Frozen Way Q3 2025: Strong Revenue Growth, Stable Profitability and a Loaded Release Pipeline

Company overview

Frozen Way S.A. is a Kraków-based game developer and publisher focused on mid-budget PC and console titles, typically with production budgets between roughly PLN 1.5 million and PLN 10 million and development cycles of one to six years. The company works with distributed development teams and an extended network of specialists across game design, programming, art, audio and marketing.

The core of the portfolio is the “House Flipper” franchise and related DLCs, complemented by simulation and builder titles such as Builder Simulator, Train Station Renovation and the newer Train Yard Builder. The report for the third quarter of 2025 confirms Frozen Way’s position as a profitable, content-rich studio with a growing pipeline of new IP and expansions.

Q3 2025 financial performance and profitability

In Q3 2025 (1 July–30 September), Frozen Way generated:

Net revenues from sale of products of PLN 2.80 million, up from PLN 2.32 million in Q3 2024, an increase of 20.8%.
Total revenues including change in product inventories of PLN 4.57 million versus PLN 3.53 million a year earlier.

The strong top-line growth was driven mainly by:

An expansion of the commercial portfolio from 13 to 18 titles year on year, including new DLCs and ports.
Wider platform coverage across PC (Steam and other stores), PlayStation, Xbox, Nintendo Switch and VR devices.

Despite a sizeable 38.6% increase in operating costs to PLN 3.59 million (from PLN 2.59 million), the company maintained healthy profitability:

Profit from sales rose to PLN 0.98 million (Q3 2024: PLN 0.94 million).
Operating profit reached PLN 0.94 million (Q3 2024: PLN 0.95 million).
Net profit climbed to PLN 0.75 million, up from PLN 0.70 million in the prior-year quarter.

For the first nine months of 2025, Frozen Way posted:

Total revenues of PLN 14.67 million (9M 2024: PLN 13.15 million).
Operating profit of PLN 4.42 million (9M 2024: PLN 4.32 million).
Net profit of PLN 3.55 million (9M 2024: PLN 3.81 million).

The slight year-on-year decline in cumulative net profit despite higher revenues reflects, among others, higher operating expenses tied to project scale-up, rising personnel costs and a more intensive marketing schedule ahead of upcoming releases.

Revenue structure and the role of the House Flipper franchise

The report gives an unusually detailed breakdown of revenue by platform and franchise, which is particularly informative for investors.

By platform in Q3 2025:

PC (mainly Steam and associated PC platforms) generated approximately PLN 1.89 million of revenue.
PlayStation (PS4, PS5, PSVR, PSVR2) contributed around PLN 0.46 million.
Xbox (Xbox One and Xbox Series) added roughly PLN 0.33 million.
Other platforms (Nintendo Switch, Oculus/Quest) delivered about PLN 0.12 million.

The House Flipper ecosystem remains the revenue engine:

The House Flipper franchise generated roughly PLN 2.44 million in Q3 2025, accounting for the vast majority of product sales.
Strong contributions came from DLC such as Pets, Farm and Dine Out, across PC, PlayStation, Xbox and Switch.
Additional monetisation layers include VR editions (House Flipper VR, House Flipper Pets VR) and themed furniture packs.

Beyond House Flipper, titles such as Builder Simulator, Train Station Renovation, Train Yard Builder and Chornobyl Liquidators add diversification, but their financial weight is still clearly lower than that of the flagship franchise.

An important technical nuance is the timing of revenue recognition. Due to contractual settlement periods with distribution partners, a portion of digital sales from August and September 2025 – especially for House Flipper DLC on PC and consoles – will only be recognised in Q4 2025. This implies that the Q3 numbers understate the actual commercial momentum during the period and set up a potentially strong reported Q4.

