Post by : Badri Ariffin

Ubisoft, the renowned French game developer, reported quarterly net bookings that surpassed its forecast, showcasing resilience in the face of a recent accounting-related setback and a temporary breach of a crucial debt covenant.

The company postponed its results, originally set for November 13, due to a change in the revenue recognition method mandated by a newly appointed audit committee. The revised methodology now records revenue from usage-based partnerships steadily as services are provided, rather than upfront, thus affecting reported debt ratios.

Shares fell nearly 6% when trading resumed on Friday but rapidly recovered to a 10% increase, highlighting strong market trust in Ubisoft’s operational capabilities.

The accounting adjustment raised Ubisoft’s net debt-to-core profit ratio to 1.81, breaching the 1.5 limit in certain financial agreements. In response, the company plans to early repay around €286 million in loans, utilizing proceeds from Tencent’s €1 billion investment in Vantage Studios, which oversees its flagship franchises.

Despite these hurdles, Ubisoft recorded second-quarter net bookings of €490.8 million, a 39% rise compared to the previous period, exceeding its guidance of approximately €450 million. This growth was driven by robust sales from its game catalog and contributions from TV adaptations of its titles.

Looking ahead, Ubisoft reaffirmed its full-year guidance, anticipating stable net bookings and close to breakeven operating income. Third-quarter bookings are projected to be around €305 million. The company is also progressing with its “Creative Houses” initiative, with complete details expected by January 2026.

As of September, Ubisoft’s workforce totaled 17,097, down roughly 1,500 over the past year, aiding in achieving nearly €70 million of the targeted €100 million cost savings for 2025.

#Global News #Technology