Ubisoft Entertainment SA (UBI.PA) Soars as Tencent Deal Nears and Q2 Bookings Smash Guidance

Ubisoft’s rollercoaster week ends with a relief rally

French video game publisher Ubisoft Entertainment SA (UBI.PA) staged a sharp rebound on Friday, 21 November 2025, as trading in its shares resumed on Euronext Paris after a week-long suspension.

The catalyst:

Q2 net bookings that comfortably beat guidance,
first-half FY 2025–26 results showing a strong rebound in sales, and
confirmation that Tencent’s €1.16 billion investment into new subsidiary Vantage Studios is “imminent” and fully cleared from a regulatory perspective. ^[1]

By late trading, Ubisoft shares were up around 8–10%, with intraday data showing the stock at roughly €7.34–€7.46, more than 10% above its last closing level before the halt. ^[2]

At the same time, Ubisoft confirmed that its new Tencent-backed structure will be used to slash debt, fix a breached loan covenant and fund its biggest franchises, easing immediate balance-sheet fears that had fueled takeover rumors over the past week. ^[3]

Trading resumes after a week-long suspension and accounting scare

On 13–14 November, Ubisoft abruptly postponed the release of its first-half FY 2025–26 results and requested that Euronext suspend trading in its shares and bonds, triggering a storm of speculation that the company might be preparing a sale. ^[4]

Today’s disclosures fill in what actually happened:

A new panel of auditors required Ubisoft to change how it recognizes revenue from certain usage‑based partnership deals.
That restatement pushed the net debt-to-EBITDA ratio up to 1.81, breaching a 1.5x limit in some financing agreements – technically breaking a covenant. ^[5]
Ubisoft chose to delay the results while it worked through the restatement and its plan to fix the covenant breach. ^[6]

With those issues now addressed and a refinancing plan in place, Ubisoft said trading would resume at the market open on Friday, which it did at 09:00 CET. ^[7]

Shares opened weak – dropping as much as 6% at the start – but quickly reversed as investors digested the earnings beat and Tencent news, at one point jumping around 10% on the day. ^[8]

Q2 & H1 FY 2025–26: strong bookings, still-lossmaking but improving

Ubisoft’s fiscal year runs to March, so today’s announcement covers the first half of FY 2025–26, ending 30 September 2025. Key numbers from the official release: ^[9]

Headline figures

H1 2025–26 net bookings:
- €772.4 million, +20.3% year-on-year.
Q2 2025–26 net bookings:
- €490.8 million, up about 39% YoY and well above guidance of ~€450 million.
Digital net bookings:
- €685.8 million, up 30% YoY, now almost 89% of total bookings.
Back‑catalog net bookings:
- €741.4 million, up 50% YoY, accounting for 96% of total bookings – showing just how much older titles and services are carrying the business.

Profitability and cash flow

The turnaround is visible but incomplete:

Non‑IFRS operating income:
- +€27.1 million, versus a loss of roughly €252 million a year earlier.
Non‑IFRS net income:
- Still a loss of about €37 million, but far better than the ~€208 million loss in H1 2024–25.
IFRS net income:
- Loss of about €161 million, reflecting restructuring, amortisation and the impact of restatements on the accounts. ^[10]
Non‑IFRS cash flow from operating activities:
- Outflow of roughly €240 million in H1, worse than the ~€106 million outflow a year ago, partly due to working‑capital swings. ^[11]

Ubisoft also reported 34 million monthly active users (MAUs) and 88 million unique users on console and PC in the first half, slightly down if you strip out free‑to‑play shooter XDefiant, but still indicating a very large player base to monetise. ^[12]

The Tencent deal: €1.16bn into Vantage Studios to fix the balance sheet

The centerpiece of today’s story is the Tencent deal, which Ubisoft describes as “on track to close in the coming days” with all conditions precedent now satisfied. ^[13]

What exactly is Vantage Studios?

Earlier this year, Ubisoft created Vantage Studios, a new subsidiary that bundles some of its biggest IPs, including:

Assassin’s Creed
Far Cry
Tom Clancy’s Rainbow Six

Tencent is set to invest €1.16 billion for a 25% stake in this unit, implying a valuation of about €4 billion for the carve‑out. Ubisoft will retain the remaining 75%. ^[14]

The goal is twofold:

Deleveraging – using the cash to pay down debt and fix the covenant breach.
Fueling growth – funding bigger, more frequent releases and live‑service support for the flagship franchises.

How the money will be used

Ubisoft ended September with: ^[15]

Non‑IFRS net debt: about €1.15 billion
Cash and cash equivalents: about €668 million

Management plans to:

Use roughly €286 million of Tencent proceeds to repay term loans and Schuldschein debt early, directly resolving the covenant breach. ^[16]
Apply the remainder to bring non‑IFRS net debt “around zero” once the transaction closes. ^[17]

In the earnings release and follow‑up coverage, CEO Yves Guillemot described the Tencent deal as “a pivotal milestone in Ubisoft’s transformation”, emphasizing that the cash injection should both strengthen the balance sheet and accelerate investment into Vantage’s core IP slate. ^[18]

Accounting restatement, covenant breach, and why it matters

The debt‑covenant scare is not just a technical footnote – it goes to the heart of investor trust.

According to Ubisoft and Reuters: ^[19]

Ubisoft had previously booked some partnership revenue upfront when deals were signed.
The new auditor panel insisted revenue for usage‑based partnerships be recognized gradually, as services are actually used.
That restatement altered historic earnings and raised the net debt / EBITDA ratio to 1.81, breaching the 1.5x limit in certain financing agreements.

By committing to repay €286 million of loans early and bringing net debt down near zero after the Tencent deal, Ubisoft aims to:

Restore full compliance with its financing covenants,
Remove overhang around liquidity and refinancing risk, and
Buy time for its game slate and cost‑cutting program to rebuild profitability.

