Financial Performance - Total net revenues for the three months ended September 30, 2022, were 1,782million,adecreaseof142,070 million for the same period in 2021[8]. - Net income for the three months ended September 30, 2022, was 435million,down32639 million in the same period last year[10]. - Cash and cash equivalents at the end of the period were 7,769million,adecreasefrom9,736 million at the end of September 30, 2021[12]. - Total current assets increased to 13,110millionasofSeptember30,2022,comparedto12,556 million at December 31, 2021[6]. - Total liabilities decreased to 6,812millionasofSeptember30,2022,from7,457 million at December 31, 2021[6]. - Operating income for the nine months ended September 30, 2022, was 1,302million,adeclineof502,578 million in the same period of 2021[8]. - The company reported a basic earnings per share of 0.56forthethreemonthsendedSeptember30,2022,comparedto0.82 for the same period in 2021[8]. - Cash flows from operating activities for the nine months ended September 30, 2022, were 1,097million,downfrom1,753 million in the same period last year[12]. - The company incurred total costs and expenses of 1,297millionforthethreemonthsendedSeptember30,2022,comparedto1,246 million for the same period in 2021[8]. - The company’s total assets increased to 25,620millionasofSeptember30,2022,from25,056 million at December 31, 2021[6]. - As of September 30, 2022, total shareholders' equity was 18.808billion,anincreasefrom17.599 billion at December 31, 2021[16]. - The company reported a comprehensive income loss of 8millionforthethreemonthsendedSeptember30,2022[16].−Thecompanydeclareddividendsof0.47 per common share, totaling 367millionforthethreemonthsendedSeptember30,2022[16].−Thecompanyhad1.5 billion available under a revolving credit facility as of September 30, 2022, with no draws made to date[55]. - The gross unsecured senior notes outstanding as of September 30, 2022, amounted to 3.7billion[57].−Thetotalnetcarryingamountoflong−termdebtasofSeptember30,2022,was3.610 billion[57]. - The company reported segment net revenues of 1.715billionforthethreemonthsendedSeptember30,2022,comparedto1.786 billion for the same period in 2021[66]. - Consolidated net revenues for the three months ended September 30, 2022, were 1,782million,adecreaseof142,070 million in the same period of 2021[67]. - Segment operating income for the three months ended September 30, 2022, was 616million,down16735 million in the prior year[67]. - The company experienced a net effect from the recognition (deferral) of deferred net revenues of (47)millionforthethreemonthsendedSeptember30,2022,comparedto190 million in the same period of 2021[67]. - The total change in deferred revenues for the nine months ended September 30, 2022, was (246)million,comparedto(421) million in the same period of 2021[73]. - Total consolidated net revenues for the nine months ended September 30, 2022, were 6,640million,comparedto6,867 million for the same period in 2021, reflecting a decrease of approximately 3.3%[83]. - The total segment net revenues for the nine months ended September 30, 2022, were 5,867million,downfrom6,200 million in the same period of 2021, indicating a decline of approximately 5.4%[83]. Business Risks and Challenges - Activision Blizzard's forward-looking statements are based on current expectations and projections, which may differ from actual results due to various risks and uncertainties[4]. - The company emphasizes the importance of regulatory approvals for the proposed transaction with Microsoft, which could impact business operations and stock price[4]. - Activision Blizzard acknowledges potential disruptions to its business from the ongoing COVID-19 pandemic and macroeconomