Ubisoft FY17 Earnings and Sales

Key insights

7 takeaways

01
Ubisoft achieved record-breaking digital revenue in FY17, which now accounts for 50% of total sales as part of a strategic shift toward recurring, digital-first business models.See it on page 14
02
The company reported FY17 sales of 1,460 million euros, a 5% year-over-year increase, and reached a record non-IFRS operating margin of 16%.See it on page 15
03
Ubisoft projects an operating income of approximately 440 million euros and an operating margin of 21% for FY19.See it on page 24
04
The company is reducing its annual AAA release cadence from five titles to four to prioritize back-catalog longevity and player recurring investment (PRI).See it on page 25
05
Player recurring investment is targeted to exceed 25% of total revenues by FY19 to sustain long-term profitability.See it on page 27
06
Engagement in the Tom Clancy franchise saw significant growth, with the number of unique players rising by approximately 150% over an 18-month period.See it on page 6
07
Ubisoft’s total shareholder return has outperformed major market indices, including the NASDAQ and CAC40, over the past five years.See it on page 10

Summary

Ubisoft’s fiscal year 2017 performance highlights a successful strategic transition toward a more recurring, digital-first business model. By prioritizing live operations, back-catalog longevity, and player recurring investment (PRI), the company achieved record-breaking digital revenue, which accounted for 50% of total sales. This shift has effectively reduced the company’s historical reliance on new game releases, leading to a third consecutive year of growth in non-IFRS operating margins, which reached a record 16% in fiscal year 2017.

Financial results for fiscal year 2017 show sales of 1,460 million euros, a 5% year-over-year increase, supported by strong performances from titles such as Tom Clancy’s Ghost Recon Wildlands and For Honor. The company’s focus on multiplayer, competitive, and co-op gameplay has significantly boosted engagement, with unique players for the Tom Clancy franchise rising by approximately 150% over an 18-month period. These operational improvements are reflected in a robust total shareholder return, which has significantly outperformed major market indices like the NASDAQ and CAC40 over the past five years.

Looking ahead, the company maintains a positive outlook for fiscal years 2018 and 2019. Projections for fiscal year 2019 include an operating income of approximately 440 million euros and an operating margin of 21%. The strategy involves a disciplined reduction in the number of annual AAA releases—shifting from five to four—while simultaneously increasing the contribution of digital and back-catalog revenues. By targeting higher player recurring investment, which is expected to exceed 25% of total revenues by 2019, the company aims to sustain long-term value creation and profitability beyond the current planning horizon.