Activision Blizzard, Inc. (Nasdaq: ATVI) today announced
second-quarter 2021 results.
“With respect to our financial performance, we are pleased that
the company continued to deliver strong results in the second
quarter, and we are raising our outlook for the year,” said Bobby
Kotick, CEO of Activision Blizzard. “We remain intensely focused on
the well-being of our employees and we are committed to doing
everything possible to ensure that our company has a welcoming,
supportive and safe environment where all of our team members can
thrive.”
Financial Metrics
Q2
(in millions, except EPS)
2021
Prior Outlook*
2020
GAAP Net Revenues
$2,296
$2,135
$1,932
Impact of GAAP deferralsA
($375)
($285)
$146
GAAP EPS
$1.12
$0.81
$0.75
Non-GAAP EPS
$1.20
$0.91
$0.81
Impact of GAAP deferralsA
($0.29)
($0.21)
$0.16
* Prior outlook was provided by the company on May 4, 2021 in
its earnings release.
Please refer to the tables at the back of this earnings release
for a reconciliation of the company’s GAAP and non-GAAP
results.
For the quarter ended June 30, 2021, Activision Blizzard’s net
revenues presented in accordance with GAAP were $2.30 billion, as
compared with $1.93 billion for the second quarter of 2020. GAAP
net revenues from digital channels were $2.03 billion. GAAP
operating margin was 42%. GAAP earnings per diluted share were
$1.12, as compared with $0.75 for the second quarter of 2020. On a
non-GAAP basis, Activision Blizzard’s operating margin was 44% and
earnings per diluted share were $1.20, as compared with $0.81 for
the second quarter of 2020.
For the quarter, operating cash flow was $388 million, as
compared with $768 million for the second quarter of 2020. For the
trailing twelve-month period, operating cash flow was $2.57
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 Metrics
For the quarter ended June 30, 2021, Activision Blizzard’s net
bookingsB were $1.92 billion, as compared with $2.08 billion for
the second quarter of 2020. In-game net bookingsC were $1.32
billion as compared with $1.37 billion for the second quarter of
2020.
For the quarter ended June 30, 2021, overall Activision Blizzard
Monthly Active Users (MAUs)D were 408 million.
Commitment to a Safe Working Environment
Following serious allegations regarding the company’s
employment, compensation and workplace practices, Activision
Blizzard is taking swift action to ensure a safe and welcoming work
environment for all employees. We have engaged a law firm to
conduct a review of our policies and procedures to ensure that we
have and maintain best practices to promote a respectful and
inclusive workplace. We will be adding additional staff to our
Compliance and Employee Relations teams, strengthening our
capabilities in investigating employee concerns. We are creating
safe spaces, moderated by third parties, for employees to speak out
and share areas for improvements. We will be evaluating managers
and leaders across the company with respect to their compliance
with our processes for evaluating claims and imposing appropriate
consequences. And we will be adding resources to ensure and enhance
our consideration of diverse candidate slates for all open
positions. The leadership of the company is committed to creating
the most welcoming, comfortable, and safe culture possible.
Selected Business Highlights
Activision Blizzard exceeded its prior outlook for the second
quarter, benefiting from strong execution by our creative and
commercial teams in delivering compelling experiences and in-game
content to our deeply engaged communities. Our increased investment
in our largest franchises over the last two years has significantly
expanded the scale and enhanced the financial trajectory for
Call of Duty®, World of Warcraft®, and Candy
CrushTM. This work continued to deliver strong results in the
second quarter, even as countries continued to reopen from
lockdowns related to the pandemic.
Activision
- Activision delivered another strong quarter, contributing to
record first half segment revenue and segment operating income.
Activision had 127 million MAUsD in the second quarter.
- The Call of Duty ecosystem sustained reach, engagement,
and player investment well above levels seen prior to the
introduction of free-to-play experiences across console, PC, and
mobile. Q2 franchise MAUsD were consistent versus the year ago
quarter, and over three times higher than Q2 2019. Hours played in
the franchise in Q2 were higher than for the entirety of 2019.
- Conversion from Warzone again drove strong premium sales
at multiples of the level typically seen in Q2 prior to 2020.
- Console and PC in-game net bookingsC were similar to that seen
in Q1, and approximately four times the level of Q2 2019.
- For Call of Duty Mobile, net bookings grew double-digit
percentages year-over-year and quarter-over-quarter, driven by
strong execution in seasonal content in the West and the recent
launch of the game in China. Call of Duty Mobile is on track
to exceed $1 billion in consumer spending for the year.
Blizzard
- Blizzard’s launch of Burning CrusadeTM Classic in June
marked the start of what is intended to be a very significant
18-month period for content releases. Blizzard had 26 million MAUsD
in the second quarter.
- World of Warcraft net bookingsB again grew a
double-digit percentage year-over-year, driven by the launch of
Burning Crusade Classic. Subscriber numbers and hours played
were higher following the release, demonstrating the importance of
Classic in enabling more ways for players to engage.
World of Warcraft remains on track for much stronger
engagement this year than is typical outside of a modern expansion
year.
- The latest expansion of the Hearthstone®franchise,
Forged in the BarrensTM, delivered expansion-over-expansion
net bookingsB growth for a second consecutive release following its
March launch. With the latest expansion, United in
StormwindTM, launching today, and MercenariesTM, a new
mode in the popular role-playing genre planned for the coming
months, we expect the financial performance of Hearthstone
to strengthen in the second half of the year.
- The highly anticipated Diablo® II: ResurrectedTM will
launch on PC and console on September 23. On mobile, Diablo
ImmortalTM continued to progress well through testing,
receiving excellent feedback for its gameplay. The team is pursuing
additional opportunities to make the title even more engaging for a
wider audience, with the launch now slated for first half of 2022.
Blizzard continues to make strong progress on Diablo®4 and
is allocating substantial resources to creating exciting in-game
content to drive engagement over multiple years.
- Overwatch®2 development passed an important internal
milestone in recent weeks. After a great response to the recent
community update, the team is looking forward to revealing more of
the game in the coming months as they approach the laterstages of
production.
King
- King segment revenue grew 15% year-over-year, with segment
operating income growing even faster and both metrics reaching new
records. King had 255 million MAUsD in the second quarter.
- The business saw ongoing year-over-year growth in franchise
payers and investment per payer, with Candy Crush once again
the highest grossing game franchise in the United States app
stores1.
