Ubisoft Shares Surge 10% Mid-Day After Solid Half-Year Results
Ubisoft announced this Friday the imminent finalization of its strategic transaction with Tencent, which will see the Chinese giant become a minority shareholder in its new subsidiary Vantage Studios with a cash contribution of 1.16 billion euros, enabling the Group's debt reduction. The group recorded net bookings higher than its forecasts, driven by higher-than-expected partnerships, highlighting the attractiveness of its brands. The video game publisher confirmed its financial targets for the fiscal year ending next March, after recording half-year results that exceeded analysts' estimates.
Stock Performance and Market Response
Ubisoft shares, which had been suspended since November 19, resumed trading around 09:00 GMT and jumped 10.5% to 7.48 euros by 10:30 GMT, after initially dropping nearly 6%. The stock thus shows a mid-day increase of 10.28% compared to its last closing price of 6.77 euros, driven by the publication of quarterly results better than expected. With a trading volume representing 1.2% of the capital, the stock is attempting to rebound after a challenging twelve-month period, where it still shows a decline of 42.3%, against a rise of 10.59% for the CAC 40 over the same period.
The creator of Assassin's Creed reported net bookings of 490.8 million euros in the second quarter, up 39% year-on-year and significantly exceeding its own estimates of 450 million euros, with half-year net bookings at 772 million euros, up 20% from last year. Chief Financial Officer Frederick Duguet explained during a press conference that the delay in publication was due to the appointment of a new panel of auditors requiring a reprocessing of the 2025 accounts concerning the recognition of partnership revenues.
Strategic Investments and Financial Planning
Vantage Studios, dedicated to flagship franchises Assassin's Creed, Far Cry, and Rainbow Six, will benefit from an investment of 1.16 billion euros from the Chinese conglomerate Tencent, with all suspensive conditions of the transaction having been met. The proceeds from this transaction will enable the Group to reduce its debt, particularly through the early repayment of bank credit and Schuldschein, the remaining balance of which amounts to approximately 286 million euros, with 210 million euros due next month. Following the closure of the transaction with Tencent, the Group plans to maintain a consolidated non-IFRS net debt position around zero.
Ubisoft still anticipates stable net bookings for 2025-2026 compared to 2024-2025, around 1.85 billion euros, an operating result close to break-even, and a negative free cash flow. The Group expects a return to positive non-IFRS operating income and generation of Free Cash Flow for the fiscal year 2026-27, and to have significant content from its main franchises over the fiscal years 2026-27 and 2027-28.
Technical Analysis and Market Indicators
Technically, the stock is now trading at 7.47 euros, still below its 50-day moving average of 8.29 euros and significantly below its 200-day moving average of 9.71 euros, indicating a long-term downward trend not yet reversed. The RSI at 30 points is in the oversold zone, suggesting a potential for technical rebound after the significant drop in recent months. The price remains within the range of the Bollinger Bands, which are set between 5.78 euros (lower boundary) and 8.22 euros (upper boundary), with a monthly volatility of 15.12%.
The MACD histogram shows a value of 0.11, with the MACD line at -0.52 remaining below the signal line at -0.63, signaling a possible bullish inflection after several weeks of negative divergence. The resistance level at 9.13 euros will be a major hurdle to validate a trend reversal, while the support at 6.08 euros now appears as a technically reinforced floor by the ongoing recovery. The negative Chaikin Money Flow at -0.41 and the On-Balance Volume at -3,207,982 indicate that selling pressure remains despite the session's rebound.
