RNS Number : 1070B
Devolver Digital, Inc.
29 September 2025
29 September 2025
Devolver Digital, Inc.
("Devolver Digital", "Devolver" or the "Company", and the Company together with all of its subsidiary undertakings "the Group")
Unaudited results for the six months ended 30 June 2025
On track to meet FY 2025 guidance
Exciting release pipeline for 2H 2025
Devolver Digital, the award-winning digital publisher and developer of independent ("indie") video games, announces its unaudited results for the six months ended 30 June 2025. All figures relate to this period unless otherwise stated.
· Resilient revenues in line with expectations against a strong prior year comparator, which benefitted from outperformance in platform deals and back catalogue revenues.
· Strong group-wide performance from new releases.
o High Metacritic ratings and user reviews for new titles, reflecting quality and future back catalogue potential.
· Visibility on 2H - currently on track underpinned by:
o At least 8 releases in 2H 2025, with pleasing early sales;
o Strong current trading on back of recent positive Steam publisher sale held in 2H 2025, vs 1H in 2024;
o >65% of signed platform deals for 2025 expected to be recognised in 2H (2H 2024: c. 20% of 2024 platform deals)
Harry Miller, Chief Executive Officer of Devolver, said:
"Our performance in the first half of 2025 was resilient against a tough prior year comparator. We have good visibility on the second half of the year, supported by signed platform deals, Steam publisher and seasonal sales, a healthy release schedule and strong current trading since the half year end. We're delighted with the new titles we've delivered so far in 2025. These exciting new games have been very well received and will bolster the back catalogue in the future.
We are also very excited about the potential of Switch 2, with three Devolver games featured in the recent Nintendo Direct showcase and several games due to be launched on the platform this year and next. We are building momentum going into 2H 2025, with at least 8 new titles including the highly anticipated releases of BALL x PIT and Quarantine Zone, on the back of the recent successes with Monster Train 2, Stronghold Crusader: Definitive Edition and Baby Steps. We remain confident in the rest of year and reiterate our guidance for FY 2025."
Current trading and outlook
· At least 15 new titles expected for full year 2025, with 8 or more releases in 2H 2025 including Stronghold Crusader: Definitive Edition, Mycopunk, Stick it to the Stickman, Baby Steps, BALL x PIT and Quarantine Zone.
· On track to meet our guidance: revenues over US$100m and Adjusted EBITDA1 after non-cash impairments in the high-single digit US$ millions.
· Healthy pipeline of more than 30 new titles due for release in the future 3-year cycle to mid 2027.
Key Performance Indicators*
* Preliminary unaudited results - refer to full statutory tables below in this report.
1H in line with expectations; good front catalogue momentum
· 1H 2025 trading in line with expectations, on track for a stronger 2H.
· Exciting new releases such as Look Outside and Monster Train 2 exceeding expectations and contributing strongly to front catalogue sales across the Group in 1H.
· Multiple Devolver games featured in Nintendo Switch 2 global reveal showcase.
· Signed platform deals: 80% / 20% in 1H/2H FY24 versus <35% / >65% in 1H/2H FY25.
· Steam publisher sale in 2H 2025 vs 1H 2024 supports expected 2H revenue weighting.
Front catalogue rises 76%, cash costs down 6%
· Revenues in line with FY 2025 full year expectations, with new release revenue up 76% v 1H 2024.
· Back catalogue fell 38% due to high revenue cliff in 1H last year, with platform deals and Steam publisher sale 2H weighted this year.
· Tight control of adjusted operating costs2, down 5.6% year-over-year as management continues to focus on cost discipline.
· 1H included a non-cash write-down of deferred tax assets totalling $6.8 million ($5.9 million related to previous period stock option expense tax losses), given lack of visibility if such deferred tax assets would be utilised.
· Statutory net loss of US$11.0m3 (1H 2024: US$4.5m loss).
· Cash holdings of US$34.7m as of 30 June 2025 (year-end 2024: US$41.6m).
Notes:
1. Adjusted EBITDA is a non-IFRS measure and is defined as earnings before interest, tax, depreciation, amortisation (but does not exclude amortisation of capitalised software development costs), share-based payment expenses, foreign exchange gains or losses, fair value adjustments and one-time non-recurring items and non-trading items. Impairments of capitalised software development costs relating to released game performance are included in Adjusted EBITDA.
2. Adjusted operating costs reflect recurrent cash operating expenses and include: payroll, professional fees, travel & entertainment and other administrative expenses. Total statutory operating costs fell 23.3% year-over-year in 1H 2025.
3. Including non-cash impact of US$0.6m of share-based payments and US$7.0m of tax expense, which includes a US$6.8m write-down of deferred tax assets relating primarily to stock options.
