2019 Consolidated Full-Year Results: DONTNOD Entertainment

Key insights

6 takeaways

01
DONTNOD Entertainment reported 2019 operating revenues of €18.0 million, an 18.6% increase driven by higher capitalized production costs for titles like Twin Mirror and Tell Me Why.See it on page 2
02
The company shifted toward a self-publishing and co-production model, resulting in a 41.6% increase in staff costs to €14.3 million to support an expanded development pipeline.See it on page 2
03
Royalty income fell by 45.9% in 2019 due to the lack of new game launches during the calendar year.See it on page 2
04
Despite heavy investment in development, the studio maintained a positive operating EBITDA of €3.3 million and an operating EBIT of €0.8 million.See it on page 2
05
The balance sheet remains stable with €16.9 million in cash and cash equivalents and €32.9 million in shareholders' equity.See it on page 2
06
Future growth is tied to the 2020 release of Twin Mirror and Tell Me Why, alongside continued royalty revenue from Life is Strange 2.See it on page 3

Summary

DONTNOD Entertainment’s 2019 full-year results reflect a strategic transition toward increased self-publishing and co-production within the independent video game sector. The studio, based in France, reported operating revenues of €18.0 million, an 18.6% increase over the previous year, driven primarily by a significant rise in capitalized production costs associated with new titles such as Twin Mirror and Tell Me Why. While royalty income declined by 45.9% due to the absence of new game launches during the 2019 calendar year, the studio maintained a stable financial foundation with €16.9 million in cash and cash equivalents and a positive operating EBITDA of €3.3 million.

The studio’s financial performance was characterized by a deliberate ramp-up in development activities, which necessitated a 41.6% increase in staff costs to €14.3 million. Despite these investments, the company achieved a positive operating EBIT of €0.8 million and remained near break-even regarding consolidated net income. The firm’s balance sheet remains robust, supported by €32.9 million in shareholders' equity and a positive gross operating cash flow of €3.2 million. These figures underscore the studio's focus on long-term value creation through the retention of intellectual property and the expansion of its internal publishing capabilities.

Looking ahead, the studio is positioned to capitalize on the growing demand for premium content across digital platforms. The 2020 outlook includes the realization of royalties from Life is Strange 2 and the release of new titles, including the self-published Twin Mirror and the collaborative project Tell Me Why. While the studio has implemented business continuity measures in response to the COVID-19 pandemic, it continues to advance its development pipeline, including new co-productions and original projects, aiming to expand its catalog beyond its initial post-IPO projections.