CD PROJEKT Group Q1 2023 Financial Results

Key insights

6 takeaways

01
CD PROJEKT reported Q1 2023 revenue of 175 million PLN and a net profit of 69.7 million PLN, maintaining a strong liquidity position with 1.112 billion PLN in cash, deposits, and treasury bonds.See it on page 2
02
The Witcher 3: Wild Hunt reached 50 million units sold, contributing to a total franchise milestone of over 75 million copies.See it on page 1
03
Development resources are heavily concentrated on the Cyberpunk 2077: Phantom Liberty expansion with 320 staff, and the Polaris project with 220 developers.See it on page 1
04
The company is undergoing structural shifts, including a downsizing of the GWENT team for community-led management and a restructuring of the Sirius project that provided a 19 million PLN boost to EBIT.See it on page 1
05
Management has formally rejected acquisition rumors and plans to expand operations with new North American studios by 2024.See it on page 4
06
The board recommended a dividend payout of 100 million PLN to shareholders while continuing to manage high development expenditures driven by wage inflation and new remuneration policies.See it on page 3

Summary

CD PROJEKT Group’s financial results for the first quarter of 2023 reflect a period of strategic transition, characterized by a focus on the upcoming release of the Cyberpunk 2077: Phantom Liberty expansion. The company reported sales revenue of 175 million PLN and a net profit of 69.7 million PLN. While revenue declined compared to the same period in 2022—which benefited from the launch of the Cyberpunk 2077 next-gen edition—the firm maintained a robust financial position, ending the quarter with 1.112 billion PLN in cash, deposits, and treasury bonds.

Key operational highlights include the milestone achievement of 50 million copies sold for The Witcher 3: Wild Hunt, bringing the total franchise sales to over 75 million units. Development efforts are currently concentrated on Phantom Liberty, which employs over 320 staff, and the Polaris project, which has reached 220 developers. The company also initiated a restructuring of the Sirius project, resulting in a partial reversal of impairment allowances that positively impacted EBIT by nearly 19 million PLN. Conversely, the GWENT development team is being downsized as the game transitions toward community-led management.

The company maintains a firm commitment to independence, explicitly rejecting rumors regarding potential acquisition by external entities. Looking ahead, management is prioritizing the Phantom Liberty marketing campaign and the expansion of research and development for future projects, specifically Orion and Hadar. While development expenditures remain high due to wage inflation and new remuneration policies, the firm continues to allocate capital toward long-term growth, including the planned establishment of new studios in North America by 2024. The board has recommended a dividend payout of 100 million PLN to shareholders, underscoring a strategy of balancing reinvestment with direct profit distribution.