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Winking Studios Revenue Surges 42.6% to US$45.5M as Mineloader Transforms the Business Deep-dive financial analysis of Winking Studios (SGX/AIM: WKS) FY2025 full-year results. Revenue jumped 42.6% to US$45.5M, AAA titles soared 735% to 117, and indicative FY2026 bookings hit US$34.6M. Expert breakdown of margins, Mineloader integration impact, and what the numbers really mean for investors. AT A GLANCE — KEY PERFORMANCE INDICATORS METRICFY2025FY2024Revenue$45.5M$31.9M +42.6%Gross Profit$13.5M$9.5M +43.2%Gross Margin29.8%29.7% +0.1ppEBITDA$3.4M$2.0M +69.2%Adjusted EBITDA$5.4M$4.8M +13.2%Adj. EBITDA Margin12.0%15.1% -3.1ppAdjusted Net Profit$3.0M$3.4M -12.3%Reported Net Profit$0.3M$0.5M -37.9%Adj. Net Margin6.5%10.6% -4.1ppOperating Cash Flow$5.1M$0.6M +706.9%Cash + Bonds (Year End)$28.8M$41.3M -$12.5M24-Month Bookings≥$48.6M$35.8M +$12.8MFY2026 Confirmed Bookings~$34.6M—AAA Titles11714 +735.7%Headcount1,426846 +68.6%Studios139 +4Dividend/ShareSGD 0.024¢SGD 0.024¢ 0% 1. Executive Summary: Strong Top Line, Nuanced Bottom Line Winking Studios delivered its strongest revenue year on record in FY2025, but the headline 42.6% growth number requires a scalpel, not a rubber stamp. The Mineloader acquisition did the heavy lifting — and the underlying margin compression tells a more nuanced story for long-term investors. For the financial year ended 31 December 2025, Winking Studios (SGX/AIM: WKS) reported total revenue of US$45.5 million, up from US$31.9 million in FY2024 — a year-on-year increase of US$13.6 million. Of this, approximately US$11.4 million (84% of the increment) came directly from the consolidation of Mineloader, the Taiwanese AAA studio acquired in April 2025 for US$19.8 million. Strip out the acquisition contribution and underlying organic growth was a respectable but more modest 8.6%, with the bulk concentrated in the second half as mobile gaming demand in Asia recovered. The result landed marginally above the broker consensus of US$43.6 million — a clean beat on the top line. The more complex picture emerges at the profit line: Adjusted EBITDA grew just 13.2% to US$5.4 million despite the near-doubling of scale, and the Adjusted EBITDA margin contracted 310 basis points to 12.0%. Reported net profit fell 37.9% to US$0.3 million — a number that, while depressed by acquisition costs and FX losses, is the operating reality shareholders must weigh against the growth trajectory. BULL CASE: Revenue visibility is the most compelling metric in this result. Indicative 24-month bookings stand at US$48.6 million as of year-end, with US$34.6 million expected in FY2026 alone — providing exceptional forward cover for a company of this size. KEY WATCH: The gap between 42.6% revenue growth and 13.2% EBITDA growth is significant. Investors should monitor whether Mineloader's cost base and ongoing LSE listing expenses (~US$0.4M annually) can be absorbed as the platform scales in FY2026. 2. Revenue Decomposition: What Actually Drove the 42.6% Growth? 2.1 Business Segment Performance The business remains highly concentrated in its Art Outsourcing segment, which accounted for 82.4% of group revenue (US$37.5M, +42.0% YoY). Game Development contributed 17.3% (US$7.9M, +48.4% YoY), while the Global Publishing segment remains negligible at US$0.1M. This segment concentration is a feature, not a bug — it reflects Winking's intentional 'work-for-hire' positioning, which eliminates game IP risk and delivers recurring, contract-based revenue. Art Outsourcing (82.4% of revenue): US$37.5M, up 42.0%. Driven by Mineloader consolidation and stronger orders in the US and Mainland China. Game Development (17.3% of revenue): US$7.9M, up 48.4%. Higher volumes from existing clients plus Mineloader's development pipeline. Global Publishing (<1%): US$0.1M. Remains a negligible contributor. Not a strategic focus. 2.2 The AAA Transformation: 14 to 117 Titles — A Game Changer The single most operationally significant data point in the FY2025 release is the explosion in AAA title involvement: from 14 titles in FY2024 to 117 titles in FY2025 — a 735.7% increase. This is primarily attributable to Mineloader's portfolio, which brought console-focused clients including Battlefield 6, Avatar: Frontiers of Pandora, WWE, and Borderlands 4. This AAA pivot is strategically important because AAA console projects command premium pricing and build deeper client stickiness versus mobile content work. The Ninja Gaiden case study demonstrates the combined entity executing compressed multi-title schedules: Winking handled core combat animation for Ninja Gaiden 4 while Mineloader led full-level production for Ninja Gaiden 2 Black simultaneously — a capability only possible at scale. The Riot Games relationship (2XKO and Teamfight Tactics) further illustrates the depth of integration with tier-one Western publishers. ANALYST NOTE: AAA console projects typically carry higher gross margins than mobile art work due to complexity premiums. However, they also generate fewer 'follow-up' repeat orders — repeat revenue fell from 41.4% to 32.8% post-Mineloader. This represents a structural shift in the revenue quality model: less predictable follow-on, but higher individual project value. For a growth-stage company, this trade-off is acceptable. 