NHN Reports 113.4 Billion KRW Operating Loss in 3Q Due to "Timeff Incident" (Update)

Operating Profit of 27.3 Billion Won Excluding One-Time Bad Debt Expense

NHN announced on the 12th that it posted an operating loss of 113.4 billion KRW on a consolidated basis for the third quarter of this year, turning to a deficit compared to the same period last year. Revenue increased by 6.4% year-on-year to 608.3 billion KRW.

The operating loss was due to a one-time bad debt write-off related to unrecovered receivables from the TimeF incident. Excluding the one-time bad debt write-off, the third quarter operating profit was 27.3 billion KRW. Revenue reached a quarterly record high thanks to balanced growth across all business sectors including gaming, payment & advertising, and technology.

Looking at revenue by segment, the gaming division recorded 112.5 billion KRW, up 2.1% year-on-year. The overall web board game revenue increased by 8.1% year-on-year, boosted by the 5th anniversary event of the mobile game ‘Hangame Poker Classic’ and the Chuseok holiday period. In particular, the monthly new users of ‘Hangame Poker Classic’ in the third quarter more than doubled compared to the same period last year,

The payment & advertising division achieved 292.6 billion KRW, up 10.3% year-on-year, driven by continuous growth in transaction volume from domestic and overseas merchants of NHN KCP. Especially, NHN Payco’s corporate welfare solution business saw a 31% increase in transaction amount in the third quarter compared to the same period last year.

The commerce division recorded 61.0 billion KRW, up 0.5% year-on-year, supported by NHN Commerce’s expansion of new brand collaborations in its China business.

The technology division achieved 102.7 billion KRW, up 7.6% year-on-year. NHN Cloud’s revenue increased by 22.5% year-on-year due to the inclusion of sales from its cloud native consulting business, and NHN Doorey also recorded double-digit revenue growth year-on-year as public sector sales expanded.

The content division recorded 50.5 billion KRW, up 1.0% year-on-year. NHN Link saw a 33% increase in revenue year-on-year, driven by steady growth in sports and performance sales.

NHN has high expectations for its gaming business next year. Rootshooter’s new title ‘Darkest Days’ is scheduled for simultaneous release on mobile and PC, with a final test planned at the ‘Steam Next Fest’ in February next year. Additionally, the subculture genre game ‘Stella Fantasy’ has been renamed ‘Abyssdia’ and its release is confirmed for the second quarter of next year. NHN plans to launch a total of eight new titles in 2025, aiming to achieve significant results in the gaming business.

NHN Payco is currently operating under an emergency management system, accelerating business structure improvement and cost efficiency. To create synergy with its subsidiary NHN KCP, it plans to relocate its headquarters to NHN KCP’s Guro building in the first quarter of next year. Furthermore, it plans to focus company-wide capabilities on core businesses such as coupons and B2B to improve profitability.

NHN Cloud is expected to achieve even better results in future public-private partnership projects, having secured more than 60% of the total scale in this year’s National Information Resources Service Daegu Center project, including winning the ‘Government-wide Service Integrated Window Cloud Leasing Project’ in September.

In addition, NHN Doorey plans to actively respond to financial demand based on the first financial CSP stability evaluation in the domestic SaaS industry, while leading the AI collaboration tool market through its recently launched ‘Doorey AI’.

Jung Woo-jin, CEO of NHN, stated, "Although the one-time cost related to the TimeF incident affected short-term profitability, excluding this impact, operating profit growth rate reached double digits, reflecting balanced profit and loss improvements across all business sectors. We will focus on profit-centered solid growth in all business areas through continuous management efficiency improvements across the group."