11 bit studios

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230 documents

Documents

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.

investment market-analysis europe+1

11 bit studiosNov 2022

Financial

Half-Year Report of 11 Bit Studios S.A. for the Six Months Ended June 30th 2022

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.

investment market-analysis europe+1

11 bit studiosSept 2022

Financial

Quarterly Report of 11 Bit Studios S.A. for the First Quarter of 2022

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.

investment europe market-analysis+2

11 bit studiosMay 2022

Financial

Annual Report of 11 bit studios S.A. for 2021

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.

investment mergers-acquisitions europe+2

11 bit studiosMar 2022

Legal

Audit Committee Report on Activities and Assessment for 2022 — 11 bit studios S.A.

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.

investment employment europe+1

11 bit studiosJan 2022

Financial

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.

investment market-analysis europe+1

11 bit studiosNov 2021

Financial

Half-Year Report of 11 Bit Studios S.A. for the First Half of 2021

11 bit studios S.A. reported a solid financial performance for the first half of 2021, characterized by a transition from immediate product launches to a period of intensive internal development. While revenue fell 28.7% year-on-year to PLN 35.8 million and net profit decreased 46.8% to PLN 13.3 million, these declines are attributed to a high comparative base in 2020 following major content releases and significant subscription contracts. Despite the lower year-on-year figures, the period represents the third-best first half in the company’s history, supported by the enduring commercial success of the Frostpunk and This War of Mine franchises. The company’s balance sheet remains exceptionally strong, with total assets growing to PLN 201.2 million and record-high cash resources and financial assets reaching PLN 114.6 million. This liquidity is being strategically deployed to fund an ambitious expansion of the studio’s production capabilities. 11 bit studios is currently managing three internal development teams working on major projects, including Frostpunk 2, Dolly, and Project 8, with a combined budget of approximately PLN 110 million. Simultaneously, the publishing division continues to scale, contributing 27% of H1 revenue and planning a PLN 50 million investment in third-party titles through 2023. Operational costs saw a notable shift during this period, with a 54% increase in salaries driven by a workforce expansion to 181 personnel and the implementation of a new 2021–2025 incentive scheme. This scheme sets aggressive five-year targets, including PLN 656 million in total revenue, signaling a long-term growth strategy. By leveraging IP Box tax relief and maintaining low-risk relationships with global distributors like Valve and Nintendo, the studio is well-positioned to transition from an indie developer into a larger-scale producer capable of annual proprietary releases.

investment market-analysis europe+1

11 bit studiosAug 2021

Financial

Quarterly Report of 11 Bit Studios S.A. for the First Quarter of 2021

During the first quarter of 2021, 11 bit studios S.A. transitioned into a phase of intensive internal development and portfolio scaling, following a period of high revenue generated by major content releases in the previous year. Revenue for the period reached PLN 14.84 million with a net profit of PLN 3.56 million, representing a significant year-on-year decline from the PLN 30.52 million in revenue and PLN 16.53 million in profit recorded in Q1 2020. This contraction was primarily due to the high comparative base set by the 2020 expansion of the Frostpunk franchise and the natural aging of the publishing portfolio, including titles such as Moonlighter and Children of Morta. Despite the decline in immediate earnings, the company maintained a robust financial position, ending the quarter with record liquidity. Total financial assets and receivables reached PLN 107.8 million, supported by a diverse investment portfolio of bonds and investment funds. The balance sheet remained strong with total assets of PLN 192.48 million, even as operating costs rose by 72.7% due to an expanding workforce and non-cash provisions for a new incentive scheme. Notably, the company utilized the "IP Box" tax relief for the first time, applying a preferential 5% corporate income tax rate to qualifying intellectual property revenue. The strategic focus has shifted toward long-term growth, with the company aiming to release one proprietary title annually. Development efforts are currently concentrated on three major internal projects—Project 8, Dolly, and Eleanor—while the publishing division manages a pipeline of third-party titles. To support this expansion, 11 bit studios is scaling its headcount toward a target of 250–300 employees and has implemented a 2021–2025 Incentive Scheme tied to ambitious financial goals, including a cumulative profit target of PLN 328 million. Ongoing revenue continues to be anchored by the long-tail sales of established hits and the anticipated mobile launch of Frostpunk in partnership with NetEase.

