Earnings call transcript: 11 Bit Studios Q2 2025 misses revenue forecast

11 Bit Studios reported its second-quarter 2025 earnings, revealing a revenue shortfall against projections. The company posted actual revenue of SEK 41.2 million, falling short of the anticipated SEK 44.7 million, marking a 7.83% negative surprise. According to InvestingPro analysis, the company currently appears undervalued based on its Fair Value estimate, which may explain why, despite this miss, the company’s stock price rose by 1.42% to 182.6, reflecting a positive market reaction amidst broader strategic developments and new product announcements.

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Key Takeaways

• Revenue for Q2 2025 was SEK 41.2 million, below the forecast of SEK 44.7 million.
• Stock price increased by 1.42% to 182.6 following the earnings release.
• Significant growth in first-half 2025 revenues, up 90% year-over-year.
• Upcoming product launches include "Moonlighter Two" and "Death Howell."
• The company is actively pursuing Game Pass deals to enhance revenue streams.

Company Performance

11 Bit Studios demonstrated robust growth in the first half of 2025, with revenues increasing by 90% compared to the previous year. InvestingPro data reveals even more impressive metrics, with a 172.31% revenue growth over the last twelve months and an exceptional gross profit margin of 92.79%. The company’s diversified portfolio, including titles like "The Altars" and "Frostpunk Two," contributed significantly to its financial performance. Despite the revenue miss this quarter, the company’s strategic focus on expanding its game offerings and securing lucrative deals positions it well in the competitive gaming industry.

Financial Highlights

• Revenue: SEK 58 million for the first half of 2025, a 90% increase year-over-year.
• Operating Profit: SEK 18 million with a 30.7% margin.
• EBITDA: SEK 29 million with a 49.7% margin.
• Net Profit: SEK 8.5 million with a 14.5% net profit margin.
• Cash Balance: PLN 74 million as of July 2025.

Earnings vs. Forecast

The actual revenue for Q2 2025 was SEK 41.2 million, missing the forecast of SEK 44.7 million by 7.83%. This shortfall is notable compared to the company’s historical performance, which has generally met or exceeded expectations. The miss reflects challenges in achieving projected sales targets, possibly due to competitive pressures or market conditions.

Market Reaction

Despite the revenue miss, 11 Bit Studios’ stock price rose by 1.42% to 182.6. This increase suggests investor confidence in the company’s strategic direction and upcoming product launches. The stock’s performance remains within its 52-week range, with a high of 646 and a low of 149.2, indicating potential for future growth. Notably, InvestingPro analysis shows the stock has a beta of -0.32, suggesting it often moves counter to market trends, which could provide portfolio diversification benefits.

Outlook & Guidance

Looking ahead, 11 Bit Studios is targeting better revenue and net profit outcomes for the full year 2025 compared to 2024. The company plans to release "Death Howell," "Moonlighter Two," and "Frostpunk 1886," alongside potential new publishing titles in 2026. These initiatives are expected to bolster the company’s financial performance and market position.

Executive Commentary

Przemek, CEO, emphasized the company’s pursuit of Game Pass deals, stating, "We are constantly looking for Game Pass deals," highlighting the strategic importance of these partnerships. Martin, CFO, reiterated the company’s commitment to achieving better revenue and net profit targets, saying, "Our plan remains to achieve better revenue and net profit targets."

Risks and Challenges

• Currency exchange losses of SEK 8 million, impacting financial results.
• Competitive pressures in the gaming industry, particularly in Q4.
• Dependence on successful product launches to drive future growth.
• Potential delays in development projects or product releases.
• Macroeconomic factors affecting consumer spending and gaming demand.

Q&A

During the earnings call, analysts inquired about the early access strategy for "Moonlighter Two" and the sales performance of "Frostpunk Two." Executives addressed these questions, providing insights into the company’s publishing and development pipeline and discussing strategies to mitigate currency exchange challenges.

Full transcript - 11BIT (11B) Q2 2025:

Martin Balevaider, CFO, Eleven Bit Studios: Good morning, ladies and gentlemen. Welcome to eleven Bit Studio’s conference to present the First Half twenty twenty five Financial Reports, which we had the pleasure of publishing yesterday. I’d like to present on my right to Ms. Joao Marshall, CEO of eleven Bit Studios. My name is Martin Balevaider.

