SONKA S.A. Q3 2025: Team17 Partnership Transforms Cash Position and Returns Company to Profit

Overview

The Q3 2025 report of SONKA S.A., a NewConnect-listed Polish game developer and porting studio, marks a turning point for the company. A new publishing agreement with Team17 for the flagship survival horror title Holstin has reshaped SONKA’s financial profile, eliminating debt, generating strong cash inflows and returning the business to profitability after a period of losses. At the same time, the company is becoming increasingly focused on a single key project, magnifying both potential upside and execution risk.

Financial Results: Strong Revenue Surge and Return to Profit

In the third quarter of 2025, SONKA generated net revenues and related income of PLN 5.92m, compared with just PLN 0.46m in Q3 2024. This represents a more than twelvefold increase year-on-year. Operating expenses also rose sharply to PLN 5.53m (Q3 2024: PLN 0.64m), reflecting higher outsourced services, production spend and personnel costs tied primarily to Holstin and porting activities.

Despite this cost growth, the company delivered a positive result:

• Operating profit in Q3 2025 reached roughly PLN 0.39m, versus an operating loss of about PLN 0.17m a year earlier.
• Net profit for Q3 2025 amounted to PLN 0.43m, compared with a net loss of PLN 0.19m in Q3 2024.

On a year-to-date basis (three quarters 2025), revenues climbed to PLN 6.86m (up around 383% versus PLN 1.42m in 9M 2024). The company recorded a net profit of PLN 0.21m for the nine-month period, versus a net loss of PLN 0.48m in the comparable period of the previous year. This transition from loss-making to profitable operations is a direct consequence of the Team17 production and publishing deal and the associated recognition of income related to Holstin.

Profitability and Cost Structure

The Q3 figures show a significant improvement in profitability despite a cost base that has scaled up substantially. The main cost driver remains “services purchased” (external services), which rose to over PLN 5.26m in the quarter. This line reflects outsourced development work, contractor fees and other production or porting services, consistent with SONKA’s lean, partner-heavy model.

Personnel expenses (wages and social security) remain relatively modest compared with overall costs, with a small internal team of 14 people as of 30 September 2025 (two management board members and 12 collaborators on civil-law contracts). This structure allows SONKA to remain flexible and scalable, but also means much of the execution risk sits with external partners.

The improvement in the gross margin and the positive net result indicate that the economics of the Team17 agreement are favourable for SONKA, as emphasised by the CEO in the letter to shareholders. Management notes that the revenue-share terms are competitive despite Team17’s sizeable total budget commitment of USD 2.864m for Holstin’s development and publishing.

Balance Sheet: From Negative Equity to Positive Capital and High Cash Reserves

SONKA’s balance sheet has strengthened materially over the last twelve months. Total assets as at 30 September 2025 amounted to PLN 6.51m, compared with PLN 4.65m a year earlier. The key changes include:

• Cash and cash equivalents surged to PLN 4.66m from PLN 0.64m at the end of September 2024.
• Inventories (work in progress) related to game development fell from PLN 3.65m to PLN 1.28m, reflecting both progress on Holstin and reclassification of costs following the new financing structure.
• A deferred tax asset of PLN 0.43m has been recognised under long-term accruals, indicating that prior tax losses will be utilised against future profits.

On the equity and liabilities side, the most notable shifts are:

• Equity improved from negative PLN 0.18m a year earlier to positive PLN 0.82m at the end of Q3 2025, driven by the profit and restructuring of financing.
• Short-term liabilities rose sharply to PLN 5.58m (from PLN 0.85m), largely due to obligations towards related parties and settlement of the PlayWay investment and Team17 funding.
• The company reports no long-term financial debt and only non-interest-bearing loans from management.

The CEO underscores that SONKA is effectively free of bank debt and that the financial risk of Holstin now lies primarily with Team17. SONKA’s own risk is therefore more operational than balance-sheet related.

Cash Flows: Exceptional Operating Inflows

Cash flow dynamics are particularly striking in Q3 2025. Operating cash flow for the quarter reached PLN 4.48m, compared with approximately PLN 0.06m in Q3 2024. For the first nine months of 2025, operating cash flows totalled PLN 3.74m, up from PLN 0.32m in the prior-year period.

