REG - Devolver Digital - Trading Update

Devolver DigitalAnnouncement

31/01/2024 07:00

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RNS Number : 4414B  Devolver Digital, Inc.  31 January 2024

31 January 2024

 

Devolver Digital, Inc.

("Devolver", the "Group" or the "Company")

Trading Update

Revenue in line with consensus expectations

Return to positive EBITDA in the second half of 2023

Devolver Digital, Inc. (AIM: DEVO), an award-winning digital publisher and
developer of indie video games, announces a trading update for the financial
year ended 31(st) December 2023(1).  All financial figures relate to that
period unless otherwise stated.

Performance recovered steadily in the second half of 2023, which delivered a
positive Normalised Adjusted EBITDA(2) in 2H.  Full year 2023 revenues are
expected to be in line with consensus expectations at not less than US$90
million and Normalised Adjusted EBITDA is expected to breakeven excluding
non-cash title impairments of up to US$2.5m, of which US$0.9m was already
reflected in 1H 2023.  Q4 new releases Wizard With a Gun and The Talos
Principle 2 have good momentum, supported by continued strength in back
catalogue (over 15% year-on-year growth) including titles Cult of The Lamb,
Inscryption and Stronghold: Definitive Edition. This back catalogue strength
is ongoing and weighs revenues towards lower margin third party sales.

Devolver has a robust balance sheet with c.US$42 million net cash as at 31
December 2023, including the c.US$22m cash cost of acquiring System Era in
November 2023 and related costs.

The Company confirms a number of board changes today, as outlined in a
separate announcement:

·    Douglas Morin has stepped down as CEO to be succeeded by Harry
Miller, Executive Chairman.

·    Kate Marsh, Senior Independent Director, has been appointed as
Non-Executive Chair.

·    Graeme Struthers, COO, has been appointed to the Board.

 

The Group will announce its results for the year ended 31 December 2023 in
early April 2024.

 

Harry Miller, CEO of Devolver Digital, said:

"Devolver recovered strongly in the second half of 2023 to deliver revenues in
line with expectations, supported by excellent demand for our back catalogue
and return to positive EBITDA in the second half.  After a quiet year in
2023 for major title releases, we enter 2024 with a release schedule featuring
wonderful titles such as Pepper Grinder, The Plucky Squire, Anger Foot and
NEVA, with releases more evenly balanced throughout the year.  In addition,
we will enjoy a full year of contribution from recently acquired System Era
which takes us into the exciting area of expandable games and has performed in
line with expectations since acquisition.  As a result of this momentum for
our strategy heading into 2024, we expect Normalised Adjusted EBITDA to
return to growth in 2024 and accelerate in 2025."

 

 

-ENDS-

 

Notes

1. Financial numbers contained within this Trading Update are based on
preliminary unaudited 2023 results and will include impairments which are
currently being reviewed. The second half 2023 impairment relates to one
title published by Good Shepherd.

2. Normalised Adjusted EBITDA ("EBITDA") makes the following adjustments: it
excludes: 1) stock compensation (share-based payment) expenses and revaluation
of contingent consideration; 2) one-time expenses and other non-recurring
items; 3) amortisation of IP (but does not exclude amortisation of capitalised
software development costs), and; 4) impairments of goodwill and acquired
IP.

 

 

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 100 titles, with more than 30
titles in the pipeline scheduled for release over the next few 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.                                             ir@devolverdigital.com
 Kate Marsh, Non-Executive Chair

 Harry Miller, Chief Executive Officer

 Daniel Widdicombe, Chief Financial Officer

 Zeus (Nominated Adviser and Sole Broker)                                     +44 (0)20 3829 5000
 Nick Cowles, Jamie Peel, Alexander Craig (Investment Banking)

 Ben Robertson (Equity Capital Markets)

 FTI Consulting (Communications Adviser)                            devolver@fticonsulting.com
 Jamie Ricketts    / Dwight Burden / Valerija Cymbal / Usama Ali    +44 (0)20 3727 1000

 

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