Keywords Studios plc

Revenue for 2023 was €780 million, up 13% year over year at actual rates and 17% at constant exchange rates; organic growth was 9% excluding the strike and FX impact. Adjusted operating profit was €122 million, with a 15.6% margin, and adjusted EBITDA rose 8%; operating profit increased 6%, while EPS was flat. Adjusted free cash flow was €94 million and cash conversion was just over 82%; the company also reported €225 million of M&A consideration, five deals, and a final dividend up 10% to 2.61p per share. For 2024, management reiterated expectations for strong revenue and profit growth, organic growth improving progressively through the year, adjusted operating margins above 15%, a tax rate around 22%, CapEx of around 4% to 5% of sales, and cash conversion around 80%.

Bertrand Bodson said the company is benefiting from a diversified, resilient model and is using the tougher market to gain share, deepen client relationships, and invest for the long term. He emphasized strategic partnerships, technology, and M&A as the main growth levers, and said the firm is increasingly embedded with clients’ workflows, especially in AAA games and adjacent entertainment opportunities. His tone was confident and constructive, with repeated references to long-term market growth, a flight to quality, and Keywords’ ability to adapt faster than peers.

Robert Kingston highlighted strong revenue growth despite industry disruption, with costs managed carefully and profits ahead of guidance. He noted that the U.S. entertainment strikes reduced revenue by around €20 million and FX was a roughly 4% or €29 million headwind, while the company still delivered adjusted free cash flow of €94 million and cash conversion just over 82%. He also pointed to disciplined capital allocation: €225 million spent on M&A, 15 million shares bought back for the EBT, net leverage at 0.4x EBITDA, and €260 million of RCF capacity, while saying the balance sheet remains strong.

Analysts asked about Quebec tax credits, player support exposure to AI, M&A opportunity, client behavior amid studio closures, 2025 game pipeline visibility, and whether AI is affecting pricing or staffing. Management said any Quebec change would not have a significant impact beyond 2027 because the group can move production across locations, and described player support as only about 10% of the business and expanding into higher-value services such as VIP, trust and safety, and community management. On AI and pricing, they said there is no impact today, but over time technology should improve efficiency and help drive more client investment and volume. They also said the M&A pipeline is the best in a long time, helped by a tougher environment bringing more attractive targets to market, though cultural fit and quality remain non-negotiable.