3. Geographic Revenue Mix: Western Diversification Accelerating Geographic diversification continues to improve meaningfully. The United States is now the standout growth market — US revenue more than doubled to US$7.3 million (+109.3% YoY), driven by Mineloader's Western client portfolio. Mainland China and Hong Kong grew 51.1% to US$16.7M, remaining the largest regional bloc at 36.8% of total revenue. South Korea was the only region to decline slightly (-2.2%), reflecting softer mobile demand. RegionFY2025FY2024ChangeShare %MixMainland China & Hong Kong$16,742K$11,078K+51.1%36.8%■■■■■■■United States$7,298K$3,487K+109.3%16.0%■■■Taiwan$7,598K$7,044K+7.9%16.7%■■■South Korea$6,043K$6,176K-2.2%13.3%■■■Japan$4,681K$3,299K+41.9%10.3%■■Other Markets$3,138K$815K+285.0%6.9%■ The sharp growth in 'Other' markets (+285.0% to US$3.1M) reflects the first meaningful contributions from newly penetrated geographies — likely European studios that came via Mineloader. This broadening of the revenue base reduces dependency on any single Asian market and supports the bull case for the Western expansion strategy. 4. Profitability Analysis: Where the Margin Compression Is Coming From 4.1 Gross Profit — Stable and Impressive Gross profit grew 43.2% to US$13.5 million with gross margin essentially flat at 29.8% (FY2024: 29.7%). This stability is creditable: Mineloader's higher-margin AAA console work partially offset competitive pricing pressure in the Asian mobile segment. For a services business operating across multiple low-cost Asian geographies, this margin consistency over a period of significant M&A activity is a genuine positive signal. 4.2 EBITDA and Net Profit — The Absorption Challenge Adjusted EBITDA grew 13.2% to US$5.4 million, but the margin compressed from 15.1% to 12.0%. The primary culprits are specific and largely expected: US$1.6M in Mineloader administrative costs added to overhead base US$0.6M in acquisition and integration costs (one-off, but recurring until M&A activity ends) US$0.5M in amortisation of acquisition-related intangible assets (~US$0.8M/year run rate) US$0.4M in ongoing AIM listing costs (permanent new overhead that did not exist in FY2024) US$0.7M decline in non-recurring other income and gains that were present in FY2024 MARGIN MATH: The LSE dual listing added permanent annual overhead of ~US$0.4M. Combined with Mineloader's cost base, the Group added approximately US$3.5M in recurring costs against US$13.6M in new revenue — a cost-to-revenue ratio of 26% on the incremental dollar. Management must demonstrate operating leverage in FY2026 for the M&A strategy's financial logic to hold. Reported net profit fell 37.9% to US$0.3 million. This was further impacted by a US$0.5M swing in FX losses (a gain of US$0.8M in FY2024 became a loss of US$0.5M in FY2025 due to currency movements, particularly USD strength). The adjusted net profit figure of US$3.0M provides a cleaner view of underlying earnings power, though even this declined 12.3% YoY — a number management will need to reverse in FY2026 to maintain investor confidence. 5. Cash Flow and Balance Sheet: The Foundation Remains Solid 5.1 Cash Flow Overview ActivityFY2025FY2024NotesOperating Cash Flow+$5.1M+$0.6M+706.9%Investing Cash Flow-$14.5M-$3.7Mincl. Mineloader -$13.2MFinancing Cash Flow-$1.7M+$27.0MNo new equity raisedNet Cash Change-$11.1M+$23.9MCash to $27.4M Operating cash flow was a highlight: net cash from operations surged to US$5.1 million from just US$0.6 million in FY2024. This improvement was partly structural (absence of one-off LSE listing costs paid in FY2024) and partly reflective of the larger business scale generating more cash. This is the single most encouraging indicator that the business model works at higher revenue levels. 