Ubisoft: Fiscal 2024 Starts on Decent Note, but Second Half Remains Key

Ubisoft UBI started fiscal 2024 by beating management’s outlook, as first-quarter net bookings declined 9% to EUR 268 million, ahead of the EUR 240 million guidance. Player recurring revenue fell 17% versus a year ago to EUR 127 million and represented 48% of net bookings. Ubisoft only reports top-line results for its fiscal first and third quarters. Management maintained its targets for fiscal 2024 as the firm held to its release dates for a packed second half. Ubisoft will release multiple titles this fiscal year, including a new installment of Assassin’s Creed, the long-awaited launch of Skull and Bones, and the delayed Avatar game. We are maintaining our EUR 33 fair value estimate.

The outperformance in net bookings versus guidance was due to strong back-catalog performance driven by new seasonal content for Rainbow Six Siege, The Division 2, and The Crew 2. These titles were all released more than four years ago, with Siege over eight years old. While these games are not juggernauts like Take-Two’s Grand Theft Auto V (ten years ago) or Epic’s Fortnite (six years ago), all three titles are holding on to a significant number of players, making it harder for new games to thrive.

Management remains steadfast that the firm will be able to meet its packed second-half schedule. The firm is releasing eight games in the last two quarters with one “large” title still unannounced. While some of the titles are mobile or annual (Just Dance), the number of releases is high for Ubisoft, a firm that has suffered a number of delays in key titles over the last five years. We would not be surprised if one or more titles slipped into fiscal 2025, with the unannounced game a prime candidate.