NHN achieved the highest quarterly revenue in history in the fourth quarter of last year, but due to the so-called "Timaf (Timon, Wemaef) incident," annual operating profit fell into the red. Having cleared the burden of receivables from Timon and Wemaef at once, NHN aims to focus all its efforts on the game and cloud business this year to seek a rebound.
During the 2024 fourth quarter performance conference call held on the 14th, NHN stated, "We recorded 643.9 billion won in fourth-quarter revenue and 25 billion won in operating profit, successfully achieving the highest quarterly revenue and a return to profitability," and added, "However, due to approximately 32.6 billion won in bad debt expenses reflected in the third quarter, the annual operating loss totaled 32.6 billion won." The bad debt expenses related to the large receivables from Timon and Wemaef (approximately 130 billion won) had a significant impact on profits.
The company noted, "Excluding this one-time expense, the operating profit last year was about 108.1 billion won, an increase of 94% compared to the previous year." The annual revenue also grew 8.2% year-on-year to 2.4561 trillion won, setting a new record.
Jeong Woo-jin, CEO of NHN, said, "If we exclude the Timaf incident, we virtually achieved the highest annual operating profit," and added, "This year, we expect a significant performance rebound compared to last year by focusing our capabilities on the game, cloud, and AI businesses." Ahn Hyun-sik, Chief Financial Officer (CFO), also noted, "Although profits temporarily worsened due to the sudden reflection of bad debt expenses for receivables in the third quarter, we succeeded in returning to profitability in the fourth quarter through cost efficiency and restructuring effects."
The game institutional sector showed solid growth, driven by web board and Japanese mobile games. "HanGame Poker Classic" achieved the highest quarterly revenue, boosted by new content (guild wars) and a fifth anniversary event, while "HanGame Double A Poker (WA Poker)" saw more than double its revenue compared to the same period last year due to an e-sports tournament held in collaboration with the virtual asset platform Bithumb. The Japanese flagship title "Compass" also set new records for highest quarterly revenue, thanks to the collaboration with "Hunter X Hunter" and the success of the eighth anniversary offline event.
CEO Jeong mentioned, "We plan to introduce six new games this year," and stated, "From February 25, we will conduct the final test of 'Darkest Days' at Steam Next Fest, and we are excited about the global release planned for the first half of the year, as well as 'Abyss Dia,' which is set for formal entry into Japan in the second quarter, and the large IP-based 'Project STAR' that will be announced in the second half."
The cloud and AI institutional sector recorded fourth-quarter revenue of 118.5 billion won, marking a 50.2% year-on-year increase and continued strong performance. NHN Cloud excelled in the public cloud transition project, successfully securing contracts with 10 out of 17 agencies, establishing a strong presence in the public market.
Kim Dong-hoon, CEO of NHN Cloud, stated, "We have positioned ourselves as the number one contractor in the public market, securing a series of large-scale projects with agencies such as the Ministry of the Interior and Safety and the National Geographic Information Institute," and added, "We will expand our GPU as a service (GPUaaS) business based on the Gwangju AI Data Center and actively respond to the government's increasing budget for research and development in AI."
NHN Dooray is emerging as a new revenue driver by supplying SaaS (cloud-based software) collaboration tools to major financial sectors, including Woori Financial Group and Shinhan Investment Corp., after being designated as an innovative financial service by the Financial Services Commission.
In the payment and advertising institutional sector, although NHN Payco saw a decrease in online transaction volume due to payment withdrawal impacts from Timon and Wemaef, B2B (corporate welfare solutions) revenue increased by 44% year-on-year, successfully defending performance. NHN Payco plans to sequentially terminate low-profit businesses and enhance synergy with NHN KCP in the payment sector. The commerce institutional sector recorded revenue of 61.2 billion won, a decrease of 16.6% compared to the previous year, but the company stated it would focus on improving profits rather than scale this year through restructuring of subsidiary businesses, including China IBT.
CFO Ahn stated, "Last year, we reorganized 14 subsidiaries, and there are more than 10 targeted for restructuring this year," adding, "We will boldly reorganize unnecessary organizations and businesses centered around the commerce institutional sector, expecting meaningful profit improvement in 2025." CEO Jeong also stated, "Although there were difficult issues last year, we confirmed sufficient profitability, excluding problems related to 'Timaf,' and we are moving forward with more aggressive investments in the three pillars of game, cloud, and AI, aiming for a full-fledged rebound this year."