Ubisoft FY23 Earnings: First-Half Performance

Key insights

6 takeaways

01
Ubisoft reported a non-IFRS operating loss of €139 million for the first half of FY23, a significant decline from the €44.1 million profit recorded during the same period last year.See it on page 10
02
Net bookings for the first half of FY23 totaled €699 million, representing a 3% year-over-year decrease despite a strong second quarter that exceeded projections by €136 million.See it on page 4
03
R&D expenses surged to €452.2 million from €276.2 million in the prior year, driven primarily by increased depreciation of in-house software production.See it on page 7
04
Digital revenue remains the company's primary income stream, accounting for 92% of total net bookings.See it on page 4
05
Core franchise performance remains resilient, with Rainbow Six Siege bookings increasing by 18% and Assassin’s Creed Valhalla surpassing 20 million unique players.See it on page 5
06
The company projects a recovery in the third quarter of FY23 with estimated net bookings of €830 million and maintains a full-year non-IFRS operating income target of €400 million.See it on page 4

Summary

Ubisoft’s first-half performance report for fiscal year 2023 details a period of financial transition characterized by a slight decline in net bookings alongside strategic operational shifts. The company reported net bookings of €699 million, a 3% decrease year-over-year, while digital revenues remained a dominant force, accounting for 92% of total net bookings. Despite the overall dip, the second quarter outperformed expectations, with net bookings reaching €406 million, significantly exceeding the projected €270 million. This growth was primarily driven by robust back-catalog performance and accelerated revenue recognition from mobile licensing partnerships.

Key operational metrics highlight the resilience of core franchises. Assassin’s Creed Valhalla surpassed 20 million unique players, and the Rainbow Six Siege franchise saw an 18% increase in bookings, bolstered by record engagement and average revenue per user. However, the company faced increased R&D expenses, which rose to €452.2 million from €276.2 million in the previous year, reflecting higher depreciation of in-house software production. Consequently, the company reported a non-IFRS current operating loss of €139 million, a sharp contrast to the €44.1 million profit recorded in the same period of the prior fiscal year.

The report maintains a forward-looking perspective, projecting significant growth for the third quarter of fiscal year 2023 with estimated net bookings of approximately €830 million and a full-year non-IFRS operating income target of €400 million. These projections are supported by the positive critical reception of recent releases such as Mario + Rabbids Sparks of Hope. The financial data provided reflects a focus on long-term investment in software development and recurring player engagement to stabilize and grow future earnings.