About Devolver Digital
Devolver is an award-winning video games publisher in the indie games space with a balanced portfolio of third-party and own-IP. Devolver has an emphasis on premium games and has published more than 135 titles, with more than 30 titles in the pipeline scheduled for release over the next three years. Devolver has in-house studios developing first-party IP titles and a complementary publishing brand. Devolver is registered in Wilmington, Delaware, USA.
Enquiries:
Devolver Digital, Inc. Harry Miller, Chief Executive Officer Graeme Struthers, Chief Operating Officer Daniel Widdicombe, Chief Financial Officer
ir@devolverdigital.com
Zeus (Nominated Adviser and Joint Broker) David Foreman / Kieran Russell (Investment Banking) Ben Robertson (Equity Capital Markets)
+44 (0)20 3829 5000
Panmure Liberum (Joint Broker) Max Jones / Dru Danford / Shalin Bhamra (Investment Banking) Rupert Dearden (Corporate Broking)
OPERATING REVIEW
1H 2025 - robust performance with increase in new titles to 7 releases
Devolver released 7 new well-received titles in 1H 2025 - Look Outside, The Talos Principle - Reawakened, Moroi, Gorn 2, Shotgun Cop Man, Monster Train 2 and Tron: Catalyst. High Metacritic scores and positive user ratings are important as they help to bolster the longevity of releases, with the average Metacritic rating of 77 secured in 1H 2025.
1H 2025 front catalogue revenues rose 76% year-over-year, with a number of new releases exceeding expectations so far. After two quieter years of new releases in 2023 and 2024, and with only 3 new game releases in 1H 2024, the new wave of content this year will inject fresh impetus into prospective back catalogue next year and beyond.
We expect that 1H 2025 revenues will account for less than 40% of the full year 2025 projected total, with the majority of revenues being generated in the seasonally stronger second half. 1H 2024 had a high first-half weighted revenue profile, driven by the timing of platform deals for front and back catalogue, the Steam publisher sale in May 2024, and a large content update from fan favourite Cult of the Lamb earlier in January 2024. These three factors drove 1H 2024 revenues up to 49% of full year revenue. The absence of these drivers in the first half of 2025 resulted in a 38% fall in back catalogue versus last year.
Strong front catalogue performance and continued excitement for 2H
1H 2025 saw the release of some exciting new games including Look Outside, an inexpensive early-year survival horror RPG release developed by Francis Coulombe which garnered an overwhelmingly positive response from gamers and a high Metacritic score of 83. A user review on Gamespace.com captured the excitement, noting that this "gameplay-rich masterpiece" was created in just half a year and is "capable of delivering many indescribable emotions that are worth experiencing for yourself." We look forward to much more from Look Outside as more content-drops come to the market in future.
Monster Train 2 ("MT2") is the sequel to the extremely popular roguelike deck-builder developed by Shiny Shoe and released in 2020. MT2, published by our subsidiary Big Fan Games, is another game that came hot out of the traps this year also with an overwhelmingly positive response from gamers and a very high 87 Metacritic score, further bolstered by a Game Pass subscription deal upon release.
The Talos Principle: Reawakened, the Definitive Edition of the original game released in 2014, was developed by our studio subsidiary Croteam. Its release in April 2025 was met with an 87 Metacritic score as well as very positive reviews elsewhere in the market.
Gorn 2, a Virtual Reality-only sequel to the highly successful original game released in 2019, was also released in April this year. It was developed by Cortopia and Free Lives and received very positive reviews in the market. Meta has identified it as the best-selling Premium Game on its platform to date in 2025.
While the first half of the year was marked by a number of high quality well-received releases, titles scheduled for release in the second half will drive further momentum as Devolver continues to excite its fans with unique, creative games. Among those already released at the start of the second half, Stronghold Crusader: DE already exceeded our high expectations for the title, while recently released Baby Steps has secured a positive initial Metacritic score of 77 on PC.
Nintendo Switch 2 reveal event
Another area of excitement was the full reveal of Switch 2 at Nintendo's April 2025 showcase event, in which three future Devolver games were highlighted. Subsequent to the 1H period end, the Tokyo Games Show featured three Devolver game reveals which will come to Switch 2 - BALL x PIT, Skate Story and Possessors - with a positive reception worldwide for the reveal.
We see this as an indication of Nintendo's view of the ongoing importance of indie games publishing. Devolver has historically had success with Switch 1, publishing over 40 games on the platform over the years. Since Switch 2 sales began in June 2025 it has already sold c.6m units, ahead of expectations to date, which is an early sign that it could become as popular as the original. We look forward to several Devolver games coming to Switch 2 later this year and into 2026.
