Changes in the loss allowance
of accounts and other receivables during the years ended December 31, 2025 and 2024 are as follows:
(In thousands of won)

2025

2024



Accounts
receivables

Other receivables

Accounts
receivables

Other receivables
Beginning balance

W
549,671 5,101 625,940 5,092 
Bad debt expenses


757,099 (4,883)588,809 9 
Write-off

(687,381)- 　(665,078)- 
Ending balance

W
619,389 218 　549,671 5,101 

30
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
7. Accounts and Other Receivables, Continued
(3) Expected credit losses (ECLs) and credit risk exposures for accounts receivable as of December 31, 2025 and 2024 are as follows
(a) Accounts receivable
(In thousands of won)

December 31, 2025

Expected loss rate(%)

Carrying
amount

Loss
allowance
Not due or overdue for less than 90 days

0.90
W56,616,891 510,464 
More than 90 days ~ Less than 180 days
6.7 221,308 14,884 
More than 180 days ~ Less than 270 days87.7 41,362 36,254 
More than 270 days ~ Less than 1 year99.8 39,564 39,502 
More than 1 year100.0 18,285 18,285 
W56,937,410 619,389 

(In thousands of won)

December 31, 2024

Expected loss rate(%)

Carrying
amount

Loss
allowance
Not due or overdue for less than 90 days

0.43 
W
81,335,050 350,478 
More than 90 days ~ Less than 180 days
22.5 214,517 48,305 
More than 180 days ~ Less than 270 days87.0 12,851 11,177 
More than 270 days ~ Less than 1 year100.0 4,430 4,430 
More than 1 year100.0 135,281 135,281 

W81,702,129 549,671 

(b) Other receivables
(In thousands of won)

December 31, 2025

Expected loss rate(%)

Carrying
amount

Loss
allowance
Not due or overdue for less than 90 days

0.0 W2,901,347 

- 
More than 90 days ~ Less than 180 days
0.0 2,992 

- 
More than 180 days ~ Less than 270 days0.0 - 

- 
More than 270 days ~ Less than 1 year0.0 - 

- 
More than 1 year100 218 

218 
W2,904,557 

218 
(In thousands of won)

December 31, 2024

Expected loss rate(%)

Carrying
amount

Loss
allowance
Not due or overdue for less than 90 days

0.0 

W
1,566,100 

9 
More than 90 days ~ Less than 180 days
0.0 


6,091 

- 
More than 180 days ~ Less than 270 days0.0 


- 

- 
More than 270 days ~ Less than 1 year0.0 


- 

- 
More than 1 year100 


5,092 

5,092 


W
1,577,283 

5,101 

31
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
7. Accounts and Other Receivables, Continued
(3) Expected credit losses (ECLs) and credit risk exposures for accounts receivable as of December 31, 2025 and 2024 are as follows, Continued:
In assessing the recoverability of accounts and other receivables, the Group considers changes in the credit rating of accounts and other receivables from the commencement of the credit to the end of the reporting period.

The Group applies simplified approach for accounts and other receivables to measure the loss allowance at an amount equal to lifetime expected credit losses. To measure the expected credit losses, accounts and other receivables are grouped based on credit risk characteristics and the duration of past due balances. ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls. The Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes the Group’s historical experience and informed credit assessment, that includes forward-looking information.


8. Property and Equipment
(1) Details of property and equipment as of December 31, 2025 and 2024 are as follows:
(In thousands of won)
December 31, 2025
December 31, 2024

Acquisition
cost

Accumulated depreciation

Carrying
amount
Acquisition cost
Accumulated depreciation

Carrying
amount
Computer and other equipment
W
8,136,437 (6,638,485)1,497,952 7,359,682 (5,965,593)1,394,089 
Furniture and fixture

1,849,592 (1,657,504)192,088 1,844,600 (1,624,216)220,384 
Construction in- progress

- - - - - - 
Vehicles

9,101 (9,101)- 9,101 (9,101)- 
Leasehold improvements

3,771,628 (3,027,624)744,004 3,527,843 (2,348,905)1,178,938 
Right-of-use assets

13,489,812 (5,153,435)8,336,377 13,087,225 (5,923,550)7,163,675 
W
27,256,570 
(16,486,149)
10,770,421 25,828,451 (15,871,365)9,957,086 
(2) Changes in property and equipment for the years ended December 31, 2025 and 2024 are as follows:

(In thousands of won)
 
2025
 
 

Computer and other equipment
Furniture
and fixture

Construction in progress

Vehicles

Leasehold
Improvements

Right-of-use assets
Total
Beginning balance W1,394,089 220,384 - - 1,178,938 7,163,675 9,957,086 
Rent Adjustment
- - - - - 21,913 

21,913 
Acquisitions/Capital expenditure
  769,947 116,510 - - 182,103 5,815,163 6,883,723 
Depreciation  (678,634)(142,884)- - (649,593)(4,739,765)(6,210,876)
Disposition/Disposals/
Removals		  - (146)- - - - (146)
Foreign exchange differences
  12,550 (1,776)- - 32,556 75,391 118,721 
Ending balance W1,497,952 192,088 - - 744,004 8,336,377 10,770,421 

32
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
8. Property and Equipment, Continued
(2) Changes in property and equipment for the years ended December 31, 2025 and 2024 are as follows:,Continued.
(In thousands of won)
 
2024
 
 

Computer and other equipment
Furniture
and fixture

Construction in progress

Vehicles

Leasehold
Improvements

Right-of-use assets
Total
Beginning balance W1,536,102 266,524 1,209,024 1,328 516,972 6,620,800 10,150,750 
Rent Adjustment
- - - - - 131,131 

131,131 
Acquisitions/Capital expenditure
  474,620 130,505 - - 11,059 4,781,383 5,397,567 
Depreciation  (649,645)(180,149)- (1,328)(638,774)(4,552,951)(6,022,847)
Disposition/Disposals/
Removals		  - (69)- - - - (69)
Substitution- - (1,290,528)- 1,290,528 - - 
Foreign exchange differences
  33,012 3,573 81,504 - (847)183,312 300,554 
Ending balance W1,394,089 220,384 - - 1,178,938 7,163,675 9,957,086 
(3) Classification of depreciation expenses in the statements of comprehensive income for the years ended December 31, 2025 and 2024 are as follows:
(In thousands of won)
2025

2024
Cost of revenuesW1,923,810 1,749,867 
Selling, general and administrative expenses(*)

4,287,066 4,272,980 
W6,210,876 6,022,847 
(*) The depreciation expenses recognized as the research and development included in selling, general and administrative expenses was W25,774 thousand and W33,388 thousand, respectively, for the years ended December 31, 2025 and 2024.
(4) As of December 31, 2025 and 2024, there are no property and equipment that are pledged as collateral for the Group’s debts.

9. Intangible Assets
(1) Details of intangible assets as of December 31, 2025 and 2024 are as follows:
(In thousands of won)
December 31, 2025
December 31, 2024

Acquisition cost
Accumulated amortization(*)

Carrying
amount

Acquisition
cost

Accumulated amortization(*)
Carrying
amount
Software
W
18,703,053 (15,393,040)3,310,013 16,535,808 (14,751,681)

1,784,127 
Patents
2,092,881 (1,004,003)1,088,878 1,745,310 (863,134)882,176 
Other intangible assets
9,873,018 (7,114,976)2,758,042 10,196,274 (5,806,029)4,390,245 
W
30,668,952 (23,512,019)7,156,933 28,477,392 (21,420,844)7,056,548 

(*) Accumulated amortization includes the amount of accumulated impairment loss.
33
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
9. Intangible Assets, Continued
(2) Changes in intangible assets for the years ended December 31, 2025 and 2024 are as follows:
(In thousands of won)
2025
Software
Patents
Other intangible assets
Total
Beginning balance

W1,784,127 882,176 4,390,245 7,056,548 
Acquisitions/Capital expenditure


3,202,784 353,193 
1,511,103
5,067,080 
Amortization


(1,676,787)(142,032)(2,789,435)(4,608,254)
Disposals


- (4,459)(67)(4,526)
Impairment(*)


- - (52,570)(52,570)
Miscellaneous


- - (314,000)(314,000)
Foreign exchange differences


(111)- 12,766 12,655 
Ending balance

W
3,310,013

1,088,878

2,758,042

7,156,933

(*) The Group recognized W52,570 thousand of impairment loss as carrying amount of the other intangible assets exceeded recoverable amount as of December 31, 2025.


(In thousands of won)
2024
Software
Patents
Other intangible assets
Total
Beginning balance
W2,780,930 624,867 2,964,162 6,369,959 
Acquisitions/Capital expenditure
378,818 369,387 3,758,303 4,506,508 
Amortization
(1,381,774)(112,078)(1,717,116)(3,210,968)
Disposals
- - (2,839)(2,839)
Impairment(*)
- - (614,741)(614,741)
Foreign exchange differences
6,153 - 2,476 8,629 
Ending balance
W
1,784,127 882,176 4,390,245 7,056,548 

(*) The Group recognized W614,741 thousand of impairment loss as carrying amount of the other intangible assets exceeded recoverable amount as of December 31, 2024.
(3) Classification of amortization in the statements of comprehensive income for the years ended December 31, 2025 and 2024 are as follows:
(In thousands of won)2025

2024
Cost of revenues
W
2,568,805 935,620 
Selling, general and administrative expenses(*)2,039,449 2,275,348 
W
4,608,254 3,210,968 
(*) The amortization recognized as the research and development included in selling, general and administrative expenses was W441,653 thousand and W528,382 thousand, respectively, for the years ended December 31, 2025 and 2024.
34
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
10. Other non-current assets
(In thousands of won)December 31, 2025

December 31, 2024
Prepaid Expenses(*) 
W
14,645,888 8,131,937 
Others 555,121 319,506 
W
15,201,009 8,451,443 

(*) It consists of minimum guaranteed royalties and technical support fees.

11. Employee Benefit
The expenses recognized in relation to defined contribution plan for the years ended December 31, 2025 and 2024 are W2,892,930 thousand and W2,654,583 thousand, respectively. In addition, expenses related to defined benefit plans amounting to W146,104 thousand are included in other non-current liabilities as of December 31, 2025.

12. Commitments
(1) The Group has entered into license agreements with various third-party game developers to secure exclusive rights to publish the games developed by the third-party developers. Upfront license fees paid are capitalized and recognized as other intangible assets and minimum guaranteed royalties are capitalized and recognized as other non-current assets. Purchase obligations for future acquisition related to the above agreements which were not recognized as liabilities as of December 31, 2025 and 2024 are W2,713,461 thousand and W4,835,726 thousand, respectively.
(2) As of the end of the current period, the Group is provided with payment guarantees of W110,400 thousand from Seoul Guarantee Insurance Co., Ltd. In connection with the performance of contracts, etc.
35
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
13. Share Capital and Capital Surplus
(1) Details of common shares as of December 31, 2025 and 2024 are as follows:
(In won and in number of shares)
December 31, 2025

December 31, 2024

Number of authorized shares
40,000,000 40,000,000 
Value per share
W500 500 
Number of shares issued
6,948,900 6,948,900 
Common shares
W
3,474,450,000 　3,474,450,000 

(2) Details of capital surplus as of December 31, 2025 and 2024 are as follows:
(In thousands of won)
December 31, 2025

December 31, 2024

Additional paid-in capital
W
25,292,211 25,292,211 
Other capital surplus
1,687,150 1,687,150 
W
26,979,361 　26,979,361 
(3)Details of other components of equity as of December 31, 2025 and 2024 are as follows:
(In thousands of won)
December 31, 2025

December 31, 2024

Foreign currency translation adjustments
W
25,489,648 23,784,631 
Re-measurements of defined benefit liability
33,398 15,920 
W
25,523,046 23,800,551 

(4)Details of retained earnings as of December 31, 2025 and 2024 are as follows:
(In thousands of won)
December 31, 2025

December 31, 2024

Unappropriated retained earnings
W
580,881,573 513,417,859 

(5) According to the Parent Company's Articles of Incorporation, the Parent Company may issue 2,000,000 shares of preferred stock without voting rights, and there are no preferred shares issued as of December 31, 2025.
36
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
14. Revenue from Contracts with Customers
(1) Details of revenue from contracts with customers based on the service contract type and the timing of satisfaction of performance obligations are as follows:
(In thousands of won)
2025
2024

Service contract

 Micro-transaction and subscription revenue
W481,016,060 

409,950,571 
- Online Game
76,874,527 

61,425,023 
- Mobile Game
404,141,533 

348,525,548 
 Royalties and license fees
64,557,573 

72,714,536 
- Online Game
13,464,207 

15,564,108 
- Mobile Game
51,093,366 

57,150,428 
 Others revenue
14,973,812 

18,180,013 
W560,547,445 

500,845,120 
Timing of satisfaction of performance obligations

 At a point in time
669,722 

111,219 
Over time
559,877,723 

500,733,901 
W
560,547,445 
　
500,845,120 
(2) Accounts receivable, incremental costs of obtaining a contract and contract liabilities related to contracts with customers as of December 31, 2025 and December 31, 2024 are as follows:
(In thousands of won)
December 31, 2025
December 31, 2024

Accounts receivable
W
56,318,021 

81,152,458 
Incremental costs of obtaining a contract (Prepaid expenses)
1,825,802 

2,385,905 
Contract liabilities (Deferred revenue)

21,910,221 

29,332,594 
Micro-transaction and subscription revenue
19,787,112 

25,290,276 
Royalties and license fees
2,094,611 

4,037,318 
Others revenue
28,498 

5,000 


(3) Contract liabilities
Revenue recognized in the current period that was included in the contract liability balance at the beginning of FY2025 was ₩26,760,732 thousand (FY2024 : ₩18,089,771 thousand). This consists of ₩25,290,276 thousand from paid content, ₩1,465,457 thousand from licenses, and ₩5,000 thousand from others (FY2024: ₩17,158,516 thousand from paid content, ₩641,255 thousand from licenses, and ₩290,000 thousand from others).
37
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
14. Revenue from Contracts with Customers, Continued
(4) Transaction price allocated to unsatisfied performance obligations as of December 31, 2025 and 2024 are as follows:
(In thousands of won)
December 31, 2025

December 31, 2024
Micro transaction and subscription revenue
W
19,787,112
25,290,276
- Online Game
11,691,196
10,822,217
- Mobile Game
8,095,916
14,468,059
Royalties and license fees
2,094,611
4,037,318 
- Online Game
100,381
448,348 
- Mobile Game
1,994,230
3,588,970 
Others revenue
28,498
　5,000 
W
21,910,221
29,332,594 

The Group’s management expects to recognize 98.1% (W21,500,469 thousand) of the transaction price allocated to contracts that have not been performed as of December 31, 2025 as revenue within 12 months. The remaining 1.9% (W409,752 thousand) is expected to be recognized as revenue thereafter. The amounts disclosed above do not include variable consideration which is constrained.
(5) Details of incremental costs of obtaining a contract recognized as assets as of December 31, 2025 and 2024 are as follows:
(In thousands of won)
December 31, 2025

December 31, 2024
Incremental costs of obtaining a contract recognized as at the reporting period-end
W
1,825,802 2,385,905 
Incremental costs of obtaining a contract recognized as cost of revenues

2,385,905 1,556,590 
38
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
15. Classification of expenses by nature
Details of classification of expenses by nature for the years ended December 31, 2025 and 2024 are as follows:
(In thousands of won)
2025

2024

Fees and commissions
W
346,781,636 293,302,275 
Bad debt expenses
752,216 588,818 
Advertising expenses
44,737,519 38,731,094 
Salaries
55,455,370 50,091,764 
Outsourcing expenses
7,415,128 9,214,740 
Rent
1,610,384 1,379,987 
Employee benefits
5,056,647 4,538,213 
Post-employment benefits
3,691,970 3,021,659 
Depreciation
6,210,876 6,022,847 
Amortization
4,608,254 3,210,968 
Others
5,197,943 4,554,065 
W
481,517,943 　414,656,430 

Total expenses consist of cost of sales, selling, general and administrative expenses.