5.2 Balance Sheet: M&A Has Left Its Mark The balance sheet tells an M&A story. Total assets grew 14.3% to US$68.9 million, but composition shifted significantly. Intangible assets jumped from US$1.9 million to US$17.2 million (+792.6%), reflecting goodwill and customer relationship intangibles from Mineloader. This introduces amortisation drag (~US$0.8M/year) that will weigh on reported earnings for several years. Net assets grew 6.0% to US$53.0 million with net asset value per share at US$12.00 cents. Zero financial debt is a strategic asset — the balance sheet can comfortably absorb further acquisitions without dilutive equity issuance at current valuations. FORTRESS BALANCE SHEET: Zero debt, US$28.8M in cash and bonds, and a forward revenue book of US$48.6M over 24 months. For a company targeting further M&A, this is an enviable position — particularly as smaller Asian studios face funding constraints in the post-Covid correction. Management has the capital to be opportunistic. 6. Strategic Assessment: What FY2025 Tells Us About the Long-Term Thesis 6.1 Mineloader Integration: A-Grade Execution Integrating a ~500-person studio within nine months while growing revenue and maintaining gross margins is genuinely difficult operational work. The cultural and operational integration appears seamless, with Mineloader teams absorbed into live delivery pipelines rapidly. The joint execution of simultaneous Ninja Gaiden titles demonstrates that the combined entity can operate as a unified capability rather than two separate businesses. This validates the buy-and-build thesis. 6.2 AI Risk: The Most Grounded Industry Narrative We've Seen Management's treatment of AI risk in the investor presentation is among the most intellectually honest from any gaming services company. They correctly identify three binding constraints: compute economics (real-time AI generation at 2K quality costs ~US$70/hour vs ~US$0.44/hour for PS5-rendered gameplay — a 150x gap that must close before commercial viability), IP and data constraints (major publishers remain cautious about copyright risk with AI training data), and player acceptance (games deliver emotional value; audiences resist fully AI-generated content). The conclusion — that AI enhances production tools but does not replace structured production platforms within the 3-5 year investor horizon — is defensible and well-evidenced by the Black Myth: Wukong and Clair Obscur: Expedition 33 precedents showing that lean teams with high-quality outsourcing partnerships outperform AI-only approaches. 6.3 Western Expansion: The Critical FY2026 Test The establishment of formal Western operations — studios, regional leadership, UK presence — is the most important strategic bet in FY2026. US revenue already doubled to US$7.3M through Mineloader's inherited client relationships. Converting this into a self-sustaining origination engine would meaningfully de-risk Asian market dependency and open access to Western pricing premiums while retaining Asian production cost efficiency. Western PlatformFormal establishment of UK/North American studios with regional leadership; direct engagement with Western clients and time zones.Revenue GrowthCapturing outsourcing tailwinds as global games market enters recovery; prioritising sustainable profitability over short-term margin expansion.Disciplined M&AMultiple targets under active review; evaluating production, commercial and geographic fit. Zero debt provides clean firepower. 7. Investment Verdict: Growth Story Intact, Execution Is the Test Winking Studios exited FY2025 as a structurally larger, more capable company than it entered. The Mineloader integration has landed cleanly, the AAA franchise is credible, and revenue visibility into FY2026 is unusually strong for a company of this size. The forward booking of US$34.6M covers a substantial portion of expected FY2026 revenue before the year has even begun. The concerns are real but manageable: margin compression needs to reverse, the gap between reported EBITDA growth (13.2%) and revenue growth (42.6%) must close through operating leverage, and the Western expansion is an unproven strategic step carrying execution risk. Net profit of US$0.3M leaves a thin cushion against any demand softening. KEY RISK: If outsourcing demand softens in 2H2026 or Western establishment costs exceed expectations, the thin reported net profit (~US$0.3M) leaves minimal buffer. Watch the H1 2026 interim results carefully — EBITDA margin trajectory will be the definitive signal. A recovery toward 13-14% Adj. EBITDA margin would confirm the thesis; a continued decline would raise structural questions. POSITIVE CATALYST: The US$48.6M indicative 24-month booking pipeline is 2.7x larger than Winking's FY2020 total revenue of US$14.5M. The market has structurally shifted toward outsourcing — 70% of studios in the XDS 2025 survey anticipate external development budgets exceeding US$6M. Winking is correctly positioned to capture this tailwind.

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Winking Studios Revenue Up 43% in FY2025