REG - Devolver Digital - Unaudited preliminary results
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RNS Number : 6935Z Devolver Digital, Inc. 09 April 2026
9 April 2026
Devolver Digital, Inc.
("Devolver Digital", "Devolver" or the "Company", and the Company together
with all of its subsidiary undertakings "the Group")
Unaudited preliminary results(1) for the year ended 31 December 2025
Continued revenue uptick, 39% Adjusted EBITDA(2) growth, in line with
consensus
Positive free cashflow generation in 2H
Devolver Digital, an award-winning digital publisher and developer of
independent ("indie") video games, announces its unaudited results for the
twelve months ended 31 December 2025. All figures relate to this period unless
otherwise stated.
Momentum across business reflects the strength of a balanced portfolio
· 15 new titles released in 2025, reflecting long-term investment in
our pipeline and business
o Strong average Metacritic score of 78 for new releases in 2025
o Notable successes including Monster Train 2, Stronghold Crusader:
Definitive Edition and BALL x PIT
o Lower cost releases such as Look Outside and Mycopunk performed ahead of
expectations
· 2H 2025 revenues bolstered by timing of platform deals and 3Q
Devolver Publisher Sale on Steam
· 218% annual increase in revenues from front catalogue releases
· Positive free cash flow generation in 2H 2025 owing to the
disciplined strategy implemented
Key Performance Indicators(1)
Year ending 31 December, US$m 2025 2024 yoy %
Revenue 107.9 104.8 3.0%
Gross profit 33.1 30.1 10.1%
Statutory loss for the period (16.0) (6.4) n.m.
Basic and diluted loss per share ($) (0.034) (0.013) n.m.
Cash balance at period end 36.6 41.6 (12.0%)
Adjusted EBITDA(2) before performance-related impairments
11.4 9.6 18.5%
Adjusted EBITDA(2) 7.1 5.1 39.4%
Adjusted EBIT 1.4 (2.8) n.m.
Revenue and Adjusted EBITDA growth in line with FY25 consensus
· Growth in underlying Adjusted EBITDA pre non-cash impairment, to
US$11.4m (2024: US$9.6m)
· Disciplined cost control with adjusted operating expenses 1.1% lower
year-on-year
· Non-cash impairment from underperforming releases of US$4.3m in 2025
(2024: US$4.5m)
· Adjusted EBITDA (after impairments), of US$7.1m, with EBIT of US$1.4m
after reflecting US$5.7m expense from amortisation of acquired software and
depreciation of assets
· Statutory net loss of US$16.0m(3) (2024: US$6.4m loss), after
US$14.6m of non-cash tax expense related to unwind of deferred tax assets, and
US$3.7m of share-based payment expense
· Robust balance sheet with c.US$36.6m net cash at 31 December 2025, an
improvement versus 1H 2025 ($34.7m) as a result of positive free cash
generation in 2H 2025
Current trading and outlook
· Positive start in January 2026 with Quarantine Zone: The Last Check
performing strongly in the weeks after release and three titles in Steam(4)
Global Best Sellers Top 10 list, a Devolver 'first'
· Pipeline of at least 13 new titles in FY26 with greater visibility
and control over our release cadence
· FY26 pipeline includes two games with significant budgets
(STARSEEKER: Astroneer Expeditions and Serious Sam: Shatterverse) as well as
several lower cost third-party releases, in line with our longer-term strategy
· In total our pipeline has over 30 new titles due for release over the
next three years
· Continued focus on expandable games, prioritising premium titles with
long-term engagement through meaningful paid for and free content updates to
strengthen player retention and increase the long-term value of our back
catalogue
· Ongoing commitment to disciplined investment to support high-quality
creative games
· Expect to deliver continued revenue and Adjusted EBITDA growth in
2026
· Adjusted EBITDA is expected to be significantly first half weighted
due to the pace of scheduled game releases, the Devolver publisher sale on
Steam and timing of recognition of platform deals
Harry Miller, Chief Executive Officer of Devolver, said:
"In a broadly flat gaming market, Devolver delivered another year of progress
in 2025, with revenue and Adjusted EBITDA growth and performance in line with
consensus. Our multi-year investment in our pipeline and greenlight process
came through in 15 new releases, including successes such as Monster Train 2,
BALL x PIT and lower cost titles such as Look Outside and Mycopunk. Our mix
of first-party and third-party IP, alongside a healthy contribution from new
releases and our back catalogue, continues to demonstrate the resilience of
the Devolver model.
