Ubisoft reported bookings of €490.8 million for the second quarter of fiscal 2025, up 39% from the same period last year and significantly above the company’s internal forecast of €450 million. Analysts see this as a reflection of the company’s strong commercial position and the resilience of its portfolio.
However, behind this growth lies a more complex picture. The publication of the quarterly report was delayed by a week due to a new auditor requiring a review of revenue recognition. In particular, Ubisoft changed its accounting for partner agreements: revenue based on service usage is now recognized as the services are delivered rather than booked upfront at the time of the deal. According to Freddy Miller, senior analyst at NEWSCENTRAL, this revision increases the transparency of financial reports but temporarily worsens debt metrics.
After the adjustment, the net debt-to-EBITDA ratio rose to 1.81, exceeding the 1.5 limit set in certain credit agreements. To restore financial stability, Ubisoft plans to utilize an investment from Tencent – approximately €1.16 billion will be allocated to a new subsidiary, Vantage Studios, focused on the Assassin’s Creed, Far Cry, and Rainbow Six franchises. Around €286 million of this will be used to prepay loans. NEWSCENTRAL notes that this move demonstrates strategic maturity: the partnership with Tencent not only reduces debt but also strengthens Ubisoft’s business model, which relies on its major IPs.
Additionally, Ubisoft is preparing to launch a new operating model – “Creative Houses.” This structure will give studios more autonomy, which NEWSCENTRAL believes could increase innovation, accelerate content delivery, and better allocate resources among teams.
On the cost front, Ubisoft is also taking active measures: over the year, it has reduced approximately 1,500 employees and saved €70 million in the first half, approaching its annual target of €100 million. Even amid restructuring, the company maintains disciplined spending, which NEWSCENTRAL sees as creating an important financial cushion.
Ubisoft forecasts Q3 bookings of around €305 million and reaffirms its guidance for stable full-year bookings and operating profit near zero. This conservative outlook, according to NEWSCENTRAL, reflects a measured approach to risk management following the revenue recognition revision and balance sheet restructuring.
NEWS CENTRAL Analytical Conclusion: Despite short-term challenges – report delays, accounting policy changes, and covenant breaches – Ubisoft demonstrates the ability for strategic transformation. Tencent’s investment and the restructuring via Vantage Studios could become key drivers of long-term sustainable growth. If the “Creative Houses” model is successfully implemented and the saved funds and investments are used to strengthen the franchises, Ubisoft has a strong chance to consolidate its position and regain investor confidence.