Cost dynamics and margin drivers

Operating costs in Q3 2025 increased by roughly 39% year on year to PLN 3.59 million. The major drivers were:

Higher external services, primarily outsourcing and subcontracted development work, which rose by over 30%.
Increased salary expenses as the company continues to formalise employment relationships and expand its internal team.
Strong growth in social security and other employee-related benefits.
A sharp increase in other operating expenses, largely related to participation in industry events Gamescom 2025 and Tokyo Game Show 2025.

At the same time, amortisation remained relatively modest, reflecting the company’s accounting approach in which most development expenditure is captured in inventories (work in progress and finished products) rather than capitalised as intangible assets.

Despite these cost pressures, Frozen Way preserved a solid operating margin, thanks to:

High-margin digital distribution.
The scale and stickiness of its House Flipper DLC portfolio.
A significant positive contribution from the change in product inventories that reflects progress on multiple in-development titles.

Balance sheet structure and equity position

As of 30 September 2025, Frozen Way’s balance sheet totalled PLN 21.86 million, up from PLN 18.70 million a year earlier.

Key features include:

A very asset-light fixed base: non-current assets amount to approximately PLN 0.79 million, with tangible assets of only about PLN 0.15 million and other intangibles of PLN 0.03 million.
A high share of inventories in current assets: PLN 14.61 million, consisting largely of work in progress (around PLN 12.16 million) and finished games and DLC (around PLN 2.45 million). This reflects the capitalised cost of the current and upcoming portfolio.
Short-term financial assets and cash of PLN 5.13 million, an increase compared to PLN 4.78 million in the prior year.

On the equity and liabilities side:

Equity stands at PLN 17.40 million (previous year: PLN 16.66 million), supported by retained earnings and a large share premium reserve.
Short-term liabilities and provisions amount to around PLN 4.46 million, including deferred tax liabilities and accruals.
The equity ratio remains high, above 70%, which is conservative for a mid-sized NewConnect issuer and provides a solid buffer against project volatility.

The shareholder base is highly concentrated. Frozen District sp. z o.o. holds approximately 75.95% of the share capital and votes, with the free float and other investors owning the remaining 24.05%. This structure ensures strategic alignment with the main partner and content owner but limits the liquidity profile of the share.

Cash flows, dividend policy and liquidity

Cash flow dynamics in 2025 are shaped by strong operating performance and a shareholder-friendly dividend policy.

For the first nine months of 2025, Frozen Way generated:

Net cash from operating activities of about PLN 1.41 million, a significant improvement compared with a slight outflow in the prior year period.
Net cash from investing activities of roughly PLN 0.14 million, mainly reflecting modest capex and proceeds from financial assets.
Net cash from financing activities of approximately minus PLN 3.85 million, entirely driven by dividend payments to shareholders and associated settlements.

As a result, total cash and cash equivalents decreased from roughly PLN 7.42 million at the beginning of the year to PLN 5.13 million at the end of September. The decline is almost entirely explained by dividends, while the underlying business remains cash-generative and investment needs are manageable.

This profile suggests:

Liquidity is comfortable in the short term.
The company has room to continue investing in content while maintaining a dividend, as long as upcoming releases perform in line with expectations.

Operational developments and project pipeline

The quarter was rich in operational milestones, both on the development and marketing fronts.

Key production efforts were focused on:

“Honeycomb: The World Beyond” – an ambitious title for PC, PlayStation 5 and Xbox Series.
“Farmbotic” – a farming and automation-themed project, also targeting PC and current-generation consoles.
“Campus Life” – a PC game nearing completion, with intensive pre-launch marketing and localisation into 11 languages.
“House Flipper Remastered Collection” – updated versions of House Flipper for PC and consoles.
“House Flipper 2 – Pets DLC” – an expansion leveraging one of the strongest themes within the franchise.

The company also invested heavily in visibility:

At Gamescom 2025, Frozen Way showcased an improved demo of Honeycomb ahead of its planned launch.
At Tokyo Game Show 2025, the company presented playable versions of Honeycomb, House Flipper Remastered Collection and Farmbotic, and revealed the House Flipper 2 – Pets DLC trailer.
The new DLC quickly climbed into the Top Wishlists on Steam, while Farmbotic gained over five thousand new wishlist additions in just three days, confirming strong community interest.

