Frontier Developments FY22 Financial Results

Key insights

6 takeaways

01
Frontier Developments achieved record revenue of £114.0 million in FY22, a 26% year-on-year increase driven by Jurassic World Evolution 2 and the Foundry publishing label.See it on page 1
02
Operating profit dropped significantly to £1.5 million from £19.9 million in the previous year due to increased R&D and marketing spend, plus a £7.4 million impairment charge for Elite Dangerous: Odyssey.See it on page 10
03
The company utilized £8.7 million in tax credits from Video Games Tax Relief and Patent Box schemes to help mitigate the impact of rising costs on net profit.See it on page 20
04
Frontier maintains a stable financial position with £38.7 million in cash reserves to support its ongoing operations.See it on page 1
05
The long-term growth strategy focuses on scaling internal studios and diversifying the portfolio through third-party partnerships.See it on page 6
06
Future value is expected to be driven by the F1 Manager 2022 release and a development roadmap that balances new IP investment with existing game support.See it on page 2

Summary

Frontier Developments achieved record revenue of £114.0 million during the 2022 fiscal year, representing a 26 percent year-on-year increase. This growth was primarily fueled by the successful commercial launch of Jurassic World Evolution 2 and the continued expansion of the Foundry publishing label. The company’s established portfolio of genre-leading titles provided a stable foundation for these results, while ongoing content updates ensured sustained engagement across its core offerings.

Despite the record top-line performance, operating profit experienced a significant contraction, falling to £1.5 million from £19.9 million in the previous fiscal year. This decline was largely attributable to a strategic increase in research, development, and marketing expenditures, alongside a one-off £7.4 million non-cash impairment charge related to the underperformance of Elite Dangerous: Odyssey. The overall net profit for the year was further impacted by these rising costs, though the company successfully mitigated some of the financial pressure through an £8.7 million tax credit derived from Video Games Tax Relief and Patent Box schemes.

The company maintains a robust financial position with £38.7 million in cash reserves, supporting its status as a going concern. Looking forward, the organization remains committed to its long-term growth strategy, which emphasizes the scaling of its internal development studios and the diversification of its portfolio through third-party partnerships. With the recent release of F1 Manager 2022 and a clear development roadmap, the company is positioned to leverage its current infrastructure to drive future value, balancing aggressive investment in new intellectual property with the maintenance of its existing game ecosystem.