Ladies and gentlemen, thank you for standing by. I would like to welcome you to CD PROJEKT first quarter 2026 earnings conference call on the 28th of May. At this time, all participants' lines are on listen-only mode. The format of the call today will be a presentation by the management team, followed by a question and answer session. Without further ado, I would now like to pass the line to Mr. Michał Nowakowski, the Joint Chief Executive Officer. Please go ahead, sir.
Thank you, and good afternoon, everyone. I'm Michał Nowakowski, Joint CEO of CD PROJEKT, and it's a pleasure to welcome you to our first quarter 2026 result presentation. I'll be sharing the stage today with our CFO, Piotr Nielubowicz. As usual, we'll reserve time at the end for our Q&A session, where Karolina Gnaś, our VP Investor Relations, will step in to join us. As you probably already know, yesterday, we announced that we are working on Songs of the Past. That is a brand-new, fully-fledged third expansion for The Witcher 3: Wild Hunt that we previously referred to as one of our unannounced projects. We are absolutely thrilled about this development and incredibly happy with the community's super positive reaction. Our expansion announcement is officially the second most liked and shared tweet ever on The Witcher profile, surpassed only by our official announcement of the new saga.
It got 16 million impressions within just 24 hours of the reveal. With that in mind, we really look forward to welcoming newcomers to The Witcher universe, as well as returning players eager to hit the trail with Geralt of Rivia one more time. At the same time, we are well aware that stepping back into such a beloved universe comes with high expectations and a great deal of responsibility. That's why we're working hard to deliver to players an authentic and memorable experience. I can share that the expansion is now in an advanced phase of production. Around 190 developers, most of them from our trusted partner at Fool's Theory, are currently working with us on the project. At the same time, provides the creative oversight to safeguard the quality of The Witcher experience.
We are launching the expansion in 2027 on PlayStation 5, Xbox Series X and S, and PC. We look forward to sharing more details about it during Gamescom. Stay tuned. Staying with "The Witcher" brand for a moment, I have another huge milestone to share. According to our latest numbers, "The Witcher 3" has now sold over 65 million copies globally, making it one of the most successful titles in gaming history. For us, this is obviously a perfect setup for everything we're planning next for the franchise. Beyond these major announcements, I would like to summarize other key business events from early 2026. Over the past few months, we focused on strategically expanding the reach of our flagship titles. We introduced "The Witcher 3: Wild Hunt - Complete Edition," as well as the base version of "Cyberpunk 2077" to the Xbox Game Pass Premium and Ultimate catalogs.
Offering these titles for subscription services allows us to attract new players to our universes. Growing our audiences works well both for our future games and for other projects within our franchises, such as the highly anticipated expansion for The Witcher 3: Wild Hunt and the upcoming Cyberpunk: Edgerunners two-anime series. Alongside expanding our player base, we remain committed to ensuring our existing titles deliver the highest possible technological quality. In April 2026, we successfully rolled out a dedicated tech update for Cyberpunk 2077. It allows the game to fully leverage the expanded hardware capabilities offered by the PlayStation 5 Pro console, ensuring that exploring Night City remains a cutting-edge experience, even years after the release. We believe this will contribute to the game's lasting appeal and support its sales over the long term. While we aim to continue delivering high-quality games, our long-term growth relies on building strong IPs.
The Cyberpunk trading card game Kickstarter campaign proved to be the biggest gaming project ever on the platform and the third largest of all time, which proved to us that the excitement surrounding the universe goes far beyond video games. While only a portion of the final total of $28 million raised for the campaign is recognized as CD PROJEKT Group revenue, it's still a very meaningful result for us as it reveals the continued strength of the Cyberpunk brand. As this is a license-based cooperation, we will also participate in the game's financial performance once the game launches. Now concluding my part, let me briefly comment on the current project allocation. Since the last update, as you may see on the chart, our projects have seen only some adjustments in team size, aligning with their ongoing progress and evolving workload requirements.
As we are now in the most intensive phase of The Witcher 4 development, the team has grown to 513 developers, while the Cyberpunk 2 and series team also grew by 1,000 or so. This reflects a stable organizational setup that has the right capabilities and expertise in place. With that, I'll pass it over to Piotr, who will walk you through our Q1 financial results.
Thank you, Michał. Good evening, everyone. Let's start with our consolidated P&L account on slide nine. First, a technical reminder. Following last year's sale of GOG, we no longer report separate business segments. Secondly, the corresponding period for 2025 has been adjusted for comparative purposes, meaning GOG has been excluded from what we had reported in last year's Q1. Therefore, the columns for both Q1 2025 and Q1 2026 present only, the operation we continue. The net result from discontinued operations for the first quarter of the previous year has been presented separately at the bottom of the table. Now we can move on to the numbers. Our sales revenue for the first quarter of 2026 reached over PLN 191 million , a 6% increase year-on-year.
