KOSPIIT & Software181710

NHN

₩57,200▲ 1.60%2026-10-02 close

Market Cap

₩1.8T

Turnover

₩7.5B

Volume

130,000 shares

Shares out.

32.3M

PER

31.5×

PBR

1.5×

EPS

₩2,273

Dividend Yield

0.70%

PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩500 per share · Prices as of the 2026-10-02 close

Report overview

AI GPU Reshapes NHN's Profit Mix

With games, payments and technology all contributing profit at the same time, NHN's earnings profile has shifted from losses to a profit trend, driven above all by the AI GPU business inside its cloud unit.

1
Second-quarter 2026 revenue of KRW 757.9bn and operating profit of KRW 57.9bn were quarterly records, which the company attributed to simultaneous growth across games, payments and technology.
2
The technology segment posted KRW 159.8bn in second-quarter revenue on AI GPU expansion, with NHN Cloud revenue up 85.3% year on year according to the company.
3
On an annual basis the company swung from a 2024 operating loss to KRW 132.4bn operating profit in 2025 (5.3% margin), with operating cash flow also sharply higher.
4
An enforcement decree raising the monthly webboard game spending cap from KRW 700,000 to KRW 1m was promulgated in February 2026, feeding through to per-user spending in the game segment.
5
Simultaneous data-center leasing, in-house construction and newer GPU purchases are lifting fixed costs such as depreciation and electricity while also pushing the debt ratio higher.

Business structure

NHN operates through four axes: games, payments and advertising, technology (cloud), and others such as content, commerce and ticketing.

The group's main businesses are online and mobile games, PG and VAN services plus the PAYCO simple-payment platform, and CSP/MSP-type cloud technology, alongside ticketing, commerce and webtoons; as of end-first-quarter 2026 the revenue mix was games 20.49%, payments and advertising 54.31%, and others 25.20%.

For the second quarter of 2026 the company disclosed games at KRW 139.6bn, payments at KRW 394.0bn and technology at KRW 159.8bn, with the other segment at KRW 88.0bn.

The payments axis centers on subsidiary NHN KCP, which the company said handled KRW 17tn of transaction value in the quarter, up 34.0% year on year, holding a 30% share of the domestic PG market at quarter-end.

In games, Hangame-based webboard titles act as the cash cow while Japanese subsidiary NHN PlayArt handles the overseas leg.

Second-quarter PC online game revenue was KRW 49.1bn and mobile game revenue KRW 90.5bn, attributed to higher average spending per paying user after the webboard regulatory change, the Hangame Royal Holdem offline tournament, and the Japanese title Compass collaborating with Chainsaw Man.

The technology segment combines NHN Cloud's public-sector, financial and gaming vertical cloud plus GPU-as-a-service with the AWS resale business of Japanese unit NHN Techorus.

Over recent years the company wound down or restructured loss-making non-core subsidiaries and services in commerce, travel and content, cutting consolidated subsidiaries from around 90 to roughly 60 while lowering fixed costs through service closures and reorganization.

Competitively it faces webboard rivals such as Neowiz and Netmarble's affiliate in games, domestic PG and simple-payment providers in payments, and local CSPs plus global hyperscalers in cloud.

Earnings trend

Quarterly revenue · Operating profit

₩604.9B₩21.9B25Q2₩625.6B₩27.6B25Q3₩685.6B₩55.2B25Q4₩671.4B₩26.3B26Q1₩757.9B₩57.9B26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩2.1T₩39.1B2022₩2.3T₩55.6B2023₩2.5T-₩32.6B2024₩2.5T₩132.4B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩604.9B	₩21.9B	3.6%
2025Q3	₩625.6B	₩27.6B	4.4%
2025Q4	₩685.6B	₩55.2B	8.1%
2026Q1	₩671.4B	₩26.3B	3.9%
2026Q2	₩757.9B	₩57.9B	7.6%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩2.1T	₩39.1B	-₩32.1B	1.8%	−1.9%	51.8%
2023	₩2.3T	₩55.6B	-₩8.5B	2.4%	−0.5%	73.4%
2024	₩2.5T	-₩32.6B	-₩132.5B	−1.3%	−9.1%	80.9%
2025	₩2.5T	₩132.4B	₩32.1B	5.3%	2.2%	117.5%

Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-09-04

Earnings analysis

The annual trajectory forms a clear U-shape.

Revenue rose steadily from KRW 2,114.9bn in 2022 to KRW 2,269.6bn in 2023, KRW 2,456.1bn in 2024 and KRW 2,516.2bn in 2025, yet operating profit of KRW 39.1bn in 2022 and KRW 55.6bn in 2023 turned into a KRW 32.6bn operating loss in 2024 before swinging to a KRW 132.4bn profit in 2025.

