Gravity Reports Third Quarter of 2025 Result and Business Updates
MWN-AI** Summary
Gravity Co., Ltd. (NasdaqGM: GRVY) reported its third-quarter financial results for 2025, revealing mixed performance indicators. For the quarter ending September 30, 2025, the company generated total revenues of KRW 138.9 billion (approximately US$98.9 million), an 18.7% decline from the previous quarter but a notable 8.2% increase year-over-year. The operating profit reached KRW 21.3 billion (US$15.1 million), marking an 8.2% rise from Q2 2025, however, it fell 22.8% compared to the same quarter in the previous year.
Notably, profit before income tax soared by 45.4% quarter-over-quarter, reaching KRW 27.2 billion (US$19.4 million), but showed a 4.3% decrease year-over-year. Net profit attributable to the parent company also experienced significant growth on a quarterly basis, up 50% to KRW 19.9 billion (US$14.1 million), yet down 11.2% year-over-year.
In terms of revenue streams, online game revenues rose sharply by 18.2% to KRW 26.0 billion (US$18.5 million) from the previous quarter, driven largely by new game launches such as *Ragnarok Zero* in Taiwan, Hong Kong, and Macau. Conversely, mobile game revenues faced a 23.9% decline quarter-over-quarter due to decreased performance of existing titles, though they grew by 6.9% year-over-year.
The company also provided several business updates, highlighting various game launches, including *Ragnarok Idle Adventure Plus* and *Ragnarok: Twilight*. Furthermore, Gravity has expanded its IP business, notably with upcoming titles and collaborations, reflecting its ongoing commitment to innovation and market expansion. The full investor presentation detailing these results is available on the company's website.
MWN-AI** Analysis
Gravity Co., Ltd. (NasdaqGM: GRVY) has delivered a mixed financial performance in its third quarter results for 2025. While total revenues saw an 18.7% decline from the previous quarter, they experienced an 8.2% year-on-year increase. Notable was the positive trend in online game revenues, credited to successful launches like Ragnarok Zero in several new regions. The mobile segment, however, underperformed with a 23.9% QoQ decline, mainly attributed to challenges faced by Ragnarok M: Classic, despite some compensation from new launches.
Operating profits increased QoQ, suggesting improved cost management, but a concerning 22.8% decline YoY indicates a need for sustained innovation and engagement strategies to invigorate growth. Notably, net profits surged 50% QoQ, signaling effective strategic adjustments; yet the 11.2% drop YoY raises caution about long-term profitability sustainability.
The company's liquidity remains robust with nearly KRW 610 billion in cash equivalents, granting them considerable flexibility for future investments or strategic initiatives. The extensive pipeline of upcoming game launches, both existing IP and new titles, may provide a much-needed revenue boost and market expansion opportunities.
Investors should watch for the performance impacts of these new launches, particularly in North and South America and newly tapped regions like China. While the dips in mobile revenues warrant concern, the positive trajectory in online gaming revenues and cost-cutting measures present an opportunity for recovery.
In conclusion, while Gravity demonstrates resilience through strategic launches and cost efficiencies, it must address its mobile revenue downturn and capitalize on its upcoming games to ensure ongoing growth. Investors should consider a cautious but optimistic approach, factoring in the potential for future growth driven by new IP and expanding market presence.
**MWN-AI Summary and Analysis is based on asking OpenAI to summarize and analyze this news release.
Seoul, South Korea, Nov. 07, 2025 (GLOBE NEWSWIRE) -- GRAVITY Co., Ltd. (NasdaqGM: GRVY) (“Gravity” or “Company”), a developer and publisher of online and mobile games based in South Korea, today announced its unaudited financial results for the third quarter ended September 30, 2025, prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board and business updates.
THIRD QUARTER 2025 HIGHLIGHTS
- Total revenues were KRW 138,894 million (US$ 98,883 thousand), representing an 18.7% decrease from the second quarter ended June 30, 2025 (“QoQ”) and an 8.2% increase from the third quarter ended September 30, 2024 (“YoY”).