Bloomberg’s coverage stressed that auditors judged Ubisoft to have mis‑booked some sales under IFRS, and that the Tencent infusion is central to closing the gap. ^[20]

Games, TV and transmedia: what’s driving the numbers?

Ubisoft’s rebound is notably driven by existing franchises and cross‑media projects rather than a surge of brand‑new blockbuster launches.

From the company’s own breakdown: ^[21]

Back‑catalog (older games and ongoing live titles) made up 96% of H1 net bookings, highlighting the importance of long‑tail monetisation.
Partnerships – including distribution and platform deals – were “stronger than expected” and a major reason Q2 bookings beat guidance.
TV and streaming content is starting to matter:
- Splinter Cell: Deathwatch premiered on Netflix on 14 October and achieved an 86% Rotten Tomatoes score, entering the daily Top 10 in more than a dozen countries, including six straight days in the US.

FY 2025–26 release slate

Key titles and updates the company highlighted today include: ^[22]

Anno 117: Pax Romana – launched on 13 November with a Metacritic score around 85, providing a late‑quarter boost.
Assassin’s Creed Mirage – “Valley of Memory” update – rolled out on 18 November.
Avatar: Frontiers of Pandora – “From the Ashes” expansion – due 19 December, timed with the new film.
Q4 pipeline:
- Prince of Persia: The Sands of Time remake
- Rainbow Six Mobile
- The Division Resurgence
- plus an unannounced title slated before year‑end.

Longer‑term, Ubisoft reiterated that it expects a return to positive non‑IFRS operating income and free cash flow in FY 2026–27, helped by new content from its biggest brands in FY 2027 and FY 2028. ^[23]

Cost cuts, Creative Houses and headcount reduction

The earnings release also underscores Ubisoft’s ongoing restructuring: ^[24]

The company is building a new operating model based on “Creative Houses”, groups of studios organised around clear creative leadership and accountability.
- The design is expected to be finalised by year‑end 2025, with details presented in January 2026.
Ubisoft is running a cost‑reduction program targeting at least €100 million in fixed‑cost savings by FY 2026–27 vs FY 2024–25.
Global headcount stood at around 17,100 employees at the end of September, down roughly 1,500 compared with a year earlier, with management saying about €70 million of the targeted savings have already been captured.

All of this is meant to complement the Tencent cash injection: a leaner cost base plus lower interest expense should make it easier for Ubisoft to convert future hits into sustainable profits rather than brief spikes.

Market reaction and valuation: big bounce from depressed levels

Even after today’s jump, Ubisoft’s share price remains far below its levels earlier this year and over the last console cycle.

Data providers tracking UBI.PA and its German/Paris tickers show: ^[25]

Closing price (21 November 2025): about €7.46, up 10.2% on the day.
Intraday range: roughly €6.40–€7.63, with significant volatility as trading resumed.
52‑week range: approximately €5.87–€14.48.
1‑year performance: still around ‑40% to ‑45%, depending on index and currency.
Market capitalisation: roughly €0.9–1.0 billion after today’s move.

On fundamental metrics, third‑party data (Eulerpool) put Ubisoft at: ^[26]

2025 revenue: around €1.9 billion
Net loss: about €159 million
Price‑to‑sales ratio: roughly 0.4–0.5x
Price‑to‑earnings: negative, reflecting ongoing losses

In other words, today’s rally is a relief bounce from distressed levels, not a return to its former mid‑teens share price – investors are still pricing in execution risk, competitive pressure in AAA gaming, and the need to successfully integrate the Vantage Studios structure.

What changes after 21 November 2025?

For investors, analysts and players tracking Ubisoft Entertainment SA (UBI.PA), today’s flood of news effectively resets the story:

Liquidity risk has eased
- The Tencent deal, now described as imminent and fully cleared, should drive non‑IFRS net debt close to zero after loan repayments, removing the immediate covenant overhang. ^[27]
Operations are stabilising, not booming
- Bookings are growing double‑digit, driven largely by existing franchises and partnerships, and non‑IFRS operating income has flipped back into the black – but Ubisoft is still loss‑making under both IFRS and non‑IFRS net income and burning cash in H1. ^[28]
Strategy is crystallising around Vantage + Creative Houses
- Vantage Studios will concentrate resources on Assassin’s Creed, Far Cry and Rainbow Six, with Tencent as a 25% minority partner.
- The rest of the group shifts into Creative Houses, backed by a leaner cost base and a big transmedia push (TV and film tie‑ins, expansions and live services). ^[29]
Speculation of an imminent full takeover looks less likely – for now
- Commentary from outlets like 80.lv and GameFile, which chronicled intense speculation around a potential sale during the results delay, now frame the Tencent cash plus debt clean‑up as a “clear the air” moment rather than a prelude to a buyout. ^[30]
The next big checkpoint is January 2026
- That’s when Ubisoft has promised a full unveiling of its Creative Houses operating model, while investors will watch closely how the Q3 bookings (guided at around €305 million) actually land. ^[31]

Bottom line

On 21 November 2025, Ubisoft finally answered the questions that had hung over it for a week:

The earnings delay and trading halt were about accounting changes and a temporary covenant breach, not an immediate collapse.
The Tencent Vantage Studios deal is going ahead, bringing in €1.16 billion of cash to reset the balance sheet and double down on core franchises.
Operationally, bookings are growing strongly, but profits and cash flow still need work, and the success of Ubisoft’s transformation will hinge on execution over the next 18–24 months.

For anyone following UBI.PA – whether as an investor, analyst or just a fan of Assassin’s Creed and the broader Ubisoft universe – today’s news marks a turning point, but not yet a victory lap.

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