16. Selling, General and Administrative Expenses
Details of the selling, general and administrative expenses for the years ended December 31, 2025 and 2024 are as follows:

(In thousands of won)
2025

2024
Fees and commissions
W
17,914,109 14,613,156 
Bad debt expenses
752,216 588,818 
Advertising expenses
44,737,519 38,731,094 
Salaries
26,562,266 22,990,995 
Outsourcing expenses
2,366,202 1,952,620 
Rent
888,668 773,168 
Employee benefits
2,804,397 2,384,507 
Post-employment benefits
1,327,110 1,180,912 
Depreciation
4,261,292 4,239,592 
Amortization
1,597,796 1,746,966 
Research and development
10,326,126 15,262,000 
Others
3,712,676 3,289,536 
W
117,250,377 　107,753,364 
39
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
17. Finance Income and Costs
(1) Details of finance income for the years ended December 31, 2025 and 2024 are as follows:
(In thousands of won)
2025

2024

Finance income
Interest income
W15,822,058 17,058,776 
Unrealized foreign currency gain
2,323,012 3,579,314 
Gain on foreign currency transactions
6,453,921 10,250,899 

W
24,598,991 　30,888,989 

(2) Details of finance costs for the years ended December 31, 2025 and 2024 are as follows:
(In thousands of won)
2025

2024

Finance costs
Interest expense
W281,809 135,377 
Unrealized foreign currency loss
4,520,987 2,025,902 
Loss on foreign currency transactions
6,253,439 7,764,391 

W
11,056,235 　9,925,670 

18. Other Non-Operating Income and Expenses
(1) Details of other non-operating income for the years ended December 31, 2025 and 2024 are as follows:
(In thousands of won)
2025

2024

Gain on disposal of property and equipment
W4,107 8,085 
Miscellaneous gain
308,658 780,813 
W
312,765 　788,898 
(2) Details of other non-operating expenses for the years ended December 31, 2025 and 2024 are as follows:
(In thousands of won)
2025

2024

Loss on disposal of property and equipment
W146 6,112 
Loss on disposal of intangible assets
4,459 - 
Impairment loss on intangible assets
52,570 614,741 
Impairment loss on other non-current assets
1,876,212 962,025 
Miscellaneous loss
12,973 10,995 
W1,946,360 　1,593,873 

40
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
19. Income tax expense
(1) Details of income tax expense for the years ended December 31, 2025 and 2024 are as follows:
(In thousands of won)
2025

2024

Current tax expense
Current year
W
24,778,320 22,198,761 
Deferred tax expense
Changes in net deferred tax assets
(1,148,986)(753,935)
Income tax expense
W
23,629,334 　21,444,826 
(2) The differences between the tax expense on the Group’s profit before tax and the amount that would arise using the statutory tax rates applicable to profits of the entities are as follows:
(In thousands of won)
2025

2024

Profit before income tax expense
W
90,938,663 106,347,034 
Income tax using the statutory tax rate of each country
18,480,048 19,749,419 
Adjustments:
Expenses not deductible for tax purposes
333,220 481,370 
Non taxable income
(676,499)(349,774)
Foreign tax payment
5,807,422 6,321,917 
Utilization of previously unrecognized tax losses
(87,609)(298,451)
Tax credit
(1,820,981)(1,413,463)
Corporate tax on unappropriated earnings
- 94,943 
Changes in deferred tax liabilities related to investment in subsidiaries
599,509 (1,058,223)
Others
994,224 (2,082,912)
Total Adjustment
5,149,286 1,695,407 
Income tax expense
W23,629,334 　21,444,826 
Effective tax rate
26 %20 %

41
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
19. Income tax expense, Continued
(3) Details of the changes in deferred tax assets (liabilities) for the years ended December 31, 2025 and 2024 are as follows:
(In thousands of won)
20252024

Beginning
balance
Increase
(Decrease)

Ending
balance

Beginning
balance
Increase
(Decrease)

Ending
balance
Property and equipment
W
177,324 

(104,004)

73,320 

51,166

126,158

177,324
Intangible assets

82,574 

127,828 

210,402 

665,063

(582,489)

82,574
Other non-current assets

14,096 

28,809 

42,905 

24,999

(10,903)

14,096
Accounts Payable

1,769,785 

410,744 

2,180,529 

1,518,055

251,730

1,769,785
Accrued expenses

311,585 

167,030 

478,615 

282,091

29,494

311,585
Deferred revenue

82,573 

402,937 

485,510 

355,434

(272,861)

82,573
Allowance for doubtful account
57,036 

32,815 

89,851 

1,178,980

(1,121,944)

57,036
Other non-current liabilities
77,813 

7,211 

85,024 

81,970

(4,157)

77,813
Lease

(16,073)

2,366 

(13,707)

(38,046)

21,973

(16,073)
Investment in subsidiaries

(1,198,385)

(537,967)

(1,736,352)

(2,368,565)

1,170,180

(1,198,385)
Others

(261,285)

593,938

332,653

881,670

(1,142,955)

(261,285)
Subtotal

1,097,043

1,131,707

2,228,750

2,632,817

(1,535,774)

1,097,043
Deferred tax due to carry-forward losses

1,149,059 

(862,428)

286,631 

701,138

447,921

1,149,059
Deferred tax due to tax credit carry-forward

2,077,705 

879,707 

2,957,412 

235,916

1,841,789

2,077,705
Deferred tax assets(*)
W
5,617,488 

1,591,657

7,209,145

5,952,133

(334,645)

5,617,488
Deferred tax liabilities

(1,293,681)

(442,671)

(1,736,352)

(2,382,262)

1,088,581

(1,293,681)

(*) The future realizability of deferred tax assets is assessed by taking into consideration various factors such as each subsidiary’s performance, the overall economic environment and industry outlook, expected future earnings, and deductible period of tax credit carry-forward and carry-forward losses. The Group periodically reviews these matters, and has recognized deferred tax assets related to temporary differences, tax loss carryforward and tax credit carryforwards, based on the likelihood of each subsidiary’s future taxable income as at December 31, 2025. This amount may change if the estimate for future taxable income changes.

(4) Details of unused tax loss carryforwards and unused tax credit carry-forwards that are not recognized as deferred income tax assets as of December 31, 2025 are as follows:
(In thousands of won)



Year of expiration
Unused loss carryforwards

Unused tax credit carryforwards

2026
2,002,452
175,371
2027
352,039
202,218
2028
2,134,171
520,368
2029
347,955
402,380
2030
220,510
412,486
After 2030
11,091,460
541,141
Total
W
16,148,587
2,253,964

42
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
19. Income tax expense, Continued
(5)As of December 31, 2025 the Group has not recognized deferred tax assets and deferred tax liabilities for deductible temporary differences of ₩29,704,307 thousand (December 31, 2024: ₩22,504,425 thousand) and taxable temporary differences of ₩108,844,768 thousand (December 31, 2024: ₩102,570,411 thousand) associated with investments in subsidiaries, etc., as it is not probable that these will reverse in the foreseeable future.

(6)The gross balances of deferred tax assets and liabilities for the years ended December 31, 2025 and 2024, is as follows:


(In thousands of won)


2025

2024
Deferred tax assets





- Deferred tax assets to be recovered after more than 12 months

W
1,772,848

2,783,985
- Deferred tax assets to be recovered within 12 months


7,671,394

5,725,147
Sub-total


9,444,242

8,509,132
Deferred tax liabilities




　
- Deferred tax liabilities to be recovered after more than 12 months


(870,902)

(1,018,806)
- Deferred tax liabilities to be recovered within 12 months


(3,100,547)

(3,166,519)
Sub-total


(3,971,449)

(4,185,325)
Deferred tax assets (liabilities), net

W
5,472,793

4,323,807
(7)The impact of the global minimum tax
Under the Pillar Two legislation, the Group is liable to pay top-up tax for the difference between the GloBE effective tax rate and the minimum tax rate of 15% for each jurisdiction where its constituent entities are located. For all entities within the Group, except for Gravity Game Vision Limited operating in Hong Kong, the GloBE effective tax rate in their respective jurisdictions exceeds 15%. In the case of Hong Kong, the Group has recognized KRW 724,851 thousand as current income tax expense for Pillar Two income taxes in accordance with the local Qualifying Domestic Minimum Top-up Tax (QDMTT), and has applied the exception to the recognition and disclosure of related deferred tax assets and liabilities.

20. Earnings per share
Basic earnings per share is calculated by dividing the profit attributable to owners of the Parent by the weighted average number of common shares outstanding each year.

(1)Basic earnings per share
(In thousands won and in number of shares)
2025

2024

Profit attributable to owners of the Parent
W
67,463,714 84,919,277 
Weighted average outstanding shares of common shares
6,948,900 6,948,900 
Basic earnings per share(in won)
W
9,709 　12,221 

20. Earnings per share, Continued
43
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
(2) Diluted earnings per share
As of and for the years ended December 31, 2025 and 2024, the Parent Company does not have outstanding dilutive potential ordinary shares. Accordingly, the diluted earnings per share for the years ended December 31, 2025 and 2024 are the same as the basic earnings per share.

21. Cash flow information
(1) Adjustments for calculating cash generated from operations for the years ended December 31, 2025 and 2024 are as follows:
(In thousands of won)
2025

2024

Adjustments for:
　
Depreciation
W6,210,876 6,022,847 
Amortization
4,608,254 3,210,968 
Bad debt expense
752,216 588,818 
Unrealized foreign currency loss
4,520,987 2,025,902 
Interest expense
281,809 135,377 
Loss on disposal of property and equipment
146 6,112 
Loss on disposal of intangible assets
4,459 - 
Impairment loss on intangible asset
52,570 614,741 
Impairment loss on other non-current assets
1,876,212 962,025 
Retirement benefit expenses
352,478 127,554 
Income tax expense
23,629,334 21,444,826 
Unrealized foreign currency gain
(2,323,012)(3,579,314)
Gain on disposal of property and equipment
(4,107)(8,085)
Interest income
(15,822,058)(17,058,776)
W24,140,164 　14,492,995 

44
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
21. Cash flow information, Continued
(2) Changes in assets and liabilities arising from operating activities for the years ended December 31, 2025 and 2024 are as follows:
(In thousands of won)20252024
Accounts receivableW22,169,171 (1,886,253)
Other receivables(1,249,445)2,747,905 
Prepaid expenses(5,524,105)(4,492,818)
Other current assets102,544 (123,527)
Other non-current assets(3,956,325)(2,318,065)
Accounts payable(9,509,079)(2,879,054)
Deferred revenue(7,616,862)5,983,805 
Withholding276,014 (1,546,052)
Accrued expenses(64,789)225,700 
Long-term deferred revenue(3,409)467,191 
W(5,376,285)(3,821,168)

(a)Significant non-cash transactions for the years ended December 31, 2025 and 2024 are as follows:
(In thousands of won)
2025

2024
Reclassification of prepayment to intangible assets
W
129,798 212,220 
Increase in accounts payable relating to the acquisition of software
2,046,400 292,480 
Increase in accounts payable relating to the acquisition of other intangible assets
724,639 2,556,979 
Increase in accounts payable relating to the acquisition of other non-current assets
4,450,200 - 
Acquisition of right-of-use assets
5,837,076 4,912,514 


45
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
21. Cash flow information, Continued
(4) Changes in liabilities arising from financing activities for the years ended December 31, 2025 and 2024 are as follows:
(In thousands of won)

2025

2024

Beginning of the year
W7,121,523 6,562,398 
Cash flows used in financial activities – payment of lease liabilities
(4,514,664)(4,525,288)
Cash flows used in operating activities – Interest paid
(271,969)(130,027)
Non-cash transactions:
　
Acquisitions – leases
5,628,116 4,912,514 
Interest expense
271,969 130,027 
Others
- (17,059)
Translation difference
76,585 188,958 
Ending of the year
　
W
8,311,560 7,121,523 

22. Leases
The Group leases offices, vehicles and others. The leases typically run for a period of 1~ 5 years with an option to renew or terminate the lease after that date. There are no restrictions or covenants imposed to leases, but the lease assets are not provided as collateral for borrowings.
(1)Details of right-of-use assets and lease liabilities recognized in the consolidated statements of financial position as of December 31, 2025 and 2024 are as follows:
(In thousands of won)

December 31, 2025

December 31, 2024

Right-of-use assets(*1)
 
Offices
W8,262,427 6,250,151 
Vehicles
- 121,449 
Others
73,950 792,075 
W8,336,377 7,163,675 
Lease liabilities(*2)
Current
3,588,778 
            3,179,423
Non-current
4,722,782 
            3,942,100
　W8,311,560 
7,121,523

(*1) Right-of-use assets are included in the ‘Property and equipment’ in the consolidated statement of financial position.
(*2) Lease liabilities are included in the ‘Other current liabilities’ and ‘Other non-current liabilities’ in the consolidated statement of financial position.
46
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
22. Leases, Continued
(2) Changes in right-of-use assets for the years ended December 31, 2025 and 2024 are as follows:
(In thousands of won)
2025


Offices

Vehicles

Others

Total
Balance as of January 1, 2025

W
6,250,151


121,449


792,075


7,163,675
Depreciation


(3,376,491)


(121,449)


(1,241,825)


(4,739,765)
Reassessment


21,913


-


-


21,913
Acquisitions


5,056,574


-


758,589


5,815,163
Translation difference


310,280


-


(234,889)


75,391
Balance as of December 31, 2025

W
8,262,427


-


73,950


8,336,377

(In thousands of won)
2024


Offices

Vehicles

Others

Total
Balance as of January 1, 2024

W
4,720,419


367,030


1,533,351


6,620,800
Depreciation


(3,209,666)


(245,581)


(1,097,704)


(4,552,951)
Reassessment


7,470


-


123,661


131,131
Acquisitions


4,574,637


-


206,746


4,781,383
Translation difference


157,291


-


26,021


183,312
Balance as of December 31, 2024

W
6,250,151


121,449


792,075


7,163,675

(a)Details of amounts recognized in the consolidated statements of comprehensive income for the years ended December 31, 2025 and 2024 are as follows:
(In thousands of won)
2025

2024

Interest expense relating to lease liabilities (included in finance cost)
W271,969 130,027 
Expense relating to short-term leases
150,174 50,460 
Expense relating to leases of low-value assets excluding short-term leases
44,930 47,082 
(b)Details of amounts recognized in the consolidated statement of cash flows for the years ended December 31, 2025 and 2024 are as follows:
(In thousands of won)

2025

2024

Total cash outflows of leases
W4,981,737 4,752,857 
47
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
23. Financial Risk Management

The Group’s operating activities expose itself to a variety of financial risks: market risk, credit risk and liquidity risk from which the Group’s risk management program focuses on minimizing any adverse effects on its financial performance. The Group operates financial risk management policies and programs that closely monitor and respond to each risk factor.
(1)Capital Risk Management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern, so the Group can continue to provide returns and benefits for shareholders and to maintain an optimal capital structure to reduce the cost of capital. The Group monitors capital on the basis of the debt ratio. This ratio is calculated as total debt divided by total capital. The debt ratios as of December 31, 2025 and 2024 are as follows:
(In thousands of won)
December 31, 2025

December 31, 2024

Total Liabilities
W
105,295,102 118,095,483 
Total Equity
637,366,761 568,363,459 
Debt ratio
17 %21 %
(2) Market Risk
(a) Foreign exchange risk
The Group is exposed to foreign exchange risk arising from royalty revenues and commission payment primarily with respect to the US dollar etc. The Group’s financial assets and liabilities are exposed to foreign currency risk as of December 31, 2025 and 2024 are as follows:
(In thousands of won, in foreign currencies)

December 31, 2025


Assets in foreign
currency

Liabilities in foreign currency


Assets in
Korean Won

Liabilities in Korean Won
USD


74,570,304


18,911,133


107,126,784


27,137,706
JPY


309,989,470


44,698,337


2,844,559


410,165
EUR


27,179


45,155


45,815


76,139
IDR


9,851,056


711,971,835


843


61,201
THB


21,131


 - 


964


 - 
VND


6,026,400


 - 


329


 - 
HKD


197,522


 - 


36,617


 - 
MYR


 - 


24,358


 - 


8,607
GBP


 - 


7,182


 - 


13,888


W
110,055,911


27,707,706
48
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
23. Financial Risk Management, Continued
(2) Market Risk, Continued
(a) Foreign exchange risk
(In thousands of won, in foreign currencies)

December 31, 2024


Assets in foreign
currency

Liabilities in foreign currency


Assets in
Korean Won

Liabilities in Korean Won
USD


70,136,599


29,286,354


103,021,478


43,009,052
JPY


496,929,791


56,100,772


4,653,649


525,373
EUR


27,925


32,910


42,689


50,310
IDR


9,851,056


522,083,448


897


47,558
THB


21,131


 - 


909


 - 
VND


6,026,400


 - 


348


 - 
HKD


141,271


 - 


26,727


 - 


W
107,746,697


43,632,293

The Group measures foreign exchange risk at the exchange rate of 10% for each foreign currency, and the rate of change reflects the management's assessment of the risk of exchange rate fluctuation that can be reasonably experienced. The effects of changes in foreign currency exchange rate on profit before income tax for the years ended of December 31, 2025 and 2024 are as follows:
(In thousands of won)

2025

2024


Increased by 10%

Decreased by 10%

Increased by 10%

Decreased by 10%
USD

W
7,998,908 


(7,998,908)

6,001,243


(6,001,243)
JPY


243,439 


(243,439)

412,828


(412,828)
Others


(7,527)


7,527 

(2,630)


2,630
Total

W
8,234,820


(8,234,820)

6,411,441


(6,411,441)

