Don't Nod Entertainment (ALDNE) H1 2024 earnings summary

Executive summary

• Released Banishers: Ghost of New Eden in February 2024, but sales underperformed expectations, leading to significant asset impairments.

• Operating revenues declined 11% year-over-year to €14.6 million due to underperformance of recent game launches and fewer new co-productions.

• Temporarily paused development of projects P12 and P13, resulting in further asset write-downs.

• Announced a potential reorganization plan that could impact up to 69 jobs in France to restore competitiveness and secure resources.

• Signed a major innovation agreement under France 2030 for AI-driven narrative game tools.

Financial highlights

• Revenue for H1 2024 was €1.9M, down from €2.7M year-over-year.

• Operating EBITDA including tax credits fell to -€1.3 million from €1.1 million year-over-year.

• Net result was a loss of €42.4M, sharply down from a €0.9M loss in H1 2023, mainly due to nearly €40M in asset impairments and write-offs.

• Cash and cash equivalents at June 30, 2024, were €45.5M, down from €54.8M at year-end 2023.

• Operating EBIT including tax credits dropped to -€34.5M from €0.4M year-over-year.

Outlook and guidance

• Lost Records: Bloom & Rage scheduled for release in two parts in February and March 2025.

• Koira set for April 2025 launch.

• Ongoing development continues for Lost Records: Bloom & Rage, P10, and P14 (releases before end of 2027).

• Project conception phases are being reoriented to reach a wider audience and increase partnership opportunities.

• Focus on three core genres and maximizing IP revenues; ongoing cost optimization and production refocus.