- Building on successful initiatives to broaden its payer base
over the last two years, King has been accelerating the delivery of
compelling seasonal content, and in Q2, reached a monthly cadence
within Candy Crush SagaTM, its largest title. The team is
planning an innovative slate of seasonal events and live operations
for the second half of the year, including tie-ins with brands that
value the association with our premium network, positioning the
franchise for ongoing momentum in its in-game business.
- Advertising revenues grew sequentially and doubled
year-over-year. King’s ongoing initiatives to enhance its ad
platform, work with more demand partners and reach more categories
of advertisers drove year-over-year growth in both volume and
pricing, with broad-based strength across geographies.
Company Outlook
In July 2021, the State of California filed a complaint against
the Company alleging violations of the California Fair Employment
and Housing Act and the California Equal Pay Act. The complaint was
recently filed, and we are taking actions to address the concerns
of employees and other key stakeholders and the adverse
consequences to our business. If we experience prolonged periods of
adverse publicity, significantly reduced productivity or other
negative consequences relating to this matter, our business likely
would be adversely impacted. We are carefully monitoring all
aspects of our business for any such impacts.
(in millions, except EPS)
GAAP Outlook
Non-GAAP Outlook
Impact of GAAP
deferralsA
CY
2021
Net Revenues
$8,515
$8,515
$135
EPS
$3.08
$3.54
$0.22
Fully Diluted Shares
785
785
Q3
2021
Net Revenues
$1,970
$1,970
($120)
EPS
$0.64
$0.75
($0.10)
Fully Diluted Shares
785
785
Net bookingsB are expected to be $8.65 billion for 2021 and
$1.85 billion for the third quarter of 2021.
Capital Allocation
The company paid a cash dividend of $0.47 per common share, up
15% year-over-year, on May 6, 2021. Cash payments totaled $365
million.
Conference Call
Today at 4:30 p.m. EDT, Activision Blizzard’s management will
host a conference call and webcast to discuss the company’s results
for the quarter ended June 30, 2021 and management’s outlook for
the remainder of 2021. The company welcomes all members of the
financial and media communities and other interested parties to
visit https://investor.activision.com to listen to the conference
call via live Webcast or to listen to the call live by dialing into
866-777-2509 in the U.S. We encourage participants to pre-register
for the conference call using the following link
https://dpregister.com/sreg/10157836/e9f11bb8b0. A replay of the
call will also be available after the call's conclusion and
archived for one year at
https://investor.activision.com/events.cfm.
About Activision Blizzard
Our mission, to connect and engage the world through epic
entertainment has never been more important. Through communities
rooted in our video game franchises we enable hundreds of millions
of people to experience joy, thrill and achievement. We enable
social connections through the lens of fun, and we foster purpose
and a sense of accomplishment through healthy competition. Like
sport, but with greater accessibility, our players can find purpose
and meaning through competitive gaming. Video games, unlike any
other social or entertainment media, have the ability to break down
the barriers that can inhibit tolerance and understanding.
Celebrating differences is at the core of our culture and ensures
we can create games for players of diverse backgrounds in the 190
countries our games are played.
As a member of the Fortune 500 and as a component company of the
S&P 500, we have an extraordinary track record of delivering
superior shareholder returns for over 30 years.
Our enduring franchises are some of the world’s most popular,
including Call of Duty®, Crash Bandicoot™, World of Warcraft®,
Overwatch®, Hearthstone®, Diablo®, StarCraft®, Candy Crush™, Bubble
Witch™, Pet Rescue™ and Farm Heroes™. Our sustained success has
enabled the company to support corporate social responsibility
initiatives that are directly tied to our franchises. As an
example, our Call of Duty Endowment has helped find employment for
over 85,000 veterans.
Learn more information about Activision Blizzard and how we
connect and engage the world through epic entertainment on the
company's website, www.activisionblizzard.com.
1 Based on App Annie Intelligence.
A Net effect of accounting treatment from revenue deferrals on
certain of our online-enabled products. Since certain of our games
are hosted online or include significant online functionality that
represents a separate performance obligation, we defer the
transaction price allocable to the online functionality from the
sale of these games and then recognize the attributable revenues
over the relevant estimated service periods, which are generally
less than a year. The related cost of revenues is deferred and
recognized as an expense as the related revenues are recognized.
Impact from changes in deferrals refers to the net effect from
revenue deferrals accounting treatment for the purposes of
revenues, along with, for the purposes of EPS, the related cost of
revenues deferrals treatment and the related tax impacts.
Internally, management excludes the impact of this change in
deferred revenues and related cost of revenues when evaluating the
company’s operating performance, when planning, forecasting and
analyzing future periods, and when assessing the performance of its
management team. Management believes this is appropriate because
doing so enables an analysis of performance based on the timing of
actual transactions with our customers. In addition, management
believes excluding the change in deferred revenues and the related
cost of revenues provides a much more timely indication of trends
in our operating results.
B 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.
C In-game net bookings primarily includes the net amount of
downloadable content and microtransactions sold during the period,
and is equal to in-game net revenues excluding the impact from
deferrals.
D Monthly Active User (“MAU”) Definition: We monitor MAUs as a
key measure of the overall size of our user base. MAUs are the
number of individuals who accessed a particular game in a given
month. We calculate average MAUs in a period by adding the total
number of MAUs in each of the months in a given period and dividing
that total by the number of months in the period. An individual who
accesses two of our games would be counted as two users. In
addition, due to technical limitations, for Activision and King, an
individual who accesses the same game on two platforms or devices
in the relevant period would be counted as two users. For Blizzard,
an individual who accesses the same game on two platforms or
devices in the relevant period would generally be counted as a
single user. In certain instances, we rely on third parties to
publish our games. In these instances, MAU data is based on
information provided to us by those third parties, or, if final
data is not available, reasonable estimates of MAUs for these
third-party published games.
Non-GAAP Financial Measures: As a supplement to our
financial measures presented in accordance with U.S. Generally
Accepted Accounting Principles (“GAAP”), Activision Blizzard
presents certain non-GAAP measures of financial performance. These
non-GAAP financial measures are not intended to be considered in
isolation from, as a substitute for, or as more important than, the
financial information prepared and presented in accordance with
GAAP. In addition, these non-GAAP measures have limitations in that
they do not reflect all of the items associated with the company’s
results of operations as determined in accordance with GAAP.
Activision Blizzard provides net income (loss), earnings (loss)
per share, and operating margin data and guidance both including
(in accordance with GAAP) and excluding (non-GAAP) certain items.