Naturally, the majority of this revenue came from sales of our own products, particularly the Cyberpunk family. Additionally, we recognized revenue from the inclusion of the base edition of Cyberpunk 2077 and The Witcher 3: Wild Hunt Complete Edition in Xbox Game Pass Premium and Ultimate subscriptions. With the cost of sales remaining flat compared to Q1 2025, our gross profit stood at PLN 177 million. Selling and administrative expenses slightly increased over the period, amounting to a combined PLN 81 million. Finally, our net profit for the first quarter of 2026 reached 106 million PLN, with the net profitability at a solid 56%. The next slide, number 10, presents our consolidated balance sheet. On the asset side, we see the usual expenditures on development projects.
The balance here increased by PLN 169 million, driven by nearly PLN 180 million in new development expenses offset by PLN 10 million in amortization of previously launched games. There was also a visible increase of PLN 51 million in the property, plant, and equipment line item. This was due to further expenditures on construction works and the acquisition of a property related to the plant expansion of our campus. The decrease of other current assets was driven mainly by the reduction of other receivables related to the sale of GOG shares at the very end of 2025 and some of our previously made prepayments. The total value of cash deposits and bonds included in the three asset items marked with an asterisk is summed up under the table and amounts to PLN 1,411 million as of the end of March.
As usual, I'll discuss this in more detail on the dedicated cash flow slides. Moving forward to equity and liabilities, slide 11. The most significant impact here came from the net profit generated in the current period, which helped our equity surpass 3.4 billion PLN at the end of March. Now please move on to slide 12. 's expenditures on research works, development, and cost of product maintenance, presented here on a quarterly basis over the last five quarters. Looking at a chart, the trend is clear. We continue to scale our investments in both public and announced projects as development progresses. The increase over the last quarter comes from both the projects developed internally as well as those created in cooperation with our partners. Finally, let's look at our aggregated cash flow drivers on slide 13.
The 106 million PLN book net profit was supported by PLN 27 million in amortization, depreciation, and non-cash costs of our share-based incentive programs. At the same time, PLN 43 million was spent on the acquisition of tangible and intangible assets. The overall change in receivables, liabilities, provisions, and deferrals bolstered our cash flows by PLN 34 million, mainly thanks to the natural decrease of trade liabilities after the intense end-of-year sales. Other cash flows were mainly driven by the difference between the income tax recorded in our P&L and actual transfers related to income tax during the reported period. Excluding investments in currently developed products, our ongoing business generated PLN 148 million in positive cash flows during the first quarter. At the same time, most of our team was engaged in work on new projects, hence the nearly PLN 150 million outflow associated with development expenditures.
Additionally, at the beginning of January, we received the already mentioned payment for the sale of GOG shares, which after transaction costs bolstered our cash position by PLN 87 million. All in all, during the reporting period, our financial reserves kept in cash, bank deposits, and bonds increased by PLN 86 million, standing at over PLN 1.4 billion at the end of March. To conclude my part of the presentation, let me briefly walk you through where we currently stand in achieving the goal for the first stage of our share-based incentive program. Please move to slide 14. The earnings condition for the 2023, 2026 period was set at PLN 2 billion in cumulative net profit from continuing operations. Following a solid first quarter, we still need PLN 418 million to reach this target. The goal remains highly ambitious.
Nevertheless, with both gaming and non-gaming projects in a fairly advanced stage of production and some initiatives we are working on, we believe we have a chance of meeting the goal. That's all from me. We are now ready for the Q&A session.
Thank you. Thank you very much for the presentation. We are now opening the floor for the question and answer session. If you are to ask a question, you can use the interface provided to raise your hand for voice question, or you can use the interface to send your question as a text. We'll just give a moment or so for the questions to come in.
Okay. Since we seem to have no voice questions, we have a few in the text form. The first one is from Christoph Koch from Erste. The question is, "Is the company satisfied with the current quality of the new The Witcher 3 expansion developed in cooperation with Fool's Theory?" The short answer is yes, we are. I really have not much more to add here.