Net profit attributable to owners also moved from three consecutive loss years through 2024 (a KRW 132.5bn loss that year) to a KRW 32.1bn profit in 2025.

The operating margin recovered to 5.3% in 2025 after 1.8% in 2022, 2.4% in 2023 and minus 1.3% in 2024, while operating cash flow expanded from KRW 47.0bn in 2024 to KRW 374.0bn in 2025.

Quarterly, revenue and operating profit went from KRW 604.9bn and KRW 21.9bn in the second quarter of 2025 to KRW 625.6bn and KRW 27.6bn, then KRW 685.6bn and KRW 55.2bn, KRW 671.4bn and KRW 26.3bn, and KRW 757.9bn and KRW 57.9bn in the second quarter of 2026, a stair-step improvement with profit spikes in the fourth and second quarters.

The company said cost-efficiency and cost-control gains began showing from the fourth quarter of 2025, with core business results turning into profit from the second quarter of 2026. For the softer first quarter of 2026, management pointed to up-front AI GPU infrastructure investment costs.

On second-quarter costs, of KRW 700.0bn total operating expenses, payment fees were KRW 507.3bn on higher revenue-linked fees at KCP, while depreciation of KRW 37.0bn rose 47.6% year on year as right-of-use asset amortization tied to the government AI GPU project was additionally recognized.

The balance sheet is in expansion mode: total liabilities grew from KRW 1,427.7bn in 2024 to KRW 2,080.6bn in 2025, lifting the debt-to-equity ratio from 80.9% to 117.5%, while total equity was little changed at KRW 1,770.8bn.

Net profit attributable to owners eased from KRW 23.6bn in the first quarter of 2026 to KRW 20.0bn in the second, which the company linked to base effects from financial-asset disposal gains booked in the prior quarter.

Industry analysis

End-demand has shifted toward AI infrastructure. As AI services spread, demand for GPU-as-a-service, in which customers rent only the GPU capacity they need, is growing, making pre-emptive access to stable power and data-center space a key competitive factor in cloud.

Industry observers argue that how quickly a provider secures power and cooling infrastructure capable of running high-performance GPUs is a critical variable for scaling AI businesses.

NHN Cloud entered the market on the back of a government GPU build-out program, and in May 2026 unveiled the full-stack AI brand FactoryX, spanning GPU sourcing, operational optimization and AI agent runtime environments.

Management differentiates itself from pure GPU suppliers by citing among the largest and most stable domestic GPU operating track records plus control-plane and AI agent environments.

In payments, the domestic PG market continues to consolidate around leading players as transaction values grow, and NHN KCP signed a partnership with blockchain developer Ava Labs in April 2026 to build a payments-focused mainnet, plus an MOU with NH NongHyup Bank on a stablecoin-based payment ecosystem.

In games, regulation remains the biggest swing factor. An amended enforcement decree of the Game Industry Promotion Act raising the webboard spending cap from KRW 700,000 to KRW 1m was promulgated on February 3, 2026, and it is regarded as the largest easing step since 2014.

That said, the government has stated it will strengthen post-implementation oversight and monitoring even after the cap increase, so the regulatory direction cannot be assumed to be one-way.

Outlook

Management's stated second-half agenda consists of verifiable milestones across all three axes.

In technology, the plan is to secure at least 30MW of additional AI data-center capacity by next year and add Nvidia B300-class or newer GPUs to existing regions, with 20MW of the 30MW leased externally and 10MW built in-house, targeted for the second half of next year and roughly comparable in scale to the current Yangpyeong, Pangyo and Gwangju footprint.

Execution has begun. On August 28, 2026 NHN disclosed that NHN Cloud would sign a lease commitment with AI Factory Pohang PFV covering 20MW of space and related facilities at the Pohang data center for 60 months from the lease start date. The board on the same day also approved a debt guarantee for NHN Cloud.

On revenue visibility, the company said it is discussing new long-term contracts for the remaining capacity at the operating Yangpyeong data center.

Overseas, the head of NHN Cloud said GPU demand from foreign companies is rising, contracts with some customers are expected shortly, and a Japanese data center is being secured to support global expansion.

In games, a new title co-developed by NHN's game division and NHN PlayArt, romanized as Hwansang Segye-ui Puchipoyong, targets a launch this winter and will be introduced alongside other new and live titles at the Tokyo Game Show in September.

In payments, a proof of concept with employees was completed on the mainnet co-developed with Avalanche, and a July demo day showcased stablecoin payments via a digital wallet embedded in the PAYCO app together with merchant settlement flows.