Summer Game Fest 2025
2025's Summer Game Fest in June this year highlighted several pending Devolver releases including a showcase dedicated to Kenny Sun, the solo developer of BALL x PIT, developer Heart Machine's Possessors, and Sam Eng's Skate Story.
Continued focus on cost control
Devolver successfully controlled adjusted operating expenses in 1H 2025, with a 5.6% fall versus 1H 2024, led by control of travel, entertainment and other administrative expenses. Total statutory operating costs fell by 23.3% year-over-year, as non-cash stock compensation expense and amortisation of acquired IP diminished during the period. The company is continuing to focus on cost savings from operations at the same time as working to reduce development costs of first-party and third-party games.
FINANCIAL REVIEW
Unaudited first half 2025 results to 30 June 2025
The unaudited financial results included in this announcement cover the Group's combined activities for the six months ended 30th June 2025 (prepared in accordance with applicable International Financial Reporting Standards, "IFRS").
Adjusted results
The following refers to Adjusted results, as presented in the financial statements contained within this release. Adjusted results exclude any one-time exceptional items during the respective half-year periods.
Adjusted EBITDA results are not intended to replace statutory results and are prepared to provide a more comparable indication of the Group's core business performance by removing the impact of certain items including exceptional items (material and non-recurring), and other, non-trading, items that are reported separately. These results have been presented to provide users with additional information and analysis of the Group's performance, consistent with how the Board monitors results. Further details of adjustments are given in Note 4 to the condensed financial statements contained within this semi-annual results release.
P&L results and margins
Devolver Digital's first half 2025 performance was in line with expectations, with 7 new title releases compared to 3 titles released in 1H 2024. New release revenues rose 76% versus the 1H of 2024, on the back of the increased number of titles.
As anticipated however, overall revenues and back catalogue revenues in particular had a difficult year over year comparison, falling 38% versus 1H 2024, for three reasons:
1) Front- and back-catalogue platform deals in 2024 were unusually highly weighted to the first half, with c. 80% of total deals for the year recorded by the end of June 2024. By contrast, based on signed deals for 2025, <35% of the full year projected total was reflected in 1H 2025, with the balance to be reflected in 2H 2025.
2) Fan favourite Cult of The Lamb released a major content update in early 2024 which boosted 1H 2024 revenues significantly. The next significant content update for the title will come in early 2026 and will include a paid DLC, providing an expected early boost to the start of next year, but will not benefit back catalogue contribution from this title in 2025.
3) The Devolver Steam publisher sale was held in May last year, whereas this year it was held in mid-September, providing a solid contribution to second half revenues. As such the substantial back-catalogue revenue surge from 1H 2024's publisher sale was not repeated in 1H 2025.
As a result of the above factors 1H 2025 revenues of US$38.8m fell 24.8% year-over-year. Gross profit fell in line with revenues while gross margins after impairments held steady at 31.3% in the first half of 2025 (1H 2024: 29.6%). Margins remained stable, balanced by the benefit in the first half of greater new release revenue in recoup (with no royalty outpayments) offset by a lack of first-party IP platform deals which were substantial in 1H 2024 particularly with the renewal of a Microsoft Game Pass deal for Astroneer, System Era's popular expandable game.
1H 2025 Adjusted EBITDA after non-cash impairments was US$0.1m, compared to a US$3.0m profit in the first half of 2024, primarily due to the higher weighting of revenue in 1H 2024 compared to this first half.
Cost control initiatives helped reduce adjusted operating expenses for the period, down by 5.6% to US$12.7m (1H 2024: US$13.4m), principally due to a reduction in travel, entertainment and other administrative expenses. Overall operating costs fell 23.3% to US$16.4m (1H 2024: US$21.4m), due largely to falls in non-cash stock compensation expense and amortisation of acquired IP.
During 1H 2025, the Group made a non-cash write-down of deferred tax assets totalling $6.8 million, of which $5.9 million related to previous period Stock Option Expense tax losses, given lack of visibility if such deferred tax assets would be utilised. Statutory net loss for 1H 2025 was US$11.0m, versus a US$4.5m loss in 1H 2024.
Cash Balances
Cash holdings at end of June 2025 were US$34.7m, a reduction of US$6.9m compared to year-end 2024's level of US$41.6m, on the back of continued investment into game development. Devolver has no borrowings across the Group.
