Remedy Entertainment Q1 2023 Financial Results

Key insights

6 takeaways

01
Remedy Entertainment reported a 45.4% revenue decline to 6.9 million EUR in Q1 2023, down from 12.7 million EUR in Q1 2022, due to the timing of project milestones.See it on page 20
02
The company recorded an operating loss of 5.6 million EUR for the quarter, resulting in an operating profit margin of -81.0% compared to a positive 21.8% margin in the same period last year.See it on page 5
03
Remedy is currently managing five concurrent projects, including the full production of Alan Wake II and the early-stage development of Control 2, Condor, and the Max Payne 1&2 remake.See it on page 7
04
To support its multi-project pipeline, the company expanded its workforce to 376 employees and opened a new studio in Stockholm.See it on page 8
05
The company maintains a negative cash flow from operations of 3.9 million EUR but retains a solid cash position to fund its long-term development strategy.See it on page 15
06
Management anticipates a year-over-year revenue decline and a negative operating result for the full year 2023 as it continues to invest in scaling its development capabilities.See it on page 20

Summary

Remedy Entertainment’s Q1 2023 financial results reflect a strategic investment phase characterized by a planned decline in revenue and profitability as the company scales its multi-project development pipeline. For the first quarter of 2023, revenue fell by 45.4% to 6.9 million EUR, down from 12.7 million EUR in the same period the previous year. This decline is primarily attributed to the timing of project milestones, which resulted in lower development fees. Consequently, the company reported an operating loss of 5.6 million EUR, representing an operating profit margin of -81.0%, compared to a 21.8% margin in Q1 2022.

The company is currently managing a diverse portfolio of five projects in various stages of development, including Alan Wake II, which is in full production, and several others in proof-of-concept phases, such as Control 2, Condor, and the Max Payne 1&2 remake. To support this growth, Remedy expanded its talent pool to 376 employees and opened a new studio in Stockholm. Despite the current negative cash flow of 3.9 million EUR from operations, the company maintains a solid cash position to fund its long-term strategy of balancing risk and reward through a mix of co-financed and partner-funded projects.

Looking ahead, the company maintains its outlook for the remainder of 2023, anticipating a year-over-year revenue decline and a negative operating result. The long-term strategy remains focused on building sustainable growth by developing multiple parallel projects, expanding owned intellectual property, and enhancing capabilities in both game development and live operations. By diversifying its commercial models—ranging from partner-funded projects to future self-publishing ambitions—the company aims to secure higher royalty upside and strengthen its position within the global gaming value chain.