Summary of Key Points from the Conference Call Company and Industry Overview - **Company**: Ubisoft Entertainment SA (UBIP.PA) - **Industry**: Internet & Media, specifically focusing on the gaming sector Core Points and Arguments - **Price Target Adjustment**: The price target for Ubisoft has been lowered from €8.00 to €5.10, indicating a significant downward revision in expectations for the company's performance [1][49] - **Forecasts for Revenue Growth**: Ubisoft is expected to experience revenue growth of -18% in FY26, followed by +12% in FY27 and +11% in FY28, reflecting the impact of a major restructuring and the implementation of creative houses [49][50] - **Free Cash Flow (FCF) Generation**: The company is projected to return to positive FCF generation by FY30, highlighting a long-term recovery path [49][50] - **Earnings Per Share (EPS) Impact**: EPS estimates have been adjusted downwards by -261% for FY27 and -58% for FY28, reflecting the anticipated challenges in the near term [49][50] - **Q3'26 Preview**: Expected net bookings for Q3'26 are projected at €331 million, which is a 10% increase quarter-on-quarter, aligning with guidance of €330 million [51] - **Q4'26 Expectations**: Implied net bookings for Q4'26 are expected to drop to €402 million, a significant decrease of -55% quarter-on-quarter, indicating challenges in the release pipeline post-restructuring [51] Additional Important Insights - **AI Disintermediation Risk**: The report discusses the potential risks associated with AI disintermediation in the classifieds market, emphasizing that while the risk is acknowledged, the conditions required for it to materialize are complex and not imminent [11][18] - **Market Dynamics**: The report notes that the gaming industry is facing a challenging environment, with Ubisoft's restructuring efforts being a response to these market conditions [50] - **Investment Sentiment**: The current valuation of Ubisoft, at approximately €5.10 per share, reflects a cautious sentiment among investors due to uncertainties surrounding operational delivery and the effectiveness of the restructuring [50] Industry Trends - **Classifieds Market**: The report highlights ongoing trends in the classifieds market, including the impact of AI and the need for companies to adapt to changing consumer behaviors and technological advancements [11][18] - **Comparative Performance**: The performance of Ubisoft is contrasted with other companies in the sector, indicating a broader trend of cautious investment and restructuring across the industry [50] This summary encapsulates the critical insights from the conference call, focusing on Ubisoft's financial outlook, market challenges, and the implications of AI on the industry.