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Aviation History
Preface: FINANCIAL HIGHLIGHTS TRANSLATED INTO THE EURO on page 3.
Combining the interim financial results & presentation materials into the OP.
PCF GROUP SPÓŁKA AKCYJNA GROUP
Interim Consolidated Financial Statement for the Third Quarter of 2024
Ended September 30, 2024
(all amounts in PLN thousand, unless stated otherwise).
*1 złoty = approximately 0.23 euros or 0.24 dollar*
STATEMENT OF PROFIT OR LOSS
Combining the interim financial results & presentation materials into the OP.
PCF GROUP SPÓŁKA AKCYJNA GROUP
Interim Consolidated Financial Statement for the Third Quarter of 2024
Ended September 30, 2024
(all amounts in PLN thousand, unless stated otherwise).
*1 złoty = approximately 0.23 euros or 0.24 dollar*
STATEMENT OF PROFIT OR LOSS
1 Jan - 30 Sep 2024 | 1 Jan - 30 Sep 2023 | |
|---|---|---|
| Revenue | 131,886 | 111,249 |
| Cost of Sales | 106,126 | 70,527 |
| Gross Profit (Loss) | 25,760 | 40,772 |
| Other expenses | 8,634 | 3,212 |
| Operating Profit (Loss) | (32,007) | (10,123) |
| Profit (Loss) Before Tax | (35,240) | (10,558) |
| Income Tax | (1,927) | 2,890 |
| Net Profit (Loss) | (33,313) | (13,448) |
3Q Results
1 Jul - 30 Sep 2024 | 1 Jul - 30 Sep 2023 | |
|---|---|---|
| Revenue | 55,577 | 42,583 |
| Cost of Sales | 34,971 | 26,832 |
| Gross Profit (Loss) | 20,606 | 15,751 |
| Other expenses | 377 | 113 |
| Operating Profit (Loss) | 3,798 | (1,236) |
| Profit (Loss) Before Tax | 1,690 | 803 |
| Income Tax | 1,714 | 1,181 |
| Net Profit (Loss) | (24) | (378) |
(page 8)
Cash flows from financing activities | Proceeds from sale of other financial assets | 35,000 | - |
| Cash and cash equivalents at beginning of period: | 124,016 | 67,983 |
| Cash and cash equivalents at end of period: | 67,006 | 173,804 |
3Q Results
Cash flows from financing activities | Proceeds from sale of other financial assets | - | - |
| Cash and cash equivalents at beginning of period: | 83,426 | 165,351 |
| Cash and cash equivalents at end of period: | 67,006 | 173,804 |
(pages 13-14)
Notice is the same as before 1H Financial Report (page 18)
3. Revenue and operating segments
In the nine months to 30 September 2024, the contract development segment included revenue from Project Gemini and Project Maverick, game development projects carried out by the Group in partnership with the publishers Square Enix Limited and Microsoft Corporation, respectively.
Positive cash flows from this segment enabled the Group to partially cover expenditure on games that the Group intends to publish on its own in the self-publishing model.
Project Echo
Under the master services agreement signed on 10 September 2024 (detailed in note 16), the Group established a partnership with Krafton Inc. as the publisher for the development and release of a new mode, code-named Project Echo, for the publisher’s existing video game. Some preparatory work related to Project Echo had been carried out by the Group prior to the execution of the agreement.