- Operating profit was KRW 21,276 million (US$ 15,147 thousand), representing an 8.2% increase QoQ and a 22.8% decrease YoY.
- Profit before income tax expense was KRW 27,207 million (US$ 19,369 thousand), representing a 45.4% increase QoQ and a 4.3% decrease YoY.
- Net profit attributable to parent company was KRW 19,869 million (US$ 14,145 thousand), representing a 50.0% increase QoQ and an 11.2% decrease YoY.
REVIEW OF THIRD QUARTER 2025 FINANCIAL RESULTS
Revenues
Online game revenues for the third quarter of 2025 were KRW 25,968 million (US$ 18,487 thousand), representing an 18.2% increase QoQ from KRW 21,971 million and a 32.1% increase YoY from KRW 19,657 million. The increase QoQ was mainly attributable to initial revenue from Ragnarok Zero launched in Taiwan, Hong Kong and Macau on July 3, 2025.
The increase YoY was mainly due to initial revenues from Ragnarok Online America Latina launched in Latin America on May 28, 2025 and Ragnarok Zero launched in Taiwan, Hong Kong and Macau on July 3, 2025.
Mobile game revenues were KRW 109,571 million (US$ 78,007 thousand) for the third quarter of 2025, representing a 23.9% decrease QoQ from KRW 144,003 million and a 6.9% increase YoY from KRW 102,524 million. The decrease QoQ was mainly attributable to decreased revenues from Ragnarok M: Classic launched in Southeast Asia and Taiwan, Hong Kong and Macau. Such decrease was partially offset by initial revenue from Ragnarok: Twilight launched in Taiwan, Hong Kong and Macau on July 3, 2025, increased revenue from Ragnarok X: Next Generation launched in North, Central and South America, Oceania, England, Portugal, Spain and Ireland and initial revenues from Ragnarok M: Classic Global launched in North and South America, Europe, Middle East, certain regions of North Africa and Oceania on September 3, 2025. The increase YoY was mainly due to initial revenues from Ragnarok M: Classic launched in Taiwan, Hong Kong and Macau on April 16, 2025 and Southeast Asia on February 14, 2025, Ragnarok: Twilight launched in Taiwan, Hong Kong and Macau on July 3, 2025 and Ragnarok X: Next Generation launched in North, Central and South America, Oceania, England, Portugal, Spain and Ireland on May 8, 2025. This increase was partially offset by decreased revenues from Ragnarok Origin in North, Central and South America, Southeast Asia and Taiwan, Hong Kong and Macau and THE RAGNAROK in Taiwan, Hong Kong and Macau.
Other revenues were KRW 3,355 million (US$ 2,389 thousand) for the third quarter of 2025, representing a 29.6% decrease QoQ from KRW 4,766 million and a 45.8% decrease YoY from KRW 6,195 million.
Cost of Revenue
Cost of revenue was KRW 88,542 million (US$ 63,036 thousand) for the third quarter of 2025, representing a 22.3% decrease QoQ from KRW 114,006 million and a 16.1% increase YoY from KRW 76,261 million. The decrease QoQ was mainly due to decreased commission paid for mobile game services related to Ragnarok M: Classic launched in Southeast Asia and Taiwan, Hong Kong and Macau. The increase YoY was primarily due to increased commission paid for mobile game services related to Ragnarok M: Classic in Taiwan, Hong Kong and Macau and Southeast Asia, Ragnarok: Twilight in Taiwan, Hong Kong and Macau and Ragnarok X: Next Generation in North, Central and South America, Oceania, England, Portugal, Spain and Ireland.
Operating Expenses
Operating expenses were KRW 29,076 million (US$ 20,700 thousand) for the third quarter of 2025, representing a 21.6% decrease QoQ from KRW 37,064 million and an 18.5% increase YoY from KRW 24,539 million. The decrease QoQ was mainly due to decreased advertising expenses for Ragnarok Online America Latina in Latin America, Ragnarok: Back to Glory in Korea and Nobunaga's Ambition: The Road to the World in Japan and research and development expenses . The increase YoY was mainly due to increased advertising expenses for Ragnarok Idle Adventure Plus in Korea and Global and Nobunaga's Ambition: The Road to the World in Japan, salaries and commission paid.