The sensitivity analysis is based on monetary assets and liabilities denominated in foreign currencies other than the functional currency at the end of the reporting period.
(b) Interest rate risk
There are no borrowings under variable interest rate conditions as of December 31, 2025 and 2024.
(c) Price risk
There are no assets and liabilities exposed to price risk as of December 31, 2025 and 2024.
49
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
23. Financial Risk Management, Continued
(3) Credit Risk
Credit risk arises from normal trading and investing activities and occurs when a customer or a counterparty fails to comply with the terms of the contract. In order to manage these credit risks, the Group regularly evaluates the creditworthiness of customers based on their financial condition, past experiences and other factors.
The carrying amounts of financial assets represent their maximum exposure to credit risk. The maximum exposure to credit risk of the Group as of December 31, 2025 and 2024 are as follows:
(In thousands of won)
December 31, 2025

December 31, 2024

Cash and cash equivalents
W
203,599,414 228,898,026 
Short-term financial instruments
415,033,514 324,304,040 
Accounts receivable, net
56,318,021 81,152,458 
Other receivables, net
531,784 15,557 
Other current financial assets
4,332,769 6,601,519 
Other non-current financial assets
3,811,881 1,766,588 
W
683,627,383 642,738,188 

Cash and cash equivalents and short-term financial instruments are deposited in financial institutions with strong credit ratings. Accounts receivable is mainly due from payment processing companies and platform service providers, which the Group believes have low levels of credit risk.
(4) Liquidity Risk
Liquidity risk management includes the maintenance of sufficient cash and marketable securities, the availability of funds from appropriately committed credit lines, and the ability to settle market positions. The cash flows included in the maturity classification, based on the remaining period to the contractual maturity date, are undiscounted expected cash outflows. The amount due within 12 months is the same as the carrying amount since the effect of the discount is not material. The following table summarizes the financial liabilities of the Group by maturity according to the remaining period from the end of the reporting period to the contractual maturity date.
(In thousands of won)
December 31, 2025
Carrying
value

Less than
3 months


3 months to 1 year


1 to 2 years


2 to 4 years


Total
Accounts payable
W
56,684,091


55,482,961


578,385


622,745


 - 


56,684,091
Accrued expense

385,363


385,363


 - 


 - 


 - 


385,363
Other liabilities (*)

8,311,560


1,168,483


2,616,070


2,620,202


2,268,795


8,673,550
W
65,381,014


57,036,807


3,194,455


3,242,947


2,268,795


65,743,004

(*) Other liabilities as of December 31, 2025 consist of lease liabilities.
50
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
23. Financial Risk Management, Continued
(4) Liquidity Risk, Continued

(In thousands of won)
December 31, 2024
Carrying
value

Less than
3 months


3 months to 1 year


1 to 2 years


2 to 4 years


Total
Accounts payable
W
63,548,026


63,152,918


175,000


220,108


-


63,548,026
Accrued expense

312,563


312,563


-


-


-


312,563
Other liabilities (*)

7,121,523


1,045,979


2,303,030


1,849,686


2,249,389


7,448,084
W
70,982,112


64,511,460


2,478,030


2,069,794


2,249,389


71,308,673

(*) Other liabilities as of December 31, 2024 consist of lease liabilities.

24. Segment information
(1) Operating segments
The Group determines its operating segments by establishing strategic decisions. Chief operating decision maker (“CODM”) reviews operating profit by each segment in order to make decisions regarding the resources to be allocated to the segment and to evaluate the performance of the segment.
The reportable segments of the Group are in line with the organizational structure and the review of operations by the CEO, who is the Chief operating decision maker, and they include mobile, online, and others.
The Group assesses the performance of its operating segments based on its operating profit or loss, which does not differ from operating profit reported on the consolidated statement of comprehensive income except for inter-segment transactions. The segment information for the years ended December 31, 2025 and 2024 is as follows.

(In thousands of won)
2025
Online

Mobile


Others


Total

Inter-segment
eliminations(*)
Total
Revenue
W
107,418,488 537,769,535 32,004,893 677,192,916 - 

- 
Intersegment Revenue

17,079,754 82,534,636 17,031,081 116,645,471 (116,645,471)

- 
External Revenue

90,338,734 455,234,899 14,973,812 560,547,445 - 

560,547,445 
Depreciation/
amortization

2,370,951 3,165,330 5,282,849 10,819,130 - 

10,819,130 
Operating profit

30,760,250 54,351,513 (6,082,261)79,029,502 - 

79,029,502 

(*) The Group reflects inter-segment eliminations as adjustments.
51
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
24. Segment information, Continued
(1) Operating segments, Continued
Other profit or loss items that do not constitute operating profit (loss) are not separately disclosed as they are not reviewed by the chief operating decision maker by operating segment.

(In thousands of won)
2024
Online

Mobile


Others


Total

Inter-segment
eliminations(*)
Total
Revenue
W
90,831,926 465,026,162 23,962,894 579,820,982 - 

- 
Intersegment Revenue

13,842,795 59,350,186 5,782,881 78,975,862 (78,975,862)

- 
External Revenue

76,989,131 405,675,976 18,180,013 500,845,120 - 

500,845,120 
Depreciation/
amortization

1,725,385 2,699,388 4,809,042 9,233,815 - 

9,233,815 
Operating profit

34,536,608 55,603,941 (3,951,859)86,188,690 - 

86,188,690 

(*) The Group reflects inter-segment eliminations as adjustments.
Other profit or loss items that do not constitute operating profit (loss) are not separately disclosed as they are not reviewed by the chief operating decision maker by operating segment.
(2) Revenue from external customers by country for the years ended December 31, 2025 and 2024 are as follows:
(In thousands of won)
2025(*)

2024(*)

Taiwan
W
133,721,000 114,409,543 
Korea
38,865,080 53,142,360 
Thailand
53,395,034 61,781,458 
Japan
27,643,837 18,856,828 
United States of America
52,691,155 34,652,880 
Philippines
52,682,655 58,926,548 
Indonesia
85,061,358 32,373,482 
Malaysia
18,001,413 26,360,680 
Brazil
23,475,213 26,433,674 
Hong Kong
20,159,064 17,255,442 
Other
54,851,636 

56,652,225 
560,547,445

500,845,120

(*) Revenue was attributed to the country based on the customer's location and royalty revenue was attributed to the country where the end user's payment was made.

52
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
24. Segment information, Continued
(3) Non-current assets by geographical regions as of December 31, 2025 and 2024 are as follows:
(In thousands of won)
December 31, 2025(*)

December 31, 2024(*)

Korea
W
25,904,333 18,990,332 
Overseas
7,224,030 6,474,745 
Total
W33,128,363 　25,465,077 

(*) The amounts are exclusive of financial assets and deferred tax assets.
(4) There was no customer who represents more than 10% of revenue in the mobile segment for the year ended December 31, 2024 and December 31, 2025

25. Related Party Transactions
(1) Related parties of the Group include entities and individuals capable of exercising control or significant influence over the Group. Related parties include Gung Ho Online Entertainment, Inc. (the controlling shareholder with 59.31% of common shares), its subsidiaries, management and their immediate families.
(2) Account balances with related party
Balances of receivables and payables with related party as of December 31, 2025 and 2024 are as follows:
(In thousands of won)

December 31, 2025

December 31, 2024
Related party

Name of entity

Receivables

Payables

Receivables

Payables
Parent Company
GungHo Online Entertainment, Inc.

W
1,536,467


2,700

3,333,489


2,755
Other
Gungho Online Entertainment America.


1,016


773

573


97,210

Total

W
1,537,483


3,473

3,334,062


99,965

53
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
25. Related Party Transactions, Continued
(3) Transactions with related parties
The details of transactions with related party for the years ended December 31, 2025 and 2024 are as follows:

(In thousands of won)
2025
Revenues
Related partyName of entityRoyalty　Commission Other
Parent companyGungHo Online Entertainment, Inc.W21,346,669 483,823 149,808 
OtherGungHo Online Entertainment America.7,241 - - 
W21,353,910 483,823 149,808 

(In thousands of won)
2025
Purchases
Related partyName of entityRoyaltyOther
Parent companyGungHo Online Entertainment, Inc.W- 16,764 
OtherGungHo Online Entertainment America.10,093 - 
W10,093 16,764 


(In thousands of won)
2024
Revenues
Related partyName of entityRoyalty　CommissionOther
Parent companyGungHo Online Entertainment, Inc.W16,550,535 682,115 - 
OtherGungHo Online Entertainment America559 - - 
W16,551,094 682,115 - 


(In thousands of won)
2024
Purchases
Related partyName of entityRoyaltyOther
Parent companyGungHo Online Entertainment, Inc.W- 15,946 
OtherGungHo Online Entertainment America.92,326 92,322 
W92,326 108,268 


25. Related Party Transactions, Continued
(4) Other transactions with related parties
54
GRAVITY CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements

As of December 31, 2025 and 2024
No financing transactions were made with related parties for the years ended December 31, 2025 and 2024.
(5) Key management personnel compensation
The compensation given to key management personnel (registered directors) for the years ended December 31, 2025 and 2024 are as follows:
(In thousands of won)
2025

2024

Salaries
W
2,658,549 2,264,113 

55






GRAVITY CO., LTD.

Separate Financial Statements

For the Years Ended December 31, 2025 and 2024    

(With Independent Auditor’s Report Thereon)    





Contents


Page
Independent Auditor’s Report    1
Separate Statements of Financial Position    3
Separate Statements of Comprehensive Income    5
Separate Statements of Changes in Equity    6
Separate Statements of Cash Flows    7
Notes to the Separate Financial Statements    8















Independent Auditor’s Report
English Translation of a Report Originally Issued in Korean

To the Board of Directors and Shareholders of Gravity Co., Ltd.:

Opinion
We have audited the separate financial statements of Gravity Co., Ltd (“the Company”), which comprise the separate statements of financial position as at December 31, 2025 and 2024, and the separate statement of comprehensive income, separate statements of changes in equity and separate statements of cash flows for the years then ended, and notes to the separate financial statements, including material accounting policy information.

In our opinion, the accompanying separate financial statements present fairly, in all material respects, the separate financial position of the Company as at December 31, 2025 and 2024, and its separate financial performance and its separate cash flows for the years then ended in accordance with International Financial Reporting Standards as adopted by the Republic of Korea (Korean IFRS).
Basis for Opinion
We conducted our audits in accordance with Korean Standards on Auditing. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Separate Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements of the Republic of Korea that are relevant to our audit of the separate financial statements and we have fulfilled our other ethical responsibilities in accordance with the ethical requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Other Matter
Auditing standards and their application in practice vary among countries. The procedures and practices used in the Republic of Korea to audit such separate financial statements may differ from those generally accepted and applied in other countries.
Responsibilities of Management and Those Charged with Governance for the Separate Financial Statements
Management is responsible for the preparation and fair presentation of the separate financial statements in accordance with Korean IFRS, and for such internal control as management determines is necessary to enable the preparation of separate financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the separate financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations.
Those charged with governance are responsible for overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Separate Financial Statements
Our objectives are to obtain reasonable assurance about whether the separate financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Korean Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these separate financial statements.
1

As part of an audit in accordance with Korean Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
∙Identify and assess the risks of material misstatement of the separate financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
∙Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
∙Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
∙Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the separate financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
∙Evaluate the overall presentation, structure and content of the separate financial statements, including the disclosures, and whether the separate financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.




Samil PricewaterhouseCoopers



Seoul, Korea
March 19, 2026

This report is effective as of March 19, 2026, the audit report date. Certain subsequent events or circumstances, which may occur between the audit report date and the time of reading this report, could have a material impact on the accompanying separate financial statements and notes thereto. Accordingly, the readers of the audit report should understand that there is a possibility that the above audit report may have to be revised to reflect the impact of such subsequent events or circumstances, if any.
2
GRAVITY CO., LTD.
Separate Statements of Financial Position

As of December 31, 2025 and 2024    

(In thousands of won)
Notes

December 31, 2025


December 31, 2024



Assets


Current assets

Cash and cash equivalents
5,6,23
W30,553,616 64,263,198 
Short-term financial instruments
6,23
389,000,000 278,000,000 
Accounts receivable, net
6,7,15,23
28,536,382 35,651,270 
Other receivables, net
6,7,23
3,420,324 3,409,219 
Prepaid expenses
15
1,409,245 1,226,672 
Other current financial assets
6,23
3,945,138 5,897,585 
Other current assets

 1,178,880 380,417 

458,043,585 388,828,361 
Non-current assets

Investments in subsidiaries
8
49,236,515 49,376,747 
Property and equipment, net
9,22
4,083,804 5,344,496 
Intangible assets, net
10
6,284,550 

6,765,893 
Other non-current financial assets
6,23
3,342,526 1,999,836 
Other non-current assets
11
14,529,957 6,277,319 
Deferred tax assets
20
4,118,562 3,504,236 

81,595,914 73,268,527 
Total assets
W
539,639,499  462,096,888 




See accompanying notes to the separate financial statements.

3
GRAVITY CO., LTD.
Separate Statements of Financial Position, Continued

As of December 31, 2025 and 2024
(In thousands of won)
NotesDecember 31, 2025December 31, 2024

Liabilities
Current liabilities

Accounts payable
6,23
W
22,950,035  22,597,276 

Deferred revenue
15
5,589,150 6,027,907 

Withholdings

595,152 829,430 

Accrued expenses
 
1,109,202 1,277,685 

Income tax payable
20
2,604,736 3,435,351 

Other current liabilities
6,22,23
1,338,394 1,869,454 

34,186,669 36,037,103 
Non-current liabilities
Long-term accounts payable
6,23
622,745 220,108 
Long-term deferred revenue
15409,752 

 2,571,862 
Other non-current liabilities
6,202,2232,945,864 4,614,080 

3,978,361 7,406,050 
Total liabilities
W
38,165,030  43,443,153 


Equity

Share capital
1143,474,450 3,474,450 

Capital surplus
1427,482,683 27,482,683 

Retained earnings
14470,517,336 387,696,602 
Total equity
501,474,469 418,653,735 
Total liabilities and equity
W539,639,499 462,096,888 




See accompanying notes to the separate financial statements.
4
GRAVITY CO., LTD.
Separate Statements of Comprehensive Income

For the years ended December 31, 2025 and 2024

(In thousands of won)Notes20252024
Revenue1,524
  Online games
W
37,920,178 
W
36,477,961 
  Mobile games 146,024,476 142,121,659 
  Other revenue2,176,291 703,205 
186,120,945 179,302,825 
Cost of revenue1678,629,202 79,520,828 
Gross profit107,491,743 99,781,997 
Selling, general and administrative expenses1,61764,469,666 55,591,566 
Operating profit43,022,077 44,190,431 
Non-operating income and expenses
Finance income
61817,972,941 20,047,120 
Finance costs
618(5,683,538)(5,048,084)
Other non-operating income
1957,115,565 44,145,625 
Other non-operating expenses
19(14,281,682)(989,581)
Profit before income tax98,145,363 102,345,511 
Income tax expense 2015,324,629 14,453,156 
Profit for the year
W
82,820,734 
W
87,892,355 
Other comprehensive income
Items that may be subsequently reclassified to profit or loss
Foreign currency translation adjustments

- - 
Total comprehensive income for the year
W
82,820,734 W87,892,355 


See accompanying notes to the separate financial statements.
5
GRAVITY CO., LTD.
Separate Statements of Changes in Equity

For the years ended December 31, 2025 and 2024
(In thousands of won)Notes
Share
capital
Capital
surplus
Other components of equityRetained earningsTotal
Balance at January 1, 2024
W
3,474,450 27,482,683 - 299,804,247 330,761,380 
Total comprehensive income for the period:
Profit for the year
- - - 87,892,355 87,892,355 
Balance at December 31, 2024
W
3,474,450 27,482,683 - 387,696,602 418,653,735 
Balance at January 1, 2025
W
3,474,450 27,482,683 - 387,696,602 418,653,735 
Total comprehensive income for the period:
Profit for the year
- - - 82,820,734 82,820,734 
Balance at December 31, 2025
W
3,474,450 27,482,683 - 470,517,336 501,474,469 


See accompanying notes to the separate financial statements.
6
GRAVITY CO., LTD.
Separate Statements of Cash Flow
    
For the years ended December 31, 2025 and 2024

(In thousands of won)
Notes


2025


2024








Cash flows from operating activities







Profit for the year


W
82,820,734

W
87,892,355
Adjustments
21


(31,553,425)


(35,637,197)
Changes in operating assets and liabilities
21


(2,609,149)


(6,648,561)
Interest received



11,999,254


10,086,534
Dividend received



44,937,205


43,120,174
Interest paid



(145,197)


(77,204)
Income tax paid



(17,908,050)


(18,468,574)
Net cash provided by operating activities



 87,541,372


80,267,527








Cash flows from investing activities







  Decrease in other current financial assets



8,333


6,667
  Disposal of property and equipment
9


1,387


802
  Purchase of subsidiaries
8


(2,682,618)


(13,925,514)
Increase in short-term financial instruments



(111,000,000)


(29,000,000)
  Increase in other non-current financial assets



(600,000)


-
Acquisition of property and equipment
9


(532,207)


(207,306)
  Acquisition of intangible assets
10


(5,158,039)


(3,349,455)
Net cash used in investing activities



(119,963,144)


(46,474,806)








Cash flows from financing activities







  Repayment of lease liabilities
22


(1,873,674)


(2,069,495)
Net cash used in financing activities



(1,873,674)


(2,069,495)








Effects of exchange rate changes on cash and cash equivalents



585,864


382,881
Net increase (decrease) in cash and cash equivalents



(33,709,582)


32,106,107
Cash and cash equivalents at beginning of the year



64,263,198


32,157,091
Cash and cash equivalents at end of the year


W
30,553,616

W
64,263,198


See accompanying notes to the separate financial statements.
7
GRAVITY CO., LTD.
Notes to the Separate Financial Statements

For the years ended December 31, 2025 and 2024
1. General Information        
GRAVITY CO., LTD. (the “Company”) was incorporated on April 4, 2000, to engage in developing and publishing online and mobile games, and other related business. The Company’s headquarter is located at 15F, 396 World Cup buk-ro, Mapo-gu, Seoul, Korea. The Company’s principal game product, “Ragnarok”, a massive multi-player online role-playing game, was commercially launched in August 2002, and is currently operated internationally in 91 markets. The Company also operates many other games.

