Full Year 2025 Ubisoft Entertainment SA Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Nick Dempsey - Barclays - Analyst : I've got three questions. So the first one, if I look at that first-quarter guidance that Frederick pointed to of 310, that contains decent follow-on units from Shadows. So to reach flattish revenue year on year on a full-year basis, you need to do much better in the coming quarters on average. So is that coming from notable partnership deals that will help you or from significant new content coming in those quarters. And if the last one, then can you give us an indication of the rough number of new games? So that's one question. The second question, you mentioned a new mobile opportunity which has helped your partnership deals in Q4. Is that a deal that we've seen before where you're licensing your IP to a third party so that they can make a mobile game, and you'd expect that to sell well in Asia? Is it that kind of deal? And the third one, in terms of the EUR80 million royalty that you are pointing to, is that a fixed percentage of what you currently estimate to be the average revenues for each of the next few years from those big three franchises? In other words, could it actually be quite volatile from year to year against that average of 80?

Question: Alexander Peterc - Bernstein - Analyst : I'd like to know how we should think about the revenue and profitability of what remains 100% Ubisoft post the transaction and the amount that will flow to minority shareholders, shareholder Tencent in the venture that owns your best franchises, so that we can have an idea of what kind of net profits group share we'll have after the transaction. That was my first question. I have a follow up.

Question: Alexander Peterc - Bernstein - Analyst : And just in terms of follow-up, your profitability has been quite erratic over the past five years. We now have an outlook of another break even year at the non-IFRS EBIT level. Can you give us an idea of where you would like to land in terms of non-IFRS EBIT margins with longer term once you stabilize your operations fully?

Question: Nicolas Langlet - BNP Paribas - Analyst : I've got three questions. First of all, on the licensing deals, can you tell us what was the speed between new game and back cataloguing because it seems there was an impact on both. And do you expect any other meaningful non-recurring deals in full-year '26? You mentioned the timing impact from Q4 to maybe Q1, but is there anything else you expect in the full-year '26 guidance? Secondly, on the networking guidance of '26, just to make sure that on the back-catalog, you do expect the overall back catalog to grow in 2026 or not taking into account the licensing deals. And finally in terms of the adjusted EBIT guidance for '26, what are the key building blocks compared to full year '25? I understand there is additional cost reduction. We should assume stronger contribution from AC Shadows and Rainbow Six Siege, and that would be all set by lower partnership deals. Anything else you would like?

Question: Nicolas Langlet - BNP Paribas - Analyst : I think you responded to the three. Maybe a last follow-up. On the new subsidiary, can you give us an idea of the profitability in full-year 25? Do you think like 25%, 30% would be in the ballpark?

Question: Ali Naqvi - HSBC - Analyst : I'm just wondering if you could give us an idea of what the net operating income and free cash flow would be qualitatively, excluding the restructuring costs. And then in terms of the significant content that's coming out in '27 and '28, is there anything you can say by way of quantum which year is going to be greater than the other. And the games that you're investing in in terms of time, are you delaying those by a matter of months or is it a matter of years? And then finally, what are the sort of hurdle rate that Assassin's Creed Shadows has crossed in terms of units sold?

Question: Ali Naqvi - HSBC - Analyst : One very quick follow-up. Could you just give us an idea of the phasing of the negative cash burn that you're expecting over the course of FY26, please?

Question: Ben Shelley - UBS - Analyst : I've got three questions as well, if I may. One, can I push you a bit harder on the numbers for negative free cash flow in FY26? Should we be thinking above or below the minus EUR100 million mark? Two, can you walk us through the group's transition to positive free cash flow generation in FY27 and beyond? And should we expect this to be more of a top line or cost-based story? And then, three, can you remind us of your debt obligations over the next three financial years, including any convertible bonds with put options. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 14, 2025 / 4:15PM, UBIP.PA - Full Year 2025 Ubisoft Entertainment SA Earnings Call