Aardman, the British animation studio behind Wallace & Gromit and Shaun the Sheep, has fallen short of a return to profit, its latest accounts show. The employee-owned company recorded an annual loss of £1.1m for 2025, an improvement on the previous year's £4.1m loss, but missed its target of a small profit.
Revenue up but losses persist
Revenues rose 8% to £20.4m last year, but the studio said the timing of some significant deals and weaker income in parts of the business hurt its bottom line. Production delays and a challenging market in children's content also contributed to the shortfall.
The studio, co-founded by Peter Lord and David Sproxton in Bristol in the early 1970s, has been aiming to return to profitability after two consecutive years of losses.
New projects and successes
Aardman is hoping for a boost from new projects, including a recently opened exhibition at Lightroom in London exploring its 54-year history, and a third Shaun the Sheep film released last month. Gromit, the famously silent dog, will also get a voice this month in an audiobook of his autobiography read by actor Martin Freeman.
The studio enjoyed the success of Wallace & Gromit: Vengeance Most Fowl, which became the most watched animated film broadcast on British television since 2002 over Christmas 2024. The film won two Baftas and received an Oscar nomination.
Cost pressures and AI risks
In early 2026, Aardman undertook a further strategic review to manage inflationary cost pressures, resulting in several redundancies. Its headcount for the 2025 financial year had already shrunk from 297 to 230 people, with permanent staff falling from 128 to 110.
The studio identified artificial intelligence as a principal risk and uncertainty, noting that AI and generative AI are reshaping parts of the creative industries. It said the technology must be developed and used responsibly and selectively, in ways that support and celebrate human creativity and craft rather than replace it.
Aardman became employee-owned in 2018, with Lord and Sproxton transferring majority ownership to staff to safeguard independence. The pair were knighted earlier this year.