investment market-analysis europe+1

11 bit studiosMay 2021

Financial

Annual Report 11 Bit Studios S.A. for 2020

In 2020, 11 bit studios S.A. achieved its strongest financial performance to date, characterized by record-breaking revenues of 87.1 million PLN and a net profit of 37.36 million PLN, representing a 57.5% year-over-year increase. These results were primarily driven by the sustained monetization of core intellectual properties, specifically the *Frostpunk* and *This War of Mine* franchises, alongside a growing contribution from the publishing division, which accounted for 29% of total revenue. The company successfully utilized the IP Box tax relief, significantly lowering its effective tax rate to 8.09% and further bolstering its net margin to 42.9%. The company’s strategic focus shifted toward scaling operations and transitioning from indie-level projects to larger-scale productions. This evolution included expanding the internal pipeline to three major proprietary projects—Project 8, Dolly, and Eleanor—and adopting Unreal Engine for future development. To support this growth, the workforce expanded to over 170 employees, and the company moved to a new headquarters in Warsaw. Despite the global COVID-19 pandemic, the transition to remote work caused minimal disruption to production schedules or financial stability. By the end of 2020, the financial position remained exceptionally robust, with total financial resources reaching a historic high of 107.7 million PLN and no debt. This liquidity allows for the full self-financing of current development and publishing expansions. Key corporate milestones included a leadership transition with Przemysław Marszał becoming President of the Board and the establishment of an ambitious 2021–2025 incentive program tied to cumulative revenue targets of 656 million PLN. While the United States remains the primary market, accounting for nearly 77% of sales, the company continues to manage risks associated with foreign exchange volatility and the competitive labor market for specialized developers.

investment monetization market-analysis+1

11 bit studiosApr 2021

Financial

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.

investment market-analysis europe+1

11 bit studiosNov 2020

Financial

Half-Year Report of 11 Bit Studios S.A. for the First Half of 2020

11 bit studios S.A. achieved the second-best half-year financial performance in its history during the first half of 2020, characterized by a 63.2% year-on-year revenue increase to PLN 50.2 million and a 237% surge in net profit to over PLN 25.0 million. This growth was primarily driven by the sustained monetization of the *Frostpunk* IP—specifically the successful launch of "The Last Autumn" DLC—and a robust publishing division featuring titles such as *Moonlighter* and *Children of Morta*, which contributed 30% of total revenue. Financial results were further bolstered by the application of "IP Box" tax relief, providing a preferential 5% corporate income tax rate on qualifying intellectual property. The company maintained a formidable liquidity position, with total financial assets reaching PLN 114.2 million and cash reserves exceeding PLN 95 million. These resources are being utilized to self-finance an ambitious expansion of the internal development pipeline, which includes three major projects: "Project 8," "Dolly," and "Eleanor." Notably, the company is transitioning toward higher-budget productions, evidenced by the migration of "Project 8" to Unreal Engine 5 and a strategic shift away from the traditional "indie" segment. Simultaneously, the publishing arm has committed PLN 25 million to four new third-party titles to ensure a steady release cadence. Operations remained largely undisrupted by the COVID-19 pandemic as the workforce, which grew to approximately 150 employees, successfully transitioned to a remote work model. During this period, the company also moved into its new Warsaw headquarters and finalized a partnership with NetEase to develop a mobile version of *Frostpunk*. With strong operating cash flows and no identified impairment risks to its intangible assets, the company is positioned to sustain its growth trajectory within a global gaming market that saw increased demand throughout the first half of 2020.

investment market-analysis europe+1

11 bit studiosAug 2020

Financial

11 bit studios S.A. Financial Results Q1 2020 — Investor Letter

11 bit studios S.A. achieved its second-best quarterly performance in company history during the first quarter of 2020, driven by robust sales of its internal IP and publishing portfolio. Revenue reached PLN 30.52 million, representing a 114.3% increase year on year, while net profit rose by 226.9% to nearly PLN 14.51 million. These results were achieved despite non-cash provisions of over PLN 2.05 million related to an incentive scheme and the decision to defer IP Box tax relief benefits until the annual return. The company’s total financial assets, including cash and receivables, exceeded the PLN 100 million threshold for the first time, supported by strong operating cash flows of PLN 24.3 million. The primary catalyst for this growth was the January 2020 launch of the Frostpunk: The Last Autumn expansion, which spurred renewed interest in the base game. Cumulative revenue for the Frostpunk franchise surpassed PLN 100 million during this period, overtaking the lifetime earnings of the studio's previous major hit, This War of Mine. Additionally, the publishing division contributed 24% of total quarterly revenue, led by the performance of Moonlighter and Children of Morta. This diversification highlights the company's successful transition from a single-title developer to a multi-faceted producer and publisher. Looking forward, the Warsaw-based studio is focused on scaling its operations and workforce. Plans are underway to increase staff from 140 to approximately 200 employees to support the development of three internal titles currently under the working names Projekt 8, Projekt 9, and Projekt 10. Despite the operational challenges and travel restrictions imposed by the COVID-19 pandemic, the publishing division continues to expand its pipeline with three large-scale projects currently in development. The company maintains a positive outlook for the remainder of 2020, emphasizing a strategy of aggressive recruitment and portfolio expansion to sustain its growth trajectory.

market-analysis game-publishing poland

11 bit studiosMay 2020