Winking Studios Limited FY2025 Financial Analysis: Rapid Expansion and Robust Growth

Winking Studios Limited has reported its financial results for the year ended 31 December 2025, marking a significant period of growth and expansion. The company, a top-four global player in game art outsourcing, continues to strengthen its position through organic growth and strategic acquisitions. Below, we present a detailed analysis of the key metrics, corporate actions, and outlook for investors.

Key Financial Metrics and Performance

Historical Performance Trends

• Revenue has more than tripled from \$14.5m in 2021 to \$45.5m in 2025, demonstrating strong scaling and disciplined growth.
• Underlying organic revenue growth was 8.6% for FY2025, with momentum strengthening in the second half. Excluding the Mineloader acquisition, organic growth was 7.0%.
• Gross margin remained stable despite the increased share of higher-margin AAA console projects, offsetting lower pricing in Asian mobile gaming.

Exceptional Earnings and Expenses

• Adjusted EBITDA growth was moderated by \$0.4m of ongoing LSE-related expenses incurred in FY2025, not present in FY2024.
• \$0.7m of other income and gains (excluding forex gains) recognized in FY2024 did not recur in FY2025.
• Costs of acquisition and integration rose to \$0.6m in FY2025 due to the Mineloader acquisition.
• Foreign exchange losses amounted to \$0.5m in FY2025 vs. gains of \$0.8m in FY2024.

Corporate Actions and M&A

• Largest acquisition to date: Mineloader (April 2025), for \$19.8m, adding AAA console capability and ~500 employees.
• Continued expansion with the launch of Vertic Studios, a high-end art production studio focused solely on AAA projects.
• Strong fundraising history, including a dual listing on AIM (LSE), private placement in Singapore, and SGX IPO.

Balance Sheet Overview

• Cash and cash equivalents decreased from \$39.8m to \$27.4m due to the Mineloader acquisition payment.
• Intangible assets increased substantially following the acquisition, rising from \$1.9m to \$17.2m.
• Trade and other receivables increased to \$9.3m, driven by higher revenue and consolidation of Mineloader.
• No debt on the balance sheet—strengthening financial flexibility for future M&A.

Cash Flow Analysis

• Net cash generated from operating activities surged to \$5.1m, up from \$0.6m in FY2024, reflecting expanded scale and absence of prior one-off cash outflows.
• Net cash used in investing activities rose sharply to \$14.5m, primarily due to the Mineloader acquisition.
• Net cash used in financing activities was \$1.7m, compared to net inflows of \$27.0m in FY2024 from share issuance.

Dividend Policy and Payments

• The company’s dividend policy is to distribute approximately 5% to 15% of annual distributable profits. For FY2025, the Board has proposed an annual final dividend per share (SG\$0.024, GBP 0.014), matching the prior year and exceeding the policy parameters, subject to shareholder approval.

Shareholder Structure

• Acer Group holds 63.9% of shares, management holds 13.1%, and public float is 22.9%.

Directors’ Pay and Remuneration

• No explicit disclosure of directors’ pay or remuneration levels in the report.

Market Landscape and Strategic Outlook

• Winking Studios is one of the top four largest game art outsourcing studios globally.
• Strong presence in North America, Asia, and Europe, with established collaborations with 22 of the largest 25 global game development companies.
• Revenue visibility is strong, with indicative bookings of at least \$48.6m over the next 24 months (\$34.6m expected to be recognized in FY2026).
• Expansion into Western markets is a key strategic focus, with formal establishment of studios and regional leadership underway.
• The company is actively evaluating acquisition targets, supported by a strong balance sheet and zero debt.
• Market recovery and increased outsourcing demand are expected to support further revenue growth.

Chairman’s Statement

Chairman’s Statement:
No explicit Chairman’s statement was found in the report. Inferred tone: Positive, based on continued expansion, strong financial performance, and forward-looking strategic outlook.

Conclusion and Recommendations

Overall Assessment: The financial performance of Winking Studios Limited appears strong, underpinned by rapid revenue growth, stable margins, disciplined expansion through acquisitions, and robust cash flow from operations. The company’s outlook is positive, with continued focus on Western expansion, sustainable profitability, and further M&A opportunities. The stable dividend policy and zero debt position further strengthen its appeal.

Investor Recommendations:

• If you currently hold the stock: Consider holding your position. The company is executing well on its strategy, has strong revenue visibility, and is poised for further growth through geographic expansion and acquisition. Dividend payments remain stable, and the balance sheet is robust.
• If you do not currently hold the stock: Consider initiating a position if you seek exposure to the global gaming industry’s outsourcing growth, especially as the company continues to scale and diversify its client base and geographic footprint. However, monitor for integration risks and any moderation in profit margins due to ongoing expenses and acquisition costs.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult with professional advisors before making any investment decisions.

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