CURRENT TRADING OUTLOOK
Our busy release schedule for 2H 2025 has already featured Stronghold Crusader: Definitive Edition (DE) from our subsidiary Firefly, Stick it to the Stickman and Baby Steps. Stronghold Crusader: DE has been a great success with over 300,000 units sold since release, exceeding our already high expectations for the title. Baby Steps recently released with an initial Metacritic score of 77 on PC and very positive user reviews. We look forward to several pending releases for the coming months, including BALL x PIT, Quarantine Zone and Possessors, as well as Megatech, the second Paid Downloadable Content (PDLC) release from System Era for their game Astroneer due for release this November.
Trading for the full year 2025 continues to be in line with guidance with revenues exceeding US$100 million and Adjusted EBITDA in the high single-digit US$ millions and expected improvements through 2026 and 2027. We are encouraged by the recent string of positive releases during the first nine months of this year, with multiple new games outperforming our expectations so far. We hope to continue this trend to combine with our ongoing focus on cost control to meet our guidance and keep marking improvements in performance. The Board believes that we will continue to show steady progress, and we look forward to reporting more success moving into 2026.
Harry Miller
Chief Executive Officer
Condensed Consolidated Statement of Profit or Loss
Unaudited
Unaudited
Audited
6 months ended
6 months ended
Year ended
30-Jun-25
30-Jun-24
31-Dec-24
Note
US$'000
US$'000
US$'000
Revenue
2
38,780
51,583
104,781
Cost of sales
(26,631)
(36,327)
(74,716)
Gross profit
12,149
15,256
30,065
Administrative expenses
(16,445)
(21,439)
(38,729)
Other (expenses) / income
(157)
1,134
1,496
Operating loss
(4,453)
(5,049)
(7,168)
Finance costs
(81)
(61)
(288)
Finance income
467
272
769
Loss before taxation
(4,067)
(4,838)
(6,687)
Income tax (expense) / benefit
(6,980)
366
328
Loss for the period
(11,047)
(4,472)
(6,359)
Loss for the period is attributable to:
Equity holders of the parent
(11,043)
(4,414)
(6,141)
Non-controlling interests
(4)
(58)
(218)
Loss for the period
(11,047)
(4,472)
(6,359)
Basic and diluted loss per share ($)
3
(0.023)
(0.010)
(0.013)
Non-IFRS measures
Adjusted EBITDA* before performance-related impairments
4
135
4,713
9,610
Adjusted EBITDA*
4
135
2,967
5,083
* Adjusted EBITDA is a non-IFRS measure and is defined as earnings before interest, tax, depreciation, amortisation (but does not exclude amortisation of capitalised software development costs), share-based payment expenses, foreign exchange gains or losses, fair value adjustments and one-time non-recurring items and non-trading items. Impairments of capitalised software development costs relating to released game performance are included in Adjusted EBITDA.
Condensed Consolidated Statement of Comprehensive Income
Unaudited
Unaudited
Audited
6 months ended
6 months ended
Year ended
30-Jun-25
30-Jun-24
31-Dec-24
US$'000
US$'000
US$'000
Loss for the period
(11,047)
(4,472)
(6,359)
Other comprehensive income: Items that may be reclassified
subsequently to profit or loss
Exchange differences on translation of foreign operations
1,496
(329)
(644)
Total comprehensive loss for the period
(9,551)
(4,801)
(7,003)
Total comprehensive loss is attributable to:
Equity holders of the parent
(9,547)
(4,743)
(6,785)
Non-controlling interests
(4)
(58)
(218)
Total comprehensive loss for the period
(9,551)
(4,801)
(7,003)
Condensed Consolidated Statement of Financial Position
Unaudited
Unaudited
Audited
As at
As at
As at
30-Jun-25
30-Jun-24
31-Dec-24
Note
US$'000
US$'000
US$'000
ASSETS
Non-current assets
Intangible assets
- goodwill
5
31,902
31,902
31,902
- software development costs
5
71,999
60,340
64,828
- purchased intellectual property
5
31,875
37,166
34,509
Property, plant and equipment
187
190
162
Right of use asset
835
845
967
Employee loans
327
594
327
Deferred tax assets
743
10,968
7,554
Total non-current assets
137,868
142,005
140,249
Current assets
Trade and other receivables
11,862
21,561
16,855
Cash and cash equivalents
34,726
31,926
41,645
Employee loans
450
227
442
Short-term investments
-
-
464
Current tax asset
1,699
1,227
1,570
Total current assets
48,737
54,941
60,976
Total assets
186,605
196,946
201,225
EQUITY AND LIABILITIES
Equity
Share capital
47
45
47
Share premium
157,683
146,106
157,683
Retained earnings
32,048
44,219
43,514
Translation reserve
258
(923)
(1,238)
Capital redemption reserve
(33,868)
(34,505)
(34,469)
Equity attributable to owners of the parent
156,168
154,942
165,537
Non-controlling interest
(306)
(142)
(302)
Total equity
155,862
154,800
165,235
Non-current liabilities
Trade and other payables
1,524
10,332
10,569
Deferred tax liabilities
-
238
-
Lease liability
