Wallace & Gromit maker Aardman falls short of return to profit
Animation studio narrows annual loss to £1.1m amid ‘challenging market’ in children’s content Don’t break out the celebratory Wensleydale just yet. Aardman, the British animation studio behind the cheese-loving inventor Wallace and his beloved dog Gromit, has fallen short of a target to get back in the black, its accounts show. The employee-owned business was aiming to record a small profit in 2025 after two years…
Key points
- Aardman narrowed its annual loss to £1.1m but missed its 2025 profit target.
- Revenue rose 8% to £20.4m amid production delays and a challenging children's content market.
- The studio cut staff and identified AI as a principal risk to its business.
Aardman, the British animation studio behind Wallace & Gromit, failed to return to profit in 2025, its accounts show. The employee-owned company had aimed for a small profit after two consecutive years of losses but was hit by production delays and a "challenging market" in children's content.
Revenue rose 8% to £20.4m last year, yet the studio reported a £1.1m loss, an improvement on the previous year's £4.1m loss. Aardman also produces the Shaun the Sheep series.
Costs and staffing
Aardman said the timing of some "significant" deals and weaker income in parts of the business hurt its bottom line. A further strategic review in early 2026, aimed at managing inflationary cost pressures, led to "several redundancies".
Headcount for the 2025 financial year fell from 297 to 230, with permanent staff dropping from 128 to 110. The studio also named artificial intelligence as a principal risk, saying AI and generative AI were reshaping parts of the creative industries and raising legal, ethical and authorship issues. It said the technology should be used in ways that "support and celebrate human creativity and craft rather than replace it".
support and celebrate human creativity and craft rather than replace it
— Aardman
New projects and past success
Aardman is looking to new projects for a boost, including a Lightroom exhibition in London exploring its 54-year history and a third Shaun the Sheep film released last month. This month, an audiobook of Gromit's autobiography is read by actor Martin Freeman.
In 2024 the studio launched a five-year plan to invest more in its intellectual property and cut costs. Its film Wallace & Gromit: Vengeance Most Fowl broke Christmas 2024 viewing records as the most watched animated film on British television since 2002, won two Baftas and received an Oscar nomination for best animated feature.
Peter Lord and David Sproxton co-founded the studio in Bristol in the early 1970s and made it employee-owned in 2018. Both were knighted earlier this year.
