Frontier Developments (FDEV) H2 2026 earnings summary

Executive summary

• Record financial performance in FY 2026 driven by a strategic focus on creative management simulation (CMS) games, with revenue up 16% to £104.8 million and adjusted operating profit up 62% to £21.4 million year-over-year.

• Leadership changes included Jo Cooke stepping up as CEO, a new CMO joining, and the founder transitioning to a non-executive director role, with continued focus on the CMS strategy.

• A strong roadmap of new content and CMS games is planned, including major releases and a new Disney partnership.

• Emphasis on player engagement, long-term franchise nurturing, and leveraging proprietary technology for competitive advantage.

Financial highlights

• FY 2026 revenue reached £104.8 million, up 16% year-over-year, with Jurassic World Evolution 3 as a key driver.

• Adjusted operating profit hit a record £21.4 million, up 62% year-over-year, with a margin just over 20%.

• Gross margin declined to 66.7% from 69.9% due to a higher mix of licensed IP games.

• Cash at year-end was £44.0 million, rising to £51.4 million by August 2026, aided by a one-off tax credit.

• Special dividend of £5 million declared, reflecting strong financial position and confidence.

Outlook and guidance

• Planet Zoo 2 launches next month, with Warhammer 40,000: Chaos Gate - Deathwatch and a new Planet franchise title scheduled for FY 2027 and FY 2028, respectively.

• Continued commitment to releasing one CMS title per year and leveraging the new Disney partnership for future growth.

• Gross margin expected to recover to around 68% in FY 2027.

• Tax credits and reliefs projected at £8-9 million for FY 2027.

• Ongoing investment in technology, talent, and player engagement to sustain growth.