The second question comes from Christoph Koch, Erste. "During recent conference calls, the company indicated that it planned to release a project in 2026 that should support the achievement of the incentive program targets. Was this project Songs of the Past? Was the expansion originally targeted for 2026? If so, should we expect its release rather earlier than later in 2027?" For several quarters, we've been disclosing that our pipeline includes some unannounced projects being in an advanced production stage, and one of those is the expansion being co-developed with Fool's Theory. Our early plans assumed that Songs of the Past could be released this year. However, we decided that it will be launching in 2027.
We obviously have some other content currently at an advanced production phase as well, and while it's obviously not on the same scale as the major expansion, we still plan to release it this year.
The next question we have is from Nicolas Langlet from BNP Paribas. The question reads, "How should we think about the scope and average selling price for The Witcher 3, Songs of the Past? Is it more comparable to Hearts of Stone or Blood and Wine DLCs?" First of all, I cannot stop myself. It's not a DLC, it's an expansion. We differentiate between these two. DLCs are the smaller ones, which we typically give for free. Expansions are the bigger and juicy ones. It may be semantics for some people, but it's pretty important for us. On the price, we are not really commenting. We're going to reveal that when the right comes. It's part of the marketing messaging. Whenever the time is going to be right, we're going to put it out there.
When it comes to the scope, I'd say it's actually a little bit closer to Blood and Wine. This is super subjective. It really depends on how you're going to play, what's your playthrough. We're definitely making a proper big expansion is the message I would send out there. The next question I might try and take as well, it's also from Christoph Koch from Erste. It reads, "Given the very ambitious project pipeline, does the company see room for developing expansions for the new Witcher saga?" Since, as you mentioned in the question, the plans are pretty ambitious. Specifically, it's to release three Witcher games within a six-year period. It would be difficult, to be very honest, for us to add an expansion to the upcoming trilogy. This is where we are here and now with this particular issue.
The next question is from Nicolas Langlet, BNP Paribas. "Based on current advancement of our pipeline, are you comfortable to match the 2024-2027 incentive program earning target?" The answer is kind of philosophical. All our goals are always extremely ambitious, and that one, of course, also we see as an ambitious one. There is nothing more to comment that I already did during my first part of the presentation.
The next one is also from Nico. "Would you say The Witcher 4 development team has reached the peak or it could further increase in the coming quarters?" We believe that we right now have the right mix of expertise and skills, but of course, we may slightly adjust the team size depending on the needs.
The next question is from Tomasz Rodak, Dom Maklerski BOŚ. "What was the reason of postponing the debut of Songs of the Past to 2027? Earlier, you implied that the product developed by Fool's Theory will be released this year." This ties back to what I think Piotr mentioned earlier, where we basically reported doing our investors calls, and we were given the updates on various projects, including unannounced ones. Obviously, the Fool's Theory one, well, the Songs of the Past specifically, was one of them, but we never specifically were suggesting a date for any of them because we were not really naming them. As also Piotr mentioned before, in one of the questions that were asked, I think, here in the written form, we had a moment where our plans assumed that Songs of the Past would be released this year.
We decided together with the development team, that the game will be launching in 2027, to be honest, for its best to achieve the best possible result from the consumer standpoint, which in the end, frankly speaking, is the only ultimate thing that really matters. The next one is also from Tomasz Rodak. "During the REDstreams, it was said that Songs of the Past will be showcased during upcoming Gamescom conference at the entertainment area. Does it imply a trailer or hands-on experience?" We're saying we're going to be showing the game there. I cannot really talk for the details, but what I would actually suggest is that historically, when we were showing Witcher games, we were typically doing a guided demo kind of experience. Probably you should be thinking more in those lines rather than a hands-on experience.
These are big games, very large RPG experiences. Having a five-minute session with a game like that would not really give you a lot. We're more likely going to be following the trail of what we've been doing in the past with "The Witcher 3," or for that matter, with "Cyberpunk" when we were announcing it as well.
The next question comes from Michał Wojciechowski, IPOPEMA Securities. "Was the decision regarding lack of dividend payment driven by delay of Songs of the Past, or were there more reasons? Cash flow seems still relatively healthy for Q1 2026." Thank you for this opinion. Also our cash position is pretty strong at the end of the first quarter. Songs of the Past is relatively soon. I'm sure we will still have a lot of money on our bank accounts and in our bonds on the day of launching the Songs of the Past, it's definitely not the thing. To put it simply, we always plan all of the developments we have in our pipeline looking at the long term, we are growing the studio into a multi-project development team or teams working together.
We know we have to secure all the financing for all of the projects being run at the same time. When they are to be published, also, we have to take into consideration the marketing budgets that needs to support each and every launch. On top of that, we obviously want to maintain also a solid financial cushion. This keeps us be flexible on a day-to-day basis and also allows us to jump on new business opportunities if they appear.