On costs, the CFO noted that depreciation began to be recognized from the second quarter as the Yangpyeong region came online, is expected to stay at a similar level in the third quarter, but remains fluid given new investment plans.

Valuation

PER

31.5×

PBR

1.5×

ROE

4.8%

EPS

₩2,273

BPS

₩48,453

Dividend per share

₩500

Any valuation discussion starts from the fact that the earnings base has only just changed.

The path from a large 2024 loss to 2025 profitability and then to record quarterly profit in the first half of 2026 means per-share earnings metrics are disconnected from the multi-year average, and even a four-quarter view blends low-margin and high-margin quarters.

Relative to net assets the shares trade at a premium, consistent with a market weighting the growth option in cloud and AI GPU more heavily than the steadier cash flows from games and payments.

On returns, cash dividends sit alongside buybacks and cancellations, as with the decision to acquire 431,525 shares worth KRW 16.7bn on-market between May 12 and August 11, 2026 and cancel them in full under a three-year shareholder return policy, so the cash dividend alone is an incomplete gauge.

For reference, Samsung Securities said in an August 11, 2026 report that it added AI cloud companies to the peer group and raised its target price from KRW 46,000 to KRW 65,000, while KB Securities said in a June 1, 2026 report that it lifted its target price to KRW 76,000 and switched methodology from DCF to sum-of-the-parts, assigning KRW 1,144.3bn to games, KRW 322.3bn to PAYCO, KRW 699.6bn to cloud and KRW 317.1bn to other investment assets.

Those are the brokers' own views, and it should be weighed alongside the fact that realized multiples can swing quarter to quarter with GPU contract timing and the pace at which depreciation lands.

PER, EPS, PBR and BPS are all calculated in-house (the same method as Naver and Toss) · Dividend yield = cash dividend per share from DART filings (supplemented by KRX) ÷ current price · As of 2026-09-04

Bull factors

Three axes generating profit at once

The company said its core games, payments and technology businesses are all generating operating profit, giving it a more balanced earnings structure. Management stated the quarter showed that the core businesses can produce operating profit together rather than relying on a single segment or seasonal strength.

Quarterly operating profit expanded from KRW 21.9bn in the second quarter of 2025 to KRW 57.9bn in the second quarter of 2026, with revenue up from KRW 604.9bn to KRW 757.9bn over the same period. Lower dependence on one segment also narrows the swing that any single business can inflict on group earnings.

Moving to execution on AI infrastructure capacity

The 20MW Pohang data-center lease commitment disclosed on August 28, 2026, running 60 months, shows the plan has moved into documented contract form. The company has laid out at least 30MW of additional capacity by next year, of which 10MW is to be built in-house.

It also said new long-term contracts are under discussion for the remaining capacity at the Yangpyeong data center. Running leases, self-build and newer GPU purchases in parallel creates room for improvement in the technology segment's operating margin depending on utilization and contract mix.

Games benefiting from easing rules and cost control

The enforcement decree raising the webboard spending cap to KRW 1m was promulgated on February 3, 2026. The company said total second-quarter webboard revenue rose 15% year on year on the regulatory change and the Hangame Poker Tour effect.

At the same time second-quarter advertising expenses fell 16.4% year on year to KRW 17.5bn, attributed to lower webboard marketing and lower new-title marketing spend. Higher per-user monetization coinciding with lower marketing outlays is supportive for game segment profitability.

Bear factors

Fixed costs landing ahead of revenue

Second-quarter depreciation rose 47.6% year on year to KRW 37.0bn, and KRW 18.8bn of other operating costs included electricity charges tied to the government AI GPU project.

The company said third-quarter depreciation should be similar to the second quarter but that costs could rise thereafter on further GPU purchases and data-center leases. Total liabilities grew from KRW 1,427.7bn in 2024 to KRW 2,080.6bn in 2025, lifting the debt-to-equity ratio from 80.9% to 117.5%.

If contract signings slip, the lag between costs recognized up front and revenue arriving later can weigh on earnings.

Limited margin conversion from payments growth

Second-quarter payment revenue rose 27.3% year on year to KRW 394.0bn, but payment fees in the same quarter rose 23.7% to KRW 507.3bn as KCP's revenue-linked fees grew alongside.

The payments business recognizes revenue on a gross basis with fee costs expanding in tandem, so top-line growth does not translate one-for-one into profit growth. PAYCO is still at the stage of narrowing its operating loss on growth in coupon and corporate welfare solution volumes, per the company.

With payments accounting for more than half of group revenue, the gradual pace of margin improvement there can cap the group operating margin.

Loss-making other segment and event-driven revenue

Second-quarter other segment revenue fell 8.8% year on year to KRW 88.0bn. The CFO noted the other segment is still loss-making, with losses being reduced through rapid efficiency measures.

