Frontier Developments Posts Record Annual Adjusted Operating Profit

Frontier Developments published its audited full-year results for the 12 months ended 2026年5月31日 on 2026年9月9日, reporting a 16% revenue increase to £104.8 million and a 62% rise in Adjusted Operating Profit to £21.4 million, which the Cambridge-based developer and publisher said was a company record. The Board also announced a £5.0 million special dividend.

Record Profitability

Revenue rose from £90.6 million in FY25, a performance Frontier described as the second-highest in its history. Operating profit increased 97% to £25.0 million (FY25: £12.7 million), which the company said reflected strong underlying trading alongside a one-off transitional tax credit of £4.4 million. Profit after tax increased 66% to £27.3 million (FY25: £16.4 million), and basic earnings per share rose 76% to 74.6p (FY25: 42.4p).

Adjusted Operating Profit is a non-IFRS measure Frontier uses to assess underlying financial performance. It excludes non-cash development cost accounting adjustments, non-cash share-based payment charges and non-operating items such as restructuring costs, and recognises the full value of expenditure credits in the period to which they relate. Frontier said the FY25 comparative of £13.2 million included a £3.9 million gain from the sale of publishing rights; excluding that non-recurring gain, the company said Adjusted Operating Profit more than doubled year-on-year.

In the chairman’s statement accompanying the results, Frontier said the performance built on the momentum of its FY25 turnaround following a strategic reset in FY24.

Franchise Mix, Margins and Costs

Frontier said revenue growth was led by the successful launch of Jurassic World Evolution 3 and the ongoing strength of the Planet Coaster and Planet Zoo franchises, with creative management simulation (CMS) games accounting for 89% of total revenue in FY26 compared with 77% in FY25. Frontier said Elite Dangerous, outside the CMS portfolio, delivered another year of revenue growth, reflecting its renewed content strategy and continued player engagement more than a decade after the game’s original launch.

Gross profit increased 10% to £69.9 million (FY25: £63.3 million), while gross margin was 67% compared with 70% in FY25. Frontier said the margin movement reflected higher IP royalty costs and increased physical disc distribution following the Jurassic World Evolution 3 launch.

Operating costs rose 3% year-on-year on both an IFRS and an adjusted basis, with £2.0 million of the increase due to higher all-staff bonuses following the year’s record profitability, the company said. Operating costs under IFRS were £56.1 million (FY25: £54.6 million), with research and development expenses unchanged at £32.0 million. Frontier capitalised £26.0 million of R&D cash spend (FY25: £28.3 million), representing 66% of total R&D cash spend (FY25: 72%), with the company attributing the lower rate to early-stage investment in a new own-IP Planet franchise planned for FY28, where expenditure did not meet the criteria for capitalisation during FY26.

Tax Credits and Other Income

Frontier recognised £10.0 million of expenditure credits within other operating income (FY25: nil), comprising £9.3 million under the Video Games Expenditure Credit (VGEC) scheme and £0.7 million under the Research and Development Expenditure Credit scheme. Of the total, £5.9 million related to prior periods, including a £4.4 million one-off transitional credit arising from the move of certain qualifying games from the previous Video Games Tax Relief regime to VGEC, while £4.1 million related to FY26 expenditure. The company said the total benefit from development-related tax incentives and expenditure credits recognised in Adjusted Operating Profit was £12.8 million (FY25: £6.8 million).

Other operating income under IFRS increased to £11.3 million (FY25: £3.9 million), which also included £1.2 million of subletting income from part of Frontier’s Cambridge offices under a tenancy that commenced in 2025年7月.

Cash Generation, Buybacks and Special Dividend

Cash increased to £44.0 million at 2026年5月31日, from £42.5 million a year earlier, despite £17.5 million invested in Frontier shares during the year; excluding that investment, Frontier said cash generation was a record £19.0 million (FY25: £13.0 million). Net assets rose 12% to £107.0 million, and the company said it remains debt free, with cash of £51.4 million at 2026年8月31日.

During FY26, Frontier invested £15.5 million to acquire 3,947,854 shares through two buyback programmes, reducing total voting rights by 10% with a corresponding 11% enhancement to earnings per share for FY27 and beyond. The acquired shares were cancelled on 2026年8月11日. The Employee Benefit Trust invested £2.0 million during FY26 to acquire 532,174 shares and a further £3.0 million in 2026年6月 to acquire 633,736 shares, holding 1,672,953 shares as of 2026年9月8日.

The special dividend of 14.1p per share has an ex-dividend date of 2026年9月17日, a record date of 2026年9月18日 and a payment date of 2026年10月9日. The Board said that, subject to market conditions and shareholder approval, it expects to initiate further buyback programmes in FY27 under the customary authorities to be sought at the annual general meeting in October.

Roadmap and Leadership

Planet Zoo 2 is scheduled for release on 2026年10月13日, and Warhammer 40,000: Chaos Gate – Deathwatch is scheduled for release before the end of FY27. For FY28, a new own-IP CMS game establishing a further Planet franchise is in full development and on track, the company said, within a strategy targeting an average release cadence of one new CMS game per year. As announced on 2026年9月3日, Frontier also entered an agreement with Disney to develop and publish a new game that will draw on Disney’s portfolio of intellectual property. The Board said it is confident in delivering FY27 in line with expectations.

“FY26 was a landmark year for Frontier,” Chief Executive Officer Jo Cooke said in the announcement. “We delivered record financial performance, demonstrated the strength of our CMS strategy, and continued to invest in the world-class franchises our players love, supporting vibrant communities and long-term engagement across our portfolio.”

An Executive Board was established in 2025年6月. Cooke stepped up to Chief Executive Officer from Chief Marketing Officer on 2026年1月1日, following the departure of Jonny Watts, who the chairman’s statement said had served as Chief Executive Officer from 2022年8月 and led Frontier’s 2024 strategic reset. Dan Lazarides was appointed Chief Marketing Officer on 2026年8月1日. David Braben will transition from Executive Director to a Non-Executive Director position on 2026年10月1日 while retaining his President and Founder role; in a companion news post, Frontier said it will continue to benefit from his experience and knowledge on the Board. The transition is supported by a relationship agreement that continues, subject to renewal at the end of 2030年5月, provided Braben remains a director or his shareholding remains above 15%.

“I am immensely proud of what our talented teams have achieved together since I founded Frontier in 1994, and excited about the opportunities ahead,” Braben said. “I have tremendous confidence in Jo as CEO to build on Frontier’s strong foundations and deliver long-term success, together with the excellent leadership team.”

The announcement stated that the statutory accounts for the year ended 2026年5月31日 have been reported on by Frontier’s auditors, whose report was unqualified. The accounts are expected to be posted to shareholders in due course and will be delivered to the Registrar of Companies after being laid before shareholders at a general meeting on 2026年10月29日.