CD PROJEKT Group Condensed Interim Consolidated Financial Statement: Q1 2020

Key insights

6 takeaways

01
CD PROJEKT Group achieved record Q1 2020 results, with revenue rising 138.6% year-over-year to 192.97 million PLN and net profit surging 418.7% to 91.98 million PLN.See it on page 7
02
Financial growth was driven by licensing royalties from The Witcher franchise, the Android launch of GWENT, and the return to profitability of the GOG.com digital distribution platform.See it on page 8
03
The company maintains a strong financial position with 695.50 million PLN in financial assets and 1.17 billion PLN in total equity.See it on page 30
04
Profitability was enhanced by a 5% preferential IP BOX tax rate on eligible intellectual property income and favorable foreign exchange rates.See it on page 63
05
Despite rising production and compensation costs, the company successfully transitioned to remote work during the COVID-19 pandemic to maintain the development schedule for Cyberpunk 2077.See it on page 38
06
The Group is diversifying its treasury strategy by investing surplus cash into low-risk government bonds while continuing to expand the GOG GALAXY 2.0 ecosystem.See it on page 15

Summary

The CD PROJEKT Group achieved its strongest first-quarter performance to date during the opening three months of 2020, characterized by substantial year-over-year growth in both revenue and profitability. Total sales revenues reached 192.97 million PLN, representing a 138.6% increase compared to the same period in 2019, while net profit surged by 418.7% to 91.98 million PLN. This financial expansion was primarily fueled by robust licensing royalties from The Witcher franchise, the successful mobile launch of GWENT on Android, and strong performance from the GOG.com digital distribution platform, which returned to profitability.

The company’s financial health remained robust, supported by a significant increase in net cash flows from operating activities and a total financial asset base of 695.50 million PLN. These results were bolstered by favorable foreign exchange rates and the strategic application of a 5% preferential IP BOX tax rate on eligible intellectual property income. While operating expenses rose due to higher compensation and production costs, the Group maintained a strong equity position of 1.17 billion PLN. Management responded to the global COVID-19 pandemic by transitioning to a remote work model while continuing to prioritize the final development phase of Cyberpunk 2077.

Geographically, the Group saw significant traction in North American and Asian markets, underscoring the global reach of its digital-first strategy. Throughout the quarter, the company balanced heavy investment in future development projects with a conservative treasury strategy, including plans to diversify surplus cash into low-risk government bonds. Prepared in accordance with International Financial Reporting Standards, these results reflect a period of operational transition as the organization focused on its dual-franchise model and the expansion of the GOG GALAXY 2.0 ecosystem.