11 bit studios

In 2022, Warsaw-based 11 bit studios S.A. demonstrated financial resilience and strategic expansion despite a 4.3% contraction in the global gaming market. The company reported revenues of 74.2 million PLN, a 5.8% year-over-year increase driven by strong back-catalog performance and a record 38% revenue share from its publishing division. While net profit decreased by 20.2% to 22.9 million PLN—largely due to rising operating costs, increased payroll, and a significant 3.66 million PLN charitable donation to the Ukrainian Red Cross—the studio outperformed internal budget expectations and maintained a robust equity-to-asset ratio of 92%.

The studio’s strategic focus shifted toward a long-term production pipeline, with intangible assets surging 69% to 99.9 million PLN. This growth reflects heavy investment in three major internal titles—Frostpunk 2, The Alters, and Project 8—with a combined production budget of approximately 130 million PLN. Simultaneously, the company expanded its publishing reach by acquiring a 40% stake in Fool’s Theory and a 5.18% stake in Starward Industries, supporting upcoming external releases like The Invincible and The Thaumaturge. Geographically, the United States remains the primary market, accounting for 77.4% of total sales.

Operating under IFRS standards, the company utilized the IP Box tax relief to maintain an effective tax rate of 15.93% and opted to allocate its 2021 profits to supplementary capital rather than dividends to self-finance future growth. To support this scaling, the workforce grew by 30% to 245 employees, managed under a new hybrid work model. While the company currently lacks formal ESG and diversity policies, it maintains high liquidity and a conservative leverage ratio of 8.98%, positioning itself to release one internal and three to four external titles annually.

The 2022 fiscal year for 11 bit studios S.A. was characterized by robust financial health and a strategic focus on long-term growth through capital reinvestment. The company achieved a net profit of 22.89 million PLN and maintained a strong balance sheet with total assets valued at 244.2 million PLN. To support upcoming publishing initiatives and the ongoing development of Project 8, the entirety of the annual profit was allocated to reserve capital. This financial strategy was overseen by a five-member independent Supervisory Board and an Audit Committee, which ensured the integrity of internal controls and risk management systems while appointing PwC as the auditor for the 2022–2023 period.

Operational success was mirrored by a significant expansion in corporate social responsibility, with charitable and sponsorship expenditures increasing by 667% over the previous year to a total of 4.22 million PLN. Notable humanitarian efforts included the donation of 850,000 USD to the Ukrainian Red Cross, funded by sales of This War of Mine, alongside continued support for animal welfare through specialized downloadable content for Children of Morta. These initiatives underscore a corporate strategy that integrates social impact with commercial performance.

The governance framework remained stable throughout the year, with the Supervisory Board conducting ten meetings to monitor strategic investments in external entities and oversee management activities. The board issued an unqualified positive assessment of the company’s financial reporting and internal operations, concluding that the management team fulfilled its duties effectively. This oversight confirms that the company is well-positioned for its 2023 development cycle, maintaining a balance between fiscal discipline, strategic expansion, and ethical engagement within the global gaming industry.

The Extraordinary General Meeting of 11 bit studios S.A., held on February 9, 2023, focused on strengthening corporate governance and refining the company’s statutory framework to align with evolving operational needs. Shareholders representing 51.32% of the total share capital participated in the session, approving a series of resolutions aimed at clarifying the roles, responsibilities, and compensation structures of the company’s leadership. These measures primarily targeted the Polish-based developer’s internal regulations, ensuring more robust oversight and administrative clarity for the 2023 fiscal year and beyond.

Key statutory amendments refined the classification of business activities and formalized the operational protocols of the Supervisory Board. Notable changes include the mandate for Management Board approval when acquiring stakes in external entities and the authorization for the Supervisory Board to engage external advisors at the company’s expense. Furthermore, the meeting established a standardized method for calculating the terms of office for board members based on full financial years, ensuring greater transparency in leadership transitions.