On February 8, 2005, the Company listed its shares on the Nasdaq Stock Market in the United States and issued 1,400,000 shares of common stocks in the form of American Depositary shares (“ADSs”) under the symbol “GRVY”.

As of December 31, 2025, the total paid-in capital amounts to W3,474,450 thousand. The Company’s major shareholders and their respective percentage of ownership as of December 31, 2025 are as follows:


Number of shares

Ownership (%)
GungHo Online Entertainment, Inc.

4,121,737

59.31
Others

2,827,163

40.69


6,948,900

100.00

2. Basis of Presentation
These separate financial statements have been prepared in accordance with Korean International Financial Reporting Standards (“K-IFRS”), as prescribed in the Act on External Audits of Stock Companies, Etc. in the Republic of Korea. The accompanying separate financial statements have been restructured and translated into English from the Korean language financial statements.

Certain information attached to the Korean language financial statements, but not required for a fair presentation of the Company’s financial position, financial performance or cash flows, is not presented in the accompanying separate financial statements.

These separate financial statements were authorized for issuance by the Board of Directors on March 6, 2026, and are expected to be submitted for approval at the shareholders’ meeting to be held on March 27, 2026.
(1) Basis of measurement
The separate financial statements have been prepared on the historical cost basis.
(2) Use of judgments and estimates
The preparation of the separate financial statements in conformity with K-IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
The estimates and assumptions that have significant risk of affecting the carrying amounts of assets and liabilities for the reporting period are as follows:
8
GRAVITY CO., LTD.
Notes to the Separate Financial Statements

For the years ended December 31, 2025 and 2024
2. Basis of Presentation, Continued
(2) Use of judgments and estimates, Continued
(a) Deferred revenue     
The Company sells virtual currency and in-game items that can be used in mobile games to game users. For each game in each country, the Company estimates and applies the game user's life cycle in order to recognize revenue generated by micro-transactions. The game user's life cycle is estimated based on the average period from the game user's first payment date to the last access date for active paying game users. The Company considers a game user as an active user if the period between the time of the user’s most recent access of the game and the end of reporting period equals or is shorter than the estimated game users’ life cycle. For remaining amounts of virtual currency and items that active users own at period-end, the related revenue is deferred considering the items’ attributes. The Company estimates the user’s life cycle by analyzing game users’ activity patterns such as payment and access and it periodically reviews if there is any change of these estimates.
(b) Impairment of investments in subsidiaries
The Company has elected to account for its investments in subsidiaries and associates using the cost method in accordance with Korean International Financial Reporting Standards (K-IFRS) No. 1027, 'Separate Financial Statements.' Meanwhile, dividends received from subsidiaries and associates are recognized in profit or loss at the point when the right to receive the dividend is established.
The Company determines whether to recognize impairment losses on investments in subsidiaries and associates in accordance with the provisions of K-IFRS No. 1036, 'Impairment of Assets.' If there are indicators of impairment, the Company performs an impairment test by comparing the entire carrying amount of the investment in subsidiaries and associates (including goodwill) with its recoverable amount (the higher of its fair value less costs to sell and its value in use) in accordance with K-IFRS No. 1036, 'Impairment of Assets.'
Any recognized impairment loss is not allocated to any asset (including goodwill) that forms part of the carrying amount of the investment in subsidiaries and associates. Furthermore, the reversal of an impairment loss is recognized to the extent that the recoverable amount of such investment assets subsequently increases in accordance with K-IFRS No. 1036, 'Impairment of Assets.'

3. New Standards and Interpretations Adopted During the Year and Resulting Changes in Accounting Policies

The Company has applied the following standards and amendments for the first time for the annual reporting period commencing on January 1, 2025.
(1)Amendments to K-IFRS No. 1021 'The Effects of Changes in Foreign Exchange Rates' - Lack of Exchangeability
It requires assessing the exchangeability of a currency and, if it is not exchangeable into another currency, estimating the spot exchange rate and disclosing related information. There is no material impact on the financial statements from the amendments to the relevant standards.
9
GRAVITY CO., LTD.
Notes to the Separate Financial Statements

For the years ended December 31, 2025 and 2024
4. Significant Accounting Policies
The principal accounting policies applied in the preparation of these separate financial statements in accordance with the K-IFRS are set out below. These policies have been consistently applied to all years presented, except if mentioned otherwise in Note 3.
(1) Investment in subsidiaries, joint ventures, and associates
These separate financial statements are prepared and presented in accordance with K-IFRS No. 1027, Separate Financial Statements. The Company applies the cost method to investments in subsidiaries, associates, and joint ventures in accordance with K-IFRS No. 1027 (Note 8). Dividends from subsidiaries, associates, and joint ventures are recognized in profit or loss when the right to receive the dividends is established.
(2) Cash and Cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with financial institutions, and other short-term investments with original maturities of three months or less that are readily convertible to known amounts of cash.
3) Financial Assets
(a) Classification
At initial recognition, the Company classifies its financial assets in the following measurement categories:

•measured at fair value through profit or loss;
•measured at fair value through other comprehensive income; and
•measured at amortized cost.

The classification depends on the Company’s business model for managing the financial assets and the contractual terms of the cash flows.

For financial assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income. For investments in debt instruments, this will depend on the business model in which the investment is held. The Company reclassifies debt investments when, and only when its business model for managing those assets changes.
For investments in equity instruments that are not held for trading, this will depend on whether the Company has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income. Changes in fair value of equity instruments not elected as equity investment at fair value through other comprehensive income will be recognized in profit or loss.
(b) Measurement
At initial recognition, the Company measures a financial asset at its fair value plus, for a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to its acquisition. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.
10
GRAVITY CO., LTD.
Notes to the Separate Financial Statements

For the years ended December 31, 2025 and 2024
4. Significant Accounting Policies, Continued
(3) Financial Assets, Continued
(b) Measurement, Continued
Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest.
(i) Debt instruments
Subsequent measurement of debt instruments depends on the Company’s business model for managing the asset and the cash flow characteristics of the asset. The Company classifies its debt instruments into one of the following three measurement categories:
•Amortized cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. A gain or loss on a debt investment that is subsequently measured at amortized cost and is not part of a hedging relationship is recognized in profit or loss when the asset is derecognized or impaired. Interest income from these financial assets is included in ‘finance income’ using the effective interest rate method.
•Fair value through other comprehensive income: Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash flows represent solely payments of principal and interest, are measured at fair value through other comprehensive income. Movements in
the carrying amount are taken through other comprehensive income, except for the recognition of impairment loss (reversal of impairment loss), interest income and foreign exchange gains and losses which are recognized in profit or loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss. Interest income from these financial assets is included in ‘finance income’ using the effective interest rate method. Foreign exchange gains and losses are presented in ‘finance income or costs’ and impairment losses are presented in ‘other non-operating expenses’.

•Fair value through profit or loss: Assets that do not meet the criteria for amortized cost or fair value through other comprehensive income are measured at fair value through profit or loss. A gain or loss on a debt investment that is subsequently measured at fair value through profit or loss and is not part of a hedging relationship is recognized in profit or loss and presented net in the statement of profit or loss within ‘finance income or costs’ in the year in which it arises.
11
GRAVITY CO., LTD.
Notes to the Separate Financial Statements

For the years ended December 31, 2025 and 2024
4. Significant Accounting Policies, Continued
(3) Financial Assets, Continued
(b) Measurement, Continued
(ii) Equity instruments
The Company subsequently measures all equity investments at fair value. Where the Company’s management has elected to present fair value gains and losses on equity investments, which are held for long-term investment or strategic purpose, in other comprehensive income. There is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment.
Changes in the fair value of financial assets at fair value through profit or loss are recognized in ‘other non-operating income and expenses’ in the statement of profit or loss as applicable. Impairment loss (reversal of impairment loss) on equity investments measured at fair value through other comprehensive income are not reported separately from other changes in fair value.
(c) Impairment
The Company recognizes loss allowances for expected credit losses(“ECLs”) on:
•financial assets measured at amortized cost;
•debt investments measured at fair value through other comprehensive income; and
•contract assets under K-IFRS No. 1115.
The Company measures loss allowances at an amount equal to lifetime ECLs, except for the following, which are measured at 12-month ECLs:
•debt securities that are determined to have low credit risk at the reporting date; and
•other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.
Loss allowances for accounts and other receivables (including lease receivables) and contract assets are always measured at an amount equal to lifetime ECLs.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Company’s historical experience and informed credit assessment, that includes forward-looking information.
12
GRAVITY CO., LTD.
Notes to the Separate Financial Statements

For the years ended December 31, 2025 and 2024
4. Significant Accounting Policies, Continued
(3) Financial Assets, Continued
(c) Impairment, Continued
The Company considers a financial asset to be in default when:
•the debtor is unlikely to pay its obligations to the Company in full, without recourse by the Company to actions such as realizing security (if any is held); or
•the financial asset is more than 90 days past due.
Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.
12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

The maximum period considered when estimating ECLs is the maximum contractual period over which the Company is exposed to credit risk.
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Company expects to receive). ECLs are discounted at the effective interest rate of the financial asset.
At each reporting date, the Company assesses whether financial assets carried at amortized cost and debt securities at fair value through other comprehensive income are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.
Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets. For debt securities at fair value through other comprehensive income, the loss allowance is charged to profit or loss.
(d) Recognition and Derecognition
Regular way purchases and sales of financial assets are recognized or derecognized on trade-date, the date on which the Company commits to purchase or sell the asset. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and the Company has transferred substantially all the risks and rewards of ownership.

If a transfer does not result in derecognition because the Company has retained substantially all the risks and rewards of ownership of the transferred asset, the Company continues to recognize the transferred asset in its entirety and recognizes a financial liability for the consideration received.
13
GRAVITY CO., LTD.
Notes to the Separate Financial Statements

For the years ended December 31, 2025 and 2024
4. Significant Accounting Policies, Continued
(3) Financial Assets, Continued
(e) Offsetting of financial instruments
Financial assets and liabilities are offset and the net amount reported in the statements of financial position where there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the assets and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.
(4) Accounts receivable
Accounts receivable are recognized initially at the amount of consideration that is unconditional, unless they contain significant financing components when they are recognized at fair value. Accounts receivables are subsequently measured at amortized cost using the effective interest method, less loss allowance.
(5) Property and Equipment
Property and equipment are initially measured at cost. The cost of property and equipment includes expenditures arising directly from the construction or acquisition of the asset, any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management, and the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located.
Property and equipment, subsequently, are carried at cost less accumulated depreciation and accumulated impairment losses. Subsequent costs are recognized in the carrying amount of property and equipment at cost or, if appropriate, as a separate item if it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be reliably measured.
Depreciation of all property and equipment, except for land, is calculated using the straight-line method to allocate their cost or revalued amounts, net of their residual values, over their estimated useful lives as follows:


Estimated Useful Lives
Computer and other equipment

4 years
Furniture and fixture

4 years
Vehicles

4 years
Leasehold improvements

(*)
Right-of-use assets

(*)

(*) The Company depreciates Right-of-use assets and the Leasehold improvements from the commencement date and the available date to the earlier date between the end of the lease term and the expiration date of Right-of-use asset’s useful life using the straight-line method.
Depreciation methods, useful lives, and residual values are reviewed at the end of each reporting date and adjusted, if appropriate. The change is accounted for as a change in an accounting estimate.
14
GRAVITY CO., LTD.
Notes to the Separate Financial Statements

For the years ended December 31, 2025 and 2024
4. Significant Accounting Policies, Continued
(6) Intangible Assets
Intangible assets, except for goodwill, are initially recognized at its historical cost, and carried at cost less accumulated amortization and accumulated impairment losses.
The Company amortizes intangible assets with a limited useful life using the straight-line method over the following periods:


Estimated Useful Lives
Software

1~3 years
Industrial property rights

10 years
Other intangible assets

1~5 years
Expenditure on research activities is recognized in profit or loss as incurred. Development expenditure is capitalized only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable and the Company intends to and has sufficient resources to complete development and to use or sell the asset. Other development expenditure is recognized in profit or loss as incurred.
The Company entered into a game licensing agreement with a number of third parties to gain exclusive rights to the games developed by those companies. The license fee payments are recognized as other intangible assets and amortized over the term of the contract using the straight-line method.
(7) Impairment of Non-financial Assets

At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than contract assets, incremental costs of obtaining a contract, costs to fulfil a contract, employee benefit related assets and deferred tax assets) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill and intangible assets that have indefinite useful lives or that are not yet available for use, irrespective of whether there is any indication of impairment, are tested for impairment annually by comparing their recoverable amounts to their carrying amounts.

The recoverable amount of an asset or cash generating unit (“CGU”) is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using an adjusted discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.
An impairment loss is recognized in profit or loss if the carrying amount of an asset or CGU exceeds its recoverable amount.
15
GRAVITY CO., LTD.
Notes to the Separate Financial Statements

For the years ended December 31, 2025 and 2024
4. Significant Accounting Policies, Continued
(8) Leases
At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company uses the definition of a lease in K-IFRS No. 1116.
(a) As a lessee
At commencement or on modification of a contract that contains a lease component, the Company allocates the consideration in the contract to each lease component on the basis of its relative stand-alone prices. However, the Company has elected not to separate non-lease components and account for the lease and non-lease components as a single lease component by class of underlying asset.
The Company determines the lease term as the non-cancellable period of a lease, together with both (a) periods covered by an option to extend the lease if the lessee is reasonably certain to exercise that option; and (b) periods covered by an option to terminate the lease if the lessee is reasonably certain not to exercise that option. When the lessee and the lessor each has the right to terminate the lease without permission from the other party, the Company should consider a termination penalty in determining the period for which the contract is enforceable.
The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Company by the end of the lease term or the cost of the right-of-use asset reflects that the Company will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.
The Company determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased.
16
GRAVITY CO., LTD.
Notes to the Separate Financial Statements

For the years ended December 31, 2025 and 2024
4. Significant Accounting Policies, Continued
(8) Leases, Continued
(a) As a lessee, Continued
Lease payments included in the measurement of the lease liability comprise the following:
•fixed payments, including in-substance fixed payments;
•variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
•amounts expected to be payable under a residual value guarantee;
•the exercise price under a purchase option that the Company is reasonably certain to exercise, lease payments in an optional renewal period if the Company is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Company is reasonably certain not to terminate early.
The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee, if the Company changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The Company presents right-of-use assets that do not meet the definition of investment property in ‘Property and equipment’ and lease liabilities in ‘Other current liabilities’ and ‘Other non-current liabilities’ in the statement of financial position.
The Company has elected not to recognize right-of-use assets and lease liabilities for leases of low-value assets and short-term leases. The Company recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.
(b) As a lessor
At inception or on modification of a contract that contains a lease component, the Company allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices.

When the Company acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating lease.
To classify each lease, the Company makes an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then it is an operating lease. As part of this assessment, the Company considers certain indicators such as whether the lease is for the major part of the economic life of the asset.
17
GRAVITY CO., LTD.
Notes to the Separate Financial Statements

For the years ended December 31, 2025 and 2024
4. Significant Accounting Policies, Continued
(8) Leases, Continued
(b) As a lessor, Continued
When the Company is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Company applies the exemption described above, then it classifies the sub-lease as an operating lease.

If an arrangement contains lease and non-lease components, then the Company applies K-IFRS No.1115 to allocate the consideration in the contract.
The Company applies the derecognition and impairment requirements in K-IFRS No. 1109 to the net investment in the lease. The Company further regularly reviews estimated unguaranteed residual values used in calculating the gross investment in the lease.
The Company recognizes lease payments received under operating leases as income on a straight-line basis over the lease term as part of ‘non-operating income’.

