• H1 Net Bookings: EUR642 million, down 22% year-on-year.

• Q2 Net Bookings: EUR352 million, in line with revised guidance.

• Back Catalog Growth: Up 12% year-on-year, excluding partnerships.

• Digital Net Bookings: EUR269 million, up 12% year-on-year, excluding partnerships.

• Free Cash Flow: Minus EUR126 million, improved from minus EUR284 million in H1 fiscal year '24.

• Non-IFRS Net Debt: EUR1.1 billion.

• Cash and Cash Equivalents: EUR933 million.

• Cost Reduction: Achieved more than EUR200 million savings on an annualized basis compared to two years ago.

• Employee Count: 18,666 at the end of September 2024, a decrease of more than 2,000 over the last 24 months.

• Q3 Net Bookings Guidance: Approximately EUR380 million, a year-on-year increase of around 39%.

• Q4 Net Bookings Guidance: Around EUR900 million, slightly up versus last year.

• Warning! GuruFocus has detected 6 Warning Signs with UBSFF.

Release Date: October 30, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Ubisoft Entertainment (UBSFF) achieved significant milestones with its major franchises, including Assassin's Creed, Rainbow Six Siege, and Far Cry, each generating billions in consumer spending over the past decade.

• The company reported a 12% year-over-year increase in back catalog sales, excluding partnerships, highlighting the enduring value of its brand portfolio.

• Ubisoft Entertainment (UBSFF) has made substantial progress in its cost reduction program, achieving over EUR200 million in savings compared to two years ago.

• The company has seen a 4% year-over-year increase in unique active users, with strong engagement metrics across its console and PC platforms.

• Ubisoft Entertainment (UBSFF) is focusing on improving game quality and player experience, as seen with the updates and enhancements for Star Wars Outlaws and the upcoming Assassin's Creed Shadows.

Negative Points

• H1 net bookings were down 22% year-on-year, reflecting a high comparable base from the previous year and underperformance in new releases like Star Wars Outlaws.

• The company experienced a decline in gross margin due to the absence of high-margin partnerships that were present in the previous year.

• Ubisoft Entertainment (UBSFF) reported a negative free cash flow of EUR126 million for the first half of the fiscal year.

• The company is facing challenges in the first-person shooter market, with games like XDefiant not meeting expectations.

• There is ongoing pressure to improve execution and address polarized comments around Ubisoft Entertainment (UBSFF), which could impact its reputation and sales potential.