Growth in Japanese mobile games also reflected collaboration effects such as Compass with Chainsaw Man, meaning quarterly volatility can follow the collaboration and event cycle.

The new title romanized as Hwansang Segye-ui Puchipoyong is still at the stage of targeting a winter launch, so the game segment's next growth pillar remains unproven until results are seen.

Risk factors

Regulation

Webboard games are perpetually discussed alongside gambling-proximity and illegal cash-out issues.

Because controversy has recurred for years in this genre, public debate over easing is expected to continue, betting mechanics make it hard to fully block illegal cash-out, and unofficial exchange operations via online channels and social media are reportedly increasing.

The government has said it will strengthen post-implementation oversight and monitoring even after the cap increase. Stablecoin payments are likewise an area where commercialization pace depends on how the regulatory framework develops.

Investment recovery and contracts

GPU economics vary widely with contract terms. The CFO said government projects grant partial GPU usage rights but carry operating-cost burdens, so directly operated capacity should carry higher margins, and that precise margin levels are hard to state given market volatility.

Management also noted operating profit could vary with how quickly contracts are signed and whether they are long term. Securing the Pohang data center came with a debt guarantee for NHN Cloud, linking the expansion to the parent's financial obligations.

Governance and capital structure

The subsidiary listing question remains unresolved.

The CFO said discussions are under way with financial investor IMM Investment and that shareholder consent is needed, making it hard to commit, adding that a concrete answer on a listing is only possible once the technology business is fully ramped and sufficient operating margins are secured.

The company says duplicate-listing rules and the timing of fair value recognition must both be considered. Whether and how a listing proceeds affects both the cloud unit's funding options and how value is shared with parent shareholders.

What to watch next

Late September 2026
NHN PlayArt is scheduled to introduce the new title romanized as Hwansang Segye-ui Puchipoyong plus key live games at the Tokyo Game Show. The specifications shown and whether a firm launch date is set will be the first read on the credibility of the winter launch plan.
Early to mid-November 2026
Third-quarter 2026 results. Key items are whether technology revenue holds near the second quarter's KRW 159.8bn and whether the CFO's guidance that third-quarter depreciation would be similar to the second quarter is borne out in the reported figures.
Fourth quarter of 2026
A window to check whether new long-term contracts for the remaining Yangpyeong capacity are signed and whether overseas GPU supply contracts are actually disclosed. Contract size and duration will determine the visibility of technology segment revenue.
Winter 2026 through first half of 2027
Worth monitoring the start date of the Pohang data-center lease, which runs 60 months from commencement and progress on the 10MW self-built portion of the 30MW plan, targeted for the second half of next year. Related costs begin flowing through the income statement once the lease starts.
Around February 2027
Full-year 2026 results, alongside disclosure of the next year's execution under the three-year shareholder return policy, covering buyback, cancellation and dividend decisions. It will also show how the annual operating margin has moved from 5.3% in 2025.

Overall view

NHN is being reshaped from a games-and-payments operator into a company with cloud and AI infrastructure as a third pillar.

Financially it swung from a KRW 32.6bn operating loss in 2024 to KRW 132.4bn operating profit in 2025, and on a quarterly basis reached KRW 757.9bn revenue and KRW 57.9bn operating profit in the second quarter of 2026.

The company attributes this to cost-efficiency and cost-control gains reflected from the fourth quarter of 2025 and core business results ramping in 2026.

On the other side, total liabilities grew to KRW 2,080.6bn in 2025, lifting the debt-to-equity ratio to 117.5%, and management itself flagged that costs could increase on further GPU purchases and data-center leases.

The constructive case rests on all three axes earning profit at once and on documented capacity such as the 20MW Pohang lease commitment, while the cautious case rests on front-loaded fixed costs, the margin conversion rate in payments, losses in the other segment and regulatory variables.

On the flow side, disclosures confirm the National Pension Service raised its NHN stake from 9.62% to 10.12% during August.

Ultimately what needs verifying is how quickly the remaining Yangpyeong capacity and overseas customer contracts convert into revenue, and whether that pace outruns the growth in depreciation and electricity costs. This report is for information purposes only and contains no buy or sell recommendation or target price.

Sources

Korea Exchange (KRX) — Prices · Market Cap · Volume
FSS electronic disclosure system (DART) — Financial statements · Dividend filings

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Report written 2026-09-05 · Data as of 2026-09-04

This content is AI analysis of market data and web search results, provided for information only. It is not a solicitation or recommendation to invest. Investment decisions and their consequences are the investor's own responsibility. Data may be delayed or contain errors.