We continue to see the benefits of our expandable games strategy, with content
updates and strong community engagement extending the commercial life of key
titles such as Stronghold Crusader: Definitive Edition, as well as Astroneer's
second paid downloadable content (PDLC) Megatech.
With a strong start to 2026, including excellent early performance from new
releases and content updates, disciplined cost control and a robust pipeline
including three major 1(st) party titles, STARSEEKER: Astroneer Expeditions,
Serious Sam: Shatterverse and Stronghold Unreal, we are excited about the
opportunities for continued progress in the year ahead."
Notes:
1. Preliminary unaudited results - refer to full statutory tables below in
this report.
2. Adjusted EBITDA ("EBITDA") makes the following adjustments: it
excludes: i) stock compensation (share-based payment) expenses and revaluation
of contingent consideration; ii) one-time expenses and other non-recurring
items; iii) amortisation of IP (but does not exclude amortisation of
capitalised software development costs), and; iv) impairments of goodwill and
acquired IP. Released game performance impairments are included in Adjusted
EBITDA.
3. Including non-cash impact of US$3.7 million of share-based payments.
4. Steam is the world's largest one-stop-shop platform for gamers to buy,
store and play video games.
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 145 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. ir@devolverdigital.com (mailto:ir@devolverdigital.com)
Harry Miller, Chief Executive Officer
Graeme Struthers, Chief Operating Officer
Daniel Widdicombe, Chief Financial Officer
Zeus (Nominated Adviser and Joint Broker) +44 (0) 20 3829 5000
David Foreman / Kieran Russell (Investment Banking)
Ben Robertson (Equity Capital Markets)
Panmure Liberum (Joint Broker) +44 (0) 20 3100 2000
Dru Danford (Investment Banking)
Rupert Dearden (Corporate Broking)
FTI Consulting (Communications) devolver@fticonsulting.com (mailto:devolver@fticonsulting.com)
Jamie Ricketts / Dwight Burden / Valerija Cymbal / Hermione Mellor +44 (0) 20 3727 1000
Management will host a presentation for analysts this morning. This is an
invitation only event. Please direct any enquiries
to devolver@fticonsulting.com (mailto:devolver@fticonsulting.com) if you
would like further information.
OPERATING REVIEW
2025: Continued growth driven by the strength of our balanced portfolio
Devolver released 15 new well-received titles in 2025 (2024: 10) with an
average Metacritic score of 78 (2024: 79). We finished the year with a
balanced portfolio that includes successful new releases across both
third-party publishing and internally-developed first-party IP.
We recorded strong performance from our third-party IP titles. Baby Steps
released with a Metacritic score of 76 and 90% very positive Steam user
reviews. Breakout hit BALL x PIT, released in October 2025, garnered an 87
Metacritic score and an overwhelmingly positive user review Steam score of
96%. In the first 10 weeks of release to the end of December 2025 it sold over
1 million units on Steam alone, contributing meaningfully to front catalogue
revenues. Our publisher subsidiary Big Fan also saw success with Monster Train
2, the sequel in the popular franchise, also with a high 87 Metacritic score,
further bolstered by a Game Pass subscription deal upon release.
Lower-cost third-party titles such as Mycopunk and Look Outside performed
ahead of expectations, demonstrating the benefits of a balanced investment
approach across budget tiers. GORN 2 was identified by Meta as the
best-selling Premium Game on its Virtual Reality platform to date in 2025.
