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Investing.com - Benchmark has reiterated its Hold rating on Ubisoft Entertainment SA (LON:0NVL) (EPA:UBI) (OTC:UBSFY), currently valued at $1.5 billion, following the company’s first-quarter results that fell short of targets. According to InvestingPro data, the company’s stock has declined 19.26% year-to-date, significantly underperforming the broader market.
Ubisoft (EPA:UBIP) reported Q1 net bookings of €282 million, below its €310 million target and representing a 2.9% year-over-year decline. The underperformance was primarily attributed to weaker-than-expected results from Rainbow Six Siege, delayed B2B revenues now expected in Q2, and foreign exchange headwinds.
Digital bookings decreased to €250.2 million and player recurring investment (PRI) bookings fell to €151.8 million compared to the previous year. Back-catalog bookings, however, showed positive momentum with a 4.4% increase to €260.4 million, accounting for 92.5% of total bookings.
The company explained that Rainbow Six Siege, its most important recurring revenue franchise, suffered from a one-off pricing exploit that distorted virtual currency balances and impacted monetization. Ubisoft has since resolved this issue and management highlighted strong post-update engagement trends.
Ubisoft’s strategic focus remains on structural transformation through its Creative Houses initiative and the anticipated year-end closing of the Tencent (HK:0700) transaction, which management considers key strategic pillars for the company’s future.
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