Profit Before Income Tax Expense
Profit before income tax expense was KRW 27,207 million (US$ 19,369 thousand) for the third quarter of 2025 compared with profit before income tax expense of KRW 18,706 million for the second quarter of 2025 and profit before income tax expense of KRW 28,415 million for the third quarter of 2024.
Net Profit
As a result of the foregoing factors, Gravity recorded a net profit attributable to parent company of KRW 19,869 million (US$ 14,145 thousand) for the third quarter of 2025 compared with net profit attributable to parent company of KRW 13,245 million for the second quarter of 2025 and a net profit attributable to parent company of KRW 22,385 million for the third quarter of 2024.
Liquidity
The balance of cash and cash equivalents and short-term financial instruments was KRW 609,927 million (US$ 434,226 thousand) as of September 30, 2025.
Note: For convenience purposes only, the KRW amounts have been expressed in U.S. dollars at the exchange rate of KRW 1,404.63 to US$ 1.00, the noon buying rate in effect on September 30, 2025 as quoted by the Federal Reserve Bank of New York.
GRAVITY BUSINESS UPDATES
Ragnarok Online IP-based Games
- Ragnarok Idle Adventure Plus, a Vertical Idle MMORPG Mobile game
Ragnarok Idle Adventure Plus officially received an ISBN from Chinese government on September 24, 2025 and was officially launched in Korea on August 28, 2025.
- Ragnarok 3, an MMORPG Mobile and PC game
Ragnarok 3 officially received an ISBN from Chinese government on October 21, 2025 and will be launched in Global within 2026.
- Ragnarok Libre, a Time Effective MMORPG Line game
Ragnarok Libre was officially launched in Global (except Korea, China and Japan) on August 11, 2025.
- Ragnarok: Twilight, an Idle MMOARPG Mobile game
Ragnarok: Twilight was officially launched in China on August 15, 2025 and Southeast Asia (except Vietnam) on October 23, 2025.
- Ragnarok M: Classic Global, an MMORPG Mobile and PC game
Ragnarok M: Classic Global was officially launched in North and South America, Europe, Middle East, certain regions of North Africa and Oceania on September 3, 2025.
- Ragnarok: The Promised Adventure (Tentative English Title), an Adventure MMORPG Mobile and WeChat game
Ragnarok: The Promised Adventure (Tentative English Title) was officially launched in China on September 25, 2025.
- THE RAGNAROK, an MMORPG Mobile and PC game
THE RAGNAROK was officially launched on WeChat (H5) Mini Programs in China on September 20, 2025.
- Ragnarok X: Next Generation, an MMORPG Mobile and PC game
Ragnarok X: Next Generation will be launched in Europe (except England, Portugal, Spain and Ireland), Middle East and North Africa in the first half of 2026.
- Ragnarok: The New World, an MMORPG Mobile and PC game
Ragnarok: The New World will be launched in Taiwan, Hong Kong and Macau in the first quarter of 2026.
- Ragnarok Abyss, an MMOARPG Mobile and PC game
Ragnarok Abyss is underway for its launch in Southeast Asia in the first half of 2026.
- Ragnarok: Back to Glory, an MMORPG Mobile game
Ragnarok: Back to Glory is scheduled to be launched in China in the fourth quarter of 2025.
- Ragnarok Endless Trails (Tentative English Title) , a Battle Royal Mobile game
Ragnarok Endless Trails (Tentative English Title) is planned to be launched in Southeast Asia in the first quarter of 2026.
Ragnarok Online IP-based Blockchain Game
- Ragnarok Landverse Genesis America, an MMORPG Blockchain and PC game
Ragnarok Landverse Genesis America is scheduled to be launched in North and South America on December 11, 2025.
Other IP-based Games
- Schop Hero, a New Fresh Whole Digging Puzzle RPG Mobile game
Schop Hero was officially launched in Japan on September 17, 2025.
