Friday, August 3rd 2018

Activision Blizzard Announces Second-Quarter 2018 Financials - PC Business up by 28%

Activision Blizzard, Inc. today announced second-quarter 2018 results.

"This was another strong quarter for Activision Blizzard. Our portfolio of global franchises enabled us to deliver record first half revenues and earnings per share," said Bobby Kotick, Chief Executive Officer of Activision Blizzard. "This past weekend we held the Overwatch League TM Grand Finals. We had a very successful first season as we enhanced our leadership position in esports. And, today we announced two additional Overwatch League franchise sales at record prices, adding Atlanta, Georgia and Guangzhou, China to our league. We plan to announce additional franchises over the next few months."
For the quarter ended June 30, 2018, Activision Blizzard's net revenues presented in accordance with GAAP were a Q2 record $1.64 billion, as compared with $1.63 billion for the second quarter of 2017. GAAP net revenues from digital channels were $1.26 billion. GAAP operating margin was 26%. GAAP earnings per diluted share were a Q2 record $0.52, as compared with $0.32 for the second quarter of 2017.

For the quarter ended June 30, 2018, on a non-GAAP basis, Activision Blizzard's operating margin was 35% and earnings per diluted share were a Q2 record $0.62, as compared with $0.55 for the second quarter of 2017.

For the quarter ended June 30, 2018, operating cash flow was $9 million. For the trailing twelve-month period, operating cash flow was $2.08 billion.

Please refer to the tables at the back of this press release for a reconciliation of the company's GAAP and non-GAAP results.

Operating Metric:
Net bookings is an operating metric that is defined as the net amount of products and services sold digitally or sold-in physically in the period, and includes license fees, merchandise, and publisher incentives, among others, and is equal to net revenues excluding the impact from deferrals.

For the quarter ended June 30, 2018, Activision Blizzard's net bookingsA were $1.38 billion, as compared with $1.42 billion for the second quarter of 2017. Net bookingsA from digital channels were $1.20 billion, as compared with $1.28 billion for the second quarter of 2017.

Selected Business Highlights:
Activision Blizzard's consistent second-quarter results illustrate the enduring nature of our franchises. In the second half of 2018, we have several exciting launches which we expect to drive strong full-year results.

Audience Reach
  • Activision Blizzard had 352 million Monthly Active Users (MAUs) in the quarter.
  • Activision had 45 million MAUs. Call of Duty : World War II continued to have more MAUs than the prior franchise release. Pre-orders for Call of Duty: Black Ops 4 are strong. Black Ops 3 MAUs grew quarter-over-quarter and, in June,reached the highest level for this year as over 15 million players geared up for the October 12th release of Black Ops 4. During the quarter, Destiny 2 released its second expansion, Warmind, with higher attach rates than Destiny 1's second expansion, and Destiny 2 MAUs grew quarter-over-quarter. Crash Bandicoot N. Sane Trilogy successfully launched for Xbox One, Switch, and PC in the quarter with strong performance.
  • Blizzard had 37 million MAUs ahead of significant content coming in the second half of 2018. World of Warcraft momentum remains high ahead of the upcoming expansion, Battle for Azeroth , which is seeing strong pre-orders. Blizzard is building on the excitement around the Overwatch League with further Overwatch esports events, and a continuous stream of content for the game in the second half of this year, including seasonal events, maps, heroes, and new cosmetic items. Pre-purchases for theupcoming Hearthstone expansion, TheBoomsday Project , are tracking ahead of any prior expansion at the same point in time pre-release.
  • King had 270 million MAUsC. Candy Crush Saga mobile MAUsC were stable quarter-over-quarter and grew year-over-year. King's engagement remained strong with daily time spent per user at 36 minutes.
Deep Engagement
  • The Overwatch League held its Grand Finals event at Barclays Center in New York on June 27-28. The Grand Finals had a sold-out live audience and millions of global viewers watched on TV networks and streaming platforms. The hard-to-reach 18 to 34 demographic made up approximately 70% of the global audience.
  • Activision's Call of Duty World League continued to enjoy momentum with year-to-date minutes watched up 50% year-over-year heading into its championships in Columbus, Ohio later this month.
Player Investment
  • Activision Blizzard delivered $1 billion of in-game net bookings in the second quarter and a record of approximately $2 billion year-to-date.
  • Activision had record Q2 in-game net bookings A, driven by Call of Duty: WWII, Call of Duty: Black Ops 3, and Destiny 2.
  • This quarter, King had two of the top-10 highest-grossing titles in the U.S. mobile app stores for the nineteenth quarter in a row, with Candy Crush Saga at #1 again.1 Overall Candy Crush franchise net bookings A grew double digits year-over-year.
  • King's advertising business was profitable for the second quarter in a row with net bookings A growing sequentially.
Net bookings (operating metric) is expected to be $7.48 billion for 2018 and $1.61 billion for the third quarter of 2018.

