grvy-6k_20210514.htm

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

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. 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): ☐

Seoul, South Korea – May 14, 2021 – 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 first quarter ended March 31, 2021, prepared in accordance with international Financial Reporting Standards as issued by the International Accounting Standards Board and business updates.

Online game revenues for the first quarter of 2021 were KRW 19,458 million (US$ 17,270 thousand), representing a 26.6 % increase QoQ from KRW 15,370 million and a 44.8% increase YoY from KRW 13,436 million. The increase QoQ was mainly attributable to increased revenues from Ragnarok Online in Taiwan and Japan. The increase YoY was largely due to increased revenues from Ragnarok Online in Thailand and Japan.

Mobile game revenues were KRW 82,438 million (US$ 73,166 thousand) for the first quarter of 2021, representing a 10.9% decrease QoQ from KRW 92,562 million and a 47.3% increase YoY from KRW 55,982 million. The decrease QoQ resulted primarily from decreased revenues from Ragnarok X: Next Generation in Taiwan, Hong Kong and Macau and Ragnarok Origin in Korea. Such decrease was partially offset by increased revenues from Tera Classic in Japan that was launched on January 29, 2021 and Ragnarok M: Eternal Love in Southeast Asia. The increase YoY was primarily due to revenues from Ragnarok X: Next Generation in Taiwan, Hong Kong and Macau and Ragnarok Origin in Korea. This increase was partially offset by decreased revenues from Ragnarok M: Eternal Love in Taiwan, Southeast Asia, North America, Japan, Korea and Europe and Ragnarok Tactics.

Other revenues were KRW 3,163 million (US$ 2,807 thousand) for the first quarter of 2021, representing 29.8% decrease QoQ from KRW 4,508 million and an 17.7% decrease YoY from KRW 3,842 million.

Cost of revenue was KRW 57,553 million (US$ 51,080 thousand) for the first quarter of 2021, representing a 11.4% decrease QoQ from KRW 64,966 million and a 17.8% increase YoY from KRW 48,874 million. The decrease QoQ was mainly due to decreased commission paid for mobile game services related to Ragnarok X: Next Generation in Taiwan, Hong Kong and Macau and Ragnarok Origin in Korea. The increase YoY was mostly from increased commission paid for mobile game services related to Ragnarok X: Next Generation in Taiwan, Hong Kong and Macau and Ragnarok Origin in Korea.

Operating expenses were KRW 19,553 million (US$ 17,354 thousand) for the first quarter of 2021, representing a 2.9% decrease QoQ from KRW 20,131 million and a 39.4% increase YoY from KRW 14,030 million. The decrease QoQ was mainly attributable to decreased advertising expenses for Ragnarok Origin in Korea and The Labyrinth of Ragnarok in Southeast Asia, and research and development expenses. The increase YoY was mostly resulted from increased advertising expenses for Tera Classic in Japan, The Labyrinth of Ragnarok in global and The Lord in Thailand, research and development expenses and commission paid.

Profit before income tax expenses was KRW 28,620 million (US$ 25,401 thousand) for the first quarter of 2021 compared with profit before income tax expense of KRW 26,751 million for the fourth quarter of 2020 and profit before income tax expenses of KRW 11,250 million for the first quarter of 2020.

As a result of the foregoing factors, Gravity recorded a net profit attributable to parent company of KRW 23,565 million (US$ 20,915 thousand) for the first quarter of 2021 compared with net profit attributable to parent company of KRW 15,064 million for the fourth quarter of 2020 and a net profit attributable to parent company of KRW 9,263 million for the first quarter of 2020.

The balance of cash and cash equivalents and short-term financial instruments was KRW 194,754 million (US$ 172,850 thousand) as of March 31, 2021.

Note: For convenience purposes only, the KRW amounts have been expressed in U.S. dollars at the exchange rate of KRW 1,126.72 to US$ 1.00, the noon buying rate in effect on March 31, 2021 as quoted by the Federal Reserve Bank of New York.

Ragnarok Origin is being prepared for launch in Japan in the second quarter of 2021. The closed beta test (“CBT”) has completed on April 22, 2021 with users’ positive feedbacks.

Ragnarok X: Next Generation has started the CBT and pre-registration on April 23, 2021. The game is being prepared for launch in Southeast Asia in June 2021.

The Labyrinth of Ragnarok was launched in global including Korea (except Taiwan, Hong Kong, Macau, China and Japan) on March 23, 2021.

The Lost Memories: a Song of Valkyrie, a Story RPG mobile game, is expected to be launched in Thailand, North America and global in the second half of 2021. The game was developed by Gravity NeoCyon, Inc., our subsidiary in Korea.

Project S (Tentative title), a MMORPG mobile game, is scheduled to start the CBT in the second half of 2021.

The Lord, a SRPG mobile game, is expected to be launched in Indonesia, Vietnam, Taiwan, Hong Kong and Macau in the second half of 2021.

CPBL Pro-baseball 2021, a Sports mobile game, will be launched in Taiwan, Hong Kong and Macau on June 17, 2021.