I’m the CFO. So without further ado, I’d like to recap and show you a summary of our financial results that were published yesterday. In the 2025, we reported revenues of SEK 58,000,000. This represents a 90% increase on the corresponding period in 2024. Operating expenses reached a level of SEK 40,000,000, which meant that our operating profit for the first six months of 2025 was SEK 18,000,000, an operating profit margin of just over 30%.

EBITDA for the same period was SEK 29,000,000, representing a margin of 49.7%. And we reported net profit of the period of SEK 8,500,000.0 or 14.5% net profit margin. Moving on to a quick recap of our balance sheet. As at the June, we had assets of over PLN $265,000,000. Within that number, current assets total PLN 88,000,000.

We had a high trade receivable balance of PLN 35,000,000. And cash and equivalents at the June totaled PLN 52,000,000. Here, I’d just like to add that as our trade receivables are obviously monetized in the next month, our cash balance at the July was 74,000,000. Liabilities of PLN 27,000,000 and equity of PLN $238,000,000. Moving on to the third and final slide of this very short introduction.

We present a breakdown of our revenue for the 2025. In first position, we had revenue generated following the release of The Altars in June of SEK 20,000,000. Frostbunk two in the same period generated SEK 13,000,000 of revenue. And here, I’d just like to add that the revenue number for Frostbunk two includes ongoing sales as well as portions of the Microsoft Game Pass revenue that were allocated and recognized in the first half for Frostpunk two. Frostpunk one also continues to perform well, generating almost GBP 8,000,000 of sales in the ’5.

Then further down the list, The Swar of Mine and The Tau Maturge, both of which generated quite similar profit numbers of approximately GBP 4,500,000.0 of revenue numbers of GBP 4,500,000.0. And then our other cycles generated 8,000,000, bringing the total for the half year up to GBP 58,000,000. So that concludes a short presentation, a short summary of our financial results we were published. And now we go over to the Q and A session, but I’d like to hand you over to Pranek.

Przemek, CEO, Eleven Bit Studios: Hi, everyone. Awesome to meet you again around those reports that we publish. So as as Martin showed some data around our first half, that was a really fruitful and intense as always at 11 bit half any years, etcetera. It’s like you you probably are used to it already. I you saw the data from Martin.

I highly advise you also to read the investor’s letter that we published yesterday. It covers not only the data, but also the facts, the key stuff that happened around that year. And it’s a good summary to be in line on what’s going on at eleven Bit Studios. And like for today, we we shared you this that short data summary. And, like like like like in the past past times, we would like to switch to q and a and talk with you guys.

We had a lot of questions from you. That’s awesome. We are prepared for those questions. We’ve prepared for those questions, like yesterday and then day before. Thanks for all the all of what you what you asked around eleven bit studios.

And also, if you’d like to ask some other question, please push those through our email during that presentation. If the time will be right, we’ll still be able to answer the additional ones that comes during our talk today. So, welcome you again and let’s start talking. Martin, I think the question is yours first, so I’m giving it to you.

Martin Balevaider, CFO, Eleven Bit Studios: Thank you very much, Przemek. Let me just read the question first of all. The results show a write down for the impairments of one of the games over 200,000 in Swarta. Could you please provide more information on this? And is there a risk of further write downs in subsequent quarters?

Thank you for the question. This small write down was on Creatures of Ava, one of our publishing titles, 200,000 in total. If I can just remind you, I’m sure you’re aware, but we wrote down this project by a more significant amount of 7,000,000 in December 2024. So that relates to the $200,000 relates to Creatures of Ava. Regarding the second half of the question, is there a risk of further write downs in subsequent quarters?

What I would say is that at eleven Bit Studios, in accordance with our accounting policy, we conduct impairment tests on all our IP assets, both those that have been released and those that are under development. We conduct impairment tests twice a year. And those are based on essentially a DCF model of expected revenues, expected cost completion, discounted to the balance sheet dates as our cost of capital and then compared with the carrying value of the asset that we have in our books. And we will continue to conduct those tests in the future. The next set of tests will be conducted at the end of the year.

And that’s really all I can say on that question. Looking on going on to the second question, which I think also is directed to me. Could you please explain the decrease in remuneration in the 2025? That’s another good question. As you can see from our financial report that we published, wages and salaries decreased by 42% in the 2025 compared to the corresponding period last year.