Meanwhile, 1(st) party titles were also active, with Stronghold Crusader:
Definitive Edition from our subsidiary Firefly another success with sales
exceeding our already high expectations for the title. The Talos Principle:
Reawakened, the long-awaited Definitive Edition of this seminal game, was
released from our studio Croteam, a third title registering an excellent 87
Metacritic score. At the same time, our Seattle-based studio System Era
released the second Paid Downloadable Content (PDLC) release Megatech from
their long-running popular game Astroneer.
Overall, 2025 front catalogue revenues rose 218% year-over-year to US$37.9
million (2024: US$11.9 million), the highest quantum of new release revenue
for the last three years, accounting for 36% of total revenues for the year.
Back catalogue revenues were down 24% year-on-year to US$68.9 million (2024:
US$91.1 million), an improvement from the 38% annual fall in 1H 2025, as the
2H saw the Steam publisher sale and a greater proportion of platform deals.
The full revenue split in 2025 was 36% front catalogue, and 64% back
catalogue, a more balanced mix than at the first half.
Despite the lower share this year, our back catalogue remains a cornerstone of
the business. Early 2026 further reinforced the enduring strength of our
portfolio, with BALL x PIT seeing content updates and its launch onto console
and mobile, and new content for Cult of the Lamb - the substantial Woolhaven
PDLC - receiving widespread acclaim.
Overall, the new wave of content brought to market in 2025 has injected fresh
impetus into the back catalogue this year which should lead to further
positive growth again in 2026. This approach will further strengthen
Devolver's strategic flexibility and long-term earnings potential.
Platform releases drive further discoverability and revenue opportunity
Multiple Devolver titles featured in key showcase events are planned for
release on next-generation platforms, broadening reach, reducing platform
concentration risk and increasing tail revenue potential across install bases.
On the back of the 1H reveal of Switch 2 at Nintendo's April 2025 showcase
event, in which three future Devolver games were highlighted, we have now
launched Skate Story and BALL x PIT to this console, the first of 8 games we
have initially identified for introduction to Switch 2 going forward. Since
Switch 2 launched in June 2025, it has sold over 17m units, indicating strong
early adoption to the console. We look forward to several more Devolver games
coming to Switch 2 during 2026.
Massive Monster's enduring hit game Cult of the Lamb finally came to mobile,
being launched on the mobile platform subscription service Apple Arcade in
December 2025. The game entered the subscription service in December 2025
having received funding support from Apple, and since then has also generated
ongoing Bonus Pool payments based on the number of player/hours on the
platform. More recently, BALL x PIT released in March 2026 onto Apple App
Store and Google Play mobile platforms, a continuation of the introduction to
our most popular games to mobile formats.
FINANCIAL REVIEW
Unaudited results to December 31 2025
The unaudited preliminary results included in this announcement cover the
Group's combined activities for the twelve months ended 31(st) December 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 non-recurring
exceptional items, 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 annual results release.
P&L results and margins
Revenue performance was in line with guidance given at the start of the year,
rising 3.0% year-on-year to US$107.9 million, a continuation in growth on the
back of 2024's prior year improved result.
Gross Profit after non-cash impairments increased 10.1% year-on-year to
US$33.1 million. Gross margins expanded to 30.7%, up from 28.7% in 2024,
primarily due to an 11% reduction in marketing costs, and a 24% decline in
game development expenditure (that is expensed and not capitalised) in the
period.
Adjusted EBITDA and Adjusted EBITDA margins - pre impairments
Adjusted EBITDA pre impairments rose to US$11.4 million, up 18.5% from US$9.6
million in 2024. Adjusted EBITDA margins pre impairments improved to 10.6% for
full year 2025, compared to 9.2% in 2024.
Impairments to carrying value of released games
At year-end 2025 the Group assessed the balance sheet carrying value of
capitalised development costs of certain titles published in 2025 and previous
periods. It was determined that there was a need to impair their carrying
value based on continued low unit sales through to year end 2025 and reduced
future projections. The non-cash charge of US$4.3 million as a write-down for
impairment in their carrying value reduces 2025 Adjusted EBITDA (after
impairments) to US$7.1 million (2024: US$5.1 million).
