Digital Bros (DIB) Q1 24/25 earnings summary

Executive summary

• Revenue increased 6.2% year-over-year to €21.5 million, driven entirely by back catalogue sales as no new games were launched in the quarter.

• EBITDA more than doubled to €5.9 million, reflecting a higher-margin product mix and a 26.9% reduction in operating costs due to prior year reorganization.

• EBIT remained negative at €1.4 million but improved by €1.7 million year-over-year despite higher depreciation and amortization.

• Net loss narrowed to €2.3 million from €3.1 million year-over-year.

• Workforce reduced by over 30% year-over-year, mainly in development studios.

Financial highlights

• Premium Games revenue grew 13% to €17 million, representing 79.1% of total revenue, with Assetto Corsa franchise contributing €5.8 million.

• Free to Play revenue declined 21% to €3.5 million; relaunch planned for H2.

• Italian Distribution revenue increased 28.9% to €909 thousand.

• Digital sales accounted for 89% of total net revenue; international markets made up 94%.

• Gross profit rose to €13.9 million, with gross margin improving to 64.5% from 61.5% year-over-year.

• Net financial debt increased to €30.1 million, up €5.3 million from June 2024.

Outlook and guidance

• Assetto Corsa EVO PC Early Access release set for January 2025; another major Premium Games launch expected in Q4.

• Free to Play relaunch and new releases expected to improve H2 revenues and margins.

• Full-year revenue projected to decline, but EBIT expected to remain stable versus June 2024.

• Net financial debt anticipated to peak in Q2 and decrease by fiscal year-end.

• No impact from PAYDAY 3 earn-out included due to ongoing contractual disputes.