(9) Financial Liabilities
(a) Classification and measurement
The Company’s financial liabilities at fair value through profit or loss are financial instruments held for trading. A financial liability is held for trading if it is incurred principally for the purpose of repurchasing in the near term. A derivative that is not designated as a hedging instrument and an embedded derivative that is separated are also classified as held for trading.
The Company classifies non-derivative financial liabilities, except for financial liabilities at fair value through profit or loss, financial guarantee contracts and financial liabilities that arise when a transfer of financial assets does not qualify for derecognition, as financial liabilities carried at amortized cost and present as ‘accounts payable’, ‘other current liabilities’ and ‘other non-current liabilities’ in the separate statement of financial position.
(b) Derecognition
Financial liabilities are removed from the statement of financial position when it is extinguished; for example, when the obligation specified in the contract is discharged or cancelled or expired or when the terms of an existing financial liability are substantially modified. The difference between the carrying amount of a financial liability extinguished or transferred to another party and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

18
GRAVITY CO., LTD.
Notes to the Separate Financial Statements

For the years ended December 31, 2025 and 2024
4. Significant Accounting Policies, Continued
(10) Provisions and Contingent Liabilities
Provisions are recognized when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated.
Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value reflects current market assessments of the time value of money and the risks specific to the liability.
In addition, when there is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity or a present obligation that arises from past events but is not recognized because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation or the amount of the obligation cannot be measured with sufficient reliability, a disclosure regarding the contingent liabilities is made in the notes to the financial statements.
(11) Foreign Currency Translation
(a) Functional and presentation currency
Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which it operates (the “functional currency”), which the financial statements in the Company and its branch (Taiwan) are presented in Korean won (KRW) and New Taiwan Dollar (NTD), respectively. The separate financial statements are presented in Korean won, which is the Company’s functional and presentation currency.
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the exchange rate at the reporting date are generally recognized in profit or loss. They are recognized in other comprehensive income if they relate to qualifying cash flow hedges and qualifying effective portion of net investment hedges in a foreign operation.
Exchange differences arising on non-monetary financial assets and liabilities such as equity instruments at fair value through profit or loss and equity instruments at fair value through other comprehensive income are recognized in profit or loss and other comprehensive income, respectively, as part of the fair value gain or loss.
(12) Statement of cash flows

The Company has elected to present cash flows from operating activities using the indirect method. Cash flows denominated in a foreign currency are reported using the average exchange rate.
19
GRAVITY CO., LTD.
Notes to the Separate Financial Statements

For the years ended December 31, 2025 and 2024
4. Significant Accounting Policies, Continued
(13) Revenues from contracts with customers
The Company engages in game licensing, IP licensing, and game publishing businesses.
Revenue is measured at the fair value of the consideration received or receivable for sale of goods or rendering of services arising from the normal course of the business. Revenue is recognized as net amounts excluding value added taxes, returns, rebates and discounts.
(a) Revenue from micro-transaction and subscription
The Company recognizes micro-transaction revenue of online and mobile games when the Company satisfies its performance obligations.
Whether the performance obligations are satisfied depends on the natures of virtual currency and in-game virtual items. Items are categorized into consumable, periodic, and permanent in-game virtual items.
Consumable in-game virtual items are items that are consumed by the specific action of a game user, and periodic in-game virtual items are items that can be used repeatedly during a specified effective period. Permanent in-game virtual items are items that can be used by game users repeatedly without an effective period.
The accounting policy on revenue recognition is described below in relation to micro-transaction revenue from the sales of virtual currency and items.
(i) Online Games
The specific method of recognizing and deferring revenue for virtual currency and consumable, periodic, and permanent items purchased with virtual currency is as follows.
At the end of the reporting period, the Company defers the total amount of remaining virtual currency.
For consumable in-game virtual items, the related revenue is recognized when the in-game virtual item is consumed. The Company defers the revenue for remaining amounts of virtual items owned by active paying users within the estimated user life cycle at the end of the reporting period.
For periodic in-game virtual items, the related revenue is recognized ratably over the effective period. The Company defers the revenue for remaining effective period.
For permanent in-game virtual items, revenue is recognized ratably over the estimated user life cycle. The Company defers the revenue for remaining period of estimated user life cycle at the end of the reporting period.
(ii) Mobile Games
The specific method of recognizing and deferring revenue for virtual currency and consumable, periodic, and permanent items purchased with virtual currency is as follows.
Mobile game users purchase virtual currency that can be used to purchase in-game items. The Company has no refund obligation after the game user purchases virtual currency. At the end of the reporting period, the Company defers the revenue for the remaining virtual currency possessed by active paying users.
4. Significant Accounting Policies, Continued
20
GRAVITY CO., LTD.
Notes to the Separate Financial Statements

For the years ended December 31, 2025 and 2024
(13) Revenues from contracts with customers, Continued
(a) Revenue from micro-transaction and subscription, Continued
(ii) Mobile Games, Continued
For consumable in-game virtual items, revenue is recognized when the in-game virtual item is consumed. The Company defers the revenue for remaining virtual items possessed by active users within the estimated user life cycle at the end of the reporting period.
For periodic in-game virtual items with effective period, revenue is recognized ratably over the effective period. The Company defers the revenue for remaining effective period.
For permanent in-game virtual items, revenue is recognized ratably over the estimated user life cycle. The Company defers the revenue for remaining period of estimated user life cycle at the end of the reporting period.
(b) Royalties and License Fees
In connection with the Company’s online and mobile games, the Company enters into license agreement in connection with the right to access the intellectual property, such as game character images and stories. The Company believes that the agreement is a promise to provide a right to the customer to access the related IP because the Company will undertake activities that significantly affect the intellectual property to which the customer has rights, the rights granted by the license directly expose the customer to any positive or negative effects of the Company’s activities, and those activities do not result in the transfer of a good or a service to the customer as those activities occur. Therefore, the Company’s performance obligations in connection with these agreements are satisfied over time.
Since the nature of the license promise is to provide customers with access to the intellectual property of the Company during the license period, the Company's performance obligation corresponds to the performance obligation satisfied over the time, and revenue is recognized over the license period. The Company recognizes revenue for the license fee through the straight-line method during the contract period, and for the running royalty revenue, the revenue is recognized on an accrual basis at the time the revenue distribution is established in accordance with the terms of the contract. When the running royalty revenue based on the contractual royalty rate and the actual revenue of the licensee exceeds the ratably recognized minimum guarantee, the excess amount is then recognized as revenue and accounts receivable.
(c) Other Income (Other Revenue)
Other income consists of revenue from the sale of console games, game character merchandise, animations, and other services. These other services include the sale of mobile applications and website development and operation services for third parties. Revenue from development and operation services for third parties is recognized over time by measuring the progress toward the satisfaction of the performance obligation. The measurement method determines the percentage of completion based on the costs incurred up to the end of the reporting period relative to the total estimated costs of the contract.
21
GRAVITY CO., LTD.
Notes to the Separate Financial Statements

For the years ended December 31, 2025 and 2024
4. Significant Accounting Policies, Continued
(13) Revenues from contracts with customers, Continued
(d) Incremental costs of obtaining contract
The Company pays platform processing fees to operate mobile games on third party platforms. These fees are charged based on the game users’ purchases in cash and considered as incremental cost of obtaining contracts with customers and therefore capitalized. The Company presents these costs as prepaid expense and amortizes them to costs of revenue at the same time when the related revenue of the services provided to the game users are recognized.
(14) Current and Deferred Tax
The tax expense for the period consists of current and deferred tax. Current and deferred tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. The tax expense is measured at the amount expected to be paid to the taxation authorities, using the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation, and considers whether it is probable that a taxation authority will accept an uncertain tax treatment. The Company measures its tax balances either based on the most likely amount or the expected value, depending on which method provides a better prediction of the resolution of the uncertainty.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the separate financial statements. However, deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.
Deferred tax assets are recognized only if it is probable that future taxable amounts will be available to utilize those temporary differences and tax credit.
The Company recognizes a deferred tax liability for all taxable temporary differences associated with investments in subsidiaries, associates, and interests in joint arrangements, except to the extent that the Company is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. In addition, the Company recognizes a deferred tax asset for all deductible temporary differences arising from such investments to the extent that it is probable the temporary difference will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilized.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis.
22
GRAVITY CO., LTD.
Notes to the Separate Financial Statements

For the years ended December 31, 2025 and 2024
4. Significant Accounting Policies, Continued
(15) Employee Benefits
(a) Short-term employee benefits
Short-term employee benefits are employee benefits that are due to be settled within 12 months after the end of the period in which the employees render related services. When an employee has rendered a service to the Company during an accounting period, the Company recognizes the undiscounted amount of short-term employee benefits expected to be paid in exchange for that service.
(b) Defined contribution pension plan
The Company has a defined contribution pension plan with the related contribution to the pension plan recorded as severance benefit expenses for the employees with service period over a year. The Company recognizes provision for severance benefits for the employees with service period less than a year.
(16) Standards issued but not yet effective
A number of new standards are effective for annual periods beginning after January 1, 2025 and earlier application is permitted; however, the Company has not early adopted the new or amended standards in preparing these separate financial statements.
The following amended standards and interpretations are not expected to have a significant impact on the Company’s separate financial statements.
•Classification and Measurement of Financial Instruments (Amendment to K-IFRS 1109 ‘Financial Instruments’ and K-IFRS 1107 ‘Financial Instruments: Disclosures’)
•Annual Improvements to IFRS Accounting Standards
-K-IFRS 1101 ‘First-time adoption of International Financial Reporting Standards’;
-K-IFRS 1107 ‘Financial instruments: Disclosures’;
-K-IFRS 1109 ‘Financial instruments’;
-K-IFRS 1110 ‘Consolidated Financial Statements’ ; and
-K-IFRS 1007 ‘Statement of cash flows’
K-IFRS 1118 'Presentation and Disclosure in Financial Statements')
23
GRAVITY CO., LTD.
Notes to the Separate Financial Statements

For the years ended December 31, 2025 and 2024
5. Cash and cash equivalents
(1) Cash and cash equivalents as of December 31, 2025 and 2024 are as follows:
(In thousands of won)


December 31, 2025


December 31, 2024

Demand deposits, etc.

W
30,553,616


64,263,198

(2) The Company does not have any restricted cash and cash equivalents as of December 31, 2025 and 2024.

6. Financial Instruments by Category
(1) Carrying amounts of financial instruments by category as of December 31, 2025 and 2024 are as follows:
    
(In thousands of won)December 31, 2025December 31, 2024
Financial assets at amortized cost
Cash and cash equivalents
W
30,553,616 64,263,198 
Short-term financial instruments389,000,000 278,000,000 
Accounts receivable, net28,536,382 35,651,270 
Other receivables, net3,385,229 3,290,165 
Other current financial assets(*1)3,945,138 5,897,585 
Other non-current financial assets(*2)2,742,526 1,999,836 
Financial assets at fair value through profit or loss
Long-term financial assets measured at fair value(*3)600,000 - 
W
458,762,891 389,102,054 

Since the carrying amount is a reasonable approximation of fair value, it has been excluded from the fair value disclosure.

(*1) Other current financial assets consist of accrued income, deposits and lease receivable.
(*2) Other non-current financial assets consist of deposits and lease receivable.
(*3) Long-term financial assets measured at fair value consist of convertible bonds and are included in other non-current financial assets.


(In thousands of won)


December 31, 2025
December 31, 2024
Financial liabilities at amortized cost
Accounts payable(*1)

W
18,303,305

18,593,510
Long-term accounts payable


622,745

220,108
Other non-current liabilities


239,868

239,868
Other financial liabilities





lease liabilities(*2)


3,514,786

5,283,984


W
22,680,704

24,337,470
Since the carrying amount is a reasonable approximation of fair value, it has been excluded from the fair value disclosure
24
GRAVITY CO., LTD.
Notes to the Separate Financial Statements

For the years ended December 31, 2025 and 2024
6. Financial Instruments by Category, Continued
(1) Carrying amounts of financial instruments by category as of December 31, 2025 and 2024 are as follows, continued
(*1) Annual leave allowance, bonus accruals, etc. that should be paid to employees are excluded.
(*2) Lease liabilities were excluded from fair value disclosures in accordance with K-IFRS No. 1107 'Financial Instruments: Disclosures.'

(2) Net income(expenses) from financial instruments for the years ended December 31, 2025 and 2024 are as follows:
(In thousands of won)20252024
Financial assets at amortized cost

　
Interest income
W
11,384,704 11,819,137 
Differences in foreign currency
285,919 4,834,517 

11,670,623 16,653,654 
Financial assets at fair value through profit or loss
Interest income
633 - 
W
11,671,256 16,653,654 

(In thousands of won)20252024
Financial liabilities at amortized cost

 Differences in foreign currency
W
773,184 (1,572,064)
Other financial liabilities

 Interest expense
(155,037)(82,554)
W
618,147 (1,654,618)
(3) Fair value hierarchy
Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:
•Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
•Level 2: all inputs other than quoted prices included in level 1 that are observable (either directly that is, prices, or indirectly that is, derived from prices) for the asset or liability;
•Level 3: unobservable inputs for the asset or liability.
The fair value of financial instruments traded in an active market is determined based on the quoted market price as of the end of the reporting period. If the quoted prices are readily and regularly available through exchanges, sellers, brokers, industry groups, rating agencies or regulators and such prices represent actual market transactions that occur regularly between independent parties, they are considered active markets. These products are included in Level 1.
The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. These valuation techniques use as much market observable information as possible and use the least amount of company-specific information. At this time, if all the significant input variables required to measure the fair value of a good are observable, the good is included in Level 2.
25
GRAVITY CO., LTD.
Notes to the Separate Financial Statements

For the years ended December 31, 2025 and 2024
6. Financial Instruments by Category, Continued
(3) Fair value hierarchy, Continued
If more than one significant input variable is not based on observable market information, the item is included in Level 3.
The valuation techniques used to measure the fair value of a financial instrument include:
- Market price or dealer price of a similar financial instrument
- The fair value of derivative instruments is determined by discounting the amount to present value using the leading exchange rate as of the end of the reporting period
For the other financial instruments, the Company applied other valuation techniques such as discounted cash flow, etc.

The following table presents the amounts by fair value hierarchy as of the end of the current reporting period

Level 1Level 2Level 3Total
Fair value measurements
Long-term financial assets measured at fair value- - 600,000 600,000 

7. Accounts and Other Receivables
(1) Accounts and other receivables as of December 31, 2025 and 2024 are as follows:
(In thousands of won)


December 31, 2025

December 31, 2024




Accounts
receivable

Other receivables

Accounts
receivables

Other receivables

Non-related party

W
14,080,688

48,079

21,571,967

308,157

Related party


14,495,891

3,372,245

14,121,140

3,101,062

Less: Loss allowance


(40,197)

-
　
(41,837)

-



W
28,536,382

3,420,324
　
35,651,270

3,409,219

(2) Changes in the loss allowance of accounts receivable during the years ended December 31, 2025 and 2024 are as follows:
(In thousands of won)


Accounts receivable



2025

2024
Beginning balance

W
41,837

12,007
(Reversal of) Bad debt expenses


442

29,830
Write-off


(2,082)

-
Ending balance

W
40,197
　
41,837
26
GRAVITY CO., LTD.
Notes to the Separate Financial Statements

For the years ended December 31, 2025 and 2024
7. Accounts and Other Receivables, Continued
(3)Expected credit losses (ECLs) and credit risk exposures for accounts and other receivables as of December 31, 2025 and 2024 are as follows:
(a) Accounts receivable

(In thousands of won)

December 31, 2025


 Expected loss rate(%)


Carrying
 amount


Loss allowance
Not due or overdue for less than 90 days

0.10

W
28,406,085


27,574
More than 90 days ~ Less than 180 days

0.25


158,003


401
More than 180 days ~ Less than 270 days

33.76


311


105
More than 270 days ~ Less than 1 year

61.35


163


100
More than 1 year

100.00


12,017


12,017




W
28,576,579


40,197


(In thousands of won)

December 31, 2024


 Expected loss rate(%)


Carrying
Amount


Loss allowance
Not due or overdue for less than 90 days

               0.08 

W
35,653,617


27,574
More than 90 days ~ Less than 180 days

               0.44 


25,248


401
More than 180 days ~ Less than 270 days

             100.00 


2,023


105
More than 270 days ~ Less than 1 year

             100.00 


4,430


100
More than 1 year

             100.00 


7,789


12,017




W
35,693,107


40,197


(b) Other receivables
(In thousands of won)

December 31, 2025


 Expected loss rate(%)


Carrying
 amount


Loss allowance
Not due or overdue for less than 90 days

0.00

W
3,420,324


-
More than 90 days ~ Less than 180 days

0.00


-


-




W
3,420,324


-

(In thousands of won)

December 31, 2024


 Expected loss rate(%)


Carrying
amount


Loss allowance
Not due or overdue for less than 90 days

0.00

W
3,403,128


-
More than 90 days ~ Less than 180 days

0.00


6,091


-




W
3,409,219


-

27
GRAVITY CO., LTD.
Notes to the Separate Financial Statements

For the years ended December 31, 2025 and 2024
7. Accounts and Other Receivables, Continued
(3)ECLs and credit risk exposures for accounts and other receivables as of December 31, 2025 and 2024 are as follows, Continued:
In assessing the recoverability of accounts and other receivables, the Company considers changes in the credit rating of accounts and other receivables from the commencement of the credit to the end of the reporting period.