Disciplined Cost Control, Adjusted EBIT
Cost control initiatives helped keep adjusted operating expenses under
control, down by 1.1% to US$26.5 million (2024: US$26.8 million). Overall
operating costs fell 7.9% to US$35.7 million (2024: US$38.7 million), due
largely to a 27.9% fall in amortisation expense of acquired IP and
depreciation of assets.
Adjusted EBIT was US$1.4 million after reflecting US$5.7 million of
amortisation of acquired IP and depreciation of assets.
Deferred tax asset write-down, Statutory Net Loss
During 2025, the Group made a non-cash write-down of deferred tax assets
totalling US$14.6 million, of which US$5.9 million related to cumulative Stock
Option Share-based payment expenses, given lack of visibility if such deferred
tax assets would be utilised. As a result, statutory net loss for 2025 was
US$16.0 million, compared to a loss of US$6.4 million in 2024.
Cash Balances
Cash holdings at end of December 2025 were US$36.6 million, up from US$34.7
million at the end of June 2025, as Devolver moved into a free cashflow
positive position in the 2H of the year. Devolver Group has no borrowings.
Equity Incentive Plans
In October 2025 Devolver shareholders approved a reset to the Company's equity
incentive arrangements with the aim of re-incentivising staff across the Group
to support the forward trajectory of the Company and build on the work over
the last 18 months.
Underwater stock options granted under the 2017 Equity Incentive Plan had
their exercise prices repriced to the prevailing fair market value of £0.27
per share. The quantum of those options was reduced by between 15% and 30%
dependent on original strike price. The repricing proposal was very well
received by employees across the Group with 92% uptake, resulting in a
reduction of 4.8m outstanding options from the 2017 Equity Incentive Plan.
In addition, a newly established 2025 Equity Inventive Plan was introduced and
designed to incentivise various employees at the leadership level of the
Company for performance that delivers value for shareholders in future, with a
grant of 21,687,070 options stock options at an exercise price of £0.255,
subject to annual vesting over 3 years (1/3 each year), with a 6-month lock up
at each vesting period.
Taken together with the 2025 Plan awards the total outstanding options at the
end of 2025 is 46.9 million.
CURRENT TRADING OUTLOOK
Trading in 2026 has started strongly so far, which bolsters our confidence
that we can deliver another consecutive year of growth in revenues and
Adjusted EBITDA for the full year. Given the timing of platform deals and our
Steam Publisher sale, we expect the 1H of 2026 to be significantly stronger
than the 2H. We have several substantial first party titles releasing through
the course of the year, including STARSEEKER: Astroneer Expeditions, as well
as numerous exciting third-party IPs. Taken together with the renewed positive
back catalogue momentum the Board believes that we will continue to show
steady progress, and we look forward to reporting more success through 2026.
We expect to continue free cashflow generation through the year which should
strengthen our strong balance sheet and offer further opportunities for growth
going forward.
Harry Miller
Chief Executive Officer
Consolidated Statement of Profit or Loss
Unaudited Audited
Year ended Year ended
31-Dec-25 31-Dec-24
Note US$'000 US$'000
Revenue 2 107,896 104,781
Cost of sales (74,808) (74,716)
Gross profit 33,088 30,065
Administrative expenses (35,664) (38,729)
Other income / (loss) (563) 1,496
Operating profit / (loss) (3,139) (7,168)
Finance costs (158) (288)
Finance income 728 769
Profit / loss before taxation (2,569) (6,687)
Income tax (expense) / benefit (13,407) 328
Loss for the period (15,976) (6,359)
Loss for the period is attributable to:
Equity holders of the parent (15,971) (6,141)
Non-controlling interests (5) (218)
Loss for the period (15,976) (6,359)
Basic and diluted loss per share ($) 3 (0.034) (0.013)
Non-IFRS measures
Adjusted EBITDA* before performance-related impairments 4 11,388 9,610
Adjusted EBITDA* 4 7,083 5,083
Adjusted EBIT* before performance-related impairments 4 5,715 1,738
Adjusted EBIT / (LBIT)* 4 1,410 (2,789)
*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 and one-time non-recurring items and
non-trading items.
