Ubisoft Surpasses Q2 Estimates While Addressing Debt and Tencent Collaboration

Post by : Bianca Suleiman

The renowned French gaming company, Ubisoft, has announced quarterly net bookings that notably surpassed expectations, showcasing its resilience despite facing a debt covenant breach and an accounting delay.

Ubisoft delayed the release of its financial results, initially scheduled for November 13, due to new requirements for revenue recognition set by a recently appointed auditing team. The updated methodology now recognizes revenue from usage-based partnerships progressively, influencing the reported debt ratios.

After an initial decline of nearly 6% in share prices upon resuming trading on Friday, Ubisoft's stock quickly climbed by 10%, indicating robust market faith in the company's operational capabilities.

The new accounting practices elevated Ubisoft's net debt-to-core profit ratio to 1.81, surpassing the 1.5 threshold in some financing agreements. The company acted promptly to resolve the breach, planning an early repayment of around €286 million in loans, utilizing part of Tencent’s €1 billion investment in Vantage Studios that manages its key franchises.

Despite these hurdles, Ubisoft recorded net bookings of €490.8 million for the second quarter—a 39% increase from the previous year—outpacing its forecast of approximately €450 million. This growth is attributed to strong sales across its game portfolio and successful adaptations of its titles into television formats.

Looking towards the future, Ubisoft has maintained its annual projections, expecting stable net bookings and operating income near breakeven. Anticipated third-quarter bookings are approximately €305 million. The company is also progressing with its “Creative Houses” initiative, with more details set to be revealed in January 2026.

As of September, Ubisoft's workforce totaled 17,097, reflecting a decrease of around 1,500 over the past year, which has contributed nearly €70 million towards the aimed €100 million cost reductions for 2025.