Ubisoft First-Half 2022-23 Earnings Figures

Key insights

7 takeaways

01
Ubisoft reported H1 2022-23 net bookings of €699.4 million, a 2.6% decline year-on-year, though Q2 net bookings of €406.1 million exceeded the target of €270 million.See it on page 1
02
The company recorded a non-IFRS operating loss of €139.0 million for the first half of 2022-23, compared to a profit of €44.1 million in the same period last year.See it on page 7
03
Digital net bookings grew by 15.1% to €641.7 million, now accounting for 91.7% of total net bookings.See it on page 11
04
Tom Clancy's Rainbow Six Siege saw 18% year-on-year revenue growth and reached 85 million unique registered players, while Assassin's Creed Valhalla surpassed 20 million unique players.See it on page 1
05
Ubisoft is implementing a cost-optimization program that includes stabilizing headcount at 2021-22 levels and canceling the development of four titles, including Splinter Cell VR and Ghost Recon Frontline.See it on page 5
06
The company established a Global Creative Office to restructure its creative divisions and support its portfolio strategy, aiming to focus resources on its largest brands.See it on page 5
07
Tencent is expanding its partnership with Ubisoft, with the potential to increase its direct shareholding in the company to 9.99% and acquire a minority stake in Guillemot Brothers Limited.See it on page 5

Summary

Ubisoft’s first-half 2022-23 financial performance reflects a period of significant transition and fiscal pressure, characterized by a net loss of €190.2 million and a non-IFRS operating loss of €139.0 million. Despite a 2.6% decline in net bookings to €699.4 million, the company outperformed initial internal targets, bolstered by the enduring strength of its back-catalog titles, specifically Rainbow Six Siege and the Assassin’s Creed franchise, alongside gains from mobile licensing. While the company maintains a negative non-IFRS net cash position of €331.3 million, it has successfully improved its free cash flow compared to the previous year, maintaining a cash and cash equivalent balance of €1,446.5 million.

To address these financial headwinds and ensure long-term sustainability, the company is executing a rigorous cost-optimization program. This strategic pivot involves the cancellation of several underperforming projects and a concentrated reallocation of resources toward its largest, most profitable franchises. This consolidation of development efforts is intended to streamline operations and enhance efficiency across the global organization.

Management remains committed to its full-year financial targets, projecting significant growth in net bookings and a return to profitability with a target of €400 million in non-IFRS operating income. This optimism is anchored in a robust release schedule for the second semester, favorable foreign exchange impacts, and a strategic partnership with Tencent designed to accelerate growth in key markets. By focusing on core intellectual properties and leveraging external collaborations, the company aims to stabilize its financial trajectory and capitalize on its established portfolio to navigate the current industry landscape.