748
782
876
Total non-current liabilities
2,272
11,352
11,445
Current liabilities
Trade and other payables
25,667
26,977
19,953
Lease liability
251
173
228
Deferred revenue
2,000
1,985
3,950
Current tax liability
553
1,659
414
Total current liabilities
28,471
30,794
24,545
Total liabilities
30,743
42,146
35,990
Total equity and liabilities
186,605
196,946
201,225
Condensed Consolidated Statement of Changes in Equity
Share capital
Share premium
Translation reserve
Retained earnings
Capital redemption reserve
Total Devolver equity
Non-controlling interest
Total equity
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
Balance at 31 December 2024 (audited)
47
157,683
(1,238)
43,514
(34,469)
165,537
(302)
165,235
Loss for the period
-
-
-
(11,043)
-
(11,043)
(4)
(11,047)
Currency translation differences
-
-
1,496
-
-
1,496
-
1,496
Other movements
-
-
-
(267)
601
334
-
334
Transactions with owners in their capacity as owners:
Share Transfer from EBT
-
-
-
(767)
-
(767)
-
(767)
Share-based payments
-
-
-
611
-
611
-
611
Total transactions with owners
-
-
-
(156)
-
(156)
-
(156)
Balance at 30 June 2025(unaudited)
47
157,683
258
32,048
(33,868)
156,168
(306)
155,862
Share capital
Share premium
Translation reserve
Retained earnings
Capital redemption reserve
Total Devolver equity
Non-controlling interest
Total equity
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
Balance at 31 December 2023 (audited)
45
146,106
(594)
47,092
(34,531)
158,118
(84)
158,034
Loss for the period
-
-
-
(4,414)
-
(4,414)
(58)
(4,472)
Currency translation differences
-
-
(329)
-
-
(329)
-
(329)
Other movements
-
-
-
(150)
26
(124)
-
(124)
Fair value adjustment
-
-
-
(647)
-
(647)
-
(647)
Transactions with owners in their capacity as owners:
Other movements
-
-
-
(76)
-
(76)
-
(76)
Share-based payments
-
-
-
2,414
-
2,414
-
2,414
Total transactions with owners
-
-
-
2,338
-
2,338
-
2,338
Balance at 30 June 2024(unaudited)
45
146,106
(923)
44,219
(34,505)
154,942
(142)
154,800
Share capital
Share premium
Translation reserve
Retained earnings
Capital redemption reserve
Total Devolver equity
Non-controlling interest
Total equity
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
Balance at 31 December 2023 (audited)
45
146,106
(594)
47,092
(34,531)
158,118
(84)
158,034
Loss for the period
-
-
-
(6,141)
-
(6,141)
(218)
(6,359)
Currency translation differences
-
-
(644)
-
-
(644)
-
(644)
Other movements
-
-
-
(106)
62
(44)
-
(44)
Fair value adjustment
-
-
-
(737)
-
(737)
-
(737)
Transactions with owners in their capacity as owners:
Other movements
-
-
-
(105)
-
(105)
-
(105)
Share-based payments
-
-
-
3,511
-
3,511
-
3,511
Share placement
2
9,785
-
-
-
9,787
-
9,787
System Era deferred share consideration
-
1,792
-
-
-
1,792
1,792
Total transactions with owners
2
11,577
-
3,406
-
14,985
-
14,985
Balance at 31 December 2024(audited)
47
157,683
(1,238)
43,514
(34,469)
165,537
(302)
165,235
Condensed Consolidated Statement of Cash Flows
Unaudited
Unaudited
Audited
6 months ended
6 months ended
Year ended
30-Jun-25
30-Jun-24
31-Dec-24
US$'000
US$'000
US$'000
Loss for the period before taxation
(4,067)
(4,838)
(6,687)
Adjustments for:
Depreciation of tangible fixed assets
66
94
155
Depreciation of right of use assets
131
108
220
Amortisation of intangible assets
11,004
13,335
24,861
Impairment of intangible assets
499
1,746
4,527
Finance income
(467)
(326)
(769)
Finance costs
81
115
288
Share-based payment charge
611
2,398
3,511
Foreign exchange movements
288
(150)
(141)
Fair value adjustments
320
-
-
Other non-cash movements
(446)
(119)
(2,208)
Movements in working capital:
Receivables
5,672
(7,693)
3,997
Payables
(4,207)
(115)
(3,956)
Cash inflow from operations
9,485
4,555
23,798
Taxation paid
(1,923)
(83)
(1,534)
Taxation received
64
-
Net cash inflow from operating activities
7,626
4,472
22,264
Cash flows from investing activities
Purchase of intangible assets
(15,491)
(15,009)
(30,654)
Purchase of tangible assets
(90)
(56)
(51)
Net cash outflow from investing activities
(15,581)
(15,065)
(30,705)
Cash flows from financing activities
Share placement
-
-
9,785
Interest received
459
317
751
Interest paid
(524)
(77)
(171)
Repayment of lease liabilities
(106)
(72)
(160)
Net cash (outflow)/inflow from financing activities
(171)
168
10,205
Cash and cash equivalents
Net (decrease)/increase in the period
(8,126)
(10,425)
1,764
At 1 January*
41,645
42,651
40,424
Foreign exchange movements
1,207
(300)
(543)
At 30 June / 31 December
34,726
31,926
41,645
* In its financial reporting for the year ended 31 December 2024, the Group revised the classification of certain investment balances in its reported financials for the year ended 31 December 2023, reclassifying $0.4 million to long-term investments and $1.8 million to short-term investments from cash and cash equivalents.