When relevant, the company also provides constant FX information to
provide a framework for assessing how our underlying businesses
performed excluding the effect of foreign currency rate
fluctuations. In addition, Activision Blizzard provides EBITDA
(defined as GAAP net income (loss) before interest (income)
expense, income taxes, depreciation, and amortization) and adjusted
EBITDA (defined as non-GAAP operating margin (see non-GAAP
financial measure below) before depreciation). The non-GAAP
financial measures exclude the following items, as applicable in
any given reporting period and our outlook:
- expenses related to share-based compensation;
- the amortization of intangibles from purchase price
accounting;
- fees and other expenses related to acquisitions, including
related debt financings, and refinancing of long-term debt,
including penalties and the write off of unamortized discount and
deferred financing costs;
- restructuring and related charges;
- other non-cash charges from reclassification of certain
cumulative translation adjustments into earnings as required by
GAAP;
- the income tax adjustments associated with any of the above
items (tax impact on non-GAAP pre-tax income is calculated under
the same accounting principles applied to the GAAP pre-tax income
under ASC 740, which employs an annual effective tax rate method to
the results); and
- significant discrete tax-related items, including amounts
related to changes in tax laws, amounts related to the potential or
final resolution of tax positions, and other unusual or unique
tax-related items and activities.
In the future, Activision Blizzard may also consider whether
other items should also be excluded in calculating the non-GAAP
financial measures used by the company. Management believes that
the presentation of these non-GAAP financial measures provides
investors with additional useful information to measure Activision
Blizzard’s financial and operating performance. In particular, the
measures facilitate comparison of operating performance between
periods and help investors to better understand the operating
results of Activision Blizzard by excluding certain items that may
not be indicative of the company’s core business, operating
results, or future outlook. Additionally, we consider quantitative
and qualitative factors in assessing whether to adjust for the
impact of items that may be significant or that could affect an
understanding of our ongoing financial and business performance or
trends. Internally, management uses these non-GAAP financial
measures, along with others, in assessing the company’s operating
results, and measuring compliance with the requirements of the
company’s debt financing agreements, as well as in planning and
forecasting.
Activision Blizzard’s non-GAAP financial measures are not based
on a comprehensive set of accounting rules or principles, and the
terms non-GAAP net income, non-GAAP earnings per share, non-GAAP
operating margin, and non-GAAP or adjusted EBITDA do not have a
standardized meaning. Therefore, other companies may use the same
or similarly named measures, but exclude different items, which may
not provide investors a comparable view of Activision Blizzard’s
performance in relation to other companies.
Management compensates for the limitations resulting from the
exclusion of these items by considering the impact of the items
separately and by considering Activision Blizzard’s GAAP, as well
as non-GAAP, results and outlook, and by presenting the most
comparable GAAP measures directly ahead of non-GAAP measures, and
by providing a reconciliation that indicates and describes the
adjustments made.
Cautionary Note Regarding Forward-looking Statements: The
statements contained herein that are not historical facts are
forward-looking statements including, but not limited to statements
about: (1) projections of revenues, expenses, income or loss,
earnings or loss per share, cash flow, or other financial items;
(2) statements of our plans and objectives, including those related
to releases of products or services and restructuring activities;
(3) statements of future financial or operating performance,
including the impact of tax items thereon; and (4) statements of
assumptions underlying such statements. Activision Blizzard, Inc.
generally uses words such as “outlook,” “forecast,” “will,”
“could,” “should,” “would,” “to be,” “plan,” “aims,” “believes,”
“may,” “might,” “expects,” “intends,” “seeks,” “anticipates,”
“estimate,” “future,” “positioned,” “potential,” “project,”
“remain,” “scheduled,” “set to,” “subject to,” “upcoming,” and the
negative version of these words and other similar words and
expressions to help identify forward-looking statements.
Forward-looking statements are subject to business and economic
risks, reflect management’s current expectations, estimates, and
projections about our business, and are inherently uncertain and
difficult to predict.
We caution that a number of important factors, many of which are
beyond our control, could cause our actual future results and other
future circumstances to differ materially from those expressed in
any forward-looking statements. Such factors include, but are not
limited to: the ongoing global impact of a novel strain of
coronavirus which emerged in December 2019 (“COVID-19”) (including,
without limitation, the potential for significant short- and
long-term global unemployment and economic weakness and a resulting
impact on global discretionary spending; potential strain on the
retailers, distributors and manufacturers who sell our physical
products to customers and the platform providers on whose networks
and consoles certain of our games are available; effects on our
ability to release our content in a timely manner; effects on the
operations of our professional esports leagues; the impact of
large-scale intervention by the Federal Reserve and other central
banks around the world, including the impact on interest rates;
increased demand for our games due to stay-at-home orders and
curtailment of other forms of entertainment, which may not be
sustained; and volatility in foreign exchange rates); our ability
to consistently deliver popular, high-quality titles in a timely
manner, which has been made more difficult as a result of the
COVID-19 pandemic; competition; concentration of revenue among a
small number of franchises; our ability to satisfy the expectations
of consumers with respect to our brands, games, services, and/or
business practices; our ability to attract, retain and motivate
skilled personnel; rapid changes in technology and industry
standards; increasing importance of revenues derived from digital
distribution channels; risks associated with the retail sales
business model; the continued growth in the scope and complexity of
our business; substantial influence of third-party platform
providers over our products and costs; success and availability of
video game consoles manufactured by third parties, including our
ability to predict the consoles that will be most successful in the
marketplace and develop commercially-successful products for those
consoles; risks associated with the free-to-play business model,
including dependence on a relatively small number of consumers for
a significant portion of revenues and profits from any given game;
our ability to realize the expected benefits of, and effectively
implement and manage, our restructuring actions; difficulties in
integrating acquired businesses or otherwise realizing the
anticipated benefits of strategic transactions; the seasonality in
the sale of our products; risks relating to behavior of our
distributors, retailers, development, and licensing partners, or
other affiliated third parties that may harm our brands or business
operations; risks associated with our use of open source software;
risks and uncertainties of conducting business outside the United
States (the “U.S.”); risks associated with undisclosed content or
features that may result in consumers’ refusal to buy or retailers’
refusal to sell our products; risks associated with objectionable
consumer or other third party-created content; reliance on servers
and networks to distribute and operate our games and our
proprietary online gaming service; potential data breaches and
other cybersecurity risks; significant disruption during our live
events; risks related to the impacts of catastrophic events,
including the susceptibility of the location of our headquarters to
earthquakes; provisions in our corporate documents that may make it
more difficult for any person to acquire control of our company;
risks and costs associated with legal proceedings, including the
impact of the complaint filed by the California Department of Fair
Employment and Housing alleging violations of the California Fair
Employment and Housing Act and the California Equal Pay Act;
intellectual property claims; increasing regulation in key
territories; regulation relating to the Internet, including
potential harm from laws impacting “net neutrality”; regulation
concerning data privacy; scrutiny regarding the appropriateness of
our games’ content, including ratings assigned by third parties;
changes in tax rates or exposure to additional tax liabilities, as
well as the outcome of current or future tax disputes; fluctuations
in currency exchange rates; impacts of changes in financial
accounting standards; insolvency or business failure of any of our
business partners, which has been magnified as a result of the
COVID-19 pandemic; risks associated with our reliance on
discretionary spending; and the other factors identified in “Risk
Factors” included in Part I, Item 1A of our Annual Report on Form
10-K for the year ended December 31, 2020.