The Company applies simplified approach for accounts and other receivables to measure the loss allowance at an amount equal to lifetime expected credit losses. To measure the expected credit losses, accounts and other receivables are grouped based on credit risk characteristics and the duration of past due balances. ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls. The Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes the Company’s historical experience and informed credit assessment, that includes forward-looking information.

8. Investment in Subsidiaries

(1)Details of investment in subsidiaries as of December 31, 2025 and 2024 are as follows:








Percentage of ownership (%)
Subsidiary

Location

Main business

Fiscal year end

December 31, 2025

December 31, 2024

Gravity Interactive, Inc.

USA

Online and mobile game services

December

100.00

100.00

Gravity NeoCyon, Inc.(*1)

Korea

Mobile Game Development and Service

December

100.00

100.00

Gravity Communications Co., Ltd.

Taiwan

Online and mobile game services

December

100.00

100.00

PT. Gravity Game Link.

Indonesia

Online and mobile game services

December

70.00

70.00

Gravity Game Tech Co., Ltd.

Thailand

Online and mobile game services

December

100.00

100.00

Gravity Game Arise Co., Ltd.

Japan

Online and mobile game services

December

100.00

100.00

Gravity Game Hub PTE., Ltd.

Singapore

Online and mobile game services

December

100.00

100.00

Gravity Game Vision Limited.

Hongkong

Online and mobile game services

December

100.00

100.00

Gravity Game Unite SDN.BHD(*2).

Malaysia

Online and mobile game services

December

100.00

-

(*1) Gravity NeoCyon, Inc. was acquired an additional 0.47% during the year ended December 31, 2024 with 100% ownership interest held by the Parent Company.
(*2) Gravity Game Unite SDN. BHD was established in March 2025 and was included as a subsidiary for the year ended December 31, 2025.
28
GRAVITY CO., LTD.
Notes to the Separate Financial Statements

For the years ended December 31, 2025 and 2024
8. Investment in Subsidiaries, Continued
(2)Changes in investment in subsidiaries for the years ended December 31, 2025 and 2024 are as follows:

(In thousands of won)



2025
Subsidiary


Beginning balance


Acquisition

Impairment (reversal)

Ending balance
Gravity Interactive, Inc. (*1)

W
-


-

10,580,150

10,580,150
Gravity NeoCyon, Inc.


8,737,422


-

-

      8,737,422
Gravity Communications Co., Ltd.
5,681,415


-

-

5,681,415
PT. Gravity Game Link.


2,483,407


-

              -

      2,483,407
Gravity Game Tech Co., Ltd.


7,130,555


-

-

 7,130,555
Gravity Game Arise Co., Ltd. (*2)


18,378,045


1,952,740

(13,403,000)

6,927,785
Gravity Game Hub PTE., Ltd.


6,332,621


-

-

      6,332,621
Gravity Game Vision Limited.


633,282




-

633,282
Gravity Game Unite SDN.BHD.(*3)


-


729,878

              -

729,878


W
49,376,747


2,682,618

(2,822,850)

49,236,515

(*1) After re-evaluating the impairment losses recognized in periods prior to 2024, an impairment reversal of 10,580,150 thousand KRW was recognized.
(*2) During the current period, an impairment loss of 13,403,000 thousand KRW was recognized as the recoverable amount of Gravity Game Arise Co., Ltd. fell below its carrying amount.
(*3) During the current period, Gravity Game Unite SDN.BHD. was established with a 100% equity interest.

{In thousands of won)


2024
Subsidiary


Beginning balance


Acquisition



Ending balance
Gravity Interactive, Inc.(*1)

W
-


-



-
Gravity NeoCyon, Inc. (*2)


5,637,089


3,100,333



      8,737,422
Gravity Communications Co., Ltd.


5,681,415


-



5,681,415
PT. Gravity Game Link.
2,483,407


-



2,483,407
Gravity Game Tech Co., Ltd. (*3)
3,407,555


3,723,000



7,130,555
Gravity Game Arise Co., Ltd. (*3)
11,275,865


7,102,180



18,378,045
Gravity Game Hub PTE., Ltd.
6,332,621


-



6,332,621
Gravity Game Vision Limited.
633,282


-



633,282


W
35,451,234


13,925,513



49,376,747

(*1) Prior to 2024, the entire amount was recognized as an impairment loss as the recoverable amount fell below the carrying amount.
(*2) During the year ended December 31, 2024, the Company participated in a paid-in capital increase through the issuance of new shares by Gravity Neocyon Inc., increasing its equity interest to 99.73%, and subsequently became a 100% wholly-owned subsidiary by purchasing an additional 0.27% through the exercise of minority shareholders' appraisal rights.
(*3) During the year ended December 31, 2024, the Company participated in the paid-in capital increases conducted by Gravity Game Tech Co., Ltd. and Gravity Game Arise Co., Ltd., and there were no changes in the equity interest percentage.
29
GRAVITY CO., LTD.
Notes to the Separate Financial Statements

For the years ended December 31, 2025 and 2024
8. Investment in Subsidiaries, Continued
(3) Summary of financial information of subsidiaries for the current and prior periods is as follows:
(In thousands of won)

2025
Subsidiary


 Total assets


Total liabilities


Revenue


Profit (loss) for
the year
Gravity Interactive, Inc.

W
42,811,520


29,821,998


193,942,577


2,016,809
Gravity NeoCyon, Inc.


14,586,231


3,380,018


18,287,248


487,256
Gravity Communications Co., Ltd.


33,271,379


8,164,808


45,735,096


5,846,620
PT. Gravity Game Link.


2,429,974


735,538


2,961,141


(514,617)
Gravity Game Tech Co., Ltd.


66,438,880


12,474,843


46,040,690


9,776,017
Gravity Game Arise Co., Ltd.


11,527,830


5,729,683


14,995,225


(2,513,369)
Gravity Game Hub PTE., Ltd.


52,912,619


9,761,767


74,135,929


1,346,603
Gravity Game Vision Limited.


51,911,717


19,013,461


94,875,222


11,296,112
Gravity Game Unite SDN.BHD.


945,080


431,236


28,194


(265,995)


(In thousands of won)

2024
Subsidiary


Total assets


Total liabilities


Revenue


Profit (loss) for
the year
Gravity Interactive, Inc.

W
28,078,172 


16,855,468 


39,938,248 


73,691 
Gravity NeoCyon, Inc.


15,000,011 


4,281,053 


20,315,748 


1,771,492 
Gravity Communications Co., Ltd.


27,121,263 


6,687,225 


35,188,837 


1,754,375 
PT. Gravity Game Link


2,693,086 


366,844 


1,475,922 


(50,963)
Gravity Game Tech Co., Ltd.


72,122,833 


23,779,945 


48,771,433 


6,860,364 
Gravity Game Arise Co., Ltd.


7,712,161 


1,192,327 


5,574,326 


(6,237,282)
Gravity Game Hub PTE., Ltd.


68,727,648 


13,683,947 


89,256,880 


13,815,260 
Gravity Game Vision Limited.


72,467,900 


26,755,643 


160,067,411 


21,945,899 

9. Property and Equipment
(1) Details of property and equipment as of December 31, 2025 and 2024 are as follows:
(In thousands of won)


December 31, 2025

December 31, 2024



Acquisition
cost


Accumulated depreciation


Carrying
amount


Acquisition cost


Accumulated depreciation


Carrying
amount
Computer and other equipment

W
4,648,952


(3,882,486)


766,466


4,184,481


(3,546,324)


638,157
Furniture and fixture


907,148


(861,376)


45,772


891,343


(804,324)


87,019
Vehicles


9,101


(9,101)


-


9,101


(9,101)


-
Leasehold improvements


1,602,967


(1,566,386)


36,581


1,588,067


(1,496,534)


91,533
Right-of-use assets


5,752,800


(2,517,815)


3,234,985


5,976,408


(1,448,621)


4,527,787


W
12,920,968


(8,837,164)


4,083,804


12,649,400


(7,304,904)


5,344,496
30
GRAVITY CO., LTD.
Notes to the Separate Financial Statements

For the years ended December 31, 2025 and 2024
9. Property and Equipment, Continued
(2) Changes in property and equipment for the years ended December 31, 2025 and 2024 are as follows:
(In thousands of won)


 

2025
 


 

Computer and other equipments

Furniture
and fixture
 
Vehicles

Leasehold
improvements
 
Right-of-use assets

Total
Beginning balance


 
W
638,157

87,019

-

91,533

4,527,787

5,344,496
Acquisitions


 
 
504,330

17,296

-

14,900

471,212

1,007,738
Depreciation




(376,021)

(58,543)

-

(69,852)

(1,764,014)

(2,268,430)
Ending balance


 
W
766,466

45,772

-
-
36,581

3,234,985

4,083,804

(In thousands of won)


 

2024
 


 

Computer and other equipments

Furniture
and fixture
 
Vehicles

Leasehold
improvements
 
Right-of-use assets

Total
Beginning balance


 
W
761,436

170,628

1,327

267,058

2,979,153

4,179,602
Acquisitions


 
 
192,296

17,248

-

-

3,492,595

3,702,139
Depreciation


 
 
(315,575)

(100,857)

(1,327)

(175,525)

(1,943,961)

(2,537,245)
Ending balance


 
W
638,157

87,019

-
-
91,533

4,527,787

5,344,496

(3) Classification of depreciation expenses in the statements of comprehensive income for the years ended December 31, 2025 and 2024 are as follows:
(In thousands of won)


2025

2024
Cost of revenues

W
633,938

578,098
Selling, general and administrative expenses(*)


1,634,492

1,959,147


W
2,268,430

2,537,245
(*) The depreciation expenses recognized as the research and development included in selling, general and administrative expenses was W25,774 thousand and W33,388 thousand, respectively, for the years ended December 31, 2025 and 2024.
(4) As of December 31, 2025 and 2024, there are no property and equipment that are pledged as collateral for the Company’s debts.
31
GRAVITY CO., LTD.
Notes to the Separate Financial Statements

For the years ended December 31, 2025 and 2024
10. Intangible Assets
(1) Details of intangible assets as of December 31, 2025 and 2024 are as follows:
(In thousands of won)


December 31, 2025

December 31, 2024



Acquisition cost

Accumulated
amortization(*)

Carrying
amount

Acquisition cost

Accumulated amortization (*)

Carrying
amount
Software

W
15,012,212

(13,063,776)

1,948,436

14,572,103

(12,807,213)

1,764,890
Patents


2,070,648

(993,521)

1,077,127

1,723,078

(854,875)

868,203
Other intangible assets


9,177,670

(5,918,683)

3,258,987

8,965,066

(4,832,266)

4,132,800


W
26,260,530

(19,975,980)

6,284,550

25,260,247

(18,494,354)

6,765,893

(*) Accumulated amortization includes the amount of accumulated impairment loss.

(2) Changes in intangible assets for the years ended December 31, 2025 and 2024 are as follows:
(In thousands of won)


2025


Software

Patents

Other intangible
assets

Total
Beginning balance

W
1,764,890

868,203

4,132,800

6,765,893
Acquisitions


1,459,690

353,193

1,906,560

3,719,443
Amortization


(1,276,144)

(139,810)

(2,437,195)

(3,853,149)
Disposals


-

(4,459)

(67)

(4,526)
Impairment loss(*)


-

-

(29,111)

(29,111)
Miscellaneous


-

-

(314,000)

(314,000)
Ending balance

W
1,948,436

1,077,127

3,258,987

6,284,550
(*) The Company recognized W29,111 thousand of impairment loss as carrying amount of the other intangible assets exceeded recoverable amount as of December 31, 2025.


(In thousands of won)


2024


Software

Patents

Other intangible
assets

Total
Beginning balance

W
2,650,843

611,348

2,727,405

5,989,596
Acquisitions


375,073

366,916

2,966,618

3,708,607
Amortization


(1,261,026)

(110,061)

(1,148,240)

(2,519,327)
Disposals


-

-

(2,839)

(2,839)
Impairment loss(*)


-

-

(410,144)

(410,144)
Ending balance

W
1,764,890

868,203

4,132,800

6,765,893
(*) The Company recognized W410,144 thousand of impairment loss as carrying amount of other intangible assets license exceeded recoverable amount as of December 31, 2024.
32
GRAVITY CO., LTD.
Notes to the Separate Financial Statements

For the years ended December 31, 2025 and 2024
10. Intangible Assets, Continued
(3) Classification of amortization in the statements of comprehensive income for the years ended December 31, 2025 and 2024 are as follows:
(In thousands of won)

2025

2024
Cost of revenues
W
2,039,299

696,451
Selling, general and administrative expenses(*)

1,813,850

1,822,876
Total
W
3,853,149

2,519,327

(*) The amortization recognized as the research and development included in selling, general and administrative expenses was W552,191 thousand and W528,382 thousand, respectively, for the years ended December 31, 2025 and 2024.

11. Other non-current assets

(In thousands of won) 
December 31, 2025 
 
December 31, 2024 
Prepaid Expenses(*) 
W 
13,974,836 5,958,410 
Others 555,121 318,909 
W 
14,529,957 6,277,319 
(*) It consists of minimum guaranteed royalties and technical support fee.


12. Employee Benefit
The expenses recognized in relation to defined contribution plan for the years ended December 31, 2025 and 2024 are W2,001,438 thousand and W1,868,777 thousand, respectively.

13. Commitments
(1) The Company enters into game licensing agreements with several external game developers to secure exclusive rights to games developed by third parties; down payments paid are recognized as other intangible assets, and minimum guarantee royalties (Minimum Guarantee) are recorded as other non-current assets. In this regard, the amount of future payment commitments under these contracts, which have not been recognized as liabilities as of the end of the current period, is KRW 2,713,461 thousand (end of the previous period: KRW 4,159,526 thousand).
(2) As of the end of the current period, the Company is provided with payment guarantees of KRW 110,400 thousand from Seoul Guarantee Insurance Co., Ltd. in relation to performance contracts, etc.
33
GRAVITY CO., LTD.
Notes to the Separate Financial Statements

For the years ended December 31, 2025 and 2024
14. Share Capital and Capital Surplus
(1) Details of common shares as of December 31, 2025 and 2024 are as follows:
(In won and in number of shares)


December 31, 2025

December 31, 2024

Number of authorized shares


40,000,000

40,000,000

Value per share

W
500

500

Number of shares issued


6,948,900

6,948,900

Common shares

W
3,474,450,000

3,474,450,000


(2) Details of capital surplus as of December 31, 2025 and 2024 are as follows:
(In thousands of won)


December 31, 2025

December 31, 2024

Additional paid-in capital

W
25,357,547

25,357,547

Other capital surplus


2,125,136

2,125,136



W
27,482,683
　
27,482,683


(3) Details of retained earnings as of December 31, 2025 and 2024 are as follows:
(In thousands of won)


December 31, 2025

December 31, 2024

Unappropriated retained earnings

W
470,517,336

387,696,602


(4) According to the Company's Articles of Incorporation, the Company may issue 2,000,000 shares of preferred stock without voting rights, and there are no preferred shares issued as of December 31, 2025.

