Ubisoft’s strange earnings results delay and week-long stock and bond trading halt was caused by the company’s need to restate its fiscal year 2024-25 earnings results due to improper revenue recognition. The restated numbers showed that Ubisoft was not complying with previously agreed-upon debt convenants as of September 30, 2025. Without the Tencent deal closing, Ubisoft might have found itself in a lot more trouble, but it appears that the Assassin’s Creed publisher and its shareholders have got a stay of execution. Here’s what the company had to say about the accounting issues in the earnings release: IFRS update: FY2024-25 restatement & impact on H1 FY2025-26 accounts Following its auditors’ position as part of its review of the H1 financial accounts, the Company has reviewed its analysis relating to the IFRS 15 revenue recognition of a partnership in FY2024-25 that has led it to restate its FY2024-25 accounts as per IAS8. Utilization-based payment schedules lead this partnership to be recognized under IFRS15 as revenues over utilization. This position now applied by the Group going forward has also resulted in a partnership signed in Q2 FY2025-26 not being recognized in IFRS15 revenues. The above results in the Company not complying with its leverage covenant ratio under certain existing financing agreements at September 30, 2025. However, this is being addressed by the aforementioned actions relating to the concerned debt instruments. The restatement of the prior-year financial accounts are detailed in the Appendix of the press release. This IFRS accounting restatement has no impact on the Group’s non-IFRS indicators as defined below. Ubisoft says that it will pay about $330 million of its debt with money that is about to received from the “imminent” close of the Tencent deal, but things could have truly gone a lot worse for the company. Ubisoft’s stock is trading up 10% on the news as investors breathe a sigh of relief that the worst possible outcome has been avoided here. For now. Between the unusual stock trading halt and the sudden closing of the previously announced Tencent deal, Ubisoft management continues to make it hard to have any confidence in a turnaround for the company. The stock is down over 90% from its all-time high set back in 2018 and today’s news really highlights the uphill climb ahead for the not-so Super Guillemot Bros. Ubisoft says it will detail the new structure and operations plan for the Vantage Studios subsidiary company in early 2026, so keep it locked on Shacknews for all of the latest news as it breaks. This article is only meant for educational purposes, and should not be taken as investment advice. Please consider your own investment time horizon, risk tolerance, and consult with a financial advisor before acting on this information. Full Disclosure: At the time of this article, Shacknews primary shareholder Asif A. Khan, his family members, or his company Virtue LLC had the following positions: Long Ubisoft via UBSFY shares.
https://www.shacknews.com/article/146926/ubisoft-tencent-debt-covenant-leverage-trading