The forward-looking statements contained herein are based on
information available to Activision Blizzard, Inc. as of the date
of this filing and we assume no obligation to update any such
forward-looking statements. Although these forward-looking
statements are believed to be true when made, they may ultimately
prove to be incorrect. These statements are not guarantees of our
future performance and are subject to risks, uncertainties, and
other factors, some of which are beyond our control and may cause
actual results to differ materially from current expectations.
ACTIVISION BLIZZARD, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
(Amounts in millions, except per share
data)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Net revenues
Product sales
$
568
$
533
$
1,243
$
1,076
In-game, subscription, and other
revenues1
1,728
1,399
3,328
2,643
Total net revenues
2,296
1,932
4,571
3,719
Costs and expenses
Cost of revenues—product sales:
Product costs
116
137
255
255
Software royalties, amortization, and
intellectual property licenses
88
33
200
115
Cost of revenues—in-game, subscription,
and other:
Game operations and distribution costs
322
271
619
529
Software royalties, amortization, and
intellectual property licenses
29
28
59
74
Product development
335
291
688
528
Sales and marketing
245
242
482
485
General and administrative
189
175
471
343
Restructuring and related costs
13
6
43
29
Total costs and expenses
1,337
1,183
2,817
2,358
Operating income
959
749
1,754
1,361
Interest and other expense (income),
net
(43
)
22
(14
)
30
Income before income tax expense
1,002
727
1,768
1,331
Income tax expense
126
147
272
247
Net income
$
876
$
580
$
1,496
$
1,084
Basic earnings per common share
$
1.13
$
0.75
$
1.93
$
1.41
Weighted average common shares
outstanding
777
771
776
770
Diluted earnings per common share
$
1.12
$
0.75
$
1.91
$
1.40
Weighted average common shares outstanding
assuming dilution
783
776
784
775
1
In-game, subscription, and other revenues
represent revenues from microtransactions and downloadable content,
World of Warcraft subscriptions, licensing royalties from our
products and franchises, and other miscellaneous revenues.
ACTIVISION BLIZZARD, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
(Amounts in millions)
June 30, 2021
December 31, 2020
Assets
Current assets
Cash and cash equivalents
$
9,209
$
8,647
Accounts receivable, net
682
1,052
Software development
249
352
Other current assets
747
514
Total current assets
10,887
10,565
Software development
267
160
Property and equipment, net
174
209
Deferred income taxes, net
1,447
1,318
Other assets
583
641
Intangible assets, net
449
451
Goodwill
9,765
9,765
Total assets
$
23,572
$
23,109
Liabilities and Shareholders'
Equity
Current liabilities
Accounts payable
$
217
$
295
Deferred revenues
1,058
1,689
Accrued expenses and other liabilities
978
1,116
Total current liabilities
2,253
3,100
Long-term debt, net
3,606
3,605
Deferred income taxes, net
511
418
Other liabilities
916
949
Total liabilities
7,286
8,072
Shareholders' equity
Common stock
—
—
Additional paid-in capital
11,621
11,531
Treasury stock
(5,563
)
(5,563
)
Retained earnings
10,821
9,691
Accumulated other comprehensive loss
(593
)
(622
)
Total shareholders’ equity
16,286
15,037
Total liabilities and shareholders’
equity
$
23,572
$
23,109
ACTIVISION BLIZZARD, INC. AND
SUBSIDIARIES
SUPPLEMENTAL CASH FLOW
INFORMATION
(Amounts in millions)
Three Months Ended
June 30,
September 30,
December 31,
March 31,
June 30,
Year over Year
2020
2020
2020
2021
2021
% Increase (Decrease)
Cash Flow Data
Operating Cash Flow
$
768
$
196
$
1,140
$
844
$
388
(49
)%
Capital Expenditures
13
24
22
22
14
8
Non-GAAP Free Cash Flow1
$
755
$
172
$
1,118
$
822
$
374
(50
)
Operating Cash Flow - TTM2
$
2,143
$
2,030
$
2,252
$
2,948
$
2,568
20
Capital Expenditures - TTM2
103
93
78
81
82
(20
)
Non-GAAP Free Cash Flow1 - TTM2
$
2,040
$
1,937
$
2,174
$
2,867
$
2,486
22
%
1
Non-GAAP free cash flow represents
operating cash flow minus capital expenditures.
2
TTM represents trailing twelve months.
Operating Cash Flow for three months ended September 30, 2019,
three months ended December 31, 2019, and three months ended March
31, 2020, were $309 million, $918 million, and $148 million,
respectively. Capital Expenditures for the three months ended
September 30, 2019, three months ended December 31, 2019, and three
months ended March 31, 2020, were $34 million, $37 million, and $19
million, respectively.
ACTIVISION BLIZZARD, INC. AND
SUBSIDIARIES
RECONCILIATION OF GAAP NET INCOME TO
NON-GAAP MEASURES
(Amounts in millions, except per share
data)
Three Months Ended June 30,
2021
Net Revenues
Cost of Revenues— Product
Sales: Product Costs
Cost of Revenues— Product
Sales: Software Royalties and Amortization
Cost of Revenues—In-
game/Subs/Other: Game Operations and Distribution Costs
Cost of Revenues—In-
game/Subs/Other: Software Royalties and Amortization
Product Development
Sales and Marketing
General and
Administrative
Restructuring and related
costs
Total Costs and
Expenses
GAAP Measurement
$
2,296
$
116
$
88
$
322
$
29
$
335
$
245
$
189
$
13
$
1,337
Share-based compensation1
—
—
(5
)
(1
)
—
(18
)
(3
)
(16
)
—
(43
)
Amortization of intangible assets2
—
—
—
—
—
—
—
(2
)
—
(2
)
Restructuring and related costs3
—
—
—
—
—
—
—
—
(13
)
(13
)
Non-GAAP Measurement
$
2,296
$
116
$
83
$
321
$
29
$
317
$
242
$
171
$
—
$
1,279
Net effect of deferred revenues and
related cost of revenues4
$
(375
)
$
(17
)
$
(81
)
$
(1
)
$
—
$
—
$
—
$
—
$
—
$
(99
)
Operating Income
Net Income
Basic Earnings per
Share
Diluted Earnings per
Share
GAAP Measurement
$
959
$
876
$
1.13
$
1.12
Share-based compensation1
43
43
0.06
0.06
Amortization of intangible assets2
2
2
—
—
Restructuring and related costs3
13
13
0.02
0.02
Income tax impacts from items above5
—
7
0.01
0.01
Non-GAAP Measurement
$
1,017
$
941
$
1.21
$
1.20
Net effect of deferred revenues and
related cost of revenues4
$
(276
)
$
(229
)
$
(0.29
)
$
(0.29
)
1
Includes expenses related to share-based
compensation.
