Video game company Activision Blizzard (NASDAQ:ATVI) reported third-quarter results after the market close Monday. Here are the key highlights and an update on a pending acquisition of the company by Microsoft Corporation (NASDAQ:MSFT).
What Happened: Activision Blizzard reported third-quarter net revenue of $1.78 billion. Net revenue from digital channels was $1.61 billion.
Net bookings were $1.83 billion in the third quarter for Activision Blizzard. In-game net bookings for the third quarter were $1.36 billion. Net bookings beat a Street estimate of $1.69 billion, according to data from Benzinga Pro.
The company reported non-GAAP earnings per share of 68 cents for the third quarter, beating a Street estimate of 50 cents per share.
“Our games are the result of passion and excellence,” Activision Blizzard CEO Bobby Kotick said.
“This comes from an environment that fosters inspiration, creativity, and an unwavering commitment to develop and support our talent.”
Activision Blizzard ended the third quarter with 368 million monthly active users.
The company’s Blizzard segment saw revenue up double-digits thanks to the launch of “Diablo II: Resurrected” and “Diablo Immortal.”
The King business line saw net bookings up 8% year-over-year, with the Candy Crush franchise highlighted as the catalyst. The original Candy Crush game has over 200 million monthly active users and is nearing its 10-year anniversary.
Related Link: How To Trade Activision Blizzard Before And After Q3 Earnings
What’s Next: Since the end of the third quarter, Activision Blizzard released the highly anticipated “Call of Duty: Modern Warfare II” on Oct. 28. The game broke company records as the fastest-selling title in the history of the franchise.
The game became the fastest Call of Duty release to pass the $1-billion sales mark and has seen PC sales around twice the level of recent titles in the franchise. Hours played in the first 10 days of the game’s release were up 40% over prior franchise records.
The company also highlighted the launch of free-to-play “Overwatch 2” in October, which led to higher engagement for the game.
A highly anticipated “Diablo IV” game from Blizzard is planned for a 2023 launch and progressing well, according to the company.
Activision Blizzard acknowledged macroeconomic conditions but said it expects its global audience to continue to expand.
“We expect to expand our global audience, deepen community engagement, and deliver renewed growth in player investment in the fourth quarter and beyond."
Company guidance is for fourth-quarter GAAP revenue to be down 5% year-over-year. Fourth quarter bookings are expected to be up 20% year-over-year.
Activision is being acquired by Microsoft for $68.7 billion, or $95 per share.
“We look forward to continuing to release epic entertainment in service of our global community of players as a part of Microsoft, one of the world’s most admired companies,” Kotick said. “We continue to expect that our transaction will close in Microsoft’s current fiscal year ending June 2023.”
ATVI Price Action: Activision shares are up slightly to $71.42 in after-hours trading Monday.
