Ubisoft Reports Strong Q2 Bookings Despite Delay

Delay due to accounting change and debt covenant breach
Breach addressed with early loan repayment using proceeds from Tencent investment
Q2 net bookings rise 39%, exceeding company guidance

Ubisoft published its second-quarter results after a week-long delay, reporting bookings above expectations. The announcement was originally scheduled for November 13 but was postponed due to accounting adjustments linked to partnership revenue recognition. Trading in Ubisoft shares and bonds was temporarily halted by Euronext at the company’s request, creating uncertainty in the market. When trading resumed, shares initially fell 6% before rebounding to a 10% gain later in the morning.

Delay Linked to Accounting Changes

Finance chief Frederick Duguet explained that newly appointed auditors required a restatement of fiscal 2025 accounts. Revenue from usage-based partnerships will now be recognized gradually as services are consumed, rather than upfront. This change pushed Ubisoft’s net debt-to-EBITDA ratio to 1.81 at the end of September, exceeding the 1.5 limit set in financing agreements. Analysts noted that the delay also related to finalizing conditions of Tencent’s investment deal.

To address the breach, Ubisoft announced an early repayment of €286 million in loans, funded by Tencent’s €1 billion investment in Vantage Studios. The repayment is expected to reduce the company’s debt, which stood at €1.15 billion at the end of September. Ubisoft confirmed that the Tencent transaction, first announced in May, should close shortly after meeting all outstanding requirements. The move is intended to stabilize finances and reassure investors.

Quarterly Results Exceed Guidance

Second-quarter net bookings rose 39% to €490.8 million, surpassing guidance of around €450 million. Stronger-than-expected performance across Ubisoft’s game catalogue contributed to the increase, alongside revenue from television adaptations of its titles. The company reaffirmed its full-year outlook, projecting stable bookings and operating income near breakeven. For the third quarter, Ubisoft forecast bookings of approximately €305 million.

CEO Yves Guillemot stated that full details of the company’s new “Creative Houses” operating model will be presented in January 2026. The initiative is expected to reshape Ubisoft’s organizational structure. Cost savings remain a priority, with €70 million achieved in the first half of the year. The company aims to reach at least €100 million in savings by year-end.

Workforce and Cost Measures

Ubisoft’s global headcount stood at 17,097 employees at the end of September, down by about 1,500 compared to the previous year. The reduction reflects ongoing restructuring and efficiency measures. Management emphasized that workforce adjustments are part of broader efforts to streamline operations. These measures align with the company’s strategy to balance investment in new projects with financial discipline.