Ubisoft Q1 Financial Results: June 2023

Key insights

6 takeaways

01
Ubisoft reported Q1 fiscal year 2024 revenue of €288.9 million, a 9.2% year-over-year decrease.
02
Net bookings reached €267.7 million, exceeding the company's internal target of €240 million despite an 8.7% year-over-year decline.
03
Approximately 92% of net bookings were generated by the company's back-catalog, with in-game purchases, subscriptions, and DLC accounting for 47.6% of total net bookings.
04
Rainbow Six Siege remains a primary growth driver, achieving double-digit growth in both net bookings and daily active users.
05
Ubisoft is prioritizing mobile expansion through a strategic partnership with Tencent, including the publishing agreement for Assassin’s Creed Codename Jade and upcoming titles like The Division Resurgence and Rainbow Six Mobile.
06
The company maintains a full-year operating income target of €400 million, supported by cost-reduction initiatives and the upcoming releases of Assassin’s Creed Mirage, Avatar: Frontiers of Pandora, and Skull and Bones.

Summary

Ubisoft’s financial performance for the first quarter of fiscal year 2024, ending June 30, 2023, reflects a period of transition characterized by a year-over-year decline in revenue alongside a strategic pivot toward mobile expansion and high-profile partnerships. The company reported revenue of €288.9 million, a 9.2% decrease compared to the same period in the previous year. Net bookings reached €267.7 million, which, while down 8.7% year-over-year, exceeded the company’s internal target of €240 million.

The financial results highlight a heavy reliance on established intellectual property, with approximately 92% of net bookings derived from the company’s back-catalog. Player recurring investment, encompassing in-game purchases, subscriptions, and DLC, remained a significant revenue driver, accounting for 47.6% of total net bookings. Notably, Rainbow Six Siege demonstrated strong performance, achieving double-digit growth in both net bookings and daily active users.

A central component of Ubisoft’s growth strategy is its deepening collaboration with Tencent, particularly regarding mobile gaming. The company characterized its publishing agreement for Assassin’s Creed Codename Jade as one of the most significant deals in the industry, utilizing a revenue-sharing model similar to other major mobile titles. This partnership, facilitated through Tencent’s subsidiary Level Infinite, is part of a broader effort to leverage mobile platforms, which also includes the upcoming release of The Division Resurgence and the internally developed Rainbow Six Mobile.

Looking ahead, Ubisoft maintains a positive outlook for the remainder of the fiscal year, targeting €400 million in operating income. The company plans to bolster its financial position through a combination of cost-reduction initiatives and the release of several key titles, including Assassin’s Creed Mirage, Avatar: Frontiers of Pandora, and Skull and Bones.