The first such situation since the premiere of “The Witcher 3”. What do experts say after CD Projekt results?
Some analysts say that CD Projekt has started a year better than expected, others point out that the “wow” effect is missing. Most emphasize that the second quarter can be better again than the consensus of forecasts collected by Bloomberg, thanks to the upcoming premiere of “Cyberpunk 2077” on the Nintendo console. On the other hand, the production of games accelerates, hence the increasing investment outlays.
The results of the CD Project have positively surprised. Although the net result itself was below the consensus of PAP Biznes, revenues (by 1 percent), operational profit (by 4.7 %), EBITDA (by 9 %) and appropriate margins were higher. What's more, according to the consensus collected by the Bloomberg agency, both revenues and net profit exceeded the consensus by 9.8 percent, respectively. and 5.3 percent
The company's stock exchange rate at the session on Thursday, May 29 reacted positively and grew up after opening the session by over 5 percent. However, the scale of growth quickly decreased, even to the level of reference. We would like to remind you that from the beginning of May the CD course of the project is in a relegation correction, after growing in the first four months of the year by about 35 percent. The company's valuation is currently around PLN 22 billion.
In the Bloomberg note, analysts commented on the financial report and information provided at a press conference by the CD Projekt Board, including about the fact that the company is working on 3 undisclosed projects. Two of them are gaming projects, the third does not apply to games. A lot of attention was paid to the upcoming premiere of “Cyberpunk 2077” on the Nintendo Switch 2 console, which is scheduled for June 5. As indicated, the cost of the port on the new platform is about PLN 10 million.
Lara Simpson from JP Morgan wrote that CD Projekt started a year better than expected. “Thanks to the strong sales” Cyberpunk 2077 “and the” Phantom Liberty “addition, which exceeded 10 million copies and effective cost control,” she wrote in a commentary for Bloomberg. “The management confirmed the progress in the pre -production of the next game from the world of Cyberpunk, which is a good signal, although there is still skepticism about implementation and terms,” she added.
“The results are good, but they lack the” wow “effect, which can cause profits,” commented Piotr Poniatowski, an analyst at BM mBank. “We remain positive about CD Projekt, which has two strong brands and funds for the implementation of upcoming productions, with almost PLN 1.5 billion net of cash,” he added.
According to the CD Projekt report, the level of financial reserves at the end of the first quarter amounted to PLN 1.489 billion, which means an increase of PLN 17 million compared to December 2024. Cyberpunk revenues amounted to PLN 142.7 million (63 percent of total revenues), and games from the Witcher trilogy 29.2 million PLN (13 %).
Strong digital and physical sales of the game “The Witcher 3” fueled above average results in the first quarter. It was calculated that within 10 years of the release of the game (May 2015) “The Witcher 3” sold in over 60 million circulation and generated PLN 2.4 billion in revenues. In turn, the “spectrum of freedom” – a paid supplement to “Cyberpunk 2077” – has already reached 10 million sold pieces in 20 months from the premiere.
CD Projekt's operational revenues and profit may exceed the consensus for the second time in a row in the second quarter of 2025. Thanks to the premiere of the game “Cyberpunk 2077” on the Switch 2 console, Bloomberg wrote. In this way, the company can broaden a group of recipients outside traditional PC and console (PlayStation Xbox).
“In the short term Prime Minister Cyberpunk on Nintendo Switch 2 should significantly affect the results in the following quarters,” commented Krzysztof Tkocz, an analyst at Erste Securities. “The company can show marketing materials about the game” The Witcher 4 “or other projects during the Summer Game Fest in June” – he added.
In the context of three undisclosed projects, he indicated that some may debut in 2025-2026, supporting the achievement of the goals of the motivational program. Michał Wojciechowski from Ipopema thinks similarly. “We expect a positive market response to information about three undisclosed projects, which will probably support the results in 2025-2026,” he commented.
He added that the results are largely in line with the market consensus, except for a one -time tax effect on the net result, which was also noted by Krzysztof Tkocz, explaining it with higher taxes. In turn, the issue of free cash flows is raised by Piotr Zielonka from BM Satander.
“Despite good results, investors' attention may attract free cash flows, which are under pressure due to rising production costs,” says the analyst. “The results of the first quarter suggest that investment outlays (Capex) may exceed PLN 500 million this year, which may mean a negative FCF for the first time since the premiere of” The Witcher 3 ” – he commented.
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