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Investing.com -- Ubisoft (EPA:UBIP) shares rose more than 2% on Friday after the French video game on Thursday reported third-quarter net bookings in line with its revised guidance, easing investor concerns following a series of profit warnings in recent months.
The company posted net bookings of €301.8 million for the quarter, aligning with the €300 million figure it had warned of in early January.
While this marked a 52% year-on-year decline, the results met market expectations and provided some stability. Ubisoft also reiterated its full-year outlook, projecting net bookings of €1.9 billion and aiming for break-even non-IFRS operating income and free cash flow.
The reaffirmed guidance, combined with progress in the company’s cost-cutting efforts, played a key role in boosting market sentiment.
Ubisoft now expects to post €200 million in fixed cost reductions by the end of fiscal year 2025—one year ahead of schedule—and plans to extend these cuts into 2026, though it has yet to specify the extent.
Adding to investor optimism, Ubisoft’s strategic review has entered what it described as a “competitive phase,” suggesting multiple interested parties.
Analysts have pointed to Tencent (HK:0700) as a likely contender, with Saudi Arabia’s PIF-owned Savvy Games also emerging as a potential player following a recent partnership with Ubisoft for downloadable content in Assassin’s Creed Mirage.
However, management declined to provide a firm timeline for the review’s conclusion, saying only that a decision is expected in the “coming quarters.”
Ubisoft is betting on major releases to drive its recovery. Assassin’s Creed Shadows, launching in the final weeks of the fiscal year, is expected to contribute strongly to 2026 revenue.
The company has also confirmed at least one more AAA title, Anno Pax Romana, along with an expanded pipeline for the Rainbow Six franchise, including a significant event for the game’s 10th anniversary.
Analysts at Morgan Stanley (NYSE:MS) noted that the absence of fresh negative surprises, coupled with the accelerated cost-cutting timeline, has helped restore some confidence in Ubisoft’s ability to execute its turnaround.
“We did not really learn much new: our thinking about the company’s FY25 and beyond remains unchanged and we do not make any changes to our model or price target of €11 at this stage,” said analysts at Barclays (LON:BARC) in a note.