And that decrease was essentially because we had very large reserves for bonuses still accounted for in the 2024. We don’t have reserves for bonuses on that scale in the 2025. And the other aspect is that we also wrote back the cost of our share motivation program, but the main factor in the decrease was actually the decrease in the bonus for in the reserve for bonuses. Coming on to question number three, what parts of revenue in the 2025 came from Microsoft? We write in the notes on sales revenue that 96% of our revenue was generated by our 10 largest partners.

I think you’ll also find in the notes that revenue generated by Steam was just below 50%. So clearly, the remainder then comes from all our partners and platforms, including Microsoft. But according to our agreements with Microsoft, we can’t share the exact details with you, I’m afraid. Coming on to question number four. In the first half of the year, you recorded over GBP 8,000,000 in financial losses due to exchange rate differences.

Why don’t you hedge against exchange rate fluctuations? Yes, clearly, our results were impacted in the 2025 by the decline in the value of the dollar compared against the Polish Swatter. I would say that 80% of our revenue is generated in U. S. Dollars.

The remainder, approximately 15%, is generated in euro and the rest in other currencies. So clearly, we are an exporter. The dollar swap exchange rate is very important for us. And then the decline that we saw in the 2025 led to over NOK 8,000,000 currency losses in the 2025. But to answer the question, we do hedge against currency differences by entering into forward contracts.

That’s the first part of the answer. But I would qualify that by saying, in order to do this, we have to have a reasonable forecast of when our cash flows are going to be in any particular month over the near term to implement this policy. But we have entered into forward contracts to sell dollars at a fixed rate. And the second part of the answer, we also now hold considerably more cash in euro than in dollars. Certainly, we hold far more euros now than we did at the corresponding period twelve months ago.

So I think that answers the question. And if I can, I’d like to move on to question number five. At the investor conference in April, you declared that at the end of the year, the company would have more cash than at the 2024. Meanwhile, its level has fallen to GBP 52,000,000 from GBP 65,000,000 at the year end. Is the plan to increase its level still valid?

Yes, we had CHF 70,000,000 in cash at the 2024. And as I mentioned, when I was going through the presentation, cash at the July was over 74,000,000, so it has increased. And I can say that I still expect our cash balances to be higher by the end of the year. And I see I think we’ve had a whole batch of financial questions have come in and have been grouped together. So question number six.

Do you stand by your statement that this year’s results will be better than those achieved in 2024? Does this apply to both revenue and net profit? And what can we expect after ’twenty six when you are not planning any releases? Taking the first part of that question, yes, it still remains our plan to achieve a better revenue and net profit targets for 2025 when compared with 2024. But we have to be also very realistic that we’re operating in a completely different exchange rate environment from twelve months ago.

And that clearly puts pressure on us in achieving our goals at the current levels of the U. S. Dollar, Polish, what the exchange rate. So it is more challenging. Our plan remains as it is, but it is more challenging.

And then, of course, we have new titles that are still going to be released. I’m sure Pramek is going to say more about those in the later parts of this discussion. And clearly, we have to see how those new titles, Moonlighter two, Death Howell, perform and monetize when compared against our forecasts that we have for them. What can we expect after 2026? I’m afraid that’s a little bit too far in the future and I can’t comment on that question.

So I’ll leave it at that and then move on to question number seven. If I can, perhaps Pranek, I’ll read the question and then hand over to yourself. In the report, you informed that you’re conducting conceptual work on games P12 and P13. Can you tell us more about this? Do both projects already have leads?

How large are the teams behind them? When will work on P14 and P15 begin?

Przemek, CEO, Eleven Bit Studios: Thanks, Martin. Hi again, guys. Like, regarding coming back to the question that was the previous one, like, regarding 02/1926. Also, during that presentation on a bit on that because there was a question around 02/1926. So you will know a bit more what’s the future, like, how we look at it, what we want to publish, etcetera, etcetera.

So be a bit patient. Like like, in a few minutes, you will hear a bit more around that. So regarding the question of the projects internal projects, a wider question. Thanks, guys. So, well, first, it’s already in prototyping phase.

We are a team under a bit under 10 people currently. It’s a very fast progress. I I don’t know I know that doesn’t tell you much, but, like, like, we are doing it very fast. It’s like it looks very optimistic. Like, it’s very early.

