Uh oh! Ubisoft looks well and truly fricked. Stock fell ANOTHER 18%

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Ubisoft published its full year FY2025-26 earnings on May 20th, and the headline story is a familiar one. Revenue fell 21.8% to €1.4 billion, net bookings dropped 17.4% to €1.5 billion, and the company posted an operating loss of €1.3 billion for the year. The stock fell more than 16% on the day, extending a year-to-date decline of around 38%.

What happened with Ubisoft Earning Call?
The reaction is less about one bad year and more about how Ubisoft needs another year of moving investment to see profitability again. When the company set out its FY26 targets, it projected stable net bookings and approximately break-even operating income, with a return to positive operating income and free cash flow in FY27. Neither target was met, and the recovery milestones have now shifted again.

FY2026-27 is now framed as the low point for free cash flow rather than the year of recovery, with free cash flow consumption of no more than €500 million expected.Ubisoft does not expect to rebound on its financial forecasts until FY2027-28, with robust cash generation pushed out to FY2028-29.

It comes with Tencent cash injection last year of 1.16 billion leading the charge, with continued live service operations, and some other success stories this year bringing home some of the bread.

Heroes of Might and Magic: Olden Era, which launched into early access at the very start of FY27, sold 250,000 copies in under 24 hours and hit 650,000 within its opening weekend. Ubisoft owns the IP and collects licensing returns with minimal outlay. Assassin’s Creed: Black Flag Remastered is also confirmed for July 9, with strong early pre-order momentum, particularly in China. It will likely perform very well in the West, too. And Rainbow Six Siege continues to generate consistent live service income that is quietly holding the company together while the wider portfolio resets. Other smaller titles like For Honor even got mentioned as doing well relative to its size and scope.

Overall, its back catalog seems to have performed better than quarter estimations by €415m, versus guidance of around €390m in Q4. So, it’s not all bad. But, it does admit its overall sales figures are down, by and large due to restructuring plans reducing the amount of new games and other projects that launched in that period.

But, it is slowly running out of runway. It will be very interesting to see how far this rebuild can go and to what success it can actually bring in the next two years.

It comes as other hype enters the investor market, with Embracer announcing some major shakeup and confirmation of new Warhorse LOTR and Kingdom Come games. Even Take-Two is hyped as many expected something on GTA 6 by now.

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