2
Reflects amortization of intangible assets
from purchase price accounting.
3
Reflects restructuring initiatives,
primarily severance and other restructuring-related costs.
4
Reflects the net effect from deferral of
revenues and (recognition) of deferred revenues, along with related
cost of revenues, on certain of our online-enabled products,
including the effects of taxes.
5
Reflects the income tax impact associated
with the above items. Tax impact on non-GAAP pre-tax income is
calculated under the same accounting principles applied to the GAAP
pre-tax income under ASC 740, which employs an annual effective tax
rate method to the results.
The GAAP and non-GAAP earnings per share information is
presented as calculated. The sum of these measures, as presented,
may differ due to the impact of rounding.
ACTIVISION BLIZZARD, INC. AND
SUBSIDIARIES
RECONCILIATION OF GAAP NET INCOME TO
NON-GAAP MEASURES
(Amounts in millions, except per share
data)
Six Months Ended June 30, 2021
Net Revenues
Cost of Revenues— Product
Sales: Product Costs
Cost of Revenues— Product
Sales: Software Royalties and Amortization
Cost of Revenues—In-
game/Subs/Other: Game Operations and Distribution Costs
Cost of Revenues—In-
game/Subs/Other: Software Royalties and Amortization
Product Development
Sales and Marketing
General and
Administrative
Restructuring and related
costs
Total Costs and
Expenses
GAAP Measurement
$
4,571
$
255
$
200
$
619
$
59
$
688
$
482
$
471
$
43
$
2,817
Share-based compensation1
—
—
(12
)
(1
)
—
(34
)
(7
)
(140
)
—
(194
)
Amortization of intangible assets2
—
—
—
—
(3
)
—
—
(4
)
—
(7
)
Restructuring and related costs3
—
—
—
—
—
—
—
—
(43
)
(43
)
Non-GAAP Measurement
$
4,571
$
255
$
188
$
618
$
56
$
654
$
475
$
327
$
—
$
2,573
Net effect of deferred revenues and
related cost of revenues4
$
(584
)
$
(30
)
$
(144
)
$
(2
)
$
—
$
—
$
—
$
—
$
—
$
(176
)
Operating Income
Net Income
Basic Earnings per
Share
Diluted Earnings per
Share
GAAP Measurement
$
1,754
$
1,496
$
1.93
$
1.91
Share-based compensation1
194
194
0.25
0.25
Amortization of intangible assets2
7
7
0.01
0.01
Restructuring and related costs3
43
43
0.06
0.05
Income tax impacts from items above5
—
(30
)
(0.04
)
(0.04
)
Non-GAAP Measurement
$
1,998
$
1,710
$
2.20
$
2.18
Net effect of deferred revenues and
related cost of revenues4
$
(408
)
$
(336
)
$
(0.43
)
$
(0.43
)
1
Includes expenses related to share-based
compensation.
2
Reflects amortization of intangible assets
from purchase price accounting.
3
Reflects restructuring initiatives,
primarily severance and other restructuring-related costs.
4
Reflects the net effect from deferral of
revenues and (recognition) of deferred revenues, along with related
cost of revenues, on certain of our online-enabled products,
including the effects of taxes.
5
Reflects the income tax impact associated
with the above items. Tax impact on non-GAAP pre-tax income is
calculated under the same accounting principles applied to the GAAP
pre-tax income under ASC 740, which employs an annual effective tax
rate method to the results.
The GAAP and non-GAAP earnings per share information is
presented as calculated. The sum of these measures, as presented,
may differ due to the impact of rounding.
ACTIVISION BLIZZARD, INC. AND
SUBSIDIARIES
RECONCILIATION OF GAAP NET INCOME TO
NON-GAAP MEASURES
(Amounts in millions, except per share
data)
Three Months Ended June 30,
2020
Net Revenues
Cost of Revenues— Product
Sales: Product Costs
Cost of Revenues— Product
Sales: Software Royalties and Amortization
Cost of Revenues—In-
game/Subs/Other: Game Operations and Distribution Costs
Cost of Revenues—In-
game/Subs/Other: Software Royalties and Amortization
Product Development
Sales and Marketing
General and
Administrative
Restructuring and related
costs
Total Costs and
Expenses
GAAP Measurement
$
1,932
$
137
$
33
$
271
$
28
$
291
$
242
$
175
$
6
$
1,183
Share-based compensation1
—
—
(1
)
—
—
(11
)
(6
)
(24
)
—
(42
)
Amortization of intangible assets2
—
—
—
—
(12
)
—
—
(2
)
—
(14
)
Restructuring and related costs3
—
—
—
—
—
—
—
—
(6
)
(6
)
Non-GAAP Measurement
$
1,932
$
137
$
32
$
271
$
16
$
280
$
236
$
149
$
—
$
1,121
Net effect of deferred revenues and
related cost of revenues4
$
146
$
(19
)
$
(15
)
$
16
$
12
$
—
$
—
$
—
$
—
$
(6
)
Operating Income
Net Income
Basic Earnings per
Share
Diluted Earnings per
Share
GAAP Measurement
$
749
$
580
$
0.75
$
0.75
Share-based compensation1
42
42
0.05
0.05
Amortization of intangible assets2
14
14
0.02
0.02
Restructuring and related costs3
6
6
0.01
0.01
Income tax impacts from items above5
—
(11
)
(0.01
)
(0.01
)
Non-GAAP Measurement
$
811
$
631
$
0.82
$
0.81
Net effect of deferred revenues and
related cost of revenues4
$
152
$
125
$
0.16
$
0.16
1
Includes expenses related to share-based
compensation.
2
Reflects amortization of intangible assets
from purchase price accounting.