The current release plan (subject to change) spans 2025–2026 and includes:

Salvage Shop Simulator (PC) in late 2025 or early 2026.
Honeycomb: The World Beyond (PC, Xbox Series, PS5) in the first quarter of 2026.
House Flipper Remastered Collection (PC, Xbox Series, PS5) in the first quarter of 2026.
Train Yard Builder on consoles in the second quarter of 2026.
House Flipper 2 – Pets DLC (PC, Xbox Series, PS5) in the second or third quarter of 2026.
Farmbotic (PC, Xbox Series, PS5) in the second or third quarter of 2026.
Builder Simulator 2 at a later, yet unspecified date.

A notable decision after the reporting date was the postponement of Honeycomb’s release from November 2025 to the first quarter of 2026, in order to meet higher quality expectations from the publishing partner. While this shifts revenue recognition, it may enhance the game’s long-term commercial potential.

Risks and key sensitivities

Frozen Way’s business model exposes the company to several identifiable risk areas:

Franchise concentration risk
The House Flipper brand still accounts for the majority of current revenues. Any deterioration in its performance, competition from similar titles, or saturation of DLC demand would materially affect financial results.
Execution and timing risk on the pipeline
The release schedule for Honeycomb, Farmbotic, House Flipper Remastered Collection and House Flipper 2 – Pets DLC is dense. Delays, quality issues or weaker-than-expected reception would translate into volatility in revenues and earnings, especially given the scale of pre-release marketing investment.
Cost base and fixed commitments
The long-term office lease in Kraków, with total estimated payments of roughly PLN 3.45 million over five years and around PLN 0.65 million estimated for 2025 alone, increases fixed costs. While appropriate for a growing studio, it raises the break-even point if market conditions worsen.
Human capital and geopolitical risk
The company works with staff and contractors from Poland and abroad, including Ukraine. Changes in mobilisation rules or geopolitical conditions could affect the availability of key specialists and development capacity, though current revenue exposure to the region is small.

Despite these factors, the management board states that no risks have been identified that would threaten the company’s ability to continue as a going concern. The combination of positive operating cash flows, a strong equity base and a diversified portfolio of projects supports this assessment.

Outlook and management perspective

The Q3 2025 report paints a picture of a company in an investment and scaling phase, but already delivering stable profitability. The key themes for the coming quarters are:

Converting strong pre-release interest in Honeycomb, Farmbotic and new House Flipper content into sales across PC and consoles.
Leveraging the established House Flipper brand to sustain recurring DLC-driven revenue while extending its lifecycle through remasters and new expansions.
Gradually increasing the share of non–House Flipper titles in the portfolio to reduce concentration risk and broaden the addressable market.
Maintaining financial discipline so that growing fixed costs and marketing investments do not overshoot the revenue growth curve.

If the release pipeline executes well, Frozen Way has the potential to move from a “one flagship franchise” profile to a broader, multi-IP portfolio while preserving its current profitability and dividend capacity. The Q3 2025 figures suggest that the company is on a solid footing to attempt that transition, although the next 12–18 months will be critical in determining how much of this potential is realised.

Conclusion

Frozen Way’s Q3 2025 report confirms a healthy combination of revenue growth, solid margins and a deep, market-tested pipeline. The company continues to monetise its core House Flipper franchise effectively, while simultaneously investing in the next wave of titles that could define its growth profile beyond 2026.

For investors, the story is one of controlled risk: strong brand equity and proven DLC economics balanced against the challenges of a packed release calendar, rising operating costs and a still highly competitive global games market. Execution on upcoming launches – especially Honeycomb, Farmbotic and House Flipper 2 – Pets DLC – will be the key determinant of value creation from here.

Feel free to explore the company’s full profile on our platform: Frozen Way