Keywords Studios plc

Revenue was €780 million, up 13% reported and 17% at CER; organic growth was 9% excluding the strike and FX impact. Adjusted operating profit was €122 million with a 15.6% margin, ahead of the 15% guidance level. Adjusted EBITDA rose 8%, operating profit rose 6%, and EPS was flat. Adjusted free cash flow was €94 million and cash conversion was 82%; the dividend was increased 10% to 2.61p per share, and net leverage ended at 0.4x EBITDA after moving to a small net debt position. For 2024, management said it expects strong revenue and profit growth from organic growth plus M&A, organic growth to improve progressively through the year, operating margins to stay above 15%, tax around 22%, CapEx around 4% to 5% of sales, and cash conversion around 80%.

Bertrand Bodson framed the year as one of resilience in a challenging market, saying the company kept close to clients while controlling costs and extending market leadership. He emphasized that industry restructuring, the shift toward variable cost models, and a “flight to quality” should favor Keywords over time. He was upbeat on the medium term, pointing to a bigger market, more strategic partnerships, and the company’s role as a mission-critical backbone provider rather than just a “picks and shovels” supplier.

Robert Kingston highlighted strong revenue growth, margin outperformance, and healthy cash generation, noting adjusted operating profit was at the high end of guidance and cash conversion reached 82%. He said the U.S. entertainment strikes cut revenue by around €20 million and FX was a roughly €29 million headwind, but the business still delivered robust growth. He also pointed to disciplined capital allocation: €225 million of M&A spend, CapEx in line with guidance at 4% to 5% of sales, 15 million shares bought back for the EBT, and a final dividend increase of 10% to 2.61p per share.

Analysts focused on Quebec tax credits, AI risk in player support, M&A pricing, project cancellations, 2025 game pipeline visibility, and whether AI could pressure pricing. Management said any Quebec change would not take effect until the end of 2027 and they do not expect a significant impact because they can move production across locations. On AI, they said there is no pricing impact today; instead, AI is improving efficiency and could support more client investment and volume over time. On M&A and pipeline, they said the environment is healthier, the target pipeline is the best in a long time, and while project timing can shift, they are well positioned to adapt through their diversified footprint and flexibility.