Again, we have a design for the game, like, idea, design, etcetera. We started prototyping the game. We have a a kind of a small core with leads in key areas. So there is a a team that is, like, really constructed currently around prototyping the the the the new game. And if everything goes well, like, the game will be published somewhere in like, ’28, 2029.

It’s around, like, what we said at the conference. So, yeah, we we’ll still keeping to that. Like, it’s a it’s a it’s a good progress currently. We love the idea. Like, we are we we have still a lot to do, but everything is progressing well.

That’s that’s what I can see. And then I said, like, the the the date you know currently is confirmed as for now. Of course, it’s very early. We are under 10, something like that. So bear that in mind, but it’s looking good as for now.

So p fourteen, it’s a much smaller team than currently than the than the p twelve. It’s like the the the director for that is Kubastokalski. I know that there was another question around that, so I will follow-up later on again with more detail. So he’s working on the on the design, on the idea of the of the of the new game. He has some some help from other team other team members, but but they are working half part time on that.

So it’s not a, like, a, like, a larger team or something like that. It’s mainly Kuba with some people, like, currently working and helping him with the with the design, with some kind of tests, etcetera, around that. So that’s that that’s it around project p 14. And, like, going back to the question, when will you work on p 14 and p 15 begin? So if everything goes well as we planned and as we plan currently, like, p 14 will start start its work this year, somewhere around this year, and p 15 next year.

So so I hope that’s that’s all. I I believe that’s all what we wanted to say around that question. And the next one, I know it’s for me too. What might be the budget for Frostbunk one eight eight And for p12, do you maintain that these games will debut in 2027 and 2029?

When should we expect the release of your next in house games? A bit of that was covered already in the previous question, but, like, let’s let’s still try to explain it to you. So first, the Frost the the new Frost Bank. As for now, everything goes as planned. We currently have 17, exactly, 17 people around the team.

We should have around twenty twenty five people at the end of this year in the team. And it’s almost the target size, so we are fast progressing thing, like like, in direction to the to the production phase. Still nothing not everything is, like, set, etcetera, etcetera. We still have, like, next month, we have a lot of verifications. You must also know that.

Like, the team is preparing a lot of, like, stuff for us to verify, to check, etcetera, etcetera, on the side. But that that it’s already is a good constructive team around the around the project. And, yeah, we support the data that we that we all shared with you previously, 02/1927. It’s like, yeah, we are we we don’t see any risk around that currently. And, like, looking at all of that, the scale of the team, the dates, etcetera, you should, I believe, have rough calculations on what’s the development budget for that game.

I don’t want to say more. We don’t share the budgets. You know that. But you know the numbers. I just shared it with you.

You know the dates, like, if everything goes plan as planned, it will be twenty twenty twenty seven. So we, like, you more or less can, like, assume what’s the budget for the for the game. And, yeah, for the 12, p I already confirmed the dates in the previous question. So let’s let’s go let’s go forward, guys. The next question also for me, is the 2025 release of Death Hall still on track?

When will we know the release date? What are your expectations for this game? I have the answer from from our publishing director guy. So, like, I will just read it to you guys and add a bit of from what I have and what I know around the game. So that’s always still on track for its planet 2025 release.

The game is nearly finished, and it is nearly finished. I know what what the state of the game is. We are just polishing the final details and fixing the bugs, just final phases of of of development. But there aren’t any risk around that. So, like, we just need to, like, debit till the end, and and it and and it should be really, really great game.

The main challenge now is timing. Q 4, if you observe what’s going on, Q 4 is crowded with game launches. It’s going to be really busy. Again, as always, recently, so, like, we are getting used to that that approach and to that that situation. So q four is crowded with game launches.

So choosing a release date that gives the game the best chance to shine isn’t straightforward right now. You you you you might you might know that. We are right now looking for how situation evolves around the launch and in other launches. You probably saw that there are, like, quick launches already announced recently, etcetera, etcetera. So we are looking how it all evolves and like we will pick the date that will like maximize the game potential.

We are just like looking for the best. Of course, we have one that we believe is the closest right now, but we are not yet ready to announce the game. But, again, it’s only to maximize the game’s potential whether by avoid by avoiding heavy competition or by taking advantage of valuable partnership opportunities. That is also a point with each of our premier. You probably saw that we are discussing with our partners around some promotional stuff that we can do, actions that we can do around premiers.

