Financial11 bit studios
Interim Financial Report: Nine Months Ended September 30, 2018
1 Nov 201828 pages~90 min full read
11 bit studios achieved a 422.9% year-on-year revenue surge to PLN 59.62 million for the first nine months of 2018, resulting in a net profit of PLN 28.52 million compared to a net loss in 2017.
The launch of Frostpunk was the primary growth driver, recouping its PLN 12 million development cost in days and generating over PLN 40 million in revenue by the end of Q3.
The company maintains a strong financial position with cash reserves and short-term assets exceeding PLN 61.67 million and a high operating margin of 59.1%.
The United States is the company's dominant market, accounting for PLN 50.1 million of total sales during the nine-month period.
Management is scaling production with a PLN 20 million investment in a new internal title, 'Project 8,' and has increased third-party publishing budget caps to PLN 5 million per project.
The company is targeting a consistent release cycle of one internal and one external title per quarter, supported by upcoming console ports and new releases like Children of Morta.
Institutional confidence in the company's growth is evidenced by threshold-crossing share acquisitions from investors including NN TFI and Aviva Investors.
The first nine months of 2018 marked a period of unprecedented financial expansion and strategic transformation for 11 bit studios S.A., characterized by a fivefold increase in revenue to PLN 59.62 million. This growth represents a 422.9% year-on-year surge, shifting the company from a net loss in 2017 to a net profit of PLN 28.52 million. The primary catalyst for this performance was the April launch of Frostpunk, which recouped its PLN 12 million development cost within days and generated over PLN 40 million in revenue by the end of the third quarter. The success was further bolstered by the publishing hit Moonlighter and the sustained long-tail sales of This War of Mine, with the United States emerging as the dominant market, accounting for PLN 50.1 million of total sales.
The company’s balance sheet reflects a robust liquidity position, with cash reserves and short-term financial assets exceeding PLN 61.67 million. While operating expenses rose by 167.6% due to increased headcount, royalties, and marketing investments, the company maintained a high operating margin of 59.1%. Total assets grew to PLN 86.7 million, supported by a significant rise in intangible assets as development work on proprietary game engines and new titles reached completion. This financial stability has attracted institutional investment, evidenced by threshold-crossing share acquisitions by NN TFI and Aviva Investors during the period.
Looking forward, the strategic focus shifts toward scaling production and stabilizing recurring revenue. The company is currently transitioning its next major internal title, Project 8, into full production with a PLN 20 million investment. Simultaneously, the publishing division is expanding its scope, increasing per-project budget caps to PLN 5 million following the success of third-party titles. By leveraging upcoming console ports for Frostpunk and new releases like Children of Morta, management aims to implement a long-term release cycle of one internal and one external title per quarter to ensure consistent financial performance.
