France · Delayed Price · Currency is EUR Ubisoft Entertainment Earnings Call Transcripts
Fiscal Year 2027
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Q1 net bookings slightly exceeded guidance at €256 million, driven by Invincible: Guarding the Globe, while Assassin's Creed Black Flag Resynced surpassed annual sales expectations in just two weeks. Fiscal 2027 guidance is unchanged, with a rebound expected in fiscal 2028.
Fiscal Year 2026
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Transformation efforts led to a 17% drop in net bookings and significant restructuring, but robust back catalog and live services performance supported results. FY 2027 will be a transition year with negative margins, but a strong rebound is expected from FY 2028, driven by a richer release pipeline.
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Q3 net bookings grew double digits year-over-year, driven by strong core franchises and new releases, with digital and back catalog sales outperforming. Fiscal 2026 guidance is confirmed, supported by a robust cash position and ongoing transformation initiatives.
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A comprehensive reset introduces five creative houses, a streamlined organization, and a refocused portfolio, discontinuing six games and delaying others to enhance quality. FY26 guidance is revised downward, with significant cost reductions and a three-year plan to restore growth and cash generation.
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H1 net bookings rose 20% year-on-year, driven by strong partnerships and key franchises, while a strategic Tencent deal will inject EUR 1.16 billion to support transformation and deleveraging. FY2026 guidance is for stable net bookings and breakeven operating income, with positive cash flow expected in FY2027.
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Q1 net bookings missed expectations due to Rainbow Six Siege's pricing exploit and delayed partnership revenue, but core franchises like Assassin’s Creed and The Division 2 showed strong engagement. Fiscal 2026 guidance is maintained, with a return to positive cash flow expected in 2027.
Fiscal Year 2025
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The AGM reviewed a year of mixed market dynamics, cost discipline, and strategic transformation, including a major Tencent partnership to accelerate franchise growth. All resolutions were approved, new directors were appointed, and the company aims for efficiency and recurring revenue.
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Net bookings declined 20% year-on-year, but Q4 set a record with strong franchise performance and positive free cash flow. Major restructuring and a Tencent-backed subsidiary aim to drive future growth, with stable FY26 guidance and a return to profitability expected in FY27.
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A new subsidiary for three major franchises will receive a EUR 1.16 billion investment from Tencent for a 25% stake, strengthening financial flexibility and supporting growth. Ubisoft retains control, with the transaction expected to close by year-end.
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Q3 net bookings met revised targets at EUR 302 million, with digital bookings and PRI down year-on-year. Cost reduction efforts are ahead of schedule, and a strategic review is ongoing. Assassin's Creed Shadows is set for launch with strong early reception and preorders.
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Strategic and execution reviews are progressing, with advisors exploring value-creation options. FY25 guidance is adjusted due to lower sales and game discontinuations, but cost reductions and partnership revenues are expected to support break-even results. Cash position remains solid, with major debt repayments scheduled.
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Net bookings declined 22% YoY in H1, but strong back catalog and live services offset some weakness. Cost reductions exceeded €200 million annualized, and guidance for FY25 is reaffirmed with break-even EBIT and free cash flow expected. Major releases and partnerships are critical for H2.
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Q1 net bookings rose 8% year-on-year to €290 million, led by XDefiant's strong debut and growth in Rainbow Six Siege and Assassin's Creed. Fiscal 25 guidance is reaffirmed, with major releases Star Wars Outlaws and Assassin's Creed Shadows set for later in the year.
Fiscal Year 2024
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Q2 results missed expectations, leading to a revised FY25 outlook of €1.95 billion net bookings and break-even income. Assassin's Creed Shadows is delayed to February 2025 for quality improvements, while cost reductions and strategic transformation continue. Cash remains strong, and debt covenants are expected to be met.