It’s normal business. So, like, we are currently in talks, but the game is, like, in, like, it’s almost final shape. Everything everything is on track regarding that. The date is just like we are looking at it. Why is Monlighter two debuting in early access?

Good question. Wouldn’t it be better to wait for the full release and and simultaneously launch on several hard hardware platforms? Why is the production of this game taking so long? Very good question. Thanks, guys, for that one.

Again, I I of course, I know the the situation myself, but I, again, ask the guys from the from the publishing to, like, really write it as a wrap for you for you to understand what’s going on, how we look at it, and why we took those kinds of decisions. Okay? So let me read it through and then maybe I will also add something from myself. So decision to launch the game in early access was made some time ago. However, due to the contract con contracts obligations with our partners, we couldn’t announce it earlier.

Our reasoning is straightforward. The market has shifted. The early access now provides a strong opportunity to build the game alongside the community. That is important. We’ve always wanted to explore this model, and that is true.

We’ve spoken for sometimes already for years, like, whether will be the first time we we relaunch an early access game. We wanted to explore this model, and given its genre, Moonlighter two is perfectly suited for it. Regarding the production late, the projects the project went through and extended the concepting and prototyping phase. While we still signed and initiated in early, big production only ramped up in later on. So, like, really, the the production is just only the past past past times.

Like, in the beginning, we were working a lot on that prototyping and concepting phases. So the development time timeline might look longer from the outside that it actually is looking on the scale of the game and the people that were connected to the development during different phases. The one another thing is the demo. You’ve of course saw the demo. You’ve saw the the the results on the demo, and we released just a few months ago.

And it’s proven on one side that Monitor IP has a strong community following And that there are many players looking forward to to be playing the sequel, but they are on the other hand, they are also having their strong expectations and hopes for what Moonlighter two will become. This eventually allowed us to gather massive amounts of feedback, which we used to improve the game and also conceived as that working closely with the community is the right way to go. I already, like, highlighted that community working clouds common community aspect. And for Moonlighter two, we believe that that is crucial. And we saw the the demo comments, etcetera.

That was, like, again, like, we did it all consciously to to have that demo to check the changes, especially and it’s later on, what after what we’ve learned from Frostbunk two release, you know, the the story around that. So, like, that was, like, really important for us. It’s the last part is what’s noting noting that Digital Sun is those guys are, like, the depths of that game. They’re really experienced in the early access games, So we are not worrying around that. They know the model.

They know that it requires then constant stuff around the early access, etcetera, etcetera. So there is no, like, you know, there is no some kind of crazy reaction or or just a worrying reaction. Like, it was, like, in talks around us and, like, right now, we decided to do it, after the demo and all the stuff that we gathered. We now see how the community reacts and it is a really loving community to Moonlight, so we need to talk with them and just, like, develop the game together. So the next question also for me no.

It’s for Martin, so, like, I’ll pass it.

Martin Balevaider, CFO, Eleven Bit Studios: Thank you. Yes. Another question concerning early access of Moonlighter two. Does the release of Moonlighter two in early access mean that Microsoft will pay the company for Game Pass? As you know, we’ve always been it’s always been difficult for us to say too much about the Game Pass agreement with Microsoft.

But what we can say is that, yes, we are in discussions with them about this question. Our agreement remains in place, but we are currently discussing the payment schedule. And both sides see a potential for a split payment over time, but nothing has been finalized yet. So watch this space. And I can see also we’ve been asked the question, when will payments from Game Pass stop improving your results?

I would answer that by saying that Moonlighter two will be the last title to benefit from our current Game Pass deal agreement with Microsoft. But I know, I think, Tremec, you wanted just to comment on that as well.

Przemek, CEO, Eleven Bit Studios: Yes. The Moonlighter will be the last from that deal that we announced some years ago already. But I want to add that, guys, like, we are constantly looking for those kinds of deals. They are, like, really crucial also for the business and, like, it’s our biz dev staff. They are on in talks.

We just like, I don’t I can say, like, yesterday, we had a huge partner around us here, like, in talks, showing the portfolio, talking about the future deals, etcetera, etcetera, etcetera. It’s a normal stuff, and we we like that approach. So we and we did that for years. You you could observe that. So current can’t gain pass and soon, but signing the next one with our future or current content is, like, always a possibility.

