Ubisoft Entertainment (UBI) Q2 24/25 earnings summary

Executive summary

• H1 net bookings were €642.3m, down 21.9%–22% year-over-year, with digital revenues at €527m (82% of total), and Q2 net bookings of €352.3m in line with revised guidance.

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

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

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

• Player engagement remained robust, with 37 million MAUs (up 3% year-over-year) and 138 million unique active users over the last 12 months (up 4%).

Financial highlights

• IFRS 15 sales for H1 were €671.9m, down 19.6% year-over-year; net bookings fell 21.9%–22% to €642.3m.

• Non-IFRS operating income was €(252.1)m, compared to €43.5m prior year; non-IFRS net income was €(208.1)m (EPS: €(1.64)).

• Free cash flow for H1 was €(126.3)m, improved from €(284.2)m prior year; cash and equivalents at period end were €933.1m.

• Non-IFRS net debt increased to €1,102m; IFRS net debt at €1,408m as of September 30, 2024.

• Gross margin on net bookings was 85.9%, down from 89.3% year-over-year.

Outlook and guidance

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

• Q3 2024-25 net bookings forecasted at approximately €380m; Q4 expected to be a record at €900m, driven by major releases and back catalog.

• Gross margins expected to decline slightly year-on-year, with R&D and SG&A above historical ranges.

• No risk of delay for Assassin's Creed Shadows, which is on track for release.

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