GRAVITY Co., Ltd. (NASDAQ:GRVY) reported second-quarter results on Friday that exceeded market expectations, with robust profit growth helping to offset a modest decline in revenue. Investors welcomed the earnings performance, sending the stock more than 5% higher.
Profitability Improves Despite Lower Revenue
The gaming company posted adjusted earnings of $2.26 per share for the second quarter ended 30 June 2026, beating analysts’ expectations.
Revenue totalled $104.52 million, down 5.2% from $110.24 million in the same period last year, although sales were broadly unchanged from the previous quarter.
The decline reflected softer performance in parts of the company’s mobile gaming portfolio, but stronger profitability more than compensated for the lower revenue.
Online Games Deliver Strong Growth
Mobile game revenue fell 10.7% year over year to $83.04 million, mainly due to weaker contributions from Ragnarok M: Classic across Taiwan, Hong Kong, Macau and Southeast Asia.
However, online game revenue surged 35.0% to $19.15 million, supported by stronger demand for Ragnarok Online in Thailand, Taiwan, Hong Kong and Macau.
Operating profit climbed 40.2% year over year to $17.81 million.
Net profit attributable to shareholders increased 83.8% to $15.72 million, highlighting the company’s improved earnings performance.
Lower Costs Boost Margins
Operating expenses declined 33.2% from a year earlier to $15.99 million.
The reduction was largely driven by lower advertising spending for titles including Ragnarok Idle Adventure Plus and Ragnarok Online America Latina.
Cost of revenue also fell 3.9% to $70.73 million, reflecting lower commissions associated with mobile game services.
The combination of tighter cost control and improved operating efficiency helped drive the sharp increase in profitability.
Expanding Ragnarok Portfolio
The company continues to broaden its Ragnarok franchise through new launches and regional expansions.
“Ragnarok M: Eternal Love 2 officially received an ISBN from Chinese government on July 23, 2026,” the company stated in its business update.
During and after the quarter, GRAVITY launched Ragnarok: Twilight Global across Europe and the Americas, followed by the release of Ragnarok M: Classic in South Korea.
The company also plans to launch Ragnarok Zero: Global across Southeast Asia, Europe and Oceania on 18 August 2026.
Strong Balance Sheet Supports Growth
As of 30 June 2026, GRAVITY held $419.19 million in cash, cash equivalents and short-term financial instruments, providing substantial financial flexibility to support future game launches and international expansion.
Gravity stock price