And it’s in discussions. So it’s just a normal business and, like, we we we like that, like, that angle also. The next question, can we expect any releases from the publisher in 02/1926? We are not saying you are not saying anything about new titles. How many contracts have you signed already?

Good question. I was pointing to that one a bit in the previous ones that that will, I bet, only show you what’s going on in the next year. So, like, again, I have a lot of stuff for you here, and I’m already seeing, like, we are, like, taking a lot of time with our answers. But, like, let’s let’s try to continue. So in 02/1926, of course, we’ll be focusing on supporting multiplayer to an early access and helping the that that whole grow post launch.

That’s just normal. We’ll also look for new platforms for our existing games, reaching new plat new players. We are like that is happening. We don’t announce around around that, but, like, there are new platforms for all of our games. Like, it’s in works, etcetera.

So be patient. It will, like sooner or later, we’ll we’ll we’ll say a word around that and announce some some some platforms. What’s more, like, that might be interesting for you, like, especially I I already shared with you some months ago that we signed a new next unannounced x dev game a few few months ago. And now today, I can confirm that we we are signing another awesome game, like, really awesome stuff. May well, the the signed contract is just coming quite to us after signing from the devs, and it will be an awesome title.

So next title is signed, and it’s and it’s like we so we have, like, another apart from what you already know, we have another two games unannounced yet. So we’ll we will like, we we are thrilled we’ll have those two at least two because, like, we are in talks within other games, of course. Like, I’m just I I said what is signed. So we’ll have at least two new publishing titles lined up to announcing announcement during next year. One of those game could potentially launch in 02/1926, but only if it’s truly ready, is that the plan internally?

I don’t want to, like, say, yeah, that will be like like, we want the game to be great. It’s like we know the the time frame, but it it it has a potential to be launched next year. But, like, let’s see where we’ll be at the beginning of next year and see how the development progresses. A lot of stuff is still to be done to that game. And we want to give that game a lot of you know, enough time to for it to mature and be and be really good.

So much more GC, like, we just came from last week’s Gamescom, and the amount of games we saw, the publishing team saw is, like, enormous, like, good titles, a lot of talks, and other potentials for another publishing deals. And what is great is some of the devs really love to talk with us. And I like, when time comes, I will be able to share with some more details on that. That might be good good good case to just show you how we are, like, viewed by the devs around the world, how we how they see us, etcetera, why they want to work with us, etcetera, etcetera. So a really good GC games come 02/2025.

A lot of good meetings, a lot of people on the publishing side, on the company side as a wide, on the future of the games, like a lot of good data. Plus, you you I don’t know how you look and with that question, how you what you think about publishing, but also be in mind be in mind that we’ll we’ll also publish our internal games. That Yeah. Crazy important for eleven bit studios.

And we will publish two DLCs for the Frostpunk two. They are, like, currently being cooked. The the first one is coming soon. The next two are coming next year. We’ll have a major DLC for the authors.

And, of course, other updates for all of our games. So, again, it will be a a busy year. The next question, what are your expectations for release of the consolidation of Frostbunk two? I have a very short short note around that. So expected revenue from the console version of Frostbunk two is not too high.

You know that. We’ve spoken with you about that around Frostbunk one, Frostbunk two. Strategy for constant, it’s not a huge part of the, let’s say, deal, especially compared to the PC revenue of the game. That’s just normal. You you should already know that.

However however, that is an important milestone in the game’s post launch support, and that’s the milestone that triggers game pass payment. You also know that. So it will be on that side, it will be very important for us, and it opens the road ahead to the launch of the free upcoming DLCs also for consoles. So, like, a lot of a lot of stuff here. But, again, it’s it’s normal.

You should assume that like, you already should know that the the the strategy for consoles has its, like like, target audience. The next one, how is work on the Frostbunk two DLC progressing? When will the first DLC go on sale? Short one, our plan is to release the first DLC this year and two other the following year. Like, you know that we planned previously to have two DLC this year, but that was shift that shifted during the development.

The plan is still on track. The development of the first DLC is in an advanced stage. So, yeah, still some work to do. It’s not that it’s already finished. Still some work to do and the team is busy, but it’s this year’s plan.

