Remedy Entertainment Q3 2022 Financial Results

Key insights

6 takeaways

01
Remedy reported a 6.8% revenue increase to 7.9 million EUR in Q3 2022, though profitability declined with an operating loss of 3.0 million EUR and an EBITDA of -2.4 million EUR.See it on page 5
02
Financial losses are primarily driven by increased external development costs and a growing headcount, which reached 360 employees by the end of September 2022.See it on page 16
03
The development pipeline is headlined by Alan Wake 2 in full production for a 2023 launch, alongside the Max Payne 1&2 remake currently in the concept stage.See it on page 9
04
Remedy is managing financial risk through co-publishing agreements with partners including Epic Games, 505 Games, Tencent, and Rockstar Games.See it on page 21
05
The company is actively developing three additional projects: the Control sequel (Codename Heron) and two cooperative multiplayer titles (Codename Condor and Codename Vanguard).See it on page 6
06
Full-year 2022 revenue is expected to remain consistent with 2021 levels, while operating results are projected to decline significantly due to continued investment in long-term growth.See it on page 23

Summary

Remedy Entertainment’s third-quarter 2022 financial results reflect a period of strategic investment and portfolio expansion, characterized by revenue growth alongside a decline in profitability. During this quarter, revenue increased by 6.8% to 7.9 million EUR, primarily driven by higher development fees. However, the company reported an operating loss of 3.0 million EUR and an EBITDA of -2.4 million EUR, largely attributed to increased external development costs and ongoing investments in its growing talent pool, which reached 360 employees by the end of September 2022.

The company maintains a robust project pipeline spanning various stages of development. Key titles include the survival horror sequel Alan Wake 2, currently in full production for a 2023 launch, and the Max Payne 1&2 remake, which is in the concept stage. Other active projects include the cooperative multiplayer titles Codename Condor and Codename Vanguard, both in the proof-of-concept phase, and the larger-scale Control sequel, Codename Heron. These projects utilize a mix of co-publishing agreements with partners such as Epic Games, 505 Games, Tencent, and Rockstar Games to balance financial risk.

Looking ahead, the company remains committed to its long-term objectives of owning at least three expanding game brands and establishing itself as a premier European employer. Despite the short-term pressure on operating margins due to heavy investment in development and personnel, the company continues to focus on scaling its internal capabilities and external partnerships. The outlook for the full year 2022 anticipates revenue remaining consistent with 2021 levels, while operating results are expected to decline significantly as the company prioritizes long-term growth and the successful delivery of its current development slate.