(page 21)
January 1 - September 30, 2024Contract development of video games (development fee) | Copyrights to developed games (royalties) | Self - publishing | Other Activities | Total | |
|---|---|---|---|---|---|
| Revenue from external customer | 107,020 | 1,198 | 23,668 | - | 131,886 |
| Total Revenue | 107,020 | 1,198 | 23,668 | - | 131,886 |
| Segment's Operating Profit (loss) | (5,286) | 779 | (27,500) | - | (32,007) |
3Q Results
July 1 - September 30, 2024... | Contract development of video games (development fee) | Copyrights to developed games (royalties) | Self - publishing | Other Activities | Total |
|---|---|---|---|---|---|
| Revenue from external customer | 53,014 | 227 | 2,336 | - | 55,577 |
| Total Revenue | 53,014 | 227 | 2,336 | - | 55,557 |
| Segment's Operating Profit (loss) | 14,264 | 134 | (10,600) | - | 3,798 |
(pages 24-25)
...this is the crucial set of figures to analyse here, as the Work-For-Hire (WFH) side of the business as Contract development of video games (development fee) has partially recovered from the loss of revenue from the the renegotiated contract with Square Enix for Project Gemini. The operating profit is greater than the losses from self-publishing, People Can Fly (PCF) will need this to continue in Q4 FY24 & throughout 2025 before the 3 titles due in 2026. With the impairment loss of Project Red in 1H behind them, it's now a case of securing the additional funding to remove the going concern notice from the company reports. But it is not enough to persuade investors as the market cap has fallen considerably throughout November. Explains why PCF is seeking additional WFH. Self-publishing revenue helped somewhat by the Bulletstorm VR patch to fix its myriad of launch issues & Green Hell VR added to Quest+ subscription - will Project Bison fare better? PCF currently has 50 open job positions which is welcome hiring news, provided the company can afford to pay 'em all! Depends on how many are for WFH & self-publishing titles.
Staff Count
30.09.2024 | 30.06.2024 | 31.03.2024 | Change QoQ | |
|---|---|---|---|---|
| DEVELOPERS | 522 | 504 | 520 | +18 |
| BACKOFFICE | 81 | 85 | 87 | -4 |
| INCUVO | 70 | 72 | 74 | -2 |
| QA | 62 | 52 | 61 | +10 |
| GAMEON | 32 | 22 | 21 | +10 |
| TOTAL | 767 | 735 | 763 | +32 |
Staff by Region
30.09.2024 | 30.06.2024 | 31.03.2024 | Change QoQ | |
|---|---|---|---|---|
| EUROPE | 491 | 476 | 504 | +15 |
| NORTH AMERICA | 276 | 259 | 259 | +17 |
(slide 4)
Staff numbers have largely recovered from the setback in Q1 FY24, which just shows how pointless & short sighted it was for publishers to cause PCF job losses in the first place!WORK-FOR-HIRE (“WFH”):
(slide 6)
SELF-PUBLISHING:(slide 7)
No change QoQ on self-publishing, the main WFH change is the contract with KRAFTON INC., (which owns 10% of PCF) to develop a mode for an unnamed game - new PUBG mode?SUPPLEMENTARY PROJECTS:
(slide 8)
...PCF will be hoping both the CO-OP mode for Green Hell VR & positive word of mouth for version 1.4 of Bulletstorm VR will help improve revenue & reduce losses from self-publishing.WHAT'S NEXT
(slide 15)
If you want a summary of the latest, slide 15 is worth a read in full. Market cap has continued to fall since the 1H Financial Results & fell throughout November in the run up to these results. I think PCF will struggle to raise additional funding (350 PLN is what's mentioned as being required on slide 15, that's approximately $84 million (1 zloty = 0.24 dollar so that's 350,000,000 / 100 x 24 = 84,000,000) so I can see why it's holding a review of its strategic options. The mention of looking for additional WFH is the key here, as neither its two self-publishing titles or Project Gemini are set for release until 2026. PCF really needs another publishing deal but as we all know, right now, publishers are very cagey about committing to signing new major titles. Seek more support work from KRAFTON or how about Microsoft? PCF continues to mention investigating whether or not it can transfer one of its two self-published titles to a WFH model, presumably seeking a publisher/investor to pay for some or all development between now & Early Access in 2026. However the decision to make two live service titles with Early Access launches in 2026 means the publisher/investor would have to commit to supporting the game until at version 1.0 at the very least. No easy answers, aside from securing more WFH jobs to keep things on track.
(LATE EDIT: see post 4 on details of changes to OP title, have done the same for previous financial results threads).
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