Frontier Developments (FDEV) H1 2025 earnings summary

Executive summary

• Achieved a strong financial turnaround in H1 FY25, returning to profitability with revenue of £47.3m in line with expectations and underlying sales up 19% year-over-year.

• Adjusted EBITDA profit of £4.4m, a swing of over £9m from a loss of £4.9m in H1 FY24, driven by significant cost reductions.

• Cash position improved to £27.2m at 30 Nov 2024 and further to £30.5m at 31 Dec 2024.

• Planet Coaster 2 launched in November, selling over 400,000 units and contributing 22% of H1 revenue.

• Elite Dangerous saw a strong revenue uptick from new content and improved monetisation.

Financial highlights

• Revenue of £47.3m, down 1% year-over-year; gross margin improved to 70% from 69%.

• Adjusted EBITDA profit of £4.4m vs. loss of £4.9m in H1 FY24.

• Operating profit of £4.5m compared to a loss of £33.3m in H1 FY24.

• Profit after tax: £4.4m (vs £33.1m loss); basic EPS: 11.4p (vs -85.7p prior year).

• Cash at period end £27.2m, up from £17.1m a year ago.

Outlook and guidance

• Performance year-to-date supports delivery of FY25 revenue and profitability in line with expectations.

• Third Jurassic World game scheduled for FY26, aligned with the new film release.

• Unannounced CMS game in development for FY27, on track.

• Strong festive sales post-period, third-highest in company history, support positive outlook.