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Gravity Reports Second Quarter of 2025 Results and Business Update

1. GRVY revenues increased 24.2% QoQ to KRW 170,740 million. 2. Net profit decreased 39.9% QoQ but increased 5.4% YoY. 3. Mobile game revenues grew 24.7% QoQ, driven by new game launches. 4. Operating profit fell 20.5% QoQ, indicating potential concerns. 5. Ragnarok Online games show strong performance in various regions.

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Why Bullish?

The significant revenue growth highlights strong market demand, despite profit concerns. Historical examples show that initial strong revenues often lead to positive stock reactions.

How important is it?

This article provides detailed financial metrics that directly influence investor decisions regarding GRVY. The focus on revenue growth and upcoming game launches enhances its relevance.

Why Short Term?

The positive revenue trend may boost investor sentiment in the near-term due to expectations for sustained growth. However, profit declines could dampen enthusiasm over time.

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Seoul, South Korea, Aug. 08, 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 second quarter ended June 30, 2025, prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board and business updates. SECOND QUARTER 2025 HIGHLIGHTS Total revenues were KRW 170,740 million (US$ 126,147 thousand), representing a 24.2% increase from the first quarter ended March 31, 2025 (“QoQ”) and a 38.9% increase from the second quarter ended June 30, 2024 (“YoY”). Operating profit was KRW 19,670 million (US$ 14,533 thousand), representing a 20.5% decrease QoQ and a 31.2% increase YoY. Profit before income tax expense was KRW 18,706 million (US$ 13,821 thousand), representing a 34.2% decrease QoQ and a 6.7% decrease YoY. Net profit attributable to parent company was KRW 13,245 million (US$ 9,786 thousand), representing a 39.9% decrease QoQ and a 5.4% increase YoY. REVIEW OF SECOND QUARTER 2025 FINANCIAL RESULTS Revenues Online game revenues for the second quarter of 2025 were KRW 21,971 million (US$ 16,233 thousand), representing a 16.8% increase QoQ from KRW 18,806 million and a 13.0% increase YoY from KRW 19,445 million. The increase QoQ was mainly attributable to initial revenue from Ragnarok Online America Latina launched in Latin America on May 28, 2025. The increase YoY was also mainly due to initial revenue from Ragnarok Online America Latina launched in Latin America on May 28, 2025. Mobile game revenues were KRW 144,003 million (US$ 106,393 thousand) for the second quarter of 2025, representing a 24.7% increase QoQ from KRW 115,486 million and a 45.4% increase YoY from KRW 99,019 million. The increase QoQ was resulted by initial revenues from Ragnarok M: Classic launched in Taiwan, Hong Kong and Macau on April 16, 2025 and Ragnarok X: Next Generation launched in North, Central and South America, Oceania, England, Portugal, Spain and Ireland on May 8, 2025. Such increase was partially offset by decreased revenues from Ragnarok: Rebirth in Taiwan, Hong Kong and Macau, Ragnarok Origin in Southeast Asia, Taiwan, Hong Kong and Macau and THE RAGNAROK in Southeast Asia. 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, increased revenue from Ragnarok Idle Adventure Plus launched in Global except Taiwan, Hong Kong, Macau, China, Korea and Japan on February 20, 2025 and initial revenue from 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 and Southeast Asia. Other revenues were KRW 4,766 million (US$ 3,521 thousand) for the second quarter of 2025, representing a 50.3% increase QoQ from KRW 3,172 million and a 5.8% increase YoY from KRW 4,503 million. Cost of Revenue Cost of revenue was KRW 114,006 million (US$ 84,231 thousand) for the second quarter of 2025, representing a 30.4% increase QoQ from KRW 87,458 million and a 50.0% increase YoY from KRW 76,006 million. The increase QoQ was mainly due to commission paid for mobile game services related to Ragnarok M: Classic in Taiwan, Hong Kong and Macau and Ragnarok X: Next Generation in North, Central and South America, Oceania, England, Portugal, Spain and Ireland. The increase YoY was primarily due to increased commission paid for mobile game services related to Ragnarok M: Classic in Southeast Asia, Taiwan, Hong Kong and Macau, Ragnarok Idle Adventure Plus in Global except Taiwan, Hong Kong, Macau, China, Korea and Japan and Ragnarok X: Next Generation in North, Central and South America, Oceania, England, Portugal, Spain and Ireland. Operating Expenses Operating expenses were KRW 37,064 million (US$ 27,383 thousand) for the second quarter of 2025, representing a 46.6% increase QoQ from KRW 25,276 million and a 15.9% increase YoY from KRW 31,972 million. The increase QoQ was mainly due to increased advertising expenses for Ragnarok Online America Latina in Latin America, Nobunaga's Ambition: The Road to the World (Tentative English Title) in Japan, Ragnarok Idle Adventure Plus in Taiwan, Hong Kong and Macau and Ragnarok: Back to Glory in Korea. The increase YoY was also mainly due to increased advertising expenses for Ragnarok Online America Latina in Latin America, Ragnarok Idle Adventure Plus in Global, Taiwan, Hong Kong and Macau, Nobunaga's Ambition: The Road to the World (Tentative English Title) in Japan and Ragnarok: Back to Glory in Korea. Profit Before Income Tax Expense Profit before income tax expense was KRW 18,706 million (US$ 13,821 thousand) for the second quarter of 2025 compared with profit before income tax expense of KRW 28,450 million for the