*Adjusted EBIT is a non-IFRS measure and is defined as earnings before
interest, tax, share-based payment expenses, foreign exchange gains or losses
and one-time non-recurring items and non-trading items.
Consolidated Statement of Comprehensive Income
Unaudited Audited
Year ended Year ended
31-Dec-25 31-Dec-24
US$'000 US$'000
Loss for the period (15,976) (6,359)
Other comprehensive income: Items that may be reclassified
subsequently to profit or loss
Exchange differences on translation of foreign operations 1,181 (644)
Total comprehensive loss for the period (14,795) (7,003)
Total comprehensive loss is attributable to:
Equity holders of the parent (14,790) (6,785)
Non-controlling interests (5) (218)
Total comprehensive loss for the period (14,795) (7,003)
Consolidated Statement of Financial Position
Unaudited Audited
As at As at
31-Dec-25 31-Dec-24
Note US$'000 US$'000
ASSETS
Non-current assets
Goodwill 5 31,902 31,902
Other intangible assets 5 103,981 99,337
Property, plant and equipment 227 162
Right of use asset 705 967
Employee loans 269 327
Deferred tax assets - 7,554
Total non-current assets 137,084 140,249
Current assets
Trade and other receivables 16,338 16,855
Cash and cash equivalents 36,618 41,645
Employee loans 458 442
Short-term investments - 464
Prepaid income tax 2,610 1,570
Total current assets 56,024 60,976
Total assets 193,108 201,225
EQUITY AND LIABILITIES
Equity
Share capital 47 47
Share premium 157,683 157,683
Retained earnings 28,947 43,514
Translation reserve (57) (1,238)
Capital redemption reserve (32,926) (34,469)
Equity attributable to owners of the parent 153,694 165,537
Non-controlling interest (307) (302)
Total equity 153,387 165,235
Non-current liabilities
Trade and other payables 1,496 10,569
Deferred tax liabilities 6,086 -
Lease liability 601 876
Deferred revenue - -
Total non-current liabilities 8,183 11,445
Current liabilities
Trade and other payables 29,858 19,953
Lease liability 279 228
Deferred revenue 1,222 3,950
Current tax payable 179 414
Total current liabilities 31,538 24,545
Total liabilities 39,721 35,990
Total equity and liabilities 193,108 201,225
Consolidated Statement of Changes in Equity
Share capital Share premium Capital redemption reserve Translation reserve Retained earnings Attributable to owners of the parent 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 (34,469) (1,238) 43,514 165,537 (302) 165,235
Loss for the period - - - - (15,971) (15,971) (5) (15,976)
Currency translation differences - - - 1,181 - 1,181 - 1,181
Other movements - - 1,543 - (1,116) 427 - 427
Fair value adjustment - - - - - - - -
Transactions with owners in their capacity as owners:
Loss on EBT - - - - (1,157) (1,157) - (1,157)
Share-based payments - - - - 3,677 3,677 - 3,677
Total transactions with owners - - - - 2,520 2,520 - 2,520
Balance at 31 December 2025 (unaudited) 47 157,683 (32,926) (57) 28,947 153,694 (307) 153,387
Share capital Share premium Capital redemption reserve Translation reserve Retained earnings Attributable to owners of the parent 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 (34,531) (594) 47,092 158,118 (84) 158,034
Loss for the period - - - - (6,141) (6,141) (218) (6,359)
Currency translation differences - - - (644) - (644) - (644)
Other movements - - 62 - (106) (44) - (44)
Fair value adjustment - - - - (737) (737) - (737)
Transactions with owners in their capacity as owners:
Loss on EBT - - - - (105) (105) - (105)
Share-based payments - - - - 3,511 3,511 - 3,511
Share placement 2 9,785 9,787 9,787
SES 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 (unaudited) 47 157,683 (34,469) (1,238) 43,514 165,537 (302) 165,235
Consolidated Statement of Cash Flows
Unaudited Audited
Year ended Year ended
31-Dec-25 31-Dec-24
US$'000 US$'000
Profit / (loss) for the period before taxation (2,569) (6,687)
Adjustments for:
Depreciation of tangible fixed assets 133 155
Depreciation of right-of-use assets 262 220