3
Reflects restructuring initiatives,
primarily severance and other restructuring-related costs.
4
Reflects the net effect from deferral of
revenues and (recognition) of deferred revenues, along with related
cost of revenues, on certain of our online-enabled products,
including the effects of taxes.
5
Reflects the income tax impact associated
with the above items. Tax impact on non-GAAP pre-tax income is
calculated under the same accounting principles applied to the GAAP
pre-tax income under ASC 740, which employs an annual effective tax
rate method to the results.
The GAAP and non-GAAP earnings per share information is
presented as calculated. The sum of these measures, as presented,
may differ due to the impact of rounding.
ACTIVISION BLIZZARD, INC. AND
SUBSIDIARIES
RECONCILIATION OF GAAP NET INCOME TO
NON-GAAP MEASURES
(Amounts in millions, except per share
data)
Six Months Ended June 30, 2020
Net Revenues
Cost of Revenues— Product
Sales: Product Costs
Cost of Revenues— Product
Sales: Software Royalties and Amortization
Cost of Revenues—In-
game/Subs/Other: Game Operations and Distribution Costs
Cost of Revenues—In-
game/Subs/Other: Software Royalties and Amortization
Product Development
Sales and Marketing
General and
Administrative
Restructuring and related
costs
Total Costs and
Expenses
GAAP Measurement
$
3,719
$
255
$
115
$
529
$
74
$
528
$
485
$
343
$
29
$
2,358
Share-based compensation1
—
—
(6
)
(1
)
—
(18
)
(12
)
(48
)
—
(85
)
Amortization of intangible assets2
—
—
—
—
(43
)
—
—
(4
)
—
(47
)
Restructuring and related costs3
—
—
—
—
—
—
—
—
(29
)
(29
)
Non-GAAP Measurement
$
3,719
$
255
$
109
$
528
$
31
$
510
$
473
$
291
$
—
$
2,197
Net effect of deferred revenues and
related cost of revenues4
$
(119
)
$
(57
)
$
(67
)
$
13
$
11
$
—
$
—
$
—
$
—
$
(100
)
Operating Income
Net Income
Basic Earnings per
Share
Diluted Earnings per
Share
GAAP Measurement
$
1,361
$
1,084
$
1.41
$
1.40
Share-based compensation1
85
85
0.11
0.11
Amortization of intangible assets2
47
47
0.06
0.06
Restructuring and related costs3
29
29
0.04
0.04
Income tax impacts from items above5
—
(23
)
(0.03
)
(0.03
)
Non-GAAP Measurement
$
1,522
$
1,222
$
1.59
$
1.58
Net effect of deferred revenues and
related cost of revenues4
$
(19
)
$
(17
)
$
(0.02
)
$
(0.02
)
1
Includes expenses related to share-based
compensation.
2
Reflects amortization of intangible assets
from purchase price accounting.
3
Reflects restructuring initiatives,
primarily severance and other restructuring-related costs.
4
Reflects the net effect from deferral of
revenues and (recognition) of deferred revenues, along with related
cost of revenues, on certain of our online-enabled products,
including the effects of taxes.
5
Reflects the income tax impact associated
with the above items. Tax impact on non-GAAP pre-tax income is
calculated under the same accounting principles applied to the GAAP
pre-tax income under ASC 740, which employs an annual effective tax
rate method to the results.
The GAAP and non-GAAP earnings per share information is
presented as calculated. The sum of these measures, as presented,
may differ due to the impact of rounding.
ACTIVISION BLIZZARD, INC. AND
SUBSIDIARIES
OPERATING SEGMENTS INFORMATION
(Amounts in millions)
Three Months Ended
June 30, 2021
$ Increase /
(Decrease)
Activision
Blizzard
King
Total
Activision
Blizzard
King
Total
Segment Net Revenues
Net revenues from external customers
$
789
$
411
$
635
$
1,835
$
(204
)
$
(22
)
$
82
$
(144
)
Intersegment net revenues1
—
22
—
22
—
(6
)
—
(6
)
Segment net revenues
$
789
$
433
$
635
$
1,857
$
(204
)
$
(28
)
$
82
$
(150
)
Segment operating income
$
363
$
141
$
248
$
752
$
(196
)
$
(62
)
$
36
$
(222
)
Operating Margin
40.5
%
June 30, 2020
Activision
Blizzard
King
Total
Segment Net Revenues
Net revenues from external customers
$
993
$
433
$
553
$
1,979
Intersegment net revenues1
—
28
—
28
Segment net revenues
$
993
$
461
$
553
$
2,007
Segment operating income
$
559
$
203
$
212
$
974
Operating Margin
48.5
%
Six Months Ended
June 30, 2021
$ Increase /
(Decrease)
Activision
Blizzard
King
Total
Activision
Blizzard
King
Total
Segment Net Revenues
Net revenues from external customers
$
1,680
$
869
$
1,244
$
3,793
$
168
$
(1
)
$
193
$
360
Intersegment net revenues1
—
47
—
47
—
3
—
3
Segment net revenues
$
1,680
$
916
$
1,244
$
3,840
$
168
$
2
$
193
$
363
Segment operating income
$
804
$
349
$
452
$
1,605
$
61
$
(51
)
$
85
$
95
Operating Margin
41.8
%
June 30, 2020
Activision
Blizzard
King
Total
Segment Net Revenues
Net revenues from external customers
$
1,512
$
870
$
1,051
$
3,433
Intersegment net revenues1
—
44
—
44
Segment net revenues
$
1,512
$
914
$
1,051
$
3,477
Segment operating income
$
743
$
400
$
367
$
1,510
Operating Margin
43.4
%
1
Intersegment revenues reflect licensing
and service fees charged between segments.
Our operating segments are consistent with the manner in which
our operations are reviewed and managed by our Chief Executive
Officer, who is our chief operating decision maker (“CODM”). The
CODM reviews segment performance exclusive of: the impact of the
change in deferred revenues and related cost of revenues with
respect to certain of our online-enabled games; share-based
compensation expense; amortization of intangible assets as a result
of purchase price accounting; fees and other expenses (including
legal fees, costs, expenses and accruals) related to acquisitions,
associated integration activities, and financings; certain
restructuring and related costs; and other non-cash charges. See
the following page for the reconciliation tables of segment
revenues and operating income to consolidated net revenues and
consolidated income before income tax expense.
Our operating segments are also consistent with our internal
organization structure, the way we assess operating performance and
allocate resources, and the availability of separate financial
information. We do not aggregate operating segments.
