Winking Studios grew first-half revenue by more than a fifth but saw profitability fall sharply, as the game art outsourcing group ploughed money into a North American expansion and AI development.
The dual-listed company, quoted in both London and Singapore, saw its revenue rise 21.1% to US$23.5m in the six months to 30 June, with organic growth of 8.9% and its core art outsourcing arm up 25.4%.
Revenue from Japan more than doubled to US$3.6m.
But margins narrowed as the group stepped up investment. Adjusted EBITDA halved to US$1.2m, and it slipped to a small adjusted net loss, reflecting spending on Studios Ampera, the North American business it acquired in April to give it a direct presence in Western markets, and on AI-enabled game development.
Notably, gross margin fell to 24.0% from 30.2%, an area to keep an eye on as the company pushes ahead with expansion plans.
The company said demand for its core art services remained robust, with 24-month indicative bookings of US$51.6m and second-half revenue expected to exceed the first. These two points should please shareholders.
However, with investment set to continue, the board now expects a modest adjusted EBITDA loss for the full year.
It ended the half with US$24.6m of cash and investments and low gearing. The company has a market cap of £54m.