Frontier Developments (FDEV) reported record-adjusted operating profit of GBP 21.4 million for fiscal year 2026, driving its pre-market share price up 8.66% to $484.61 from a previous close of $446. The company also declared its first-ever special dividend of GBP 5 million, or approximately 14 pence per share, payable in early October.
Revenue reached GBP 104.8 million, the second-highest level on record, while adjusted operating margin expanded to 20.4%. Revenue from the Creative Management Simulation (CMS) segment — which includes the Planet Zoo, Planet Coaster and Jurassic World Evolution franchises — accounted for 89% of total revenue, up from 77% a year earlier, and grew 34% year-on-year. Gross profit margin came in at 66.8%, down slightly from the prior year.
Gross operating costs rose 3% year-on-year to GBP 62.5 million, primarily driven by the company’s all-staff profit share plan. Total adjusted tax credits and reliefs reached GBP 12.8 million, including a GBP 2.3 million prior-year adjustment and a GBP 4.4 million one-off transitional credit from HMRC.
The company ended the fiscal year with approximately GBP 44 million in cash, rising to roughly GBP 50 million when a post-year-end tax credit is included. Since June 1, 2026, Frontier has invested GBP 15.5 million in share buybacks, with total buybacks and EBT purchases reaching GBP 20.5 million. Management stated it believes the stock is "significantly undervalued" given its price-to-earnings ratio of 9.7 and PEG ratio of 0.35, and intends to continue using surplus cash for repurchases.
Looking ahead to FY2027, management anticipates Planet Zoo 2 — launching next month — will generate GBP 30 million or more in revenue, against analyst estimates of around GBP 25 million. Development costs for the title are approximately GBP 17 million. A Disney-backed game, developed under a newly announced partnership agreement, carries an estimated budget of GBP 20 million. Warhammer 40,000: Chaos Gate - Deathwatch, targeting a FY2027 launch, is expected to contribute GBP 5 million to GBP 10 million in revenue.
On margin guidance, Frontier expects gross profit to recover to approximately 68% in FY2027, with gross operating costs remaining in the mid-GBP 60 million range. The capitalization rate is projected to stay between 60% and 65%, down from historical levels of 70% to 80%. Normalized tax credits and reliefs are expected to total GBP 8 million to GBP 9 million annually.
Planet franchise performance remained a central theme. The Planet Zoo series has generated GBP 161 million in lifetime revenue across six years and 21 paid downloadable content releases, delivering a 404% return on investment, with PDLC accounting for 45% of total franchise revenue. Over one million players engaged with Planet Zoo in the past month alone. The Jurassic World Evolution franchise has reached nearly 20 million players globally across three games and 23 PDLC releases. Planet Coaster and Planet Coaster 2 players have collectively placed more than 23 billion kilometers of track — enough to travel to the moon and back nearly 30,000 times — over the preceding six months.
A new Planet franchise title is planned for FY2028, with a public announcement expected around January. Authority for share buybacks will be renewed at the annual general meeting in October.
Jo, who joined as chief marketing officer in August 2025 and became CEO in early 2026 following the departure of Jonny after roughly 27 years, emphasized the company's pivot toward long-term franchise economics. "The greatest value in our business comes from creating games and franchises that players engage with for many years, not just at launch," she said. Dan Lazarides joined the executive board as CMO.
