CI Games (CIG) Q2 2024 earnings summary

Executive summary

• Net revenue for H1 2024 reached PLN 58.3m, up from PLN 22.2m in H1 2023, driven by "Lords of the Fallen" release, which contributed 72% of sales; "Sniper Ghost Warrior Contracts 2" added 14% and United Label S.A. games 4%.

• Net profit for H1 2024 was PLN 2.7m, a turnaround from a net loss of PLN 3.1m in H1 2023; EBITDA rose to PLN 38.0m from PLN 0.2m.

• Operating margin improved to 5.4% from -18.0% year-over-year; net margin was 4.6% versus -14.1% in H1 2023.

• Key events included the entry of "Lords of the Fallen" into Game Pass, a publishing deal with Epic Games for the sequel, and two rounds of targeted layoffs to optimize costs.

Financial highlights

• Gross profit for H1 2024 was PLN 17.1m, up from PLN 13.6m in H1 2023, but sales margin declined to 29.3% from 61.1% due to higher amortization of "Lords of the Fallen."

• Selling costs decreased to PLN 5.5m from PLN 7.8m, reflecting lower marketing spend post-launch.

• General and administrative costs were slightly lower at PLN 8.6m, including one-off dismissal costs.

• Net cash from operating activities was PLN 28.7m, up from PLN 17.6m; net cash used in investing was PLN (30.6)m, mainly for new game development.

• Net cash from financing activities was PLN (16.9)m, reflecting repayment of two bank facilities and drawing a new PLN 15m overdraft.

Outlook and guidance

• The Group expects lower expenses and improved cash flow from recent headcount reductions.

• The publishing agreement with Epic Games for "Project 3" is expected to positively impact future cash flow and revenue after release.

• No financial forecasts were published for H2 2024.