Ubisoft Entertainment (UBI) Q4 25/26 earnings summary

Executive summary

• Undertook a major strategic transformation, including a new operating model, portfolio rationalization, cost reduction, and leadership restructuring, supported by a €1.16bn cash injection from Tencent.

• FY2025-26 marked by a 17% decline in net bookings to €1,525m, a softer release slate, and a focus on back-catalog and live services.

• Transformation expected to complete in FY2027, with FY2026-27 as a low point for free cash flow and a rebound anticipated in FY2027-28, targeting robust free cash flow by FY2028-29.

Financial highlights

• Full-year net bookings were €1,525m, down 17% year-on-year, with digital revenues at 87% of total and recurring player investment up 15% to €925m.

• Q4 net bookings reached €415m, surpassing guidance, driven by strong back-catalog performance and engagement in key franchises.

• Non-IFRS EBIT was €(1,044.7)m, and non-IFRS net income was €(1,240.3)m; non-IFRS diluted EPS was (€9.38).

• Free cash flow consumption was €443m, within the target range; net debt improved to €187m from €885m a year earlier; cash and equivalents at €1,345m.

• Gross margin on net bookings was 89.1%, stable year-on-year; fixed cost base reduced by €118m year-on-year, cumulative reduction of €325m since FY2022-23.

Outlook and guidance

• FY2026-27 net bookings expected to decline by a high single-digit percentage, with a high single-digit negative non-IFRS operating margin and free cash flow consumption capped at €500m.

• Q1 FY2026-27 net bookings expected at approximately €250m due to no major releases.

• Strong rebound expected in FY2027-28 and FY2028-29, with positive free cash flow and EBIT, and positive cumulative free cash flow over FY2026-27–FY2028-29.

• Sufficient liquidity to address near-term maturities; actively reviewing refinancing options to optimize cost of capital.