- Q3 net bookings ahead of guidance
- Q4 net bookings up sharply
- Full year guidance reiterated
Shares in French video gaming company Ubisoft Entertainment (UBI:EPS) leapt 16% after third quarter net bookings topped analysts’ forecasts.
The shares were recently trading close to five-year lows as the Assassins Creed maker has been struggling to turn the business around.
Co-founder and chief executive Yves Guillemot commented: ‘Ubisoft recorded a solid third quarter, with net bookings slightly ahead of our expectations.
‘This quarter provided us with positive momentum and marks the beginning of our turnaround to consistently creating and delivering high-quality, long-lasting games.’
The company said it expects fourth quarter net bookings to 31 March to be sharply higher leading to record annual bookings while also confirming full year financial targets.
These include ‘strong’ sales growth and non-IFRS operating income of approximately €400 million. Consensus forecasts see 2024 sales growing 15% to €2.07 billion.
Net bookings for the three months to the end of December came in at €627 million, above company guidance of €610 million but down 14% compared with the same period a year ago.
Looking ahead the company said it has a promising line-up of releases including Star Wars Outlaws in 2024 and the long-awaited Assassin’s Creed Codename Red set in the feudal Japanese universe.
STREAMING RIGHTS BENEFITS
Last year Ubisoft received streaming rights to certain Activision Blizzard titles as part of concessions made by Microsoft (MSFT:NASDAQ) to appease regulators and get the acquisition over the line.
Ubisoft finance chief Frederick Duguet said the deal should improve the appeal of the firm’s subscription programme. Duguet added that Ubisoft was talking to several platforms about licensing the rights exclusively.
Jefferies expects 2024 net bookings to come in 7% ahead of consensus to more than €2.24 billion based on management comments which call for ‘significant partnerships’ in the fourth quarter.
Analysts at TD Cowen assume fourth quarter sales will include at least €250 million in licensing revenue from the partnerships.
AJ Bell investment director Russ Mould commented: ‘The latest Assassin’s Creed game, Mirage, is a big factor behind the company’s robust quarterly performance.
‘Chief executive Yves Guillemot says the company is going to start consistently delivering good games again. Which begs two obvious questions: why didn’t they think of that before and if it was that easy, why weren’t they already?
‘Its latest update offers new hope – as does the upcoming release of Star Wars Outlaws which is obviously tapping into some extremely strong IP.
Disclaimer: Financial services company AJ Bell referenced in the article owns Shares magazine. The author of the article (Martin Gamble) and the editor of the article (Ian Conway) own shares in AJ Bell.