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Ubisoft sales dip in first half, but Q2 beat guidance handily

Publisher posts €215 million in operating losses, expects back half of the year to more than make up for it

Ubisoft reported its first half sales results today, posting revenues down slightly but still handily beating its guidance issued after the first quarter thanks to back-catalog sales.

The numbers

  • Revenue: €731 million (down 3% year-on-year)
  • Net bookings: €699 million (down 3% year-on-year)
  • Operating loss: €215 million (compared to a €25.9 million operating income in last year's first half)

The highlights

Despite the revenue dip and operating losses, Ubisoft was upbeat in reporting its first-half sales results for a handful of reasons.

On the revenue front, the single-digit dip was actually significantly better than Ubisoft had told investors to expect.

In its first quarter earnings report, it provided an outlook of second quarter net bookings of about €270 million, but it wound up reporting net bookings of €406 million for the quarter, up 3.3% year-over-year.

"The H1 bottom line notably reflects accelerated R&D depreciation, including for the previously announced cancelled projects as we pivot our focus towards our biggest opportunities," said Ubisoft CFO Frédérick Duguet.

Assassin's Creed and Rainbow Six Siege were singled out for strong performances on the back-catalog front.

Assassin's Creed: Valhalla topped 20 million unique players, while Rainbow Six Siege passed 85 million unique players as net bookings from the game jumped 18% year-over-year.

Despite the operating losses over the first half, Ubisoft reiterated its guidance of €400 million in operating income for the full year on a non-IFRS basis. (For reference, Ubisoft's first-half non-IFRS operating loss was €139 million.)

Part of that operating income guidance relies on the recently launched Mario + Rabbids: Sparks of Hope, which was described in a post-earnings call as the biggest release of the publisher's fiscal year.

Executives were asked about a recent report that physical sales of the game are tracking behind that of the original Mario + Rabbids title, but Duguet downplayed concerns, saying the company is "satisfied" with early sales of the game, particularly as it has yet to spend 80% of the game's total marketing budget as it plans to make a push for mainstream audiences in the coming weeks and months.

He added that the game has a larger share of digital purchases than its predecessor.