Ubisoft's sales are more than 80% digital
No new major releases in Q1, but overall sales still climbed 45% for the French publisher
Ubisoft continues to fire on all cylinders. Even in a quarter in which the publisher has nothing new on the market, its total sales jumped up 45.2% to €202.1 million, with digital increasing 55% to €162.4 million. The company's digital focus is growing, and Ubisoft noted that digital accounted for more than 80% of its total revenues during the first quarter (up from 75% of the total during last year's Q1). With no major releases, back catalog sales drove 94% of the company's sales total, which Ubisoft emphasized is a sign of the recurring investment profile from its customers. The company also proudly mentioned that Tom Clancy's Ghost Recon Wildlands continues to be the industry's top seller since the start of 2017.
Yves Guillemot, Co-Founder and Chief Executive Officer, commented: "Fueled by the digital segment - which saw a sharp increase in player recurring investment - as well as a strong showing from our back catalog, our sales for the first quarter of 2017-18 came in well ahead of our targets...
"Thanks to our increasing ability to engage players over the long term, combined with our unique creative strengths, we are even more confident of achieving our targets for 2017-18 and 2018-19. We expect both of these factors to continue being key drivers of value creation in the coming years."
Ubisoft arguably had one of the most diverse portfolios at this year's E3 and the company earned numerous accolades, including from GamesIndustry.biz. Guillemot is excited for the road ahead, especially coming off the reception from E3: "At this year's E3, our teams presented an outstanding line-up and I would like to thank them for their amazing work which has been recognized by the entire industry. Our games have generated enormous enthusiasm among the player community, which supports our expectations for the full year."
Coming up in the second quarter, Ubisoft will be releasing the much anticipated Mario + Rabbids Kingdom Battle for Nintendo Switch, as well as the third season of For Honor and an expansion for Rainbow Six Siege. Sales are forecast to come in at €190.0 million, which would be up 34% year-over-year.
Looking ahead, Ubisoft said it expects sales of around €1.7 billion and non-IFRS operating income of approximately €270.0 million for 2017-18. As for 2018-19, the company reiterated guidance of around €2.1 billion in sales and non-IFRS operating income of approximately €440.0 million. Ubisoft also expects free cash flow of approximately €300.0 million.
It's also worth noting that Ubisoft just signed a new revolving credit facility. The publisher has excelled at creating new IP in the industry, and the company said that the new facility, which totals €300 million with a five-year term and a one-year extension option, "has further strengthened Ubisoft's already very solid financial situation, giving it all the resources it needs to implement its ambitious development strategy."