CD PROJEKT Group H1 2023 Financial Results

Key insights

6 takeaways

01
CD PROJEKT Group reported H1 2023 consolidated sales revenues of 325 million PLN, reaching 86% of the previous year's figures.See it on page 2
02
The company maintained a net profit of 91 million PLN for the first half of 2023, with a total cash position of 931 million PLN as of June 30.See it on page 3
03
Development expenditures reached 163 million PLN during H1 2023, driven by the finalization of the Cyberpunk 2077: Phantom Liberty expansion and early work on the next Witcher title, Polaris.See it on page 3
04
The studio is undergoing a 9% workforce reduction as part of a structural reorganization to align with long-term development goals.See it on page 2
05
CD PROJEKT is shifting its technical foundation from the proprietary REDEngine to Unreal Engine, marking Phantom Liberty as the final expansion for Cyberpunk 2077.See it on page 6
06
Operating expenses were impacted by the conclusion of The Witcher 3 Next-Gen edition, the RED 2.0 transformation, and increased administrative costs from new incentive programs.See it on page 2

Summary

The CD PROJEKT Group’s financial results for the first half of 2023 reflect a transitional period characterized by significant investment in upcoming content and internal structural reorganization. The primary focus during this period was the preparation for the September 2023 release of the Phantom Liberty expansion for Cyberpunk 2077. While the company reported consolidated sales revenues of 325 million PLN—representing 86% of the previous year's figures—the period was marked by heavy development expenditures, totaling 163 million PLN, as the studio finalized the expansion and advanced work on future projects, including the next installment in The Witcher series, codenamed Polaris.

Key financial highlights include a net profit of 91 million PLN for the first half of the year. The company’s cash position, including deposits and treasury bonds, stood at 931 million PLN as of June 30, 2023. Operating expenses were influenced by the conclusion of the Witcher 3 Next-Gen edition and the ongoing RED 2.0 transformation, which includes a strategic shift toward Unreal Engine technology. Administrative costs rose due to new incentive programs, while the company successfully utilized R&D tax relief mechanisms to bolster its financial standing.

Operationally, the studio is undergoing a workforce reduction of approximately 9% to align its structure with long-term development plans. Development resources are increasingly being reallocated from the REDEngine-based Cyberpunk 2077 projects toward the Unreal-based Polaris project. Management emphasized that Phantom Liberty serves as the final expansion for Cyberpunk 2077, citing technical reasons related to the engine transition. The company maintains a positive outlook on the franchise's long-term value, supported by the critical reception of the base game and the anticipated impact of the 2.0 update.