Visual Effects and Animation Leader DNEG Announces Business Update
DNEG reported strong financial results for the year ended
- Revenue of $409.3 million represents a 33.5% increase year-over-year.
- Net income surged by 214.7% to $39.3 million, indicating strong profitability.
- Adjusted EBITDA reached $100.6 million, up 22.4%, with a robust margin of 24.6%.
- DNEG's order book grew to over $700 million by June 2022, reflecting strong demand.
- 95% of revenue came from recurring customers, enhancing revenue stability.
- None.
Company Outperformed Target Revenue for the Year Ended
Company Saw Revenue of
Revenue Increase of
Selected DNEG highlights include:
-
For the full-year ended
March 31, 2022 , DNEG generated revenue of , Net Income of$409.3 million and Adjusted EBITDA of$39.3 million , equating to year-over-year growth of$100.6 million 33.5% ,214.7% and22.4% 1, respectively. -
Net Income margin equated to
9.6% and Adjusted EBITDA margin equated to24.6% 1 for the year. -
DNEG revenue increase of
33.5% in FY2022, endedMarch 31 , was driven by healthy growth in demand for content. -
DNEG’s percentage of recurring revenue coming from customers from which revenue was generated in the prior year was
95% . -
At the end of FY2022, DNEG saw more than
in total order book and order pipeline, and has grown to over$505 million as of$700 million June 14, 2022 2. This growth was primarily the result of new project confirmations and additional bidding momentum. -
Selected recent project deliveries included “Stranger Things” Season 4, Uncharted, Sonic The Hedgehog 2, “The Gilded Age,” The Lost City, “Our Flag Means Death,”
The Adam Project and The Matrix Resurrections.
These outstanding results follow a series of significant recent announcements from DNEG including:
- A multi-year deal extension and renewal of DNEG’s VFX services agreement with Netflix through 2025; a significant expansion of its previous agreement.
-
Current and upcoming projects set to debut in 2022 include Bullet Train, Shazam! Fury of the Gods, Borderlands, Glass Onion: A Knives Out Mystery,
The School for Good and Evil , Devotion, “Super/Natural,” Black Adam and “The Witcher: Blood Origin.” -
Upcoming 2023 projects include live-action / computer-animated feature film Coyote vs. Acme, Aquaman and the Lost Kingdom,
Haunted Mansion , The Flash, Meg 2: The Trench, “The Last of Us,” and animated feature Nimona. - A digital production award by Locksmith Animation for its second animated feature film That Christmas. This follows DNEG Animation and Locksmith Animation’s collaboration on the companies’ debut animated feature, 2021’s Ron’s Gone Wrong.
-
The announcement of DNEG Animation as exclusive animation studio and producer of new animated feature Garfield, alongside partners
Alcon Entertainment . -
An official opening of DNEG’s previously announced studio in
Toronto , with MayorJohn Tory in attendance and an announcement that more than 150 personnel had already been already hired. The Company also revealed significant progress in its aggressive Canadian expansion efforts, with more than 1,500 employed acrossCanada . - The 2022 Best Visual Effects Academy Award® for its work on Dune, marking its seventh Oscar®, and sixth win in the last eight years. Its work on the feature film No Time To Die was also nominated.
-
Its seventh BAFTA award for Dune; DNEG projects had four of the five BAFTA nominees for Best Visual Effects in 2022. The Company also won seven
Visual Effects Society (VES) awards in 2022, bringing DNEG’s lifetime total to 18.
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1 | For a definition of Adjusted EBITDA and Adjusted EBITDA margin and reconciliation of Adjusted EBITDA to net income please see “Non-GAAP Financial Information” below. |
|
2 | Order book and order pipeline is one of DNEG’s Key Performance Indicators, and not necessarily indicative of its future revenue or other results of operations. DNEG’s order book is comprised of (i) projects for which it has received a written contract, either executed or awaiting execution, and (ii) projects for which it has received written or verbal confirmation that it has been awarded a particular project and for which commercial terms are either agreed or generally known due to our course of dealing with a particular customer. DNEG’s pipeline comprises projects that are in an advanced stage of active bidding and discussion, including potential change orders for current projects, but for which the customer has not yet confirmed the commercial terms, the value of the contract and/or the scope of the work. Excludes projects from DNEG’s other production services segment. |
As previously announced, DNEG entered into a Business Combination Agreement with
About DNEG
DNEG (www.dneg.com) is one of the world’s leading visual effects (VFX) and animation companies for the creation of feature film, television, and multiplatform content. DNEG employs nearly 7,000 people with worldwide offices and studios across
DNEG’s critically acclaimed work has earned the company seven Academy Awards® for Best Visual Effects and numerous BAFTA and Primetime EMMY® Awards for its high-quality VFX work. Current and upcoming DNEG projects on behalf of its
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This communication is for informational purposes only and is not intended to and does not constitute an offer to subscribe for, buy or sell, or the solicitation of an offer to subscribe for, buy or sell, or an invitation to subscribe for, buy or sell any securities or a solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in which such offer, invitation, sale or solicitation would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, and otherwise in accordance with applicable law.
Non-GAAP Financial Information
This press release includes financial measures not presented in accordance with
We believe that these measures provide an additional way of viewing aspects of our operations that, when viewed with the
($ in millions) |
|
For the Year Ended
|
|
Net income |
|
39.3 |
|
Interest expense, net |
|
12.0 |
|
Tax expense |
|
17.6 |
|
Depreciation and amortization |
|
28.9 |
|
Stock compensation expense(1) |
|
1.2 |
|
COVID-19 related costs(2) |
|
0.2 |
|
Capital raising costs(2) |
|
1.4 |
|
Adjusted EBITDA |
|
100.6 |
|
Net income margin |
|
9.6 |
% |
Adjusted EBITDA margin(3) |
|
24.6 |
% |
_____________
(1) | Represents non-cash charges related to stock compensation expense. |
|
(2) | Represents non-recurring costs incurred in connection with capital raising activities and costs related to the COVID-19 pandemic. Please refer to the proxy for further description. |
|
(3) | Adjusted EBITDA margin is defined as Adjusted EBITDA as a percentage of revenue. |
Forward-Looking Statements
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Source: DNEG
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