(5) Statements of appropriation of retained earnings as of December 31, 2025 and 2024 are as follows:
Date of appropriation for 2025: March 27, 2026






Date of appropriation for 2024: March 31, 2025













(In thousands of won)


2025

2024

Retained earnings available for appropriation






Unappropriated retained earnings carried over from prior year

W
387,696,602

299,804,247

Profit for the year


82,820,734

87,892,355




470,517,336

387,696,602

Appropriation of retained earnings


-

-

Unappropriated retained earnings to be carried forward

W
470,517,336
　
387,696,602

34
GRAVITY CO., LTD.
Notes to the Separate Financial Statements

For the years ended December 31, 2025 and 2024
15. Revenue from Contracts with Customers
(1) Details of revenue from contracts with customers based on the service contract type and the timing of satisfaction of performance obligations are as follows:
(In thousands of won)


2025

2024

Service contract






 Micro transaction & Subscription revenue

W
42,845,074

55,715,793

 Online games


7,461,772

7,082,103

 Mobile games


35,383,302

48,633,690

 Royalties & License fees


141,099,580

122,883,827

   Online games


30,458,406

29,395,858

   Mobile games


110,641,174

93,487,969

 Others


2,176,291

703,205




186,120,945

179,302,825

Major geographic market






Taiwan


39,416,747

35,999,911

Korea


27,432,485

41,978,248

Thailand


14,940,379

17,870,330

Japan


26,839,412

17,417,846

United States of America


8,787,987

4,658,647

Philippines


14,777,585

15,384,318

Indonesia


14,128,912

3,687,011

Malaysia


2,582,075

3,806,480

China


10,888,100

15,520,914

Brazil


4,128,262

6,812,422

Hongkong


3,708,233

44,189

Others


18,490,768

16,122,509




186,120,945

179,302,825

Timing of satisfaction of performance obligations






 At a point in time


437,821

13,902

Over time


185,683,124

179,288,923



W
186,120,945
　
179,302,825

35
GRAVITY CO., LTD.
Notes to the Separate Financial Statements

For the years ended December 31, 2025 and 2024
15. Revenue from Contracts with Customers, Continued
(2) Accounts receivable, incremental costs of obtaining a contract and contract liabilities related to contracts with customers as of December 31, 2025 and December 31, 2024 are as follows:
(In thousands of won)


December 31, 2025

December 31, 2024

Accounts receivable

W
28,536,382

35,651,270

Incremental costs of obtaining a contract (Prepaid expenses)


163,828

352,040

Contact liabilities (Deferred revenue)


5,614,150

8,261,474

Micro transaction & Subscription revenue


3,555,707

4,234,981

Royalties and License fees


2,052,605

4,021,493

Other revenue


5,838

5,000

(3)Contract Liabilities The amount of revenue recognized from contract liabilities of the previous period is KRW 5,686,274 thousand in the current period (previous period: KRW 4,286,132 thousand), and it consists of paid contents of KRW 4,234,981 thousand, licenses of KRW 1,449,631 thousand, and others of KRW 1,662 thousand (previous period: paid contents of KRW 3,640,941 thousand and licenses of KRW 645,191 thousand).
(4) Transaction price allocated to unsatisfied performance obligations as of December 31, 2025 and 2024 are as follows:
(In thousands of won)


December 31, 2025

December 31, 2024

Micro transaction & Subscription revenue

W
3,555,707

4,234,981

   Online games


2,930,670

2,966,391

   Mobile games


625,037

1,268,590

Royalties and License fees


2,052,605

4,021,493

   Online games


58,375

432,523

   Mobile games


1,994,230

3,588,970

Other revenue


5,838

5,000



W
5,614,150
　
8,261,474


The Company’s management expects to recognize 92.7% (W5,204,398 thousand) of the transaction price allocated to contracts that have not been performed as of December 31, 2025 as revenue within 12 months. The remaining 7.3% (W409,752 thousand) is expected to be recognized as revenue thereafter. The amounts disclosed above do not include variable consideration which is constrained.

(5) Details of incremental costs of obtaining a contract recognized as assets as of December 31, 2025 and 2024 are as follows:
(In thousands of won)


December 31, 2025

December 31, 2024

Incremental costs of obtaining a contract

W
163,828

352,040

Amortization costs recognized as cost of revenue


352,040

255,003

36
GRAVITY CO., LTD.
Notes to the Separate Financial Statements

For the years ended December 31, 2025 and 2024
16. Classification of expenses by nature
Details of classification of expenses by nature for the years ended December 31, 2025 and 2024 are as follows:
(In thousands of won)


2025

2024

Fees and commissions

W
62,925,586

66,427,377

Advertising expenses


16,014,777

9,643,942

Salaries


32,843,509

28,996,658

Outsourcing expenses


16,784,611

17,318,605

Rent


1,028,672

989,144

Employee benefits


2,679,590

2,328,942

Post-employment benefits


2,015,951

1,873,075

Depreciation


2,268,430

2,537,245

Amortization


3,853,149

2,519,327

Bad debt expenses


442

29,830

Other expenses


2,684,151

2,448,249



W
143,098,868
　
135,112,394

Total expenses consist of cost of sales, selling, general and administrative expenses.

17. Selling, general and administrative expenses
Details of selling, general and administrative expenses for the years ended December 31, 2025 and 2024 are as follows:
(In thousands of won)


2025

2024

Fees and commissions

W
9,012,972

7,835,387

Advertising expenses


16,014,777

9,643,942

Salaries


17,324,650

15,134,983

Outsourcing expenses


1,919,799

1,162,563

Rent


634,616

607,035

Employee benefits


1,816,211

1,552,039

Post-employment benefits


891,363

867,870

Depreciation


1,608,718

1,925,759

Amortization


1,261,659

1,294,494

Bad debt expenses


442

29,830

Research and development


11,922,638

13,622,253

Others


2,061,821

1,915,411



W
64,469,666

55,591,566

37
GRAVITY CO., LTD.
Notes to the Separate Financial Statements

For the years ended December 31, 2025 and 2024
18. Finance Income and Costs
(1) Details of finance income for the years ended December 31, 2025 and 2024 are as follows:
(In thousands of won)


2025

2024

Finance income






Interest income

W
11,385,337

11,819,137

Unrealized foreign currency gain


1,239,070

2,090,788

Gain on foreign currency transactions


5,348,534

6,137,195



W
17,972,941
　
20,047,120


(2) Details of finance costs for the years ended December 31, 2025 and 2024 are as follows:
(In thousands of won)


2025

2024

Finance costs






Interest expense

W
155,037

82,554

Unrealized foreign currency loss


698,537

789,046

Loss on foreign currency transactions


4,829,964

4,176,484



W
5,683,538
　
5,048,084


19. Other Non-Operating Income and Expenses
(1) Details of other non-operating income for the years ended December 31, 2025 and 2024 are as follows:
(In thousands of won)


2025

2024

Gain on disposal of property and equipment

W
1,387

977

Reversal of impairment loss on investments in subsidiaries


10,580,150

-

Dividend income


44,937,205

43,120,174

Others


1,596,823

1,024,474



W
57,115,565

44,145,625


(2) Details of other non-operating expenses for the years ended December 31, 2025 and 2024 are as follows:
(In thousands of won)


2025

2024

Loss on disposal of property and equipment

W
-

6,050

Loss on disposal of on intangible assets


4,459

                  - 

Impairment loss on intangible assets


29,111

           410,144

Impairment loss on other non-current assets(*)


838,417

572,230

Impairment Losses on investments in subsidiaries


13,403,000

-

Others


6,695

1,157



W
14,281,682

989,581

(*) The Company recognized an impairment loss as the recoverable amount was less than the book value of minimum guaranteed royalties for the game in service.
38
GRAVITY CO., LTD.
Notes to the Separate Financial Statements

For the years ended December 31, 2025 and 2024
20. Income tax expense
(1) Details of income tax expense for the years ended December 31, 2025 and 2024 are as follows:
(In thousands of won)
2025

2024

Current tax expense
Current year
W
15,938,955 13,888,982 
Deferred tax expense

Changes in net deferred tax assets
(614,326)564,174 
Income tax expense
W
15,324,629 　14,453,156 

(2) The differences between the tax expense on the Company’s profit before tax and the amount that would arise using the statutory tax rates applicable to profits of the entities are as follows:
(In thousands of won)


2025

2024

Profit before income tax expense

W
98,145,363

102,345,512

Income tax using the statutory tax rate


22,209,579

23,179,813

Adjustments:






Expenses not deductible for tax purposes


8,428

472,719

Non taxable income


(10,231,415)

(9,493,229)

Foreign tax payment


3,902,727

3,456,615

Tax credit


(1,420,570)

(1,401,333)

Corporate tax on unappropriated earnings


-

94,943

Others


855,880

(1,856,372)




(6,884,950)

(8,726,657)

Income tax expense

W
15,324,629
　
14,453,156

Effective tax rate


16%

14%

39
GRAVITY CO., LTD.
Notes to the Separate Financial Statements

For the years ended December 31, 2025 and 2024
20. Income tax expense, Continued
(3)Details of the changes in deferred tax assets (liabilities) for the years ended December 31, 2025 and 2024 are as follows:

(In thousands of won)

2025


2024

Beginning
balance

Increase
(Decrease)

Ending
balance


Beginning
balance

Increase
(Decrease)

Ending
balance
Accrued income
W
(974,020)

106,123

(867,897)


(654,585)

(319,435)

(974,020)
Property and equipment

67,243 

(11,080)

56,163


50,096 

17,147 

67,243 
Intangible assets

81,954 

33,284

115,238


663,339 

(581,385)

81,954 
Accounts Payable

1,170,507 

(103,286)

1,067,221


853,592 

316,915 

1,170,507 
Accrued expenses

277,193 

(23,339)

253,854


255,603 

21,590 

277,193 
Retirement benefit provision liabilities

31,150 

5,032

36,182


34,634

(3,484)

31,150 
Allowance for doubtful accounts
-

-

-


1,092,898

(1,092,898)

-
Asset retirement obligation

77,813 

7,211

85,024


81,970

(4,157)

77,813 
Disallowed foreign tax credit Carryforward

411,782

244,213

655,995


915,518 

(503,736)

411,782 
Others

282,909

220,294

503,203


539,429 

(256,520)

282,909 
Sub-total(Ⅰ)
W
1,426,531

478,452

1,904,983


3,832,494

(2,405,963)

1,426,531
Deferred tax due to tax credit
carry-forward(Ⅱ)

2,077,705

135,874

2,213,579


235,916 

1,841,789 

2,077,705
Deferred tax assets (Ⅰ+Ⅱ+Ⅲ) (*)
W
3,504,236

614,326

4,118,562


4,068,410

(564,174)

3,504,236

(*) The future realizability of deferred tax assets is assessed by taking into consideration various factors such as the Company's performance, the overall economic environment and industry outlook, expected future earnings, and deductible period of tax credit carry-forward. The Company periodically monitors those factors used in assessing the realizability of the deferred tax assets. As of December 31, 2025, the Company has recognized deferred tax assets related to temporary differences, carry-forward losses and tax credit carry-forward, which can be utilized based on the likelihood of future taxable income. This amount may change if the estimate for future taxable income changes.

(4) The gross balances of deferred tax assets and liabilities for the years ended December 31, 2025 and 2024, is as follows:

(In thousands of won)20252024
Deferred tax assets
  - Deferred tax assets to be recovered after more than 12 monthsW1,197,030 1,498,357 
  - Deferred tax assets to be recovered within 12 months5,041,106 4,705,577 
Sub-total6,238,136 6,203,934 
Deferred tax liabilities
  - Deferred tax liabilities to be recovered after more than 12 months(849,890)(1,018,770)
  - Deferred tax liabilities to be recovered within 12 months(1,269,684)(1,680,928)
Sub-total(2,119,574)(2,699,698)
Deferred tax assets (liabilities), netW4,118,562 3,504,236 
40
GRAVITY CO., LTD.
Notes to the Separate Financial Statements

For the years ended December 31, 2025 and 2024
20. Income tax expense, Continued
(5) As of December 31, 2025, the Company did not recognize deferred income tax asset for the temporary difference of W 24,986,086 thousand relating to investments in subsidiaries as it is not probable such temporary differences can be utilized in the foreseeable future.
(6) The impact of the global minimum tax
Under Pillar Two legislation, the Company is required to pay additional tax for the difference between the GloBE effective tax rate of each jurisdiction in which its constituent entities are located and the minimum tax rate of 15%. Except for Gravity Game Vision Limited, which operates in Hong Kong, all entities within the consolidated group have GloBE effective tax rates exceeding 15% in their respective jurisdictions. In the case of additional tax incurred in Hong Kong, it is paid directly to the Hong Kong tax authorities following the introduction of the QDMTT in that jurisdiction, and thus there is no additional Pillar Two-related tax for the Company to recognize as income tax expense in the current period. Meanwhile, the exception for the recognition and disclosure of related deferred tax assets and liabilities has been applied.

21. Cash flow information
(1) Adjustments for calculating cash generated from operations for the years ended December 31, 2025 and 2024 are as follows:
(In thousands of won)


2025

2024

Adjustments for:




　

Depreciation

W
2,268,430

2,537,245 

Amortization


3,853,149

2,519,327 

Bad debt expense


442

29,830 

Interest expense


155,037

82,554 

Unrealized foreign currency loss


698,537

789,046 

Impairment loss on intangible assets


29,111

410,144

Loss on disposal of on intangible assets


4,459

-

Loss on disposal of on property and equipment


-

6,050

Impairment Losses on investments in subsidiaries


13,403,000

-

Impairment loss on other non-current assets


838,417

572,230

Retirement benefit expenses


14,513

(5,703)

Income tax expense


15,324,629

14,453,156 

Unrealized foreign currency gain


(1,239,070)

(2,090,788)

Gain on disposal of property and equipment


(1,387)

(977)

Interest income


(11,385,337)

(11,819,137)

Dividend income


(44,937,205)

(43,120,174)

Reversal of impairment loss on investments in subsidiaries


(10,580,150)

-



W
(31,553,425)
　
(35,637,197)

41
GRAVITY CO., LTD.
Notes to the Separate Financial Statements

For the years ended December 31, 2025 and 2024
21. Cash flow information, Continued
(2) Changes in assets and liabilities arising from operating activities for the years ended December 31, 2025 and 2024 are as follows:
(In thousands of won)


2025

2024

Accounts receivable

W
6,578,474

(2,716,044)

Other receivables


118,170

(1,396,954)

Other non-current assets


(4,404,643)

(1,636,627)

Prepaid expenses


(182,573)

(78,327)

Lease receivable


223,772

242,393 

Accounts payable


(1,841,852)

(3,020,614)

Deferred revenue


(2,694,326)

859,037

Long-term Deferred revenue


(3,409)

1,323,516 

Withholdings


(234,279)

(400,888)

Accrued expenses


(168,483)

175,947 



W
(2,609,149)
　
(6,648,561)


(3) Significant non-cash transactions for the years ended December 31, 2025 and 2024 are as follows:

(In thousands of won)W20252024
Reclassification of Prepayment to intangible assets
129,798
212,220 
Acquisition of right-of-use assets471,212 3,492,595 
Increase in accounts payable relating to the acquisition of other intangible assets724,639 2,390,168 
Increase in accounts payable relating to the acquisition of software806,770 292,480 
Increase in accounts payable relating to the acquisition of other non-current assets4,450,200 - 

(4) Changes in liabilities arising from financing activities for the years ended December 31, 2025 and 2024 are as follows:

(In thousands of won)


2025

2024

Beginning of the year

W
5,283,983 

3,083,031 

Cash flows used in financial activities–payment of lease liabilities
(1,873,674)

(2,069,495)

Cash flows used in operating activities – Interest paid


(145,197)

(77,204)

Non-cash transactions:


　



Acquisitions – right-of-use asset


104,477 

3,492,595 

Acquisitions – leases receivables


-

793,666 

Interest expense


145,197 

77,204 

Other


-

(15,814)

Ending of the year

W
3,514,786 

     5,283,983 

42
GRAVITY CO., LTD.
Notes to the Separate Financial Statements

For the years ended December 31, 2025 and 2024
22. Leases
The Company leases offices, vehicles and others. The leases typically run for a period of 1 to 5 years with an option to renew or terminate the lease after that date. There are no restrictions or covenants imposed to leases, but the lease assets are not to be provided as collateral for borrowings.
The Company has a sublease for a portion of the existing lease contract.
(1) As a lessee
(a) Details of right-of-use assets and lease liabilities recognized in the separate statements of financial position as of December 31, 2025 and December 31, 2024 are as follows:
(In thousands of won)



December 31, 2025

December 31, 2024
Right-of-use assets(*1)



 

 
Offices


W
3,114,020

        3,794,795 
Vehicles



-

          121,449 
Others



120,965

          611,543 



W
3,234,985

        4,527,787 
Lease liabilities(*2)






Current



1,338,395

        1,869,453 
Non-current



2,176,391

        3,414,530 


　
W
3,514,786

        5,283,983 

(*1) Right-of-use assets are included in the 'Property and equipment' in the separate statement of financial position.
(*2) Lease liabilities are included in the 'Other current liabilities' and 'Other non-current liabilities' in the separate statement of financial position.
(b) Changes in right-of-use assets for the years ended December 31, 2025 and December 31, 2024 are as follows:
(In thousands of won)


2025



Offices


Vehicles


Others


Total
Balance as of January 1, 2025

W
3,794,795


121,449


611,543


4,527,787
Depreciation


(1,151,986)


(121,449)


(490,579)


(1,764,014)
Reassessment


157,775


-


-


157,775
Acquisitions


313,437


-


-


313,437
Balance as of December 31, 2025

W
3,114,021


-


120,964


3,234,985

(In thousands of won)


2024



Offices


Vehicles


Others


Total
Balance as of January 1, 2024

W
1,508,656 


367,030 


1,103,467 


2,979,153 
Depreciation


(1,206,457)