first quarter of 2025 and profit before income tax expense of KRW 20,057 million for the second quarter of 2024. Net Profit As a result of the foregoing factors, Gravity recorded a net profit attributable to parent company of KRW 13,245 million (US$ 9,786 thousand) for the second quarter of 2025 compared with net profit attributable to parent company of KRW 22,038 million for the first quarter of 2025 and a net profit attributable to parent company of KRW 12,569 million for the second quarter of 2024. Liquidity The balance of cash and cash equivalents and short-term financial instruments was KRW 576,840 million (US$ 426,184 thousand) as of June 30, 2025. Note: For convenience purposes only, the KRW amounts have been expressed in U.S. dollars at the exchange rate of KRW 1,353.50 to US$ 1.00, the noon buying rate in effect on June 30, 2025 as quoted by the Federal Reserve Bank of New York. GRAVITY BUSINESS UPDATES Ragnarok Online IP-based Games Ragnarok: The Promised Adventure (Tentative English Title), an Idle MMORPG Mobile and WeChat Mini Programs game Ragnarok: The Promised Adventure (Tentative English Title, Chinese title: 仙境传说之约定好的冒险) officially received an ISBN from Chinese government on May 21, 2025 and will be launched in China on October 1, 2025. Ragnarok X: Next Generation, an MMORPG Mobile and PC game Ragnarok X: Next Generation was officially launched in North, Central and South America, Oceania, England, Portugal, Spain and Ireland on May 8, 2025 and will be launched in Europe (except England, Portugal, Spain and Ireland), Middle East, Africa and South Asia in October 2025. Ragnarok Online America Latina, an MMORPG PC game Ragnarok Online America Latina was officially launched in Latin America on May 28, 2025. Ragnarok Idle Adventure Plus, a Vertical Idle MMORPG Mobile game Ragnarok Idle Adventure Plus was officially launched in Taiwan, Hong Kong and Macau on May 21, 2025 and will be launched in Korea on August 28, 2025. Poring Rush, an Idle RPG Mobile game Poring Rush was officially launched in Korea on June 12, 2025. Ragnarok Zero, an MMORPG PC game Ragnarok Zero was officially launched in Taiwan, Hong Kong and Macau on July 3, 2025. Ragnarok: Twilight, an Idle MMOARPG Mobile game Ragnarok: Twilight was officially launched in Taiwan, Hong Kong and Macau on July 3, 2025. It will be launched in China on August 15, 2025 and is underway for its launch in Southeast Asia in the second half of 2025. Ragnarok Crush, a Strategy Action Puzzle RPG Mobile game Ragnarok Crush was officially launched in Global except China and Japan on July 17, 2025. Ragnarok V: Returns, a 3D MMORPG Mobile and PC game Ragnarok V: Returns was officially launched in Global on August 7, 2025. Ragnarok M: Classic, an MMORPG Mobile and PC game Ragnarok M: Classic will be launched in North and South America, Europe, Middle East and Africa on September 3, 2025. Ragnarok: The New World, an MMORPG Mobile and PC game Ragnarok: The New World is planned to be launched in Taiwan, Hong Kong and Macau in the fourth quarter of 2025. PROJECT ABYSS, an MMOARPG Mobile and PC game PROJECT ABYSS is underway for its launch in Southeast Asia in the fourth quarter of 2025. Ragnarok Libre, a Time Effective MMORPG Line game Ragnarok Libre will be launched in Global except Korea, China and Japan on August 11, 2025. I'm the Hero of This Ragnarok! (Tentative English Title), an SLG Simulation Mobile game I'm the Hero of This Ragnarok! (Tentative English Title) is scheduled to be launched in Korea in September 2025. Ragnarok Online IP-based Blockchain Game Ragnarok Landverse, an MMORPG Blockchain and PC game Ragnarok Landverse will be launched in North and South America in the fourth quarter of 2025. Other IP-based games Gunbound, an MMO Turn-based Artillery PC game Gunbound was officially launched in Southeast Asia and Latin America on June 10, 2025. Nobunaga's Ambition: The Road to the World (Tentative English Title), an MMO History Strategy Simulation Mobile game Nobunaga's Ambition: The Road to the World (Tentative English Title) was officially launched in Japan on June 18, 2025. Dragonica Origin, an MMORPG PC game Dragonica Origin was officially launched in Southeast Asia on July 16, 2025. Meow Star Acres 2, a Farm Simulation Mobile game Meow Star Acres 2 will be launched in Global in the fourth quarter of 2025. Schop Hero, a New Fresh Whole Digging Puzzle RPG Mobile game Schop Hero will be launched in Japan in the third quarter of 2025. Chess Rumble, a Collectible Tactical RPG Mobile game Chess Rumble is planned to be launched in Global except Korea and Japan in the third quarter of 2025. Investor Presentation Gravity issued an investor presentation. The presentation contains the Company’s recent business updates, results of the second 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 markets. 