Note 1: Basis of preparation
These condensed consolidated financial statements have been prepared in accordance with the recognition and measurement requirements of International Accounting Standard 34 Interim Financial Reporting. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation have been included. The condensed consolidated financial statements as at and for the six months ended June 30, 2025 have been prepared on the same basis as the audited annual financial statements.
Operating results for the six months ended June 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025. For further information, refer to the consolidated financial statements and footnotes thereto included in the Group's annual report for the year ended December 31, 2024.
The Directors are confident that the Group will remain cash positive and will have sufficient funds to continue to meet its liabilities as they fall due for a period of at least 12 months from the date of this first half 2025 announcement and have therefore prepared this unaudited semi-annual announcement on a going concern basis.
Tax charged within 6 months ended 30 June 2025 has been calculated by applying the effective rate of tax which is expected to apply to the Group for the year ending 31 December 2025 as required by IAS 34 Interim Financial Reporting.
The financial presentation in this release should be read in conjunction with the notes to the consolidated financial statements as at and for the first half ended 30 June 2025, as contained within this release.
These preliminary unaudited financial statements were approved by the Board of Directors on 26 September 2025.
Note 2: Revenue
Unaudited
Unaudited
Audited
6 months ended
6 months ended
Year ended
30-Jun-25
30-Jun-24
31-Dec-24
US$'000
US$'000
US$'000
Revenue analysed by class of business:
Game publishing
38,780
51,583
104,781
Revenue analysed by timing of revenue:
Transferred at a point in time
38,780
51,583
104,781
The Group does not provide any information on the geographical breakdown of revenues, as game publishing revenue is earned via third-party distribution platforms which hold the sales data of end consumers.
Note 3: Earnings Per Share
Unaudited
Unaudited
Audited
6 months ended
6 months ended
Year ended
30-Jun-25
30-Jun-24
31-Dec-24
US$'000
US$'000
US$'000
Loss attributable to owners of the company
(11,043)
(4,414)
(6,141)
Weighted average number of shares
474,500,242
444,832,441
456,953,855
Dilutive effect of share options
-
-
-
Weighted average number of diluted shares
474,500,242
444,832,441
456,953,855
Basic and diluted loss per share ($)
(0.023)
(0.010)
(0.013)
Note 4: Adjusted Results
Unaudited
Unaudited
Audited
6 months ended
6 months ended
Year ended
30-Jun-25
30-Jun-24
31-Dec-24
US$'000
US$'000
US$'000
Revenue
Reported Revenue
38,780
51,583
104,781
Reported Revenue growth
(24.8)%
18.0%
13.5%
Gross Profit
Reported Gross Profit
12,149
15,256
30,065
Reported Gross Profit margin
31.3%
29.6%
28.7%
Performance-related impairments
-
1,746
4,527
Impairment of cancelled unreleased titles
499
-
-
Adjusted Gross Profit
12,648
17,002
34,592
Adjusted Gross Profit margin, pre performance-related impairment
32.6%
33.0%
33.0%
Adjusted EBITDA*
Adjusted EBITDA
135
2,967
5,083
Adjusted EBITDA margin
0.3%
5.8%
4.9%
Performance-related impairments
-
1,746
4,527
Adjusted EBITDA pre performance-related impairment
135
4,713
9,610
Adjusted EBITDA margin, pre performance-related impairment
0.3%
9.1%
9.2%
* Adjusted EBITDA is a non-IFRS measure and is defined as earnings before interest, tax, depreciation, amortisation (but does not exclude amortisation of capitalised software development costs), share-based payment expenses, foreign exchange gains or losses, fair value adjustments and one-time non-recurring items and non-trading items. Impairments of capitalised software development costs relating to released game performance are included in Adjusted EBITDA.
