Quarterly Report of 11 bit studios S.A. for Nine Months Ended September 30, 2019

During the first nine months of 2019, 11 bit studios S.A. transitioned into a phase of operational scaling and long-term investment following the high-performance benchmark set by major 2018 releases. Revenue for the period reached PLN 49.43 million, representing a 17.09% year-on-year decrease attributed to the high base effect of the previous year’s launches. Net profit fell to PLN 10.02 million from PLN 28.52 million in 2018, impacted by rising operating expenses, higher depreciation, and PLN 6.2 million in non-cash provisions for an internal incentive scheme. Despite these factors, the company maintained a strong financial position, with total assets growing to PLN 138.8 million and financial assets increasing to PLN 90.47 million.

The financial stability of the period was underpinned by the continued monetization of established titles such as Frostpunk, This War of Mine, and Moonlighter, alongside the successful PC debut of Children of Morta. Operating cash flow remained resilient at PLN 36.63 million, a 5.48% increase year-on-year, even as net cash flow turned negative due to intensified investing activities. These investments focused on expanding internal development capacity and securing a new Warsaw headquarters, supported by a PLN 12.6 million investment loan.

Strategic growth is currently driven by a significant expansion of the company’s production pipeline and publishing arm. Internal operations are scaling toward a three-team structure, with the budget for the upcoming Projekt 8 doubling to PLN 20 million and conceptual work beginning on two additional projects. Simultaneously, the publishing division has increased its scope to support third-party titles with budgets up to PLN 5.5 million. By expanding its workforce to a projected 200 employees and targeting more frequent release cycles, the company aims to mitigate revenue volatility and establish a more consistent growth trajectory within the global gaming market.