Ubisoft Entertainment (UBI) Q2 24/25 earnings summary

Executive summary

• H1 net bookings were €642 million, down 22% year-over-year, with digital revenues at €527 million (82% of total net bookings).

• Back-catalog net bookings excluding partnerships grew 12% year-over-year, highlighting strong performance from established franchises and live services.

• Six major brands surpassed €1 billion in consumer spending over the last decade, with AC, Rainbow Six Siege, and Far Cry generating €4bn, €3.5bn, and €2bn respectively.

• Cost reduction initiatives delivered over €200 million in annualized savings versus two years ago, with headcount reduced by over 2,000 in 24 months.

• Strategic review of all options, including sale of non-core assets, is underway to maximize stakeholder value.

Financial highlights

• H1 net bookings were €642.3 million, down 21.9% year-over-year; Q2 net bookings reached €352.3 million, in line with revised guidance.

• Non-IFRS net income for H1 was €(208.1)m (EPS: €(1.64)), compared to €1.6m prior year; IFRS net income was €(246.7)m.

• Free cash flow was €(126.3)m, an improvement from €(284.2)m in H1 FY24.

• Non-IFRS net debt stood at €1.1 billion; cash and equivalents at €933 million at period end.

• Gross profit based on net bookings was €552 million, down from €734.1 million year-over-year.

Outlook and guidance

• Full-year net bookings expected at around €1.95 billion, with non-IFRS EBIT and free cash flow at break-even.

• Q3 net bookings forecasted at €380 million (+39% YoY); Q4 expected to be a record at €900 million.

• Gross margins to decline slightly YoY; R&D and SG&A to be above historical ranges.

• No risk seen for Assassin's Creed Shadows missing its mid-February release.

• Company continues to review strategic options and explore sale of non-core assets.