Activision Blizzard today reported its 2009 fiscal results for the calendar and fiscal year ended December 31. Total sales came to $4.28 billion, way up from $3 billion in 2008, while net income amounted to $113 million. Net revenues in the holiday quarter alone were $1.56 billion, driven in large part of course by the record-breaking launch of Call of Duty: Modern Warfare 2. The game recently eclipsed $1 billion in retail sales worldwide.
With 11.5 million subscribers, World of Warcraft also continues to be a major contributor to the publisher's bottom line. And, Activision Blizzard had two of the top five best-selling PC titles in dollars in the U.S. and Europe for the calendar year with Modern Warfare 2 and WoW: Wrath of the Lich King, according to The NPD Group, Charttrack and Gfk.
"We delivered better-than-expected calendar year non-GAAP financial results and our fourth quarter non-GAAP net revenues and non-GAAP earnings per share were the highest in our company's history. On a non-GAAP basis, our performance enabled us to deliver the most profitable year in our company's history and record operating margin. We generated approximately $1.2 billion in operating cash flow and ended the year with approximately $3.3 billion in cash and investments," said CEO Bobby Kotick. "For the calendar year, in the U.S. and Europe, Call of Duty: Modern Warfare 2 was the #1 best-selling title overall and DJ Hero was the highest grossing new IP launched in 2009. Additionally, through Blizzard Entertainment's World of Warcraft we remain #1 in the subscription-based massively multiplayer online role-playing game category worldwide, according to The NPD Group and internal Activision Blizzard estimates."
He continued, "Despite these challenging times, in 2010 we remain focused on expanding operating margins by growing our high-margin digital/online revenues, directing our resources to the largest and most profitable opportunities and realizing operational efficiencies globally. On a non-GAAP basis, we expect to deliver a year of record net earnings and operating margins and are taking another step towards our long-term objective of operating margins of 30% or more. In calendar year 2010, we expect our net earnings and operating margin growth will be driven by our product slate that includes Blizzard Entertainment's Starcraft II and the World of Warcraft expansion pack, Cataclysm, as well as a diversified lineup based on Activision Publishing's best-selling franchises including Call of Duty, Guitar Hero and Tony Hawk, together with other well-known titles such as True Crime, Spider-Man and Bakugan."
In addition to the strong fiscal performance, Activision announced today that its Board of Directors has authorized a stock repurchase program under which the company can repurchase up to $1 billion of the company's common stock. The Board of Directors also declared an annual cash dividend of $0.15 per common share payable on April 2, 2010 to shareholders of record at the close of business on February 22, 2010.
Kotick added, "Our significant accomplishments in 2009 are the result of the expertise and skills of our employees around the world. Their hard work and commitment to excellence made us stronger even during difficult times. Our strategy and capabilities are supported by a very strong financial position. We continue to put our cash to work, including the announcements we made today – the authorization of our second billion dollar stock buyback program in two years and our first cash dividend, both of which reflect our confidence in the future and our 18-year commitment to industry leading shareholder value creation."
2 Comments
February 16, 2010
If they're not slowing down, how come they're going through layoffs - NOT just at the studios, but at headquarters in Santa Monica as well? All the sales in the world don't help if you still net a loss at the end of the day. Maybe that gorilla doesn't weigh 800 lbs after all. Just a thought.
June 18, 2010
On non-GAAP accounting, they'll (presumably) be allowing themselves to take in the sell-in of Call of Duty, which should be a damn big number. On GAAP accounting, they can't take those sales as revenue, as they haven't actually got to them yet (presuming a lag in the cash flow of about 3 months through retail). The difference in revenue of almost $1Bn is pretty staggering - and I struggle to believe that the CoD sales would make that lot up, but add all their titles together might - even though that implies 40 million units sold in and not sold through in December. Makes me glad I work for a small company - can't do the math on numbers that large. ^_^