Activision Blizzard, Inc. (NASDAQ: ATVI) reported its second quarter earnings and were much better than the company had expected.
The major gaming company posted net revenues with GAAP were $1.63 billion, compared to the $1.57 billion posted for last year’s quarter. Activision also posted an increase of 4 percent GAAP net revenues, from digital channels, were $1.31 billion, growing 15% year?over?year. GAAP operating margin was 21 percent. GAAP earnings per diluted share were a second quarter all time high of $0.32, compared to $0.20 for the second quarter of 2016, an increase of 60%.
Activision reported retail channel sales of $260 million, which is down 30 percent year over year. Digital online revenues was reported of $1.309 billion, which is up 15 percent. Digital revenues contributed 80% of total revenue in the quarter.
Bobby Kotick, Chief Executive Officer of Activision Blizzard, said, “This was another strong quarter for Activision Blizzard. We exceeded our outlook and delivered record revenues for the first half of 2017.”
Kotick added, “Celebrating players and audiences is the foundation for our success. This quarter we announced the first team owners in the Overwatch League™, the first major global, city? based professional esports league. With hundreds of hours of broadcast content ahead of us, as well as significant sponsorship and media opportunities, the Overwatch League will provide new ways for us to highlight and support the passion of esports fans and the skill of some of the world’s top Overwatch® players.”
Overwatch’s success and the company’s purchase of King’s Digital Entertainment drove a significant amount of the revenue in the second quarter.
In the second quarter, Activision Blizzard recorded a total of 407 million monthly active users across its diverse amount of games. Although Activision alone posted a lower amount of monthly active users, the anticipation of Destiny 2 and Call of Duty WW2 will drive momentum upwards. Blizzard recorded its biggest quarterly monthly active users of 46 million, which up 38 percent year over year. Games such as Overwatch and Hearthstone drove much of the success for Blizzard, as both the games recorded their all time high monthly active users. And King Digital had 314 million monthly active users, which is down year over year, but King recorded two games that ranked among the top 10 grossing mobile games this year.
With the strong second quarter, Activision Blizzard’s outlook for the rest of the year looks to be promising with the release of many more games, a major esport league for Overwatch, and of course the increasing amount of active users.
The company has raised its guidance for the rest of the fiscal year. Originally, the gaming company projected revenues of $6.1 billion and EPS of $1.80. Here’s what Activision Blizzard has projected for the rest of the year’s outlook:
- GAAP net revenue of $6.4 billion
- EPS of $1.05
On the non-GAAP outlook:
- Net revenue $6.4 billion
- EPS of $1.94