Ubisoft Entertainment (UBI) Q2 24/25 earnings summary

Executive summary

• H1 FY25 net bookings were €642.3m, down 21.9% year-over-year, with digital bookings at €526.6m (82% of total), and digital net bookings (excluding partnerships) up 12% year-over-year.

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

• Player engagement remained robust, with 37 million MAUs (+3% YoY), playtime up 9%, and 138 million unique active users over 12 months (+4% YoY).

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

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

Financial highlights

• H1 net bookings: €642.3m, down 21.9% YoY; IFRS 15 sales: €671.9m, down 19.6%; Q2 net bookings: €352.3m, in line with revised guidance.

• Non-IFRS operating loss: €252.1m vs €43.5m profit prior year; non-IFRS net loss: €208.1m (EPS: €-1.64); IFRS net income: €-246.7m.

• Free cash flow was -€126.3m, improved from -€284.2m in H1 FY24; cash and equivalents at €933.1m.

• Non-IFRS net debt stood at €1,102m; net financial debt at €1,408m as of September 2024.

• Gross margin on net bookings: 85.9% in H1 2024-25 vs 89.3% prior year.

Outlook and guidance

• FY2024-25 net bookings expected at ~€1.95bn, with non-IFRS operating income and free cash flow near break-even.

• Q3 net bookings forecasted at ~€380m; Q4 expected to be a record at €900m.

• Guidance revised downward due to delays and underperformance of major titles, but no risk seen for Assassin’s Creed Shadows missing its release.

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