Finance
Ubisoft flags strong Q2 bookings in a report delayed by debt covenant breach
Published by Global Banking and Finance Review
Posted on November 21, 2025
3 min readLast updated: January 20, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on November 21, 2025
3 min readLast updated: January 20, 2026
Ubisoft's Q2 bookings surpassed expectations despite a debt covenant breach due to an accounting change. The company is addressing the breach with early loan repayment.
By Leo Marchandon
(Reuters) -French video game group Ubisoft reported quarterly bookings above its guidance on Friday, after a week-long delay in publishing the results related to an accounting change that led to a breach in a key debt covenant.
The publication, originally scheduled for November 13, was postponed at the last minute. Upon a request from Ubisoft, Euronext halted trading in its shares and bonds a day after that, with no clear reason for the postponement provided at the time.
Trading resumed at 0900 GMT on Friday, with a volatile start that saw the shares fall up to 6% before reversing course. They were up 10% by 1024 GMT.
DELAY TIED TO ACCOUNTING CHANGE, COVENANT BREACH
Ubisoft's finance chief Frederick Duguet said in a press call the delay was due to a newly appointed panel of auditors requiring a restatement of fiscal 2025 accounts related to revenue recognition of partnership deals.
Because of this, the company altered how it recognises revenue from several deals. Under the new approach, revenue from usage-based partnerships will be recorded gradually as services are utilised, rather than booked upfront when deals are signed.
The change caused Ubisoft's net debt to core profit (EBITDA) ratio to shoot up to 1.81 as of September 30, well above the 1.5 limit set under certain financing agreements.
"The delay can ... be explained by the need to restate last year's accounts and, above all, to validate the Tencent deal (which may still have had to satisfy a few conditions) since a covenant on a credit line had been exceeded," analyst Corentin Marty from TP ICAP Midcap told Reuters in an email.
Ubisoft said it was addressing the breach through an early repayment of around 286 million euros ($330 million) in outstanding loans using proceeds from Tencent's 1-billion-euro investment in Vantage Studios, a subsidiary managing the group's three flagship franchises.
It said the repayment would help reduce its debt pile, which stood at 1.15 billion euros at the end of September.
The Tencent transaction, announced in May, is expected to close in the coming days after meeting all outstanding conditions, Ubisoft added.
QUARTERLY RESULTS BEAT EXPECTATIONS
Ubisoft's second-quarter net bookings rose 39% to 490.8 million euros, exceeding its guidance of around 450 million. That was driven by stronger-than-expected performance across its catalogue and a meaningful contribution from TV adaptations of its games, it said.
The company confirmed its full-year outlook for stable net bookings and an operating income around breakeven. It forecast third-quarter bookings of around 305 million euros.
Full details of Ubisoft's new "Creative Houses" operating model will be unveiled in January 2026, CEO Yves Guillemot said in a statement
Ubisoft's global headcount stood at 17,097 at the end of September, down by about 1,500 over 12 months, as it pursues at least 100 million euros in cost savings this year. Duguet said the company had achieved close to 70 million euros of those cost reductions in the first half.
($1 = 0.8676 euros)
(Reporting by Leo Marchandon in Gdansk, editing by Milla Nissi-Prussak)
A debt covenant is a clause in a loan agreement that requires the borrower to fulfill certain conditions or restricts certain activities to protect the lender's interests.
EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a measure of a company's overall financial performance and profitability.
Revenue recognition is an accounting principle that determines the specific conditions under which income becomes recognized as revenue, affecting financial statements.
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