Don't Nod Entertainment Half-Year Financial Report 2018

Key insights

6 takeaways

01
Don't Nod Entertainment raised €30.5 million through an IPO on Euronext Growth in H1 2018, allowing the company to exit a court-ordered continuation plan and transition into a public limited company.See it on page 2
02
The company reported €4.68 million in revenue for H1 2018, driven by the releases of Vampyr and The Awesome Adventures of Captain Spirit.See it on page 3
03
Despite revenue growth, the studio recorded a net loss of €1.03 million due to significant investments in research and development and the capitalization of production costs.See it on page 3
04
Don't Nod acquired its development partner, Don't Nod Eleven, for €3.09 million to internalize production capabilities and streamline operations.See it on page 43
05
The studio expanded its workforce to 153 employees and is currently managing an ambitious development pipeline of five simultaneous game productions.See it on page 58
06
As of the end of H1 2018, the company maintains a strong cash position of €27.7 million, supported by the use of CIJV tax credits as a core component of its economic model.See it on page 4

Summary

Don't Nod Entertainment underwent a transformative period during the first half of 2018, marked by a successful initial public offering on Euronext Growth that raised approximately €30.5 million. This capital infusion, combined with the issuance of convertible bonds, fundamentally strengthened the company’s balance sheet and allowed it to exit a court-ordered continuation plan. By transitioning into a public limited company and consolidating its financial reporting, the studio established a robust foundation to support an ambitious development pipeline featuring five simultaneous game productions.

Operational activity during this period was defined by the release of major titles, including Vampyr and The Awesome Adventures of Captain Spirit, which contributed to total revenue of €4.68 million. Despite this growth, the company reported a net loss of €1.03 million, a result driven by heavy investment in research and development and the capitalization of production costs. To streamline operations and mitigate potential conflicts of interest, the studio acquired its development partner, Don't Nod Eleven, for €3.09 million. This acquisition, alongside an expansion of the workforce to 153 employees, reflects a strategic shift toward internalizing production capabilities.

The studio’s financial health remains anchored by a strong cash position of €27.7 million and a reliance on tax credits, specifically the CIJV, as a core component of its economic model. By adopting the percentage-of-completion method for long-term contracts and implementing consistent amortization standards for intangible assets, the company has prioritized transparency in its first set of consolidated accounts. These efforts collectively position the studio to scale its creative output while maintaining the financial liquidity necessary to navigate the high-risk, high-reward nature of the global video game industry.