- 2022 Profit and revenue growth expectations downgraded

- Sales growth slower than expected

- Company expects to release 10-15 new titles

Video games publisher and developer Devolver Digital (DEVO:AIM) has downgraded full year 2022 expectations for revenues and profits after experiencing slower than anticipated sales growth over the first five months of the year.

Shares in the Austin, Texas-based company which listed on AIM in November 2021 sank 45% to 75p on Monday, reflecting the disappointing update.


The company is the largest US-based company to list on the London Stock Exchange (LSEG), with its 157p listing price valuing the firm at close to £700 million.

The company pinned the disappointing start to the year on a ‘competitive’ release window and ‘specific factors for each title which are being actively addressed for future titles’.

Furthermore, a heavier schedule of games releases has led to a step-up in amortisation charges while the company hasn’t been immune from cost inflation which is likely to increase operating expenses.

Devolver is now guiding for full year revenues to 31 December to be in the range of $130 million-to-$140 million and EBITDA (earnings before interest, taxes, depreciation, and amortisation) to be between $27 million and $32 million.

While the new guidance still represents growth at the mid-point of the range of around 30% and 15% respectively, market expectations for revenues before today’s update was $142 million, implying a 5% shortfall compared to the middle of the range.

The board said it expected to continue its track record of growth driven by a diversified business model and a back catalogue of games which represent more than half of revenues.

The company maintained its target of releasing 10-to-15 new games a year.

Founder and executive chairman Harry Miller commented: ‘Our founders and employees are majority shareholders in the company, fully committed to publishing and developing creative and exciting titles and delivering our long-term growth strategy.

Looking forward, Devolver's pipeline of titles is as strong as it has ever been, with visibility well into 2024.’


Katie Cousins, leisure analyst at Shore Capital, plans to reduce her 2022 forecast for revenues and EBITDA of $143 million and $43 million by 10% and 30% respectively.

Cousins has also slapped a sell recommendation on the shares based upon concerns ‘that the group is targeting a sector within the market that is likely to be most impacted by a depressed consumer environment without many proven IPs (intellectual properties).

‘We also believe the group will be impacted by continued higher prices and we have uncertainty about whether the group can recover depressed sales in the second half.’

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Issue Date: 13 Jun 2022