ACTIVISION BLIZZARD, INC. AND
SUBSIDIARIES
OPERATING SEGMENTS INFORMATION
(Amounts in millions)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Reconciliation to consolidated net
revenues:
Segment net revenues
$
1,857
$
2,007
$
3,840
$
3,477
Revenues from non-reportable segments1
86
99
194
167
Net effect from recognition (deferral) of
deferred net revenues2
375
(146
)
584
119
Elimination of intersegment revenues3
(22
)
(28
)
(47
)
(44
)
Consolidated net revenues
$
2,296
$
1,932
$
4,571
$
3,719
Reconciliation to consolidated income
before income tax expense:
Segment operating income
$
752
$
974
$
1,605
$
1,510
Operating income (loss) from
non-reportable segments1
(11
)
(11
)
(15
)
(7
)
Net effect from recognition (deferral) of
deferred net revenues and related cost of revenues2
276
(152
)
408
19
Share-based compensation expense
(43
)
(42
)
(194
)
(85
)
Amortization of intangible assets
(2
)
(14
)
(7
)
(47
)
Restructuring and related costs4
(13
)
(6
)
(43
)
(29
)
Consolidated operating income
959
749
1,754
1,361
Interest and other expense (income),
net
(43
)
22
(14
)
30
Consolidated income before income tax
expense (benefit)
$
1,002
$
727
$
1,768
$
1,331
1
Includes other income and expenses outside
of our reportable segments, including our distribution business and
unallocated corporate income and expenses.
2
Reflects the net effect from (deferral) of
revenues and recognition of deferred revenues, along with related
cost of revenues, on certain of our online-enabled products.
3
Intersegment revenues reflect licensing
and service fees charged between segments.
4
Reflects restructuring initiatives,
primarily severance and other restructuring-related costs.
ACTIVISION BLIZZARD, INC. AND
SUBSIDIARIES
NET REVENUES BY DISTRIBUTION
CHANNEL
(Amounts in millions)
Three Months Ended
June 30, 2021
June 30, 2020
$ Increase (Decrease)
% Increase (Decrease)
Amount
% of Total1
Amount
% of Total1
Net Revenues by Distribution
Channel
Digital online channels2
$
2,026
88
%
$
1,591
82
%
$
435
27
%
Retail channels
137
6
168
9
(31
)
(18
)
Other3
133
6
173
9
(40
)
(23
)
Total consolidated net revenues
$
2,296
100
%
$
1,932
100
%
$
364
19
Change in deferred revenues4
Digital online channels2
$
(285
)
$
230
Retail channels
(93
)
(82
)
Other3
3
(2
)
Total changes in deferred revenues
$
(375
)
$
146
Six Months Ended
June 30, 2021
June 30, 2020
$ Increase (Decrease)
% Increase (Decrease)
Amount
% of Total1
Amount
% of Total1
Net Revenues by Distribution
Channel
Digital online channels2
$
4,031
88
%
$
3,030
81
%
$
1,001
33
%
Retail channels
286
6
390
10
(104
)
(27
)
Other3
254
6
299
8
(45
)
(15
)
Total consolidated net revenues
$
4,571
100
%
$
3,719
100
%
$
852
23
Change in deferred revenues4
Digital online channels2
$
(425
)
$
146
Retail channels
(167
)
(255
)
Other3
8
(10
)
Total changes in deferred revenues
$
(584
)
$
(119
)
1
The percentages of total are presented as
calculated. Therefore, the sum of these percentages, as presented,
may differ due to the impact of rounding.
2
Net revenues from Digital online channels
represent revenues from digitally-distributed downloadable content,
microtransactions, subscriptions, and products, as well as
licensing royalties.
3
Net revenues from Other primarily includes
revenues from our distribution business, the Overwatch League, and
the Call of Duty League.
4
Reflects the net effect from deferral of
revenues and (recognition) of deferred revenues on certain of our
online-enabled products.
ACTIVISION BLIZZARD, INC. AND
SUBSIDIARIES
NET REVENUES BY PLATFORM
(Amounts in millions)
Three Months Ended
June 30, 2021
June 30, 2020
$ Increase (Decrease)
% Increase (Decrease)
Amount
% of Total1
Amount
% of Total1
Net Revenues by Platform
Console
$
740
32
%
$
655
34
%
$
85
13
%
PC
628
27
482
25
146
30
Mobile and ancillary2
795
35
622
32
173
28
Other3
133
6
173
9
(40
)
(23
)
Total consolidated net revenues
$
2,296
100
%
$
1,932
100
%
$
364
19
Change in deferred revenues4
Console
$
(245
)
$
58
PC
(128
)
37
Mobile and ancillary2
(5
)
53
Other3
3
(2
)
Total changes in deferred revenues
$
(375
)
$
146
Six Months Ended
June 30, 2021
June 30, 2020
$ Increase (Decrease)
% Increase (Decrease)
Amount
% of Total1
Amount
% of Total1
Net Revenues by Platform
Console
$
1,538
34
%
$
1,249
34
%
$
289
23
%
PC
1,248
27
981
26
267
27
Mobile and ancillary2
1,531
33
1,190
32
341
29
Other3
254
6
299
8
(45
)
(15
)
Total consolidated net revenues
$
4,571
100
%
$
3,719
100
%
$
852
23
Change in deferred revenues4
Console
$
(417
)
$
(172
)
PC
(172
)
17
Mobile and ancillary2
(3
)
46
Other3
8
(10
)
Total changes in deferred revenues
$
(584
)
$
(119
)
1
The percentages of total are presented as
calculated. Therefore, the sum of these percentages, as presented,
may differ due to the impact of rounding.
2
Net revenues from Mobile and ancillary
include revenues from mobile devices, as well as non-platform
specific game related revenues, such as standalone sales of
physical merchandise and accessories.
3
Net revenues from Other primarily includes
revenues from our distribution business, the Overwatch League, and
the Call of Duty League.
4
Reflects the net effect from deferral of
revenues and (recognition) of deferred revenues on certain of our
online-enabled products.
