Devolver Digital posts net loss of $91.5 million for 2022, shares hit new low

Devolver Digital has shared its unaudited results for the full fiscal year ended December 31, 2022. The indie publisher saw its shares hit a new low due to a huge net loss.

Financial highlights

• According to the financial report, Devolver Digital’s annual revenue reached $134.6 million, up 37.1% year-over-year. It was in line with the company’s expectations.
• Back catalog sales rose 15% from 2021, accounting for 45% of total revenue.
• Gross profit increased by 18.1% year-over-year to $46.3 million, but normalized gross margins decreased to 34.4% (compared to 40% in 2021).
• Devolver attributed this decline to amortization expenses associated with new game releases in the first half of 2022 and increased marketing costs for three more heavily-invested titles.
• The company’s pre-tax net loss was $91.5 million, compared to a profit of $30.6 million in 2021.
• “We cancelled some titles, restructured Good Shepherd, and made impairments to IP and Goodwill, reflecting the current lower sector valuations compared to the highs of 2021,” Devolver founder and executive chairman Harry Miller said. “With this reset completed we look forward to building for growth in 2024 and 2025.”
• Following the publication of the financial results, Devolver Digital shares fell 13% to £0.28 per share — the lowest price in company history.

Devolver’s video game portfolio

• In 2022, Devolver Digital launched 12 new games, with Cult of the Lamb and Return to Monkey Island being the main revenue drivers in the second half of the year.
• The company plans to release 10-12 titles in 2023, including the recently released reverse city builder Terra Nil. Most games are expected to launch in the second half of the year.
• Including the recently acquired studio Doinksoft, Devolver’s portfolio currently consists of 11 first-party IP.
• Overall, the publisher has over 30 games in its pipeline, which are expected to launch before 2026.