- Chess Rumble, a Collectible Tactical RPG Mobile game
Chess Rumble was officially launched in Global (except Korea and Japan) on October 15, 2025.
- THE GOOD OLD DAYS, a Metroidvania Adventure Console and PC game
THE GOOD OLD DAYS was officially launched in Global on October 23, 2025.
- Meow Star Acres 2, a Farm Simulation Mobile game
Meow Star Acres 2 was soft-launched in Canada, Australia, Philippines and Malaysia on October 28, 2025.
- Aeruta , an Action RPG PC game
Aeruta was officially launched on Steam in Global on November 6, 2025.
- Hashire HEBEREKE: EX, a Racing and Remake Console and PC game
Hashire HEBEREKE: EX is underway for its launch in Global in the first half of 2026.
- the Game of LIFE for Nintendo Switch , a Board and Party Console game
the Game of LIFE for Nintendo Switch will be launched in Asia (except Japan) on December 18, 2025.
Expansion of Other IP-business
Gravity Co., Ltd. has signed a publishing agreement of the Game of LIFE for Nintendo Switch, a Board and Party Console game based on the Game of LIFE's IP, in Asia (except Japan) with TOMY COMPANY, LTD.
Investor Presentation
Gravity issued an investor presentation. The presentation contains the Company’s recent business updates, results of the third quarter in 2025 and Gravity’s business plan. The presentation can be found on the Company’s website under the IR Archives section at https://www.gravity.co.kr/en/ir/updates. Korean and Japanese versions of the presentation are also provided on the website.
About GRAVITY Co., Ltd. ---------------------------------------------------
Gravity is a developer and publisher of online and mobile games. Gravity's principal product, Ragnarok Online, is a popular online game in many markets, including Japan and Taiwan, and is currently commercially offered in 91 regions. For more information about Gravity, please visit http://www.gravity.co.kr .
Forward-Looking Statements:
Certain statements in this press release may include, in addition to historical information, “forward-looking statements” within the meaning of the “safe-harbor” provisions of the U.S. Private Securities Litigation Reform Act 1995. Forward-looking statements can generally be identified by the use of forward-looking terminology, such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe”, “project,” or “continue” or the negative thereof or other similar words, although not all forward-looking statements contain these words. Investors should consider the information contained in our submissions and filings with the United States Securities and Exchange Commission (the “SEC”), including our annual report for the fiscal year ended December 31, 2024 on Form 20-F, together with such other documents that we may submit to or file with the SEC from time to time, on Form 6-K. The forward-looking statements speak only as of this press release and we assume no duty to update them to reflect new, changing or unanticipated events or circumstances.
Contact:
Mr. Heung Gon Kim
Chief Financial Officer
Gravity Co., Ltd.
Email: kheung@gravity.co.kr
Ms. Jin Lee
Ms. Yujin Oh
IR Unit
Gravity Co., Ltd.
Email: ir@gravity.co.kr
Telephone: +82-2-2132-7800
GRAVITY Co., Ltd.