There were no significant investment outflows during the period, and financing cash flows were modest (net inflow of PLN 0.13m in 9M 2025). As a result, total cash increased by PLN 3.87m year-to-date, to PLN 4.66m at the end of September.

The strong operating cash flow is primarily driven by advances and production payments tied to Holstin, together with a substantial change in payables and accruals. This inflow provides SONKA with a comfortable liquidity cushion ahead of the game’s planned 2026 release.

Strategic Developments: Team17 Partnership and Focus on Holstin

The most important strategic event in the period is the finalisation of the publishing agreement with Team17 Digital Limited, a globally recognised indie publisher behind titles such as Worms, Hell Let Loose, DREDGE, Overcooked, The Escapists and Blasphemous. Under the agreement:

• Team17 will cover the full USD 2.864m budget for Holstin’s production and publishing, including development, marketing, localisation, QA and other costs.
• SONKA receives a share of the game’s revenues under a rev-share model that management describes as “very competitive” for the company.
• SONKA has used this funding to repay PlayWay’s Holstin investment of PLN 4.4m, eliminating that obligation and improving the capital structure.

The CEO emphasises that Team17’s production support is already improving Holstin’s quality and development efficiency, with a team comparable in size to SONKA’s own staff working on balancing, redesigning mechanics, optimising asset creation and organising targeted playtests. A coordinated marketing push, including new trailers, festival participation, press demos and influencer outreach, is planned to start around the time of the official collaboration announcement.

Holstin itself is positioned as SONKA’s flagship project, with planned release on PC, Xbox, PlayStation and Nintendo Switch in 2026. Wishlist numbers on Steam have already exceeded 400,000, indicating significant pre-release interest in the survival horror title.

Outlook and Pipeline

SONKA’s near-term strategy is to focus almost entirely on delivering Holstin at the quality level demonstrated in its demos and early materials. Other projects have been frozen, reallocated or cancelled, with the exception of ongoing porting work on Hellcard.

The company sees optionality in its pipeline:

• Astro Bears 2 remains frozen but may be resumed as soon as next year if resources allow. The first Astro Bears sold nearly 500,000 copies on Nintendo Switch, and management notes that “friend-slope” party titles are among the best-selling genres on Steam in 2025.
• If Holstin’s sales reach even half of internal expectations, SONKA intends to proceed quickly with Holstin 2, turning the IP into a recurring franchise.

The publishing agreement with Team17 significantly reduces SONKA’s financial risk on Holstin itself. The main risk for the company is therefore opportunity cost: failing to capitalise fully on a strong publishing partner and a promising IP.

Key Risks

Despite the improved financial profile, several risks remain:

• Concentration risk: SONKA is now highly dependent on the commercial success of a single major title, Holstin. Underperformance at launch would limit revenue share and slow future projects, even if the balance sheet remains liquid in the short term.
• Execution risk: Delivering a high-quality survival horror experience that matches or exceeds early demos is critical. Any quality issues or delays could undermine Team17’s marketing efforts and damage the brand.
• Dependence on partners: The company relies heavily on external partners for both development and publishing. While this model is capital efficient, it reduces SONKA’s direct control over key decisions such as release date, marketing allocation and platform strategy.
• NewConnect and liquidity risk: As a smaller NewConnect-listed issuer, SONKA’s shares may exhibit higher volatility and lower liquidity, amplifying the market impact of news around Holstin’s development or performance.

Conclusion

SONKA’s Q3 2025 report shows a company that has successfully stabilised its finances and repositioned itself around a single, high-potential IP. The Team17 deal has removed most of the financial risk associated with Holstin, injected significant liquidity, restored positive equity and delivered a return to profitability. At the same time, SONKA’s dependence on the successful execution and reception of this one title is higher than ever.

For investors, SONKA now represents a focused bet on Holstin’s commercial performance and on the studio’s ability to turn that success into a longer-term franchise and broader portfolio. Monitoring the progress of development, the effectiveness of the Team17-led marketing campaign, Steam wishlist dynamics and eventual launch metrics will be essential to reassessing the risk–reward profile as the game approaches release.

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