Ubisoft Entertainment (UBI) Q2 24/25 earnings summary

Executive summary

• H1 net bookings were €642.3 million, down 21.9% year-over-year, with Q2 net bookings of €352.3 million in line with revised guidance and digital revenues at €527 million, representing 82% of total net bookings.

• Back-catalog net bookings excluding partnerships grew 12% year-over-year, highlighting strong engagement in key franchises and live services.

• Cost reduction initiatives delivered over €200 million in annualized savings versus two years ago, with the fixed cost base down €46 million year-over-year and headcount reduced by over 2,000 in 24 months.

• Strategic review of non-core assets and all options is underway to maximize stakeholder value and enhance financial flexibility.

• Player engagement remained robust, with 37 million monthly active users (+3% YoY) and playtime up 9% year-over-year.

Financial highlights

• IFRS 15 sales for H1 2024-25 were €671.9 million, down 19.6% year-over-year; net bookings fell 21.9% to €642.3 million.

• Non-IFRS operating income was €(252.1) million, compared to €43.5 million in H1 2023-24; non-IFRS diluted EPS was €(1.64), down from €0.01.

• Non-IFRS cash flows from operating activities were a net outflow of €(106.1) million, improved from €(261.3) million outflow last year.

• Cash and cash equivalents at period end were €933.1 million; non-IFRS net debt increased to €1,102 million.

• Non-IFRS consolidated net income for H1 FY25 was a loss of €207.9 million.

Outlook and guidance

• FY2024-25 net bookings expected at approximately €1.95 billion, with around break-even non-IFRS operating income and free cash flow.

• Q3 2024-25 net bookings forecasted at approximately €380 million; Q4 expected to be a record at €900 million.

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

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

• Robust free cash flow generation anticipated in H2, supported by ongoing cost discipline and asset sales.