Activision Blizzard, Inc. reported better-than-expected third quarter adjusted revenue, which was lifted by its recent launches “Call of Duty: Modern Warfare” and “Call of Duty: Mobile”.
“Our third quarter results exceeded our prior outlook for both revenue and earnings per share,” said Bobby Kotick, Chief Executive Officer of Activision Blizzard. “Recent launches have enabled significant growth in the size of our audiences for our Call of Duty and World of Warcraft franchises. As we introduce mobile and free-to-play games based on our franchises we believe we can increase audience size, engagement and monetization across our wholly owned franchises. With a strong content pipeline and momentum in mobile, esports and advertising, we are confident we will remain a leader in connecting and engaging the world through epic entertainment.”
For the quarter ended September 30, 2019, Activision Blizzard’s net revenues presented in accordance with GAAP were $1.28 billion, as compared with $1.51 billion for the third quarter of 2018. GAAP net revenues from digital channels were $1.01 billion. GAAP operating margin was 19%. GAAP earnings per diluted share were $0.26, as compared with $0.34 for the third quarter of 2018.
For the quarter ended September 30, 2019, on a non-GAAP basis, Activision Blizzard’s operating margin was 27% and earnings per diluted share were $0.38, as compared with $0.42 for the third quarter of 2018.
Overall Activision Blizzard Monthly Active Users (MAUs)D were 316 million.
Activision Blizzard exceeded its third quarter outlook, driven by better-than-expected performance for Call of Duty in-game and World of Warcraft, as well as favorable cost timing. The company started the fourth quarter with successful launches for Call of Duty: Mobile and Call of Duty: Modern Warfare, and achieved important milestones for several other franchises.
In the third quarter of 2019, Call of Duty: Black Ops 4 reach and net bookings from in-game items grew sharply versus Call of Duty: WWII in the third quarter of 2018.
The October 1, 2019, launch of Call of Duty: Mobile saw over 100 million downloads in its first month, reaching the top of the mobile app download charts in over 150 countries and regions, with a 4.9-star rating in the U.S. iOS store.
On October 25, 2019, Call of Duty: Modern Warfare launched and became the top-selling new premium game release of the year. In its first week, sell-through units grew a high-teen percentage versus Call of Duty: Black Ops 4, with strong console growth and PC units on Battle.net reaching new highs.
In the third quarter of 2019, Blizzard had 33 million MAUsD. World of Warcraft Classic drove the biggest quarterly increase to subscription plans in franchise history, in both the West and East.
The Overwatch League concluded with a sell-out crowd of over 11,000 fans watching the San Francisco Shock defeat the Vancouver Titans in the Grand Finals at the Wells Fargo Center in Philadelphia in September. Season Two average minute audience grew 18% year-over-year.
In the third quarter of 2019, King had 247 million MAUsD. Candy Crush franchise mobile reach grew year-over-year, driven by the addition of Candy Crush Friends Saga which launched in October 2018.
Candy Crush was once again the top-grossing franchise in the U.S. mobile app stores.
Activision Blizzard expects current-quarter adjusted revenue of $2.65 billion.