Consolidated Statements of Financial Position
(In millions of KRW and thousands of US$)
| As of | |||||||||||||||
| 31-Dec-24 | 30-Sep-25 | ||||||||||||||
| KRW | US$ | KRW | US$ | ||||||||||||
| (audited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||
| Assets | |||||||||||||||
| Current assets: | |||||||||||||||
| Cash and cash equivalents | 228,898 | 162,960 | 197,348 | 140,498 | |||||||||||
| Short-term financial instruments | 324,304 | 230,882 | 412,579 | 293,728 | |||||||||||
| Accounts receivable, net | 81,152 | 57,775 | 59,984 | 42,704 | |||||||||||
| Other receivables, net | 1,572 | 1,119 | 2,738 | 1,949 | |||||||||||
| Prepaid expenses | 8,115 | 5,777 | 15,734 | 11,202 | |||||||||||
| Other current financial assets | 6,602 | 4,700 | 4,158 | 2,960 | |||||||||||
| Other current assets | 2,967 | 2,112 | 4,777 | 3,401 | |||||||||||
| Total current assets | 653,610 | 465,325 | 697,318 | 496,442 | |||||||||||
| Property and equipment, net | 9,957 | 7,089 | 10,671 | 7,597 | |||||||||||
| Intangible assets, net | 7,057 | 5,024 | 8,062 | 5,740 | |||||||||||
| Deferred tax assets | 5,617 | 3,999 | 6,461 | 4,600 | |||||||||||
| Other non-current financial assets | 1,767 | 1,258 | 1,795 | 1,278 | |||||||||||
| Other non-current assets | 8,451 | 6,017 | 6,544 | 4,659 | |||||||||||
| Total assets | 686,459 | 488,712 | 730,851 | 520,316 | |||||||||||
| Liabilities and Equity | |||||||||||||||
| Current liabilities: | |||||||||||||||
| Accounts payable | 67,930 | 48,361 | 68,986 | 49,113 | |||||||||||
| Deferred revenue | 26,761 | 19,052 | 19,695 | 14,021 | |||||||||||
| Withholdings | 1,588 | 1,131 | 1,408 | 1,002 | |||||||||||
| Accrued expense | 2,651 | 1,887 | 2,511 | 1,788 | |||||||||||
| Income tax payable | 6,507 | 4,633 | 5,184 | 3,691 | |||||||||||
| Other current liabilities | 3,212 | 2,287 | 3,655 | 2,602 | |||||||||||
| Total current liabilities | 108,649 | 77,351 | 101,439 | 72,217 | |||||||||||
| Long-term account payables | 220 | 157 | 623 | 444 | |||||||||||
| Long-term deferred revenue | 2,572 | 1,831 | 506 | 360 | |||||||||||
| Other non-current liabilities | 5,361 | 3,817 | 5,388 | 3,837 | |||||||||||
| Deferred tax liabilities | 1,294 | 921 | 1,295 | 922 | |||||||||||
| Total liabilities | 118,096 | 84,077 | 109,251 | 77,780 | |||||||||||
| Share capital | 3,474 | 2,473 | 3,474 | 2,473 | |||||||||||
| Capital surplus | 26,979 | 19,207 | 26,979 | 19,207 | |||||||||||
| Other components of equity | 23,801 | 16,945 | 21,948 | 15,625 | |||||||||||
| Retained earnings | 513,418 | 365,518 | 568,570 | 404,783 | |||||||||||
| Equity attributable to owners of the Parent Company | 567,672 | 404,143 | 620,971 | 442,088 | |||||||||||
| Non-controlling interest | 691 | 492 | 629 | 448 | |||||||||||
| Total equity | 568,363 | 404,635 | 621,600 | 442,536 | |||||||||||
| Total liabilities and equity | 686,459 | 488,712 | 730,851 | 520,316 |
* For convenience purposes only, the KRW amounts are expressed in U.S. dollars at the rate of KRW 1,404.63 to US$ 1.00, the noon buying rate in effect on September 30, 2025 as quoted by the Federal Reserve Bank of New York.
GRAVITY Co., Ltd.