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 KimChief Financial OfficerGravity Co., Ltd.Email: kheung@gravity.co.kr Ms. Jin LeeMs. Yujin OhIR UnitGravity 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$)   As of  31-Dec-24  30-Jun-25  KRW  US$  KRW  US$  (audited)  (unaudited)  (unaudited)  (unaudited)Assets               Current assets:               Cash and cash equivalents        228,898       169,116       215,441        159,173 Short-term financial instruments           324,304         239,604         361,399         267,011 Accounts receivable, net             81,152           59,957           81,368           60,117 Other receivables, net               1,572             1,161             1,948             1,439 Prepaid expenses               8,115             5,996           17,768           13,127 Other current financial assets               6,602             4,878             4,759             3,516 Other current assets               2,967             2,192             3,975             2,937 Total current assets       653,610         482,904         686,658         507,320 Property and equipment, net               9,957             7,356           10,703             7,908 Intangible assets, net               7,057             5,214             8,941             6,606 Deferred tax assets               5,617             4,150             6,498             4,801 Other non-current financial assets               1,767             1,306             1,686             1,246 Other non-current assets               8,451             6,245             7,966             5,885 Total assets       686,459         507,175         722,452         533,766 Liabilities and Equity               Current liabilities:               Accounts payable             67,930           50,188           82,024           60,601 Deferred revenue             26,761           19,772           20,868           15,418 Withholdings            1,588             1,173             1,599             1,181 Accrued expense            2,651             1,959             2,181             1,611 Income tax payable            6,507             4,808             7,667             5,665 Other current liabilities            3,212             2,373             3,653             2,699 Total current liabilities        108,649           80,273         117,992           87,175 Long-term account payables               220                163                623                460 Long-term deferred revenue            2,572             1,900                880                650 Other non-current liabilities            5,361             3,961             5,262             3,889 Deferred tax liabilities            1,294                956             1,290                953 Total liabilities           118,096           87,253         126,047           93,127 Share capital            3,474             2,567             3,474             2,567 Capital surplus          26,979           19,933           26,979           19,933 Other components of equity          23,801           17,585           16,601           12,265 Retained earnings        513,418         379,326         548,701         405,394 Equity attributable to owners of the Parent Company        567,672         419,411         595,755         440,159 Non-controlling interest               691                511                650                480 Total equity        568,363         419,922         596,405         440,639 Total liabilities and equity        686,459         507,175         722,452         533,766 * For convenience purposes only, the KRW amounts are expressed in U.S. dollars at the rate of KRW 1,353.50 to US$ 1.00, the noon buying rate in effect on June 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 Six months ended  31-Mar-2530-Jun-2430-Jun-25 30-Jun-24 30-Jun-25  (KRW) (KRW) (KRW) (US$) (KRW) (KRW) (US$)  (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)Revenues:                     Online games  18,806  19,445  21,971  16,233  37,510  40,777  30,127Mobile games  115,486  99,019  144,003  106,393  197,567  259,489  191,717Other revenue  3,172  4,503  4,766  3,521  7,669  7,938  5,865Total net revenue  137,464  122,967  170,740  126,147  242,746  308,204  227,709Cost of revenue  87,458  76,006  114,006  84,231  149,634  201,464  148,847Gross profit  50,006  46,961  56,734  41,916  93,112  106,740  78,862Operating expenses:                     Selling, general and administrative expenses  21,859  28,108  33,509  24,757  43,855  55,368  40,907Research and development  3,431  4,286  3,291  2,431  7,887  6,722  4,966Others, net             (14)           (422)             264              195              (488)             250             185 Total operating expenses  25,276  31,972  37,064  27,383  51,254  62,340  46,058Operating profit  24,730  14,989  19,670  14,533  41,858  44,400  32,804Finance income(costs):                     Finance income        10,717           8,867           2,651           1,959          15,164         13,368          9,877 Finance costs        (6,997)        (3,799)        (3,615)        (2,671)          (4,467)      (10,612)       (7,840)Profit before income tax  28,450  20,057  18,706  13,821  52,555  47,156  34,841Income tax expense  6,372  7,476  5,486  4,053  13,091  11,858  8,761Profit for the year  22,078  12,581  13,220  9,768  39,464  35,298  26,080Profit attributable to:                     Non-controlling interest               40                12              (25)             (18)                 29                15               12 Owners of Parent company  22,038  12,569  13,245  9,786  39,435  35,283  26,068Earnings per share                     - Basic and diluted          3,171           1,809           1,906             1.41             5,675           5,077            3.75 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          3,171           1,809           1,906             1.41             5,675           5,077            3.75                        * For convenience, the KRW amounts are expressed in U.S. dollars at the rate of KRW 1,353.50 to US$1.00, the noon buying rate in effect on June 30, 2025 as quoted by the Federal Reserve Bank of New York.(1) Each ADS represents one common share. 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: August 8, 2025

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