Financial adjustments were also a central component of the proceedings, specifically regarding the remuneration of the Supervisory Board. New monthly gross compensation rates were set at 9,500 PLN for the Chairperson, 8,300 PLN for the Vice-Chairperson, and 6,000 PLN for other members, with these changes applied retroactively to January 1, 2023. While the majority of resolutions passed with unanimous support, certain amendments regarding board protocols saw minor dissent, though all proposals ultimately secured the necessary majority to take effect. These actions collectively enhance the institutional stability of 11 bit studios as it manages its portfolio and external investments.

Proposed resolutions for the Extraordinary General Meeting of Shareholders of 11 bit studios S.A., scheduled for February 9, 2023, outline significant structural and compensation changes for the Warsaw-based game developer. The primary purpose of these resolutions is to modernize the company’s statutes, refine corporate governance procedures, and adjust the remuneration of the Supervisory Board.

Key findings include a comprehensive update to the company’s statutes to align with the Polish Commercial Companies Code. Notable amendments include redefining the calculation of terms of office for both the Management Board and Supervisory Board to be measured in full financial years. The resolutions also clarify the Supervisory Board's authority, specifically shifting its role from directly acquiring shares in other entities to granting consent for such acquisitions. Furthermore, the proposals introduce the ability for the Supervisory Board to hire external advisors at the company's expense, provided the total annual cost does not exceed 50% of the board's total remuneration from the previous year.

The financial scope of the document focuses on a new monthly gross salary structure for the Supervisory Board, effective retroactively from January 1, 2023. Under the new terms, the Chairperson is to receive 9,500 PLN, the Vice-Chairperson 8,300 PLN, and other members 6,000 PLN. Additionally, the resolutions seek to waive certain standard information obligations under Article 380 of the Commercial Companies Code, replacing them with a requirement for the Management Board to provide aggregated data on the company’s financial, operational, and investment status. These changes take legal effect upon entry into the National Court Register.

These resolutions, adopted during the Extraordinary General Meeting of 11 bit studios S.A. on February 9, 2023, formalize several significant amendments to the company’s articles of association. The primary purpose of these changes is to refine the legal and operational framework governing the company’s business activities, the tenure of its leadership, and the specific oversight powers of the Supervisory Board. The scope of these updates covers corporate governance structures and administrative protocols for this Warsaw-based game developer and publisher.

Key findings include a technical update to the company’s business classification, shifting the definition of its entertainment and recreational activities to a more specific regulatory code. Significant changes were also made to the calculation of leadership terms; the three-year mandates for both the Supervisory Board and the Management Board are now explicitly calculated in full fiscal years. Furthermore, the Supervisory Board’s authority was clarified regarding the acquisition of shares in other business entities, transitioning from a general involvement to a specific requirement for the Board to grant formal consent for such transactions.

The resolutions also introduce new procedural rules for the Supervisory Board, including the formalization of leadership roles for the Chairperson and Vice-Chairperson, specific notice periods for meetings, and the ability to vote on matters not originally included in a meeting’s agenda. A notable addition is the provision allowing the Supervisory Board to hire external advisors for audits or analyses at the company’s expense, provided the total annual cost does not exceed 50% of the Board’s total remuneration from the previous year. Finally, the amendments modify information-sharing obligations between the Management and Supervisory Boards, opting for a customized reporting structure over certain default provisions of the Polish Commercial Companies Code. These changes take immediate effect upon adoption, pending formal entry into the National Court Register.

The draft resolutions for the Extraordinary General Meeting of Shareholders of 11 bit studios S.A., scheduled for December 6, 2022, outline significant structural and administrative updates to the company’s governing statutes. The primary objective of these resolutions is to refine the legal framework of the company’s operations, specifically regarding the roles and responsibilities of the Supervisory Board and the Management Board, while ensuring compliance with the Polish Commercial Companies Code.

Key findings include a technical update to the company’s business classification, specifically refining its entertainment and recreational activities under the PKD 93.29.B code. More substantial changes focus on corporate governance, such as clarifying that the three-year terms for both the Supervisory and Management Boards are to be calculated in full financial years. The resolutions also transition the Supervisory Board’s role regarding the acquisition of shares in other entities from a direct action to an oversight function, requiring their formal consent for such transactions.

