CD Projekt (CDR) Q2 2024 earnings summary

Executive summary

• H1 2024 saw strong sales growth, driven by Cyberpunk 2077: Phantom Liberty and The Witcher franchise back catalogue, supported by promotional activities, free trials, and mod kits, boosting both sales and community engagement.

• Net profit for H1 2024 reached PLN 170 million, up 88% year-over-year, with significant margin expansion and robust cash generation.

• Franchise engagement expanded with new brand experiences, including tabletop games, apparel, and a pop-up anime store in Japan.

• No significant unusual events impacted operations in the first half of 2024.

Financial highlights

• Group sales revenue for H1 2024 reached PLN 425 million, up 31% year-over-year, driven mainly by Cyberpunk and Phantom Liberty.

• Net profit increased 88% year-over-year to PLN 170 million, with net profitability at 40%.

• EBIT grew 43% to PLN 140.2 million, and gross profit on sales rose 38% to PLN 300 million.

• Financial reserves in cash, deposits, and bonds increased by PLN 56 million, totaling PLN 1.37 billion at June 2024.

• Dividend of nearly PLN 100 million (PLN 1.00 per share) paid out at the end of June.

Outlook and guidance

• No new releases planned for 2024, but strong catalog performance is expected to continue funding new projects and dividends.

• Ongoing R&D investments focus on Polaris and Sirius (development phase), and Orion and Canis Majoris (research phase), with 639 developers engaged as of July 2024.

• Team growth for Orion is anticipated to double over the next year; Polaris team is considered complete at current size.

• Incentive plans for 2023–2027 are in place, with performance and market conditions tied to share price and profit targets.