Amortisation of intangible fixed assets 24,356 24,861
Impairment of intangible fixed assets 4,804 4,527
Finance income (728) (769)
Finance costs 158 288
Share-based payment charge 3,677 3,511
Foreign exchange movements (502) (141)
Fair value adjustments 540 -
Other non-cash movements (2,415) (2,208)
Movements in working capital:
Receivables 1,011 3,997
Payables 3,075 (3,956)
Cash inflow from operations 31,802 23,798
Taxation paid (2,657) (1,534)
Taxation received 756 -
Net cash inflow from operating activities 29,901 22,264
Cash flows from investing activities
Purchase of intangible assets (36,278) (30,654)
Purchase of tangible assets (217) (51)
Acquisitions of businesses, net of cash acquired - -
Net cash outflow from investing activities (36,495) (30,705)
Cash flows from financing activities
Share placement - 9,785
Interest received 711 751
Interest paid (443) (171)
Repayment of lease liabilities (383) (160)
Net cash (outflow)/inflow from financing activities (115) 10,205
Cash and cash equivalents
Net (decrease) / increase in the period (6,709) 1,764
At 1 January 41,645 40,424
Foreign exchange movements 1,682 (543)
At 31 December 36,618 41,645
Note 1: Basis of preparation and consolidation
After reviewing the Group's forecasts and projections and taking into account
current net cash balances, the Directors have a reasonable expectation that
the Group has adequate resources to continue in operational existence for the
foreseeable future, which is defined as period of not less than 12 months from
the date of publication of this Annual Report. The Group has therefore adopted
the going concern basis in preparing the Annual Report.
The financial presentation in this release should be read in conjunction with
the notes to the consolidated financial statements as at and for the full year
ended 31 December 2025, as contained within this release.
These preliminary unaudited financial statements were approved by the Board of
Directors on 8(th) April 2026.
Note 2: Revenue
Unaudited Audited
Year ended Year ended
31-Dec-25 31-Dec-24
US$'000 US$'000
Revenue analysed by class of business:
Game publishing 107,896 104,781
Revenue analysed by timing of revenue:
Transferred at a point in time 107,896 104,781
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 Audited
Year ended Year ended
31-Dec-25 31-Dec-24
US$'000 US$'000
Loss attributable to owners of the company (15,971) (6,141)
Weighted average number of shares 474,505,562 456,953,855
Dilutive effect of share options - -
Weighted average number of diluted shares 474,505,562 456,953,855
Basic and diluted loss per share ($) (0.034) (0.013)
Note 4: Adjusted Results
Unaudited Audited
Year ended Year ended
31-Dec-25 31-Dec-24
US$'000 US$'000
Revenue
Reported Revenue 107,896 104,781
Reported Revenue growth 3.0% 13.0%
Gross Profit
Reported Gross Profit 33,088 30,065
Reported Gross Profit margin 30.7% 28.7%
Performance-related impairments 4,305 4,527
Adjusted Gross Profit 37,393 34,592
Adjusted Gross Profit margin pre performance-related impairment margin 34.7% 33.0%
Adjusted EBITDA*
Adjusted EBITDA 7,083 5,083
Adjusted EBITDA margin 6.6% 4.9%
Performance-related impairments 4,305 4,527
Adjusted EBITDA pre performance-related impairment 11,388 9,610
Adjusted EBITDA pre performance-related impairment margin 10.6% 9.2%
Adjusted EBIT
Adjusted EBIT / (LBIT) 1,410 (2,789)
Adjusted EBIT / (LBIT) margin 1.3% (2.7)%
Performance-related impairments 4,305 4,527
Adjusted EBIT pre performance-related impairment 5,715 1,738
Adjusted EBIT pre performance-related impairment margin 5.3% 1.7%
*Adjusted EBITDA is a non-IFRS measure and is defined as earnings before
interest, tax, depreciation, amortisation (but not excluding amortisation of
capitalised software development costs), share-based payment expenses, foreign
exchange gains or losses, fair value adjustments and one-time non-recurring
items and non-trading items.
