Financial

Quarterly Report of 11 Bit Studios S.A. for the Nine Months Ended 30 September 2025

20 November 202552 pages17,822 words

Summary

Financial performance for 11 bit studios S.A. through the first nine months of 2025 reflects a period of significant operational transition and heavy product launches. Total revenue reached PLN 101.3 million, a 5% year-over-year decrease from 2024. Net profit experienced a more pronounced decline, falling from PLN 47.5 million to PLN 22.0 million. This contraction was primarily driven by a fivefold increase in depreciation and amortization expenses following the release of major titles, as well as rising finance costs linked to exchange rate fluctuations. Despite these pressures, the company maintained a robust cash position of PLN 71.2 million and grew its total assets to PLN 282.0 million. The United States remains the primary market, accounting for over 81% of sales, with Valve’s Steam platform serving as the dominant distribution channel. Revenue was largely anchored by the successful launch of The Alters, which sold 405,000 copies, and the continued performance of Frostpunk 2 across consoles and subscription services. However, the company adjusted its long-term outlook by reducing the estimated cost of its 2021–2025 Incentive Scheme to zero, signaling that original five-year revenue and profit targets are unlikely to be met. This shift follows the termination of Project 8 and the rescheduling of several key releases. Strategic focus remains on multiplatform game production and the expansion of the publishing pipeline. Significant capital is currently tied up in intangible assets and ongoing development, including the transition of Frostpunk 1886 to Unreal Engine 5. Looking toward the final quarter of 2025, the company anticipates revenue growth driven by the Early Access launch of Moonlighter 2, the release of Death Howl, and major DLC for Frostpunk 2. While the global console market offers expansion opportunities, the company continues to manage risks associated with a strengthening Polish złoty against the US dollar.

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Quarterly Report of 11 Bit Studios S.A. for the Nine Months Ended September 30th 2021

During the first nine months of 2021, 11 bit studios S.A. focused on a strategic transition toward a multi-team production model and the expansion of its publishing pipeline. Financial performance for this period reflected a transitional phase, with revenue reaching PLN 49.2 million and net profit totaling PLN 17.4 million. These figures represent a year-over-year decline from 2020, driven by a high comparative base and the natural aging of the existing game portfolio, which includes established titles such as Frostpunk, Moonlighter, and Children of Morta. Despite lower current earnings, the company maintained a robust liquidity position, ending the period with PLN 121.5 million in financial assets and a significant increase in cash reserves to PLN 38.1 million. Operational efforts are heavily concentrated on future growth, with approximately PLN 110 million committed to the development of three major internal projects: Frostpunk 2, Project 8, and Dolly. To support these ambitions, the studio has migrated to Unreal Engine and expanded its workforce to 192 employees, contributing to a 74.6% increase in salary expenses. The company is also scaling its publishing division, earmarking PLN 80 million for third-party titles through 2023. This strategy aims to establish a consistent release cycle of one proprietary game and multiple third-party titles annually. The financial structure remains stable, characterized by a 9.8% increase in total assets to PLN 204.7 million and a reduction in total liabilities. While the abandonment of the internal Liquid Engine resulted in a minor impairment loss, the valuation of ongoing projects remains secure. Beyond core development, the studio is diversifying the Frostpunk intellectual property into mobile, board game, and literary markets while actively seeking minority acquisitions to bolster its long-term development and publishing capabilities.

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Quarterly Report of 11 Bit Studios S.A. for Nine Months Ended September 30th 2023

During the first nine months of 2023, 11 bit studios S.A. experienced a transitional period characterized by a significant decline in financial performance as the company prepared for a major new release cycle. Revenue fell 42% year-on-year to PLN 34.28 million, while net profit dropped from PLN 19.97 million to PLN 1.35 million. This downturn is primarily attributed to the natural aging of the existing game portfolio and the absence of new product launches during the period. Despite these challenges, the company maintained a strong liquidity position, with cash and cash equivalents rising to PLN 43.1 million and total assets increasing to PLN 264.1 million. The company’s strategic focus has shifted heavily toward research and development, with intangible assets related to ongoing development work rising to PLN 138.2 million. Major investments are concentrated on upcoming proprietary titles, including Frostpunk 2, The Alters, and Project 8, alongside publishing projects like The Thaumaturge. Management is targeting a more aggressive release cadence starting in 2024, aiming for one internal and three to four third-party titles annually. This growth strategy is supported by a 2021–2025 Incentive Scheme that sets ambitious five-year targets of PLN 656 million in revenue and PLN 328 million in pre-tax profit. Geographically, the United States remains the dominant market, accounting for 73% of total revenue, with Valve’s Steam platform serving as the primary distribution channel. While the company faced a Q3 net loss due to the non-cash remeasurement of its stake in Starward Industries, it continues to benefit from the "IP Box" tax relief and prudent cash management. With a robust pipeline of high-profile sequels and new IPs scheduled for the first half of 2024, the company is positioned to move past its current investment phase into a period of expected commercial expansion.

