Frontier Developments plc

FY2026 revenue was just under GBP 105 million, described as the second-highest ever for the company. Gross profit margin was just under 67%, down a few points year over year due to mix. Gross operating costs were GBP 62.5 million, up 3% year over year, and adjusted operating profit was a record GBP 21.4 million, just over a 20% margin. Tax credits and reliefs were GBP 12.8 million, including a GBP 2.3 million prior-year adjustment and a GBP 4.4 million one-off transitional credit that had already been received in cash, contributing to cash ending at just over GBP 50 million at the end of August. For FY2027, management expects gross margin to move back up to around 68%, gross operating costs to be in the mid-60s, and tax credits/reliefs to be about GBP 8 million-GBP 9 million on an adjusted operating basis. Management also signaled that buybacks will likely continue in FY2027 and that the special dividend totals GBP 5 million, or about GBP 0.14 per share.

Jo Cooke framed the business as having completed a strategic reset into a focused, player-first CMS franchise company, emphasizing that the strategy has not changed despite leadership transition. She repeatedly stressed nurturing existing franchises through updates, expansions, and premium content, saying the aim is to maximize engagement and lifetime value rather than relying only on launches. Her tone was confident and upbeat, pointing to a strong roadmap, including Planet Zoo 2, the FY2028 Planet title, and the newly announced Disney partnership.

Alex Bevis focused on the clean financial execution and cash generation. He highlighted revenue of just under GBP 105 million, adjusted operating profit of GBP 21.4 million, gross operating costs of GBP 62.5 million, and gross margin just under 67%, while explaining that the tax benefit of GBP 12.8 million included a GBP 2.3 million prior-year adjustment and a GBP 4.4 million transitional credit. He said cash ended above GBP 50 million, that the business likely only needs around GBP 20 million of cash, and that buybacks and the first-ever special dividend reflect a strong balance sheet and what he views as an undervalued share price.

Analysts focused on launch expectations, capital intensity, taxes, and the Disney deal. Management said pre-orders for Planet Zoo 2 are “very, very positive,” but declined to compare them directly with Planet Zoo 1, while estimating Planet Zoo 2 revenue at GBP 30 million+ potential and Chaos Gate: Deathwatch at roughly GBP 5 million-GBP 10 million in FY2027. On costs, they said Planet Zoo 2’s dev budget is around GBP 17 million, a normal future CMS title may be GBP 13 million-GBP 15 million, and Disney could be around GBP 20 million. They also said Disney licensing costs should benefit from the same tax-credit treatment as Jurassic, and that royalty terms are typically around 10%-20% of net revenue, with a midpoint near 15%.