Currency Assumptions for 2018 Outlook:
  • $1.21 USD/Euro for current outlook (vs. average of $1.12 for 2017 and $1.11 for 2016); and
  • $1.35 USD/British Pound Sterling for current outlook (vs. average of $1.30 for 2017 and $1.36 for 2016).
  • Note: Our financial guidance includes the forecasted impact of our FX hedging program.
Capital Allocation:
The company paid a cash dividend of $0.34 per common share, up 13% year-over-year, in May 2018 to shareholders of record at the close of business on March 30, 2018. Cash payments totaled $259 million. The Board of Directors has authorized a debt paydown of up to $1.8 billion during 2018, and the company expects to utilize the full authorization in Q3.
Add your own comment

12 Comments on Activision Blizzard Announces Second-Quarter 2018 Financials - PC Business up by 28%

#1
NTM2003
You know how much more money they make if world of Warcraft came out on consoles but probably won't ever happen.
Posted on Reply
#2
StrayKAT
NTM2003, post: 3879975, member: 154604"
You know how much more money they make if world of Warcraft came out on consoles but probably won't ever happen.
Yeah, that'd be crazy...

Although I expect them to do it next time, if/when they release another MMO.
Posted on Reply
#3
NTM2003
I play elder scrolls online but would love to see world of Warcraft come to consoles haven't used much of my PC in a while
Posted on Reply
#4
FreedomEclipse
~Technological Technocrat~
Pre-orders for call of duty....



Clearly some people havent learned....
Posted on Reply
#5
NTM2003
Black ops 4 there's a 4k version of the game for pre order for $119.99 really just to get the 4k
Posted on Reply
#6
FordGT90Concept
"I go fast!1!11!1!"
NTM2003, post: 3879975, member: 154604"
You know how much more money they make if world of Warcraft came out on consoles but probably won't ever happen.
Pretty sure Nintendo/Sony/Microsoft forbid subscription services.
Posted on Reply
#7
NTM2003
Elder scrolls online has it I don't see why world of Warcraft cant do it. Maybe they think they can't get the fans to play the game on console because its so PC exclusive.
Posted on Reply
#8
FreedomEclipse
~Technological Technocrat~
NTM2003, post: 3880047, member: 154604"
Black ops 4 there's a 4k version of the game for pre order for $119.99 really just to get the 4k
Somehow i bet that still doesnt include access to the season pass either... you gotta buy the 4k Premium Deluxe Ultimate edition of the game to get that.
Posted on Reply
#9
NTM2003
I think it does I've read up on it but I'm not pre order till I play the beta I don't pre order games I probably won't like but I do when I know I love the a game or it's my favorite. They have one every year. The only game I've pre order so far is Forza horizon 4 my all time favorite.
Posted on Reply
#10
StrayKAT
FordGT90Concept, post: 3880054, member: 60463"
Pretty sure Nintendo/Sony/Microsoft forbid subscription services.
That's never been the issue. They have tons of third party subscription services on consoles. Be it MMOs or whatever. Warcraft simply came out at a time when it wasn't very feasible (before the release of the 360 and PS3), and I imagine it's never been worth the trouble to port it.
Posted on Reply
#11
Easo
NTM2003, post: 3879975, member: 154604"
You know how much more money they make if world of Warcraft came out on consoles but probably won't ever happen.
I dont think anyone really want's that. While you can play WoW with a controller, it is far from the easiest thing to do and you are quite limited, unless you go really macro heavy, which is not for the average user.
Posted on Reply
#12
ToxicTaZ
Just give us Diablo IV please!
Posted on Reply
Add your own comment