Gravity issued an investor presentation. The presentation contains the Company’s recent business updates, results of first quarter in 2021 and Gravity’s business plan. The presentation can be found on the Company’s website under the IR Archives section at http://www.gravity.co.kr/en/ir/pds/list.asp. Korean and Japanese versions of the presentation are also provided on the website.

Based in Korea, 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 93 markets and countries. For more information about Gravity, please visit http://www.gravity.co.kr.

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, 2020 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.

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

Ms. Hye Ji An
IR Unit
Gravity Co., Ltd.
Email: ir@gravity.co.kr
Telephone: +82-2-2132-7800

	As of
	31-Dec-20						31-Mar-21
	KRW			US$			KRW		US$
	(audited)			(unaudited)			(unaudited)		(unaudited)
Assets
Current assets:
Cash and cash equivalents		110,632			98,189			116,754		103,623
Short-term financial instruments		71,000			63,015			78,000		69,227
Accounts receivable, net		59,761			53,040			62,994		55,909
Other receivables, net	8				7			183		162
Prepaid expenses		2,238			1,986			1,989		1,765
Other current assets		2,946			2,615			3,220		2,859
Total current assets		246,585			218,852			263,140		233,545
Property and equipment, net		7,695			6,830			8,286		7,354
Intangible assets, net		3,363			2,985			3,746		3,325
Deferred tax assets		3,590			3,186			2,810		2,494
Other non-current financial assets		1,324			1,175			2,070		1,837
Other non-current assets		2,815			2,498			1,916		1,701
Total assets		265,372			235,526			281,968		250,256
Liabilities and Equity
Current liabilities:
Accounts payable		52,688			46,762			47,651		42,292
Deferred revenue		13,692			12,152			11,902		10,563
Withholdings		2,851			2,530			2,991		2,655
Accrued expense		1,365			1,211			1,261		1,119
Income tax payable		9,470			8,405			8,575		7,611
Other current liabilities		2,654			2,356			2,745		2,436
Total current liabilities		82,720			73,416			75,125		66,676
Long-term deferred revenue		101			90			185		164
Other non-current liabilities		5,203			4,618			4,593		4,077
Total liabilities		88,024			78,124			79,903		70,917
Share capital		3,474			3,083			3,474		3,083
Capital surplus		27,110			24,061			27,110		24,061
Other components of equity		(1,045	)		(927	)		112		99
Retained earnings		147,371			130,796			170,936		151,711
Equity attributable to owners of the Parent Company		176,910			157,013			201,632		178,954
Non-controlling interest		438			389			433		385
Total equity		177,348			157,402			202,065		179,339
Total liabilities and equity		265,372			235,526			281,968		250,256

* For convenience purposes only, the KRW amounts are expressed in U.S. dollars at the rate of KRW 1,126.72 to US$ 1.00, the noon buying rate in effect on March 31, 2021 as quoted by the Federal Reserve Bank of New York.

	Three months ended
	31-Dec-20						31-Mar-20						31-Mar-21
	(KRW)			(US$)			(KRW)			(US$)			(KRW)			(US$)
	(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)
Revenues:
Online games		15,370			13,641			13,436			11,925			19,458			17,270
Mobile games		92,562			82,152			55,982			49,686			82,438			73,166
Other revenue		4,508			4,001			3,842			3,410			3,163			2,807
Total net revenue		112,440			99,794			73,260			65,021			105,059			93,243
Cost of revenue		64,966			57,659			48,874			43,377			57,553			51,080
Gross profit		47,474			42,135			24,386			21,644			47,506			42,163
Operating expenses:
Selling, general and administrative expenses		15,708			13,941			11,007			9,769			15,508			13,764
Research and development		4,358			3,868			2,872			2,549			4,009			3,558
Others, net		65			58			151			134			36			32
Total operating expenses		20,131			17,867			14,030			12,452			19,553			17,354
Operating profit		27,343			24,268			10,356			9,192			27,953			24,809
Finance income(costs):
Finance income		476			422			1,551			1,377			1,600			1,420
Finance costs		(1,068	)		(947	)		(657	)		(583	)		(933	)		(828	)
Profit before income tax		26,751			23,743			11,250			9,986			28,620			25,401
Income tax expenses		11,768			10,444			2,004			1,779			5,059			4,490
Profit for the year		14,983			13,299			9,246			8,207			23,561			20,911
Profit attributable to:
Non-controlling interest		(81	)		(71	)		(17	)		(15	)		(4	)		(4	)
Owners of Parent company		15,064			13,370			9,263			8,222			23,565			20,915
Earning per share
- Basic and diluted		2,168			1.92			1,333			1.18			3,391			3.01
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
Earning per ADS⁽¹⁾
- Basic and diluted		2,168			1.92			1,333			1.18			3,391			3.01

* For convenience, the KRW amounts are expressed in U.S. dollars at the rate of KRW 1,126.72 to US$1.00, the noon buying rate in effect on March 31, 2021 as quoted by the Federal Reserve Bank of New York.

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