The proposed amendments introduce new procedural protocols for the Supervisory Board, including detailed rules for leadership succession during absences, meeting notification methods via digital and physical channels, and the ability to vote on items not originally on the agenda. A significant addition is the provision for the Supervisory Board to hire external advisors at the company’s expense to conduct specific analyses or audits, subject to a spending cap of 50% of the board's total compensation from the previous year. Finally, the resolutions seek to limit certain mandatory information obligations of the Management Board under the Commercial Companies Code, replacing them with a requirement to provide aggregated data on the company’s financial, operational, and personnel status. These changes take legal effect upon registration with the National Court Register.

These corporate resolutions document the proceedings of the Extraordinary General Meeting of 11 bit studios S.A., held in Warsaw on December 6, 2022. The primary purpose of the meeting was to elect leadership for the assembly, formalize the agenda, and vote on significant structural amendments to the company’s statutes. The meeting involved shareholders representing 994,359 shares, accounting for 41.80% of the total share capital. Participation was facilitated through both physical attendance and electronic communication means in accordance with the Polish Commercial Companies Code and COVID-19 related health regulations.

The assembly successfully passed the first two resolutions. Przemysław Piotr Marszał was elected Chairman of the General Meeting by a unanimous secret ballot. Subsequently, the shareholders unanimously approved the six-point agenda, which included opening the meeting, electing the chairman, verifying the legality of the assembly, and addressing proposed changes to the company statutes.

The third resolution, which proposed extensive amendments to the company’s statutes, failed to pass. Although it received 739,311 votes in favor (approximately 74.35% of the votes cast), it fell short of the three-quarters majority required by Article 415 § 1 of the Commercial Companies Code. The rejected amendments sought to redefine the company’s business classification, clarify that Supervisory Board and Management Board terms are calculated in full financial years, and grant the Supervisory Board the authority to hire external advisors at the company's expense. The proposal also included provisions to limit certain information obligations of the Management Board toward the Supervisory Board, replacing them with a requirement to provide aggregated data on financial and operational status. Because this resolution was not adopted, the existing statutes remained unchanged.

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.

During the first half of 2022, 11 bit studios S.A. demonstrated significant financial growth and strategic expansion, reporting a 28% year-on-year revenue increase to PLN 45.8 million and a 13.3% rise in net profit to PLN 15.1 million. This performance was primarily driven by robust back-catalogue sales on global digital platforms, a major mobile distribution agreement with Netflix, and favorable foreign exchange gains. The company maintained a strong liquidity position with total financial assets of PLN 123.3 million, including PLN 109.5 million in cash reserves and equivalents, providing a solid foundation for its transition from indie developer to a producer of larger-scale titles.

The primary strategic focus during this period was the advancement of a multi-project development pipeline, including Frostpunk 2, The Alters, and Project 8. Investment in intangible assets rose to PLN 77.5 million, reflecting a 63.55% increase in development spending. To support this growth, the company expanded its headcount toward a target of 250 employees and increased its publishing commitments. Strategic equity investments were also finalized, including a 40% stake in Fool’s Theory and a significant investment in Starward Industries, aimed at securing a consistent release cycle of one major proprietary game and several third-party titles annually.

Operating expenses rose by nearly 52%, driven by higher royalty payments to third-party developers and a notable PLN 3.67 million donation to the Ukrainian Red Cross. Despite these costs and a revised weighted average cost of capital reflecting broader market risks, the company remains highly liquid and self-funded. With a strong export-led model and partnerships with major industry players like Microsoft and Valve, the firm is positioned to execute its long-term incentive scheme, which targets cumulative five-year revenues of PLN 656 million.

During the first quarter of 2022, 11 bit studios S.A. demonstrated a period of strategic expansion and financial resilience, reporting a 19.6% year-on-year revenue increase to PLN 17.75 million. Net profit rose to PLN 3.77 million, a 6% improvement over the previous year, despite significant one-time impacts including a PLN 3.68 million donation to the Ukrainian Red Cross and costs associated with a new employee incentive scheme. This growth was underpinned by the sustained commercial performance of proprietary titles such as Frostpunk and This War of Mine, alongside publishing successes like Moonlighter and Children of Morta.

