Frontier Developments (LSE:FDEV) has upgraded its outlook for the financial year ending 31 May 2026 after stronger trading across its games portfolio and improved tax credit expectations.
The company now expects annual revenue of approximately £103 million, while adjusted operating profit is forecast to reach around £16 million. Management attributed the improved guidance primarily to the successful launch and performance of Jurassic World Evolution 3, alongside steady sales from the wider catalogue of existing titles.
Frontier also benefited from higher-than-expected tax relief after transitioning to the UK’s Video Games Expenditure Credits regime, providing an additional boost to profitability.
The business continued to generate strong cash flow during the year, reporting a cash balance of £44.9 million at the end of April despite allocating £15.4 million toward share repurchases.
Through its ongoing buyback programme, Frontier has repurchased and cancelled nearly four million shares, reducing total voting rights by approximately 10%. The company expects the reduced share count to improve earnings per share by around 11% from FY27 onward, reflecting management’s confidence in the group’s long-term prospects and commitment to shareholder returns.
The company’s outlook is supported by improving profitability, robust cash generation and relatively low leverage levels. Valuation metrics also remain favourable due to a comparatively low price-to-earnings ratio. However, technical indicators continue to show weaker momentum, with the share price trading below key moving averages.
More about Frontier Developments
Frontier Developments is a Cambridge-based video game developer and publisher specialising in management simulation and strategy titles. The company develops games using its proprietary COBRA technology platform and is known for franchises including Planet Coaster, Planet Zoo and Jurassic World Evolution. Frontier’s business model combines new releases with recurring revenue from downloadable content and long-term catalogue sales.
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