Shares dropped 9.6% as investors reacted negatively to the company’s cautious outlook and clear indication of a continued trough in free cash flow due to a softer release slate, restructuring costs, and the ongoing transformation. The combination of significant deceleration in new releases and short-term financial underperformance overshadowed some stable margin metrics and solid back catalog results.

• Full-year net bookings declined 17% year-over-year to EUR 1.525 billion, primarily due to a softer new release schedule.
• The company flagged fiscal year ’27 as a free cash flow low point, driven by restructuring costs and the weak content pipeline, delaying expected significant cash flow rebound to fiscal ’28 and ’29.
• Gross margin remained stable year-over-year, reflecting limited margin compression despite the challenges.
• Q4 net bookings of EUR 415 million exceeded internal guidance by EUR 25 million, supported by a stronger back catalog performance, though still down 54% from the prior year quarter with a high comparison base.
• Digital net bookings and premium rental income declined year-over-year, reflecting decreased partnership revenues and the absence of major new title launches.