Okay, we have one more question from Piotr Poniatowski from mBank. The question is, "Would it be possible to play Songs of the Past on PlayStation 4?" Well, the answer is no. We're targeting with this release PlayStation 5, Xbox Series X and S, and PC. The last-gen consoles are not going to be part of the release. I have also one more question, this time from Nick Dempsey from Barclays.
The question is, "I know that you want to set out an exact timeline for all of the releases in the world of The Witcher, but just commercially, in order for Songs of the Past to be allowed a good run at selling the kind of units you're hoping for, how much of a time gap would be sensible between the release of that expansion and the release of 'The Witcher 4?'" Oof, that's a very complicated question. We're not really commenting on timelines and dates, because answering that question specifically would really be doing that, and we're not. We haven't actually even set out a very specific date for Songs of the Past just yet, and we have not made any comments in the past, and are not going to make them today, of course, for The Witcher 4 release date.
I'm afraid I'm going to have to ask you to be a little bit more patient.
The next question is from Tomasz Rodak, Dom Maklerski BOŚ. "Could you please comment on whether the financial targets for the Motivation Program are still considered achievable? Please refer to the stage ending in 2026 and the stage ending in 2027." As I already said, both are really ambitious. Nothing is guaranteed. We still believe that with the products we have in our pipelines and with the initiatives we are currently working on, we have a chance of reaching the goals of our Incentive Programs.
Okay, we have one more question from Sebastian Gawłowski from ISB. How do you see the role of Cyberpunk TCG in this universe after successful Kickstarter? Do you plan to take stronger supervision on this project since your partner is actually a startup? Well, the role of Cyberpunk TCG potentially can be massive and very important for us in terms of how it spreads, how it keeps the IP rolling amongst the fans of this particular way of having fun offline. Do we keep to have a stronger supervision over WeirdCo? Well, not really. They are specialists in what they do. In fact, even though they are a startup, they come from a pretty experienced background, and they have a long history of working in the TCG environment.
I don't think, even if we wanted to, we could actually give them value added in terms of how to make TCGs, if this is the question. They know how to make them, they know how to sell them, they know how to market them. What we do give them, of course, is our help with lore, our help with making sure that they stick to what is Cyberpunk truly to the bone. Of course, we help them in communicating to our community, so the fans of Cyberpunk, but that's as far as we go. We don't really go beyond that, and we don't really think they need that either.
Next question comes from Sebastian Gawłowski, ISB. How many not announced gaming projects in advanced stage you work on currently? Let's define the advanced stage as those projects who are being capitalized currently. There are two unannounced gaming projects capitalized and also one non-gaming project.
Okay, the next one is from David Mack from Red Research. How does the release of Songs of the Past influence your thinking around The Witcher 4 release? Could the expansion act as a good reminder prologue in the marketing ahead of The Witcher 4? Could The Witcher 4 be released shortly after Songs of the Past, or will you delay to maximize impact? Thank you. I'll start from the end. On the timing of what's going to be released and when exactly or how far apart from each other, we're not going to comment on that. In terms of the first part of the question, it's actually pretty interesting because it's probably going to be, in a way, all of that.
First and foremost, we really wanted to deliver a great experience to the fans, a really cool expansion that's going to make people happy that they can come back to The Witcher 3 setting. Of course, indirectly, yes, it is a reminder. It is, in a way, a prologue, although it's not a prologue in a verbatim way of it's a prologue for the actual The Witcher 4. Yes, you can look at it as it's a way to maintain certain chatter on The Witcher 3. All of those are side effects, additional side effects. The core thing for us, from our perspective, is really delivering a high-quality, fun experience to the existing fans of The Witcher. I can also move straight to the next one from Piotr Poniatowski from mBank. What's going on with the mobile project? Is it a story for 2026?
Again, we don't comment on timings, but this time I will make a small comment. It is definitely not a story for 2026. We've been previously suggesting that this is going to take some time. Scopely and their team, they're very iterative, and they work very fast and very hard, but it's more about iteration and reaching a certain level of satisfaction that is felt on both sides, both them and us. Things are happening, but, once again, it's definitely not a story for 2026. It seems that we have no more questions. I would therefore like to thank all of you. Appreciate your time, your attendance. Obviously, should any further questions arise, come up, our lovely investor relations department remains at your disposal always. Otherwise, I hope you guys are going to have a wonderful evening. Goodbye, and talk to you soon. See you all soon.
Bye-bye.
Thank you.
Goodbye, everyone.
This concludes our call for today. Thank you and goodbye.