ACTIVISION BLIZZARD, INC. AND
SUBSIDIARIES
NET REVENUES BY GEOGRAPHIC
REGION
(Amounts in millions)
Three Months Ended
June 30, 2021
June 30, 2020
$ Increase (Decrease)
% Increase (Decrease)
Amount
% of Total1
Amount
% of Total1
Net Revenues by Geographic
Region
Americas
$
1,346
59
%
$
1,112
58
%
$
234
21
%
EMEA2
695
30
615
32
80
13
Asia Pacific
255
11
205
11
50
24
Total consolidated net revenues
$
2,296
100
%
$
1,932
100
%
$
364
19
Change in deferred revenues3
Americas
$
(218
)
$
124
EMEA2
(133
)
16
Asia Pacific
(24
)
6
Total changes in deferred revenues
$
(375
)
$
146
Six Months Ended
June 30, 2021
June 30, 2020
$ Increase (Decrease)
% Increase (Decrease)
Amount
% of Total1
Amount
% of Total1
Net Revenues by Geographic
Region
Americas
$
2,653
58
%
$
2,060
55
%
$
593
29
%
EMEA2
1,426
31
1,181
32
245
21
Asia Pacific
492
11
478
13
14
3
Total consolidated net revenues
$
4,571
100
%
$
3,719
100
%
$
852
23
Change in deferred revenues3
Americas
$
(340
)
$
(19
)
EMEA2
(196
)
(85
)
Asia Pacific
(48
)
(15
)
Total changes in deferred revenues
$
(584
)
$
(119
)
1
The percentages of total are presented as
calculated. Therefore, the sum of these percentages, as presented,
may differ due to the impact of rounding.
2
Net revenues from EMEA consist of the
Europe, Middle East, and Africa geographic regions.
3
Reflects the net effect from deferral of
revenues and (recognition) of deferred revenues on certain of our
online-enabled products.
ACTIVISION BLIZZARD, INC. AND
SUBSIDIARIES
EBITDA AND ADJUSTED EBITDA
(Amounts in millions)
Trailing Twelve Months
Ended
September 30,
2020
December 31,
2020
March 31, 2021
June 30, 2021
June 30, 2021
GAAP Net Income
$
604
$
508
$
619
$
876
$
2,607
Interest and other expense (income),
net
25
31
30
(43
)
43
Loss on extinguishment of debt
31
—
—
—
31
Provision for income taxes
118
55
146
126
445
Depreciation and amortization
46
45
33
28
152
EBITDA
824
639
828
987
3,278
Share-based compensation expense1
53
80
151
43
327
Restructuring and related costs2
9
55
30
13
107
Adjusted EBITDA
$
886
$
774
$
1,009
$
1,043
$
3,712
Change in deferred net revenues and
related cost of revenues3
$
(150
)
$
407
$
(132
)
$
(276
)
$
(151
)
1
Includes expenses related to share-based
compensation.
2
Reflects restructuring initiatives,
primarily severance and other restructuring-related costs.
3
Reflects the net effect from deferral of
revenues and (recognition) of deferred revenues, along with related
cost of revenues, on certain of our online-enabled products.
ACTIVISION BLIZZARD, INC. AND
SUBSIDIARIES
GAAP to Non-GAAP Reconciliation
(Amounts in millions, except per share
data)
Outlook for the
Outlook for the
Three Months Ending
Year Ending
September 30, 2021
December 31, 2021
Net Revenues1
$
1,970
$
8,515
Change in deferred revenues2
$
(120
)
$
135
Earnings Per Diluted Share
(GAAP)
$
0.64
$
3.08
Excluding the impact of:
Share-based compensation3
0.09
0.43
Amortization of intangible assets4
—
0.01
Restructuring and related costs5
0.02
0.09
Income tax impacts from items above6
(0.01
)
(0.07
)
Earnings Per Diluted Share
(Non-GAAP)
$
0.75
$
3.54
Net effect of deferred net revenues and
related cost of revenues on Earnings Per Diluted Share7
$
(0.10
)
$
0.22
1
Net Revenues represents the revenue
outlook for both GAAP and Non-GAAP as they are measured the
same.
2
Reflects the net effect from deferral of
revenues and (recognition) of deferred revenues on certain of our
online-enabled products.
3
Reflects expenses related to share-based
compensation.
4
Reflects amortization of intangible assets
from purchase price accounting.
5
Reflects restructuring initiatives,
primarily severance and other restructuring-related costs.
6
Reflects the income tax impacts associated
with the above items. Due to the inherent uncertainties in share
price and option exercise behavior, we do not generally forecast
excess tax benefits or tax shortfalls.
7
Reflects the net effect from deferral of
revenues and (recognition) of deferred revenues, along with related
cost of revenues, on certain of our online-enabled products,
including the effect of taxes.
The per share adjustments and the GAAP and Non-GAAP earnings per
share information are presented as calculated. Therefore, the sum
of these measures, as presented, may differ due to the impact of
rounding.
ACTIVISION BLIZZARD, INC. AND
SUBSIDIARIES
OPERATING METRICS
(Amounts in millions)
Net Bookings1
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
$ Increase (Decrease)
% Increase (Decrease)
2021
2020
$ Increase (Decrease)
% Increase (Decrease)
Net bookings1
$
1,921
$
2,078
$
(157
)
(8
)%
$
3,987
$
3,600
$
387
11
%
In-game net bookings2
$
1,319
$
1,374
$
(55
)
(4
)%
$
2,661
$
2,329
$
332
14
%
1
We monitor net bookings as a key operating
metric in evaluating the performance of our business because it
enables an analysis of performance based on the timing of actual
transactions with our customers and provides more timely
indications of trends in our operating results. Net bookings is 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. Net bookings is equal to
net revenues excluding the impact from deferrals.
2
In-game net bookings primarily includes
the net amount of downloadable content and microtransactions sold
during the period, and is equal to in-game net revenues excluding
the impact from deferrals.
Monthly Active Users3
June 30, 2020
September 30, 2020
December 31, 2020
March 31, 2021
June 30, 2021
Activision
125
111
128
150
127
Blizzard
32
30
29
27
26
King
271
249
240
258
255
Total MAUs
428
390
397
435
408
3
We monitor monthly active users (“MAUs”)
as a key measure of the overall size of our user base. MAUs are the
number of individuals who accessed a particular game in a given
month. We calculate average MAUs in a period by adding the total
number of MAUs in each of the months in a given period and dividing
that total by the number of months in the period. An individual who
accesses two of our games would be counted as two users. In
addition, due to technical limitations, for Activision and King, an
individual who accesses the same game on two platforms or devices
in the relevant period would be counted as two users. For Blizzard,
an individual who accesses the same game on two platforms or
devices in the relevant period would generally be counted as a
single user. In certain instances, we rely on third parties to
publish our games. In these instances, MAU data is based on
information provided to us by those third parties, or, if final
data is not available, reasonable estimates of MAUs for these
third-party published games.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210803006052/en/
Activision Blizzard, Inc. Investors and Analysts:
ir@activisionblizzard.com or Press: pr@activisionblizzard.com
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