The company’s financial position remains exceptionally liquid, with total financial assets reaching PLN 117.3 million, including PLN 50.4 million in cash and cash equivalents. This capital strength has facilitated a transition toward a more aggressive growth model. Key investments during the quarter included the acquisition of a 40% stake in the development studio Fool’s Theory and the continued capitalization of production costs for major upcoming titles, including Frostpunk 2, Project 8, and Dolly. Total intangible assets grew to PLN 67.3 million as the studio scales toward a three-team internal production structure with a combined budget of approximately PLN 110 million.

Beyond internal development, there is a clear strategic pivot toward expanding the publishing division. The company has allocated PLN 30 million to its current external portfolio and earmarked an additional PLN 50 million for new projects through 2023, aiming for a consistent output of three to four third-party releases annually. With a workforce of 222 personnel and a long-term incentive scheme targeting PLN 656 million in revenue through 2025, the studio is positioned to leverage its robust balance sheet for both organic development and further corporate acquisitions within the global gaming market.

11 bit studios S.A. maintained a robust financial and strategic position in 2021, despite a year-over-year decline in earnings driven by a lack of new product premieres. The company reported annual revenue of 70.12 million PLN and a net profit of 28.69 million PLN, down from 37.36 million PLN in 2020. Notwithstanding lower sales, the balance sheet strengthened significantly, with total assets rising to 219.5 million PLN and record financial assets reaching 107.41 million PLN. This stability was fueled by the sustained performance of the "back catalogue," including Frostpunk and This War of Mine, alongside effective utilization of the "IP Box" tax relief.

The company is currently undergoing a major strategic transition from "Indie" developer to a larger-scale producer and publisher. To support this, 11 bit studios expanded its workforce to over 200 employees and increased R&D investment, with capitalized development costs for unfinished projects—specifically Frostpunk 2, Dolly, and Project 8—rising to 52.93 million PLN. All internal projects have migrated to Unreal Engine under a new licensing deal with Epic Games. Additionally, the company expanded its external footprint by acquiring a 40% stake in Fool’s Theory and committing 50 million PLN to its publishing pipeline through 2023.

Geographically, the United States remains the dominant market, accounting for 76% of total revenue, with Steam serving as the primary distribution channel. Because 78% of revenue is denominated in USD while costs are largely in PLN, the company remains highly sensitive to currency volatility. Looking ahead, management has established an ambitious 2021–2025 incentive program targeting 656 million PLN in consolidated revenue, underpinned by a shift toward a multi-team structure capable of delivering annual releases. Operations remain centered in Poland, with the company maintaining high liquidity and self-financing capabilities to fund its upcoming production cycles.

The Audit Committee of 11 bit studios S.A. issued this report to detail its activities, composition, and regulatory compliance throughout the 2022 fiscal year. Operating under the Polish Act on Statutory Auditors and the Best Practice for GPW Listed Companies 2021, the committee’s primary thesis is that it effectively fulfilled its advisory and supervisory roles regarding financial reporting, internal controls, and risk management.

The committee underwent a membership change in June 2022, maintaining a composition where the majority of members, including the Chairman, met statutory independence requirements. Key findings indicate that the committee held six meetings—four in-person and two remote—to address critical financial oversight tasks. Significant activities included summarizing the 2021 financial audit, reviewing the 2022 semi-annual reports, and conducting a detailed evaluation of "Project 8" in consultation with the company's management and auditors.

A major focus of the 2022 period was the selection of a statutory auditor for the 2022–2023 term. After evaluating proposals from KPMG, EY, and PwC, the committee recommended PwC to the Supervisory Board. Furthermore, the committee performed a comprehensive update of its internal policies regarding auditor selection and the provision of non-audit services, utilizing external legal counsel to ensure alignment with current standards. The report concludes that the committee successfully monitored the independence of the auditing firm and provided the necessary assurance to the Supervisory Board regarding the integrity of the company's financial reporting processes.