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Quarterly Report of 11 Bit Studios S.A. for Nine Months Ended September 30th 2022

During the first nine months of 2022, 11 bit studios S.A. demonstrated a robust financial performance characterized by a 21% year-on-year increase in revenue to PLN 59.58 million and a net profit of PLN 19.97 million. This growth was primarily fueled by the sustained monetization of established titles such as Frostpunk and This War of Mine, alongside a rapidly expanding publishing division. Third-party publishing now accounts for 39% of total revenue, up from 25% in the previous year, supported by the success of titles like Moonlighter and Children of Morta. The United States remains the company's primary market, contributing PLN 46.37 million to the total revenue. The company is currently executing a strategic transition toward a multi-project development model, significantly increasing its investment in future growth. Research and development spending rose by over 65% to PLN 34.26 million, with total intangible assets reaching PLN 89.5 million. These investments are concentrated on three major proprietary titles—Frostpunk 2, The Alters, and Project 8—as well as a diverse four-game publishing portfolio. To support this expansion, the firm has deepened its industry footprint through strategic equity acquisitions, including a 40% stake in Fool’s Theory Sp. z o.o. and a significant investment in Starward Industries S.A. Financial stability remains a core strength, with over PLN 102 million held in cash and current financial assets. While operating expenses and service costs rose due to higher third-party royalties and increased management remuneration, the company benefited from a favorable effective tax rate of 11.43% through the IP Box relief program and currency exchange gains from a depreciating złoty. Despite a substantial PLN 3.66 million charitable donation to the Ukrainian Red Cross, earnings per share rose to PLN 8.40. Management remains focused on an ambitious five-year incentive scheme targeting PLN 656 million in cumulative revenue by 2025, underpinned by a strong liquidity position and no history of collection issues with major global digital platforms.

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11 bit studios achieved record-breaking financial performance during the first nine months of 2024, characterized by a 211% year-on-year revenue increase to PLN 106.6 million. This growth translated into a dramatic surge in net profit, which rose from PLN 1.35 million in the previous year to PLN 47.5 million. The primary catalyst for this expansion was the September launch of Frostpunk 2, which sold over 511,000 copies by the reporting date and generated nearly half of the period's total revenue. Financial results were further bolstered by a significant PLN 5.8 million IP Box tax relief settlement and strong performance from the United States market. The company’s balance sheet reflects a transition toward large-scale production, with the net carrying amount of completed development work rising from PLN 5.4 million to PLN 97.8 million. While operating activities generated PLN 27.3 million in cash, heavy investment in intangible assets and property resulted in a slight net decrease in total cash reserves to PLN 35.9 million. Trade receivables saw a substantial spike to PLN 48.5 million, largely due to a major contract with a single partner, while contract liabilities include advance payments from platforms like Microsoft for future game availability. Despite the success of the Frostpunk franchise, management is currently reassessing its broader publishing strategy following the underperformance of certain portfolio titles. This shift is evidenced by the decision to write down the investment estimate for Fool’s Theory to zero and a reduction in provisions for the 2021–2025 Incentive Scheme, as game delays make original financial targets less certain. Looking ahead to 2025, the company’s outlook remains centered on the postponed release of The Alters in the first quarter and the continued development of Project 8, alongside the ongoing monetization of its established back catalogue.

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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.

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Quarterly Report of 11 Bit Studios S.A. for Nine Months Ended September 30th 2020

11 bit studios S.A. achieved record-breaking financial performance during the first nine months of 2020, characterized by a 37.89% year-on-year revenue increase to PLN 68.16 million and a net profit surge of 277.49% to PLN 32.12 million. This growth was primarily driven by the successful monetization of the Frostpunk portfolio, including the release of major expansions such as The Last Autumn and On The Edge, alongside strong contributions from the publishing division. Titles like Children of Morta and Moonlighter accounted for approximately 28% to 30% of total revenue, bolstered by new distribution channels such as Xbox Game Pass. The company significantly strengthened its liquidity position, ending the period with PLN 116 million in total financial assets and over PLN 80 million in cash and cash equivalents. Operating margins improved to 51.5%, aided by a 12% decrease in operating expenses following the conclusion of a costly 2017–2019 employee incentive scheme and the utilization of the IP Box tax relief, which applied a preferential 5% corporate income tax rate to qualifying intellectual property revenue. Despite pandemic-related recruitment challenges, the workforce grew to 156 employees as the company increased investments in intangible assets to PLN 32.69 million. Strategically, the company is transitioning toward a more frequent release cycle, aiming for one internal title every 12 to 18 months and one publishing project per quarter. Current development is focused on three internal projects, including the high-budget Project 8, which has transitioned to Unreal Engine 5, and projects codenamed Dolly and Eleanor. The publishing pipeline has expanded to four external titles with a total investment of PLN 25 million. While the company benefited from increased gaming demand during the COVID-19 pandemic, management remains cautious regarding potential long-term macroeconomic headwinds that could impact the premium games market.

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Quarterly Report of 11 Bit Studios S.A. for the Nine Months Ended 30 September 2025

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