A reconciliation from the operating loss to adjusted EBITDA is set out in the table below:
Unaudited
Unaudited
Audited
6 months ended
6 months ended
Year ended
30-Jun-25
30-Jun-24
31-Dec-24
US$'000
US$'000
US$'000
Operating Loss
(4,453)
(5,049)
(7,168)
Share-based payment expenses
611
2,414
3,511
Amortisation of intellectual property
2,634
4,840
7,497
Depreciation of property, plant and equipment
66
94
155
Depreciation of right-of-use asset
131
108
220
Loss / (gain) on foreign exchange differences
288
(150)
(141)
Impairment of cancelled unreleased titles
499
-
-
Present value adjustment to deferred consideration
320
-
251
Other taxes
-
-
48
Non-recurring, one-time expenses
39
710
710
Adjusted EBITDA
135
2,967
5,083
Performance-related impairments
-
1,746
4,527
Adjusted EBITDA pre performance-related impairments
135
4,713
9,610
Note 5: Intangible Assets
Purchased intellectual property
Software development cost
Subtotal other intangibles
Goodwill
Total
US$'000
US$'000
US$'000
US$'000
US$'000
Cost
As at 31 December 2024 (audited)
79,959
154,709
234,668
79,569
314,237
Additions
-
16,040
16,040
-
16,040
As at 30 June 2025 (unaudited)
79,959
170,749
250,708
79,569
330,277
Amortisation and impairment
As at 31 December 2024 (audited)
45,450
89,881
135,331
47,667
182,998
Amortisation charge for the period
2,634
8,370
11,004
-
11,004
Impairment charge for the period
-
499
499
-
499
As at 30 June 2025 (unaudited)
48,084
98,750
146,834
47,667
194,501
Carrying amount
As at 31 December 2024 (audited)
34,509
64,828
99,337
31,902
131,239
As at 30 June 2025 (unaudited)
31,875
71,999
103,874
31,902
135,776
Purchased intellectual property
Software development cost
Subtotal other intangibles
Goodwill
Total
US$'000
US$'000
US$'000
US$'000
US$'000
Cost
As at 31 December 2023 (audited)
79,959
121,920
201,879
79,630
281,509
Additions
-
16,652
16,652
-
16,652
Fair value adjustment
-
-
-
(61)
(61)
As at 30 June 2024 (unaudited)
79,959
138,572
218,531
79,569
298,100
Amortisation and impairment
As at 31 December 2023 (audited)
37,953
67,990
105,943
47,667
153,610
Amortisation charge for the period
4,840
8,496
13,336
-
13,336
Impairment charge for the period
-
1,746
1,746
-
1,746
As at 30 June 2024 (unaudited)
42,793
78,232
121,025
47,667
168,692
Carrying amount
As at 31 December 2023 (audited)
42,006
53,930
95,936
31,963
127,899
As at 30 June 2024 (unaudited)
37,166
60,340
97,506
31,902
129,408
Intellectual property
Software development cost
Subtotal other intangibles
Goodwill
Total
US$'000
US$'000
US$'000
US$'000
US$'000
Cost
As at 31 December 2023 (audited)
79,959
121,920
201,879
79,630
281,509
Additions
-
32,789
32,789
-
32,789
Fair value adjustment
-
-
-
(61)
(61)
As at 31 December 2024 (audited)
79,959
154,709
234,668
79,569
314,237
Amortisation and impairment
As at 31 December 2023 (audited)
37,953
67,990
105,943
47,667
153,610
Amortisation charge for the period
7,497
17,364
24,861
-
24,861
Impairment charge for the period
-
4,527
4,527
-
4,527
As at 31 December 2024 (audited)
45,450
89,881
135,331
47,667
182,998
Carrying amount
As at 31 December 2023 (audited)
42,006
53,930
95,936
31,963
127,899
As at 31 December 2024 (audited)
34,509
64,828
99,337
31,902
131,239
Note 6: Impairment to Software Development Costs
The Group assessed software development costs for indicators of impairment, considering both qualitative and quantitative factors.
During the period ended 30 June 2025, management discontinued development of a title. Following a reassessment of the project's commercial prospects, the title was determined to be no longer commercially viable and the related development costs no longer expected to generate future economic benefits.
The Group therefore recognised an impairment loss of $0.5 million within Cost of Sales, reducing the carrying value of software development costs attributable to this cancelled, unreleased title as at 30 June 2025.
In assessing value in use for games identified with indicators of impairment, the Group has prepared a cash flow forecast reflecting management's estimations of future performance of these titles. Key assumptions on which this forecast was based includes title revenue generation and revenue decay curves.