*Adjusted EBIT is a non-IFRS measure and is defined as earnings before
interest, tax, share-based payment expenses, foreign exchange gains or losses,
fair value adjustments and one-time non-recurring items and non-trading items.
A reconciliation from the operating loss to adjusted EBITDA and adjusted EBIT
is set out in the tables below:
Unaudited Audited
Year ended Year ended
31-Dec-25 31-Dec-24
US$'000 US$'000
Operating profit / (loss) (3,139) (7,168)
Share-based payment expenses 3,677 3,511
Amortisation and depreciation of non-current assets 5,278 7,497
Depreciation of property, plant and equipment 133 155
Depreciation of right-of-use asset 262 220
Foreign exchange losses (502) (141)
Non-recurring, one time expenses 96 710
Impairment of cancelled unreleased titles 499 -
Fair value adjustment 532 251
Other taxes 247 48
Adjusted EBITDA 7,083 5,083
Performance-related impairments 4,305 4,527
Adjusted EBITDA pre performance-related impairments 11,388 9,610
Unaudited Audited
Year ended Year ended
31-Dec-25 31-Dec-24
US$'000 US$'000
Operating profit / (loss) (3,139) (7,168)
Share-based payment expenses 3,677 3,511
Foreign exchange losses (502) (141)
Non-recurring, one time expenses 96 710
Impairment of cancelled unreleased titles 499 -
Fair value adjustment 532 251
Other taxes 247 48
Adjusted EBIT / (LBIT) 1,410 (2,789)
Performance-related impairments 4,305 4,527
Adjusted EBIT pre performance-related impairments 5,715 1,738
The operating loss is arrived at after charging the following items to cost of
sales:
Unaudited Audited
Year ended Year ended
31-Dec-25 31-Dec-24
US$'000 US$'000
Cost of sales
Royalty expense 42,713 43,112
Software development costs 2,501 3,306
Marketing expenses 5,711 6,407
Amortisation of software development costs 19,079 17,364
Impairment of software development costs 4,804 4,527
Total 74,808 74,716
Note 5: Intangible Assets
Purchased intellectual property Software development cost Others Subtotal other intangibles Goodwill Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Cost
As at 31 December 2024 (audited) 79,959 154,709 - 234,668 79,569 314,237
Additions - 33,786 18 33,804 - 33,804
Disposals - - - - - -
As at 31 Dec 2025 (unaudited) 79,959 188,495 18 268,472 79,569 348,041
Amortisation and impairment
As at 31 December 2024 (audited) 45,450 89,881 - 135,331 47,667 182,998
Amortisation charge for the period 5,270 19,079 7 24,356 - 24,356
Impairment charge for the period - 4,804 - 4,804 - 4,804
As at 31 December 2025 (unaudited) 50,720 113,764 7 164,491 47,667 212,158
Carrying amount
As at 31 December 2024 (audited) 34,509 64,828 - 99,337 31,902 131,239
As at 31 December 2025 (unaudited) 29,239 74,731 11 103,981 31,902 135,883
Purchased intellectual property Software development cost Subtotal other intangibles
Others Goodwill Total
US$'000 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 Dec 2024 (unaudited) 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 (unaudited) 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 (unaudited) 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. For the titles
exhibiting indicators of impairment, the Group recorded an impairment loss of
$4.8 million against the carrying value of software development costs at 31
December 2025, of which $4.3m was for released titles and $0.5m for a
cancelled, unreleased game.
The impairment is related to titles published by Devolver Digital Inc.,
Firefly Studios and Good Shepherd Entertainment / Big Fan Games. As a result
of lower than expected sales and future projections, these titles were
impaired to their recoverable amounts, being value in use.
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 calculated based on the particular circumstances of the Group
and its CGUs, derived from its Weighted Average Cost of Capital.
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