Activision Blizzard announced its financial report for the first quarter of the 2023 fiscal year last night. According to the report, Activision Blizzard’s net revenue in the first quarter was US$2.383 billion, compared with US$1.768 billion in the same period last year; net scheduled revenue was US$1.86 billion, compared with US$1.48 billion in the same period last year; This was an 87% increase from the $395 million in the same period last year.
In terms of performance, Activision Blizzard’s net scheduled revenue and adjusted earnings per share in the first quarter exceeded Wall Street analysts’ expectations. At the same time, Activision Blizzard disclosed information in its financial report that the British Competition and Markets Authority (CMA) announced that it would not allow Microsoft to acquire the company, but Microsoft has appealed the ruling, and Activision Blizzard will fully support Microsoft’s related proposals.
Key results for the first quarter:
In the fiscal quarter ended March 31, Activision Blizzard’s net income was $740 million, or $0.93 per diluted share, which was much better than the same period last year. For the first quarter of fiscal 2022, Activision Blizzard reported net income of $395 million, or $0.50 per diluted share.
Excluding certain one-time items (non-GAAP), Activision Blizzard’s adjusted net income for the first quarter was $866 million, compared with adjusted net income of $501 million in the same period last year; Earnings of $1.09 and adjusted earnings per diluted share of $0.64 in the year-ago period were both substantial increases year-over-year and exceeded analyst expectations. According to data provided by Yahoo Finance Channel, 21 analysts had expected Activision Blizzard’s first-quarter earnings per share to reach $0.52 on average.
Activision Blizzard’s first-quarter net revenue was $2.383 billion, compared with $1.768 billion in the same period last year. During the quarter, Activision Blizzard’s net revenue from digital channels was $2.16 billion.
Divided by business sector, Activision Blizzard’s net revenue from product sales in the first quarter was US$695 million, compared with US$386 million in the same period last year; revenue from subscription, licensing and other businesses was US$1.688 billion, up The same period last year was 1.382 billion US dollars.
Activision Blizzard’s net bookings revenue (Net Bookings, which equals net revenue after removing the impact of deferred revenue) was $1.86 billion in the first quarter, compared with $1.48 billion in the same period last year. This performance exceeded analysts’ previous expectations. According to data provided by Yahoo Finance Channel, 19 analysts had expected Activision Blizzard’s first-quarter net bookings to reach $1.8 billion on average. During the quarter, Activision Blizzard’s net booked revenue from in-game channels was $1.29 billion, compared to $1.01 billion a year earlier.
Activision Blizzard had an operating profit of $800 million in the first quarter, compared with an operating profit of $479 million a year earlier. Activision Blizzard’s operating margin was 34% in the first quarter; excluding certain one-time items (non-GAAP), Activision Blizzard’s adjusted operating margin in the first quarter was 40%.
Activision Blizzard’s operating cash flow was $577 million in the first quarter, compared with $642 million in the same period last year.
Activision Blizzard’s total costs and expenses in the first quarter were $1.583 billion, compared with $1.289 billion in the same period last year. Among them, in terms of cost of product sales revenue, product costs were $136 million, compared to $91 million in the same period last year; software royalties, amortization and intellectual property licensing costs were $101 million, compared to $81 million in the same period last year. In terms of in-game, subscription and other revenue costs, game operating and distribution costs were $363 million, compared to $288 million in the same period last year; software royalties, amortization and intellectual property licensing costs were $65 million, compared to $288 million in the same period last year $19 million.
In terms of expenditure items, Activision Blizzard’s product development expenditure in the fourth quarter was US$402 million, compared with US$346 million in the same period last year; sales and marketing expenses were US$278 million, compared with US$252 million in the same period last year; general and administrative expenses were 238 million billion U.S. dollars, compared with 212 million U.S. dollars in the same period last year.
Activision Blizzard’s overall monthly active users in the first quarter were 368 million, compared to 372 million in the same period last year. Broken down by department, Activision’s overall monthly active users were 98 million, compared to 100 million in the same period last year; Blizzard’s overall monthly active users were 27 million, compared to 22 million in the same period last year; The overall number of monthly active users was 243 million, compared to 250 million in the same period last year.
As of the end of the first quarter of fiscal 2023, Activision Blizzard held cash and short-term investments totaling $12.6 billion. Activision Blizzard had a net cash position of approximately $8.9 billion at the end of the first quarter.
Microsoft Acquisition Transactions:
On January 18, 2022, Microsoft announced that the company plans to acquire Activision Blizzard for an all-cash price of $95.00 per share. The deal has been approved by the boards of directors of Activision Blizzard and Microsoft and has been approved by Activision Blizzard shareholders.
On April 26, 2023, the British Competition and Markets Authority (CMA) announced its decision to block the above-mentioned merger transaction, saying that it had raised competition-related concerns in the field of cloud gaming, and believed that any concerns related to Microsoft’s cloud gaming field were unreasonable. The remedial measures taken were not sufficient. Activision Blizzard believes that the UK Competition and Markets Authority’s decision is disproportionate, unreasonable, and inconsistent with the relevant evidence. Microsoft has announced that it has decided to appeal against the UK Competition and Markets Authority’s ruling, and Activision Blizzard plans to fully support Microsoft’s efforts in this appeal. Activision Blizzard remains confident that the deal is pro-competitive, will bring Activision Blizzard content to more gamers, and will deliver substantial benefits to consumers and developers in the UK and globally. The companies will continue to engage fully with the other regulatory agencies responsible for reviewing this merger transaction to obtain any necessary regulatory approvals.
Stock price change:
On the same day, Activision Blizzard’s stock price fell by $9.93 in regular Nasdaq trading, closing at $76.81, a drop of 11.45%. In subsequent after-hours trading as of 7:52 p.m. Eastern Time on the 26th (7:52 a.m. Beijing time on the 27th), Activision Blizzard’s share price fell another $0.21, or 0.27%, to $76.60. Over the past 52 weeks, Activision Blizzard has had a high of $87.01 and a low of $70.94.