(245,581)


(491,924)


(1,943,962)
Acquisitions


3,492,596 


 - 


 - 


3,492,596 
Balance as of December 31, 2024

W
3,794,795 


121,449 


611,543 


4,527,787 


43
GRAVITY CO., LTD.
Notes to the Separate Financial Statements

For the years ended December 31, 2025 and 2024
22. Leases, Continued
(1) As a lessee, Continued
(c) Details of amounts recognized in the separate statements of comprehensive income for the years ended December 31, 2025 and December 31, 2024 are as follows:

(In thousands of won)20252024
Interest expense relating to lease liabilities (included in finance cost)W145,197 77,204 
Income from sub-lease of right-of-use asset22,677 4,056 
Expense relating to short-term leases- - 
Expense relating to leases of low-value assets excluding short-term leases15,840 11,446 
(d) Details of amounts recognized in the separate statement of cash flows for the years ended December 31, 2025 and December 31, 2024 are as follows:

(In thousands of won)



2025

2024
Total cash outflows of leases


W
2,034,711

2,158,144

(2) As a lessor
The Company has sub-leased part of its right-of-use assets. The Company recognized interest income related to the lease receivable amounting to W22,677 thousand for the year ended December 31, 2025.
The aging analysis with the amounts expressed in undiscounted lease receivables after the reporting date are as follows:
(In thousands of won)







Less than
1 Year


1 to 2 Years


2 to 5 Years


Contractual
cash flow


Unrealized financial income


Net investment in the lease
W
216,978


211,084


211,084


639,146


187,046


452,100


44
GRAVITY CO., LTD.
Notes to the Separate Financial Statements

For the years ended December 31, 2025 and 2024
23. Financial Risk Management
The Company’s operating activities expose itself to a variety of financial risks: market risk, credit risk and liquidity risk from which the Company’s risk management program focuses on minimizing any adverse effects on its financial performance. The Company operates financial risk management policies and programs that closely monitor and respond to each risk factor.
(1) Capital Risk Management
The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern, so the Company can continue to provide returns and benefits for shareholders and to maintain an optimal capital structure to reduce the cost of capital. The Company monitors capital on the basis of the debt ratio. This ratio is calculated as total debt divided by total capital. The debt ratios as of December 31, 2025 and 2024 are as follows:
(In thousands of won)


December 31, 2025

December 31, 2024

Total liabilities

W
38,165,030

     43,443,153 

Total equity


501,474,469

   418,653,735 

Debt ratio


8%

10%


(2) Market Risk
(a) Foreign exchange risk
The Company is exposed to foreign exchange risk arising from royalty revenues and commission payment primarily with respect to the US dollar etc. The Company’s financial assets and liabilities are exposed to foreign currency risk as of December 31, 2025 and 2024 are as follows:
(In thousands of won, in foreign currencies)



December 31, 2025



Assets in foreign
Currency


Liabilities in foreign currency


Assets in
Korean Won


Liabilities in Korean Won
USD


31,125,581


8,071,445


44,662,528


11,581,746
JPY


667,752,426


275,931,458


6,127,497


2,532,030
EUR


27,179


35,543


45,815


59,915
VND


6,026,400


-


329


-
THB


21,131


-


964


-
IDR


9,851,056


-


843


-


w
50,837,976


14,173,691

45
GRAVITY CO., LTD.
Notes to the Separate Financial Statements

For the years ended December 31, 2025 and 2024
23. Financial Risk Management, Continued
(2) Market Risk, Continued
(a) Foreign exchange risk, Continued

(In thousands of won, in foreign currencies)



December 31, 2024



Assets in foreign
currency


Liabilities in
 foreign currency


Assets in
Korean Won


Liabilities in Korean Won
USD


26,872,947 


9,511,027 


39,503,233 


13,980,784 
JPY


517,686,951 


107,933,859 


4,848,035 


1,010,779 
EUR


27,925 


32,910 


42,689 


50,310 
IDR


9,270,000 


3,243,600 


535 


187 
THB


29,941,192 


7,379 


1,287,471 


317 
VND


12,955,000 


3,103,944 


1,180 


283 




　



W
45,683,143


15,042,660

The Company measures foreign exchange risk at the exchange rate of 10% for each foreign currency, and the rate of change reflects the management's assessment of the risk of exchange rate fluctuation that can be reasonably experienced. The effects of changes in foreign currency exchange rate on profit before income tax for the years ended December 31, 2025 and 2024 are as follows:
(In thousands of won)


2025

2024



Increased by 10%


Decreased by 10%

Increased by 10%


Decreased by 10%
USD

W
3,308,078


(3,308,078)

2,552,245 


(2,552,245)
JPY


359,547


(359,547)

383,726 


(383,726)
Others


(1,196)


1,196

128,078 


(128,078)


W
3,666,429


(3,666,429)

3,064,049 


(3,064,049)

The sensitivity analysis is based on monetary assets and liabilities denominated in foreign currencies other than the functional currency at the end of the reporting period.
(b) Interest rate risk
There are no borrowings under variable interest rate conditions as of December 31, 2025 and 2024.
(c) Price risk
There are no assets and liabilities exposed to price risk as of December 31, 2025 and 2024.
(3) Credit Risk
Credit risk arises from normal trading and investing activities and occurs when a customer or a counterparty fails to comply with the terms of the contract. In order to manage these credit risks, the Company regularly evaluates the creditworthiness of customers based on their financial condition, past experiences and other factors.
46
GRAVITY CO., LTD.
Notes to the Separate Financial Statements

For the years ended December 31, 2025 and 2024
23. Financial Risk Management, Continued
(3) Credit Risk, Continued
The carrying amounts of financial assets represent their maximum exposure to credit risk.
The maximum exposure to credit risk of the Company as of December 31, 2025 and 2024 are as follows:
(In thousands of won)


December 31, 2025

December 31, 2024

Cash and cash equivalents

W
30,553,616

64,263,198 

Short-term financial instruments


389,000,000

278,000,000 

Accounts receivable, net


28,536,382

35,651,270 

Other receivables, net


3,385,229

3,290,165 

Other current financial assets


3,945,138

5,897,585 

Oher non-current financial assets


3,342,526

1,999,836 



W
458,762,891
　
389,102,054 


Cash and cash equivalents and short-term financial instruments are deposited in financial institutions with strong credit ratings. Accounts receivable is mainly due from payment processing companies and platform service providers, which the Company believes have low levels of credit risk.
(4) Liquidity Risk
Liquidity risk management includes the maintenance of sufficient cash and marketable securities, the availability of funds from appropriately committed credit lines, and the ability to settle market positions. The cash flows included in the maturity classification, based on the remaining period to the contractual maturity date, are undiscounted expected cash outflows. The amount due within 12 months is the same as the carrying amount since the effect of the discount is not material. The following table summarizes the financial liabilities of the Company by maturity according to the remaining period from the end of the reporting period to the contractual maturity date.
(In thousands of won)
December 31, 2025


Carrying
value


Less than
3 months


3 months to
1 year


1 to 2 years


2 to 4 years


Total
Accounts payable
W
18,926,050


17,724,920


578,385


622,745


-


18,926,050
Other liabilities (*)

3,754,654


449,014


979,050


1,248,170


1,232,335


3,908,569

W
22,680,704


18,173,934


1,557,435


1,870,915


1,232,335


22,834,619

(*) Other liabilities as of December 31, 2025 consist of lease deposits received and lease liabilities.

(In thousands of won)
December 31, 2024


Carrying
value


Less than
3 months


3 months to
1 year


1 to 2 years


2 to 3 years


Total
Accounts payable
W
18,813,618


18,418,510


175,000


220,108


 - 


18,813,618
Other liabilities (*)

5,523,852


513,629


1,500,742


1,374,064


2,431,004


5,819,439

W
24,337,470


18,932,139


1,675,742


1,594,172


2,431,004


24,633,057

(*) Other liabilities as of December 31, 2024 consist of lease deposits received and lease liabilities.
47
GRAVITY CO., LTD.
Notes to the Separate Financial Statements

For the years ended December 31, 2025 and 2024
24. Related Party Transactions
(1) Related parties of the Company include entities and individuals capable of exercising control or significant influence over the Company and its subsidiaries. Related parties include Gung Ho Online Entertainment, Inc. and its subsidiaries, management and their immediate families.

Ownership interests in subsidiaries as of December 31, 2025 and 2024 are as follows:
Name of entity

Percentage of ownership (%)

December 31, 2025

December 31, 2024
Gravity Interactive, Inc.

100.00

100.00
Gravity NeoCyon, Inc.

100.00

100.00
Gravity Communications Co., Ltd.

100.00

100.00
PT. Gravity Game Link.

70.00

70.00
Gravity Game Tech Co., Ltd.

100.00

100.00
Gravity Game Arise Co., Ltd.

100.00

100.00
Gravity Game Hub PTE., Ltd.

100.00

100.00
Gravity Game Vision Limited.

100.00

100.00
Gravity Game Unite SDN.BHD.(*)

100.00

-

(*1) Gravity Game Unite SDN. BHD. was newly established in March of the current year and has been included in the consolidated subsidiaries.

(2) Account balances with related parties
Balances of receivables and payables with related parties as of December 31, 2025 and 2024 are as follows:

(In thousands of won)
31-Dec-25
31-Dec-24
Related partyName of entityReceivables　PayablesReceivables　
Payables 
Parent companyGungHo Online Entertainment, Inc.W1,462,997 2,700 3,240,472 2,755 
OthersGungHo Online Entertainment America.1,016 773 573 97,210 
SubsidiariesGravity Interactive, Inc.4,265,138 43,555 2,210,555 154,346 
Gravity NeoCyon, Inc.654,894 1,135,081 245,600 1,617,933 
Gravity Communications Co., Ltd.766,117 1,173,556 684,193 889,384 
PT. Gravity Game Link.17,494 21,483 65,658 19,385 
Gravity Game Tech Co., Ltd.2,089,413 365,130 3,764,723 194,022 
Gravity Game Arise Co., Ltd.3,365,026 2,140,529 104,986 490,422 
Gravity Game Hub PTE., Ltd.1,226,749 19,491 1,377,730 4,213 
Gravity Game Vision Limited4,534,036 60,408 5,711,693 921 
Gravity Game Unite SDN.BHD.81,355 883 - - 
W18,464,235 4,963,589 17,406,183 3,470,591 
48
GRAVITY CO., LTD.
Notes to the Separate Financial Statements

For the years ended December 31, 2025 and 2024
24. Related Party Transactions, Continued
(3) Transactions with related parties
The details of transactions with related parties for the years ended December 31, 2025 and 2024 are as follows:

(In thousands of won)
2025
Revenues
Related partyName of entityRoyaltyOther
Parent companyGungHo Online Entertainment, Inc.W21,346,669 149,808 
OthersGungHo Online Entertainment America7,241 - 
SubsidiariesGravity Interactive, Inc.43,180,175 17,543 
Gravity NeoCyon, Inc.8 1,007,274 
Gravity Communications Co., Ltd. (*1)8,888,544 1,974,385 
PT. Gravity Game Link.262,676 16,898 
Gravity Game Tech Co., Ltd.8,367,134 7,330,510 
Gravity Game Arise Co., Ltd.126,935 42,068 
Gravity Game Hub PTE., Ltd.6,098,636 14,407,633 
Gravity Game Vision Limited.10,119,458 22,360,590 
Gravity Game Unite SDN.BHD.- 1,767 
W98,397,476 47,308,476 

(In thousands of won)


2025





Purchases
Related party

Name of entity


Royalty



Commission

Other
Parent company

GungHo Online Entertainment, Inc.

W
-



-

16,764
Others

GungHo Online Entertainment America


10,093



-

-
Subsidiaries

Gravity Interactive, Inc.


-



228,889

-

Gravity NeoCyon, Inc.


-



9,461,353

9,779

Gravity Communications Co., Ltd.


-



3,966,471

-

PT. Gravity Game Link.


-



85,167

-

Gravity Game Tech Co., Ltd.


-



-

-

Gravity Game Arise Co., Ltd.


-



3,672,880

9,648,231


Gravity Game Hub PTE., Ltd.


-



-

10,565


Gravity Game Vision Limited.


-



-

-


Gravity Game Unite SDN.BHD.


-



-

-

W
10,093



17,414,760

9,685,339
49
GRAVITY CO., LTD.
Notes to the Separate Financial Statements

For the years ended December 31, 2025 and 2024
24. Related Party Transactions, Continued
(3) Transactions with related parties, Continued

(In thousands of won)
2024
Revenues
Related partyName of entityRoyaltyOther
Parent companyGungHo Online Entertainment, Inc.W16,550,535 - 
OthersGungHo Online Entertainment America559 - 
SubsidiariesGravity Interactive, Inc.8,471,468 20,988 
Gravity NeoCyon, Inc.9,983 363,144 
Gravity Communications Co., Ltd. (*1)6,127,565 9,298,095 
PT. Gravity Game Link.127,887 9,108 
Gravity Game Tech Co., Ltd.7,923,077 10,794,544 
Gravity Game Arise Co., Ltd.736,752 15,048 
Gravity Game Hub PTE., Ltd.9,818,028 12,640 
Gravity Game Vision Limited.17,655,315 23,418,562 
W67,421,169 43,932,129 

(In thousands of won)


2024





Purchases
Related party

Name of entity


Royalty



Commission

Other
Parent company

GungHo Online Entertainment, Inc.

W
-



-

15,946
Others

GungHo Online Entertainment America.


92,326



-

92,331
Subsidiaries

Gravity Interactive, Inc.


-



790,694

2,949

Gravity NeoCyon, Inc.


-



8,293,146

6,623

Gravity Communications Co., Ltd.


-



3,311,719

 - 

PT. Gravity Game Link


-



81,750

 - 

Gravity Game Tech Co., Ltd.


-



 - 

 - 

Gravity Game Arise Co., Ltd.


-



1,553,230

1,966,937


Gravity Game Hub PTE., Ltd.


-



-

 - 


Gravity Game Vision Limited.


-



-

 - 

W
92,326



14,030,539

2,084,786

(*1) Other Revenues include dividend income of W44,937,205 thousand and W43,120,174 thousand received in 2025 and 2024, respectively.
50
GRAVITY CO., LTD.
Notes to the Separate Financial Statements

For the years ended December 31, 2025 and 2024
24. Related Party Transactions, Continued
(4) Other transactions with related parties
Other transactions with related parties for the years ended December 31, 2025 and 2024 are as follows:
(In thousands of won)


Investments
Related party

Name of entity


2025


2024
Subsidiaries

Gravity Game Arise Co., Ltd.

W
1,952,740


7,102,180


Gravity NeoCyon, Inc.


-


2,999,994


Gravity Game Tech Co., Ltd.


-


3,723,000

df
Gravity Game Unite SDN.BHD.


729,878


-

(5) Key management personnel compensation
The compensation given to key management personnel (registered directors) for the years ended December 31, 2025 and 2024 are as follows:
(In thousands of won)


2025

2024

Salaries

W
2,578,549

2,184,113

    
51

Source: View Original Filing on SEC EDGAR

FAQ

How did Gravity (GRVY) perform financially in 2025 under Korean IFRS?

Gravity’s 2025 revenue was W560.5 billion, up from W500.8 billion in 2024. However, profit for the year declined to W67.3 billion from W84.9 billion as operating expenses increased, leading to lower earnings per share despite double-digit top-line growth.

What were Gravity (GRVY) revenues from online and mobile games in 2025?

In 2025, Gravity generated W90.3 billion in online game revenue and W455.2 billion from mobile games. Together they accounted for the majority of total revenue of W560.5 billion, highlighting the company’s heavy reliance on mobile gaming performance.

How did Gravity’s 2025 profit and earnings per share compare with 2024?

Profit for 2025 was W67.3 billion, down from W84.9 billion in 2024. Basic and diluted earnings per share fell to W9,709 from W12,221, reflecting reduced profitability even as revenues increased year over year under Korean IFRS reporting.

What does the independent auditor say about Gravity (GRVY) 2025 financial statements?

Samil PricewaterhouseCoopers issued an unqualified opinion on Gravity’s 2025 and 2024 consolidated financial statements. The auditor concluded the statements present fairly, in all material respects, the Group’s position and performance in accordance with Korean IFRS requirements.

What is Gravity’s cash and overall financial position at year-end 2025?

At December 31, 2025, Gravity reported W203.6 billion in cash and cash equivalents and total assets of W742.7 billion. Total equity was W637.4 billion versus liabilities of W105.3 billion, indicating a robust net asset position supported by significant liquidity.

How did Gravity’s operating expenses change in 2025 compared with 2024?

Total expenses classified by nature rose to W481.5 billion in 2025 from W414.7 billion in 2024. Selling, general and administrative expenses increased to W117.3 billion, up from W107.8 billion, contributing to the decline in operating profit despite higher revenues.

Filing Exhibits & Attachments

2 documents

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