The next one for me, are you satisfied with the Frostbunk two sales? Patch 1.3 released in the spring did not change much. Okay. Thanks for the question. Like, of course, we are, like, crazy proud of what we achieved, like, the the team achieved, especially, like, the dedication for the and the hard work around that game, like like, brought a game that were won us a lot of, like, awards, and it’s highly praised by many.

You know that side of the of the story. And, like, I really want to highlight that as team is doing a a really good job around that and is, like, really pushing. At the same time, of course, we are concerned about the title sales sales performance. We we realized that we failed to meet some of the players’ expectations on the other side. You know?

That’s, of course, the the like, I will comment on on that in a second, which led to a split in our community. And it’s not ideal for users. Of course, you know that. You observe that. That’s an important lesson, and we we have a lot of conclusions around that.

So we, like, we are happy about the game, of course. And, like, not everything goes as planned. You know that. Like, what is good is that we have resources to apply the changes, work on the game, like, DLCs will will will launch. Like, I probably some of you remember some now that, we have already shared that, like, those DLC will be also structured in the way that there will be a a paid part of the DLC.

And along the the DLC will also launch an update, like a free update that will bring some of the DLC’s parts to the the old players for the for the game to grow. So that’s also the plan. And, like and we also what we already are doing around that, bringing all that lessons from what what happened is, like, you can g you can see our approach to Moonlight or two just I just shared with you. Just minutes ago, we are listening to the players launching in early access. And, yeah, and working on that game and, like, in the with with the community and, like, playing changes, etcetera, etcetera.

So we learned our lessons. We have, like, what is crucial. We have resources. We have great people that are committed to those games like both Frostbunk, Toma, Leiter, etcetera, etcetera. So, yeah.

So that’s how it looks on our side. Next one for you.

Martin Balevaider, CFO, Eleven Bit Studios: Thank you. The next question is please comment on the share motivation incentive program at the company. Here, if read through in the notes to the financial statements, you’ll see that we actually wrote back the costs of the incentive program to zero in the financial statements for the 2025. In other words, at this point, taking a prudent view, we felt that we will not be able to achieve the goals of the share program, both the revenue targets, clearly, net profit targets was put in doubt quite heavily by the results and write downs that we had in 2024. So that target won’t be released won’t be reached.

But if I take if I can comment on the first target of the share incentive program, which is the revenue targets, here, there is a chance that there still might be a chance that we would cross the 75% threshold, which would trigger a portion of the warrants, a very small portion of the warrants being allocated and issued. But that really does depend upon our achieving good revenue in the third and fourth quarters. And as we’ve discussed around this issue in our earlier questions, clearly, have the challenges posed by the lower U. S. Dollar conversion rates, exchange rates, but we have our upcoming releases, which we referred to.

So if we take a slightly different view in the financial statements for the third quarter, then you can expect the write back of the costs to be reinstated, if I could put it that way. But that depends where we will be financially in terms of hitting the revenue targets at the end of the third quarter. So we shall see. Moving on to the next question. Does the company have plans to buy back shares, for example, for the next incentive program?

The share price is much lower than a year ago. Obviously, yes. And given the current share price levels, a share buyback, I would say, is not something that we would rule out. But and let me be very clear about this, no decisions have yet been taken in this regard.

Przemek, CEO, Eleven Bit Studios: Thanks, Martin. Next one is mine. Did the release of the Altars met your financial expectations? How is the game selling now? When will the first DLC be released?

Will there be more DLCs? So a short like, kind of like a short update from our guys and say just like I got from you, just like also that’s also our view. So the the size numbers are more than satisfactory for us at this stage. We’re very happy really happy with the sales. We had a very strong release, and that what is interesting here is not only on PC, but also on consoles.

That was the best console release we alongside the simultaneous release we had. While sales have now declined, this is just a normal trend for a title two months after the launch at full price, what is good, we’ll still have our first 20% discount to come. And why I’m highlighting that 20% is because that around when you when you are using the first discount around 20%, you can use a lot of actions that this team, for example, allows you. With 10%, you can do not that much, but with 20%, you can do a lot of actions around the sales of the project. And, like, especially looking at the new content that is planned, looking we know what will be with the with the first DLC.

It’s really looking awesome. We we really remain very optimistic around the future of the others. So we will see. We are happy with the results. And, again, we are really happy with the altars as a game.

