CD Projekt sales rise 9% in 2025, driven by Cyberpunk franchise

Sales revenue rose 9% y/y to 867 million PLN and net profit increased 33.7% y/y to 594 million PLN. Cyberpunk was the main driver (+12% y/y) with the Switch 2 Ultimate Edition producing a fivefold jump in the goods & materials segment via physical cartridges; the group invested 513 million PLN in future releases and moved Cyberpunk 2 into production in April 2025. Headcount expanded from 707 to 933 developers (Witcher 4: 499; Cyberpunk 2: 149; Sirius: 71; Hadar: 26), and CD Projekt sold GOG to co‑founder Michał Kiciński for 90.7 million PLN (externally financed), with Kiciński retaining a 10% stake.

Analysis

Recent proprietary wins materially increase optionality on sequels and merchandise monetization, which should expand long-term cash returns per successful title even if near-term ROI on development remains muted. Physical SKU momentum after a platform refresh creates outsized margin capture versus digital-only sales because it shifts revenue from platform fees and enables more favourable wholesale terms with distributors; expect 200–400bp incremental gross margin on a sustained physical attach curve versus a purely digital release.

Management’s pivot to concentrate capital and people on fewer, bigger-IP projects raises binary outcome risk: each flagship carries higher upside if delivered well, but also amplifies downside on delays or quality issues. Headcount growth and heavy pre-launch investment lengthen the time horizon to material FCF conversion — this is a multi-quarter to multi-year play where value is realized around playable demos, beta metrics, and launch monetization windows rather than quarterly bumps.

Second-order winners include cartridge/physical-media assemblers, logistics partners and platform holders that own storefront economics; competitors without deep-owned IP may be forced into M&A or discounting to defend shelf share. Key near-term catalysts we will watch are formal release windows, engine/radical tech teardowns, external reviews of related-party disposals, and any change in distributor term sheets; conversely, governance questions or missed internal milestones are the most likely catalysts to reverse sentiment quickly.

Key Decisions for Investors

• Long CD Projekt (CDR.WA) equity on a >10% retracement within the next 30 trading days; target +35–50% over 12–24 months as new IP monetization and higher-margin SKU mix re-rate multiples. Use a 20% stop-loss to limit execution/delivery risk.
• Asymmetric options: Buy LEAPS on CD Projekt (Jan 2027) ~30–50% OTM to capture multi-year optionality; finance by selling near-term (3–6 month) calls to reduce premium. Expect skewed payoff (4:1 upside if launches meet expectations) while funding time decay from short calls.
• Play the hardware/supply-chain angle via Nintendo (NTDOY) 6–12 month call spreads to capture continued platform tailwinds from next-gen console cycles. Target 2–3x return if hardware shipments and SKU attach remain healthy; cap downside to premium paid.
• Risk hedge: Buy 6–12 month puts on CD Projekt equal to ~10% of long notional when initiating or scaling longs to protect against delivery misses, governance scrutiny from related-party disposals, or sudden downgrades after milestone slips. Treat this as insurance costing ~5–8% of position value for meaningful downside protection.