CD PROJEKT Group Condensed Interim Consolidated Financial Statement: Q3 2020

Key insights

6 takeaways

01
CD PROJEKT Group reported a 13% year-over-year increase in Q3 2020 sales revenue to 104.5 million PLN and a 57% rise in net profit to 23.4 million PLN.See it on page 7
02
The company maintained a strong liquidity profile with 634.9 million PLN in total financial reserves, despite executing a 214.3 million PLN share buy-back program.See it on page 47
03
GOG.com segment revenue grew by 23% year-over-year, supported by improved net profitability and the GOG GALAXY 2.0 technology platform.See it on page 32
04
Financial statements show a significant rise in deferred revenues, reflecting high preorder volumes and minimum guarantees ahead of the December 2020 launch of Cyberpunk 2077.See it on page 11
05
The Group is transitioning to a dual-franchise model using independent development teams to mitigate operational risk while continuing to rely on The Witcher franchise and GWENT as primary revenue drivers.See it on page 43
06
North America remains the Group's primary export region as the company continues to navigate the operational impacts of the COVID-19 pandemic.See it on page 59

Summary

The CD PROJEKT Group’s financial performance for the third quarter of 2020 reflects a period of robust growth and strategic transition, characterized by a 13% year-over-year increase in quarterly sales revenue to 104.5 million PLN and a 57% rise in net profit to 23.4 million PLN. This positive momentum was largely fueled by the sustained success of The Witcher franchise and the strong performance of GWENT: The Witcher Card Game following its expansion to mobile and Steam platforms. Simultaneously, the GOG.com segment demonstrated significant operational health, reporting a 23% revenue increase and a marked improvement in net profitability compared to the prior year.

The company’s financial position remains strong, supported by 634.9 million PLN in total financial reserves and substantial operating cash flows. These resources have been strategically deployed to fund intensive marketing campaigns and ongoing development expenditures for Cyberpunk 2077, which remained the primary focus of the Group’s investment activities. While the company executed a 214.3 million PLN share buy-back program to facilitate employee incentive plans, it maintained a solid liquidity profile. The balance sheet also reflects a significant rise in deferred revenues, driven by preorders and minimum guarantees associated with the highly anticipated launch of Cyberpunk 2077.

Operating within a global market, with North America serving as the primary export region, the Group continues to adhere to International Financial Reporting Standards while navigating the complexities of the COVID-19 pandemic. The management team is actively executing a shift toward a dual-franchise model, supported by independent development teams designed to mitigate operational risk. Despite the optimization-related delay of Cyberpunk 2077 to December 2020, the Group maintains a stable outlook, underpinned by its proprietary GOG GALAXY 2.0 technology and a commitment to long-term growth through its established intellectual property portfolio.