The game is really, like, risk like, we’re we’re we’re received everywhere. Like, when I was at the at the GC, I also met a lot of people, like, good congrats. Like, guys, awesome game awesome games from the a lot of devs, like publishers, etcetera, etcetera. So the, like it was really naughty, and the the players knows us, etcetera. So it’s a it’s a good stuff.

The last question that we had from the from, like, from our release that we prepared from today is, like, how many people are currently working on Frostbunk one eight eight six? How many of on the p 12 and p 13? I already shared a lot on that, guys. So, like, you you already know, like, the the Frostbunk eighteen eighty six is progressing as intended. Currently, 17 developers, like, it’s planned.

We have planned to grow this number to around 25. It will it will happen, to be to be honest, around when the console version for Frostbunk two will release. We will, like, transfer some of the devs to the to the Frostbunk one and eight six team. Right after the release, they are just, like, finishing the console release. It’s, like, like, the the last stuff is done there.

So it’s it’s on the p 12. You already know about that. We are approaching that prototype. We are around the proto first prototyping phases. And, you know, the scales p 14, I already shared with you.

It’s with Kubas Toukalski. He’s working with some part time guys currently shaping the the design for the for the game. So it will grow a bit at the end of the year if everything goes as plans planned, if we green light the idea, etcetera, if we accept the design, etcetera. It’s, like, around that phase. So we have a few questions from just like we will answer will answer a few.

Let let me chat. Like, thanks for the new questions that just appeared during the the call the call that we had right now. So let me just read it through. Like, what are your intentions regarding the stake in Fools Theory? Are you considering selling it, for example, to CD projects?

Currently, we aren’t considering any change around that. We are, like, we are, like, happy with the Fools Theory. We’re currently in talks. That’s, today, had a talk with the Kubarakos from the from the full story. So, no, there’s no intention currently around that.

We are happy they are working with CD Projekt and making Witcher stuff for them. So that’s awesome. We are happy about that. And as for now, there’s no such thought or decision. You know, thoughts are always somewhere, like, whatever.

But but there is no such a decision and it’s not, like, circulating around us that, like, we should no. We are happy with the rules right now and, like, no no no no such thing in in talks. There are a lot of question, guys. Derek already, like, raised those. There were a lot of questions when you asked about, like, what are the what is the scale of that team of that team of that team of that team, etcetera, etcetera.

I believe we already shared that with you. What I think is, like, one like, few few few sentences to say. We almost assume that, like, the others team is working mostly on the DLC. Like, currently, We are just wrapping the after the release. So, like, most of the team, if not all of the team is, like, working on the on the future DLCs.

Like, we will start working on a new project with a very small team around, like like like, in the coming months around that. So the the so we are, like, taking some people to help with the other teams, but, like, Frostbunk team, the the the Altus team is working on the DOC. This Frostbunk team is divided a bit. A lot of people are working on the console, you know, that on DLCs. Like, most, like, most of the one eight eight six team is from the Frostbunk team also.

So you also, like, understand that there is, like, this divide on that team. And a few people from that team are working on p 13. So that’s how it currently looks around that. Of course, p eight, like, we know the story on p eight, but like, most of the p twelve team are the the awesome people from p eight. So and, like, we are just and some of them are also in the other projects.

So yeah. Some it’s mostly, like like, more people are currently working on DLCs, platforms, evolution of our games, and some part of the team is working on new projects either by really closing to some kind of production phases like for one eight eight six or either by prototyping new or these starting the concept design for our new games. And I hope that’s it. The one last question, just give me a second. Yeah.

There was a question around the marketing activities around not yet announced projects. As I probably, I already I already said that during the the talk, one with our around one of the questions, like, most, if one if not 100% of the work here will be done in the next year. K? So regarding the announced stuff. And is there a possibility that the host bank and or other series could come to a streaming platform similar to the Witcher series on net Netflix?

All I can say is that we are in talks constantly when if we’ll if something like that will happen, we’ll, of course, inform you guys. But, yeah, we we are in talks. But it’s not something new like I’m sharing right now. It’s like our our job to look if there is a there is a way to extend our our IPs to other platforms. And that’s all, guys.

Thanks for all the questions. If you have additional ones, please send them to our email. We’re all happy to organize any additional meetings if you’d like to meet with us in person and talk about, like, stuff that’s happening at eleven studios. We are doing it constantly. So thanks again, and see you the next time.

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