Consolidated Statements of Comprehensive Income
(In millions of KRW and thousands of US$ except for share and ADS data)
| Three months ended | Nine months ended | ||||||||||||||||||||
| 30-Jun-25 | 30-Sep-24 | 30-Sep-25 | 30-Sep-24 | 30-Sep-25 | |||||||||||||||||
| (KRW) | (KRW) | (KRW) | (US$) | (KRW) | (KRW) | (US$) | |||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||
| Revenues: | |||||||||||||||||||||
| Online games | 21,971 | 19,657 | 25,968 | 18,487 | 57,167 | 66,745 | 47,518 | ||||||||||||||
| Mobile games | 144,003 | 102,524 | 109,571 | 78,007 | 300,090 | 369,060 | 262,745 | ||||||||||||||
| Other revenue | 4,766 | 6,195 | 3,355 | 2,389 | 13,865 | 11,293 | 8,041 | ||||||||||||||
| Total net revenue | 170,740 | 128,376 | 138,894 | 98,883 | 371,122 | 447,098 | 318,304 | ||||||||||||||
| Cost of revenue | 114,006 | 76,261 | 88,542 | 63,036 | 225,895 | 290,006 | 206,464 | ||||||||||||||
| Gross profit | 56,734 | 52,115 | 50,352 | 35,847 | 145,227 | 157,092 | 111,840 | ||||||||||||||
| Operating expenses: | |||||||||||||||||||||
| Selling, general and administrative expenses | 33,509 | 20,325 | 26,675 | 18,991 | 64,181 | 82,043 | 58,409 | ||||||||||||||
| Research and development | 3,291 | 3,706 | 2,149 | 1,530 | 11,594 | 8,871 | 6,316 | ||||||||||||||
| Others, net | 264 | 508 | 252 | 179 | 18 | 502 | 357 | ||||||||||||||
| Total operating expenses | 37,064 | 24,539 | 29,076 | 20,700 | 75,793 | 91,416 | 65,082 | ||||||||||||||
| Operating profit | 19,670 | 27,576 | 21,276 | 15,147 | 69,434 | 65,676 | 46,758 | ||||||||||||||
| Finance income(costs): | |||||||||||||||||||||
| Finance income | 2,651 | 5,924 | 3,283 | 2,337 | 21,088 | 16,651 | 11,854 | ||||||||||||||
| Finance costs | (3,615) | (5,085) | 2,648 | 1,885 | (9,552) | (7,964) | (5,670) | ||||||||||||||
| Profit before income tax | 18,706 | 28,415 | 27,207 | 19,369 | 80,970 | 74,363 | 52,942 | ||||||||||||||
| Income tax expense | 5,486 | 6,080 | 7,362 | 5,241 | 19,172 | 19,220 | 13,683 | ||||||||||||||
| Profit for the year | 13,220 | 22,335 | 19,845 | 14,128 | 61,798 | 55,143 | 39,259 | ||||||||||||||
| Profit attributable to: | |||||||||||||||||||||
| Non-controlling interest | (25) | (50) | (24) | (17) | (21) | (9) | (6) | ||||||||||||||
| Owners of Parent | 13,245 | 22,385 | 19,869 | 14,145 | 61,819 | 55,152 | 39,265 | ||||||||||||||
| Earnings per share | |||||||||||||||||||||
| - Basic and diluted | 1,906 | 3,221 | 2,859 | 2.04 | 8,896 | 7,937 | 5.65 | ||||||||||||||
| Weighted average number of shares outstanding | |||||||||||||||||||||
| - Basic and diluted | 6,948,900 | 6,948,900 | 6,948,900 | 6,948,900 | 6,948,900 | 6,948,900 | 6,948,900 | ||||||||||||||
| Earnings per ADS | |||||||||||||||||||||
| - Basic and diluted | 1,906 | 3,221 | 2,859 | 2.04 | 8,896 | 7,937 | 5.65 | ||||||||||||||
* For convenience, the KRW amounts are expressed in U.S. dollars at the rate of KRW 1,404.63 to US$1.00, the noon buying rate in effect on September 30, 2025 as quoted by the Federal Reserve Bank of New York.
(1) Each ADS represents one common share.
FAQ**
What strategies is GRAVITY Co. Ltd. GRVY implementing to address the 18.7% QoQ revenue decrease, and what impact do they foresee from upcoming game launches?
How does GRAVITY Co. Ltd. GRVY plan to stabilize its mobile game revenue, considering the 23.9% QoQ decline reported in the third quarter of 2025?
In what ways will the successful launch of new titles like Ragnarok Zero and Ragnarok M: Classic Global benefit GRAVITY Co. Ltd. GRVY’s YoY performance moving forward?
What factors contributed to the 22.8% YoY decrease in operating profit for GRAVITY Co. Ltd. GRVY, and what measures are in place to mitigate these challenges?
**MWN-AI FAQ is based on asking OpenAI questions about GRAVITY Co. Ltd. (NASDAQ: GRVY).
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