The cash flows were discounted to their present value utilising a pre-tax discount rate of 20.6%, calculated based on the particular circumstances of the Group and its CGUs, derived from its Weighted Average Cost of Capital. Based on this assessment, none of the titles tested under this method showed impairment, as the discounted future cash flows supported their carrying amounts.
Note 7: Financial Instruments
Financial assets and liabilities analysed by the categories were as follows:
Unaudited
Unaudited
Audited
6 months ended
6 months ended
Year ended
30-Jun-25
30-Jun-24
31-Dec-24
US$'000
US$'000
US$'000
Financial assets at amortised cost:
Trade and other receivables
12,639
22,382
15,268
Short-term investments
-
-
464
Cash and cash equivalents
34,726
31,926
41,645
47,365
54,308
57,377
Financial liabilities at amortised cost:
Trade and other payables
14,726
17,685
15,910
Lease liabilities
999
955
1,104
Deferred consideration
9,506
11,366
9,186
25,231
30,006
26,200
Financial liabilities at fair value through profit or loss:
Contingent consideration
1,524
1,405
1,391
Fair values of financial assets and liabilities
The Group measures financial instruments at fair value using the following hierarchy:
· Level 1 - Quoted prices in active markets.
· Level 2 - Valuations based on observable market data.
· Level 3 - Valuations based on unobservable inputs.
Except for contingent consideration, which is measured using Level 3 inputs, all of the Group's financial instruments are classified as Level 1 in the fair value hierarchy.
At 30 June 2025, the Group recognised contingent consideration of $1.5 million (31 December 2024: $1.4 million), relating to share option grants issued to the sellers of an acquired subsidiary. The fair value is based on the exercise price of the options, with fluctuations arising primarily from:
· the denomination of exercise prices in GBP and retranslation into USD; and
· changes in the estimate of the number of options expected to be exercised.
Contingent
consideration
$'000
Balance at 1 January 2025
1,391
Unrealised fair value changes recognised in profit or loss
133
Balance at 30 June 2025
1,524
Financial Risk Management
The Group's financial risk exposures and management approach remain consistent with those disclosed in the annual financial statements for the year ended 31 December 2024. There have been no material changes in the nature of the Group's risks or the processes applied to manage them during the six-month period ended 30 June 2025.
Foreign exchange risk
The Group continues to receive and remit payments in Euros, US Dollars and Pounds. Foreign currency risk is managed through natural hedging, with excess balances transferred into USD or GBP at the earliest opportunity.
Liquidity risk
Management continues to monitor cash balances and forecasts on a regular basis to ensure sufficient liquidity is maintained to meet obligations as they fall due. No liquidity issues were encountered in the period.
Credit risk
Credit risk management processes remain unchanged. The Group's exposure to credit losses continues to be low, reflecting the blue-chip nature of its customers and the absence of significant historical write-offs. Expected credit losses on financial assets measured at amortised cost remain immaterial. Cash and cash equivalents are held with counterparties rated investment grade or above, and investments continue to be focused on bonds and senior unsecured debt instruments with recognised credit ratings.
Note 8: Deferred Tax
Deferred tax assets have been recognised in respect of all tax losses and other temporary differences giving rise to deferred tax assets where the Group believes it is probable that these assets will be recovered. During the period, the Group reassessed the recoverability of the deferred tax assets relating to US federal and state taxes. Given the history of tax losses and the challenges in reliably estimating when the deferred tax assets would be recognised, in particular for deferred tax assets relating to Stock Options, the Group derecognised deferred tax assets totalling $6.8 million, of which $5.9 million related to Stock Options. Management will continue to monitor and reassess the recognition of deferred tax assets as appropriate.
Note 9: Events After the Reporting Date
On July 4, 2025, the "One Big Beautiful Bill Act" (OBBBA) was signed into law. Key corporate tax provisions of the OBBBA include the reinstatement of 100% bonus depreciation, immediate expensing of domestic research and experimental expenditures (Section 174) , modifications to Section 163(j) interest limitations, updates to GILTI and FDII provisions, amendments to energy credits, and expanded Section 162(m) aggregation requirements.
The effects of newly enacted tax legislation will be recognized in the period of enactment. Consequently, the impact of the OBBBA will be reflected in the Group's financial statements for the year ended 2025. The Group is currently evaluating the implications of the OBBBA. While no material change in tax expense is anticipated, the Group expects that certain balance sheet items, including tax payable and deferred tax assets, may be materially affected as a result of the new legislation, largely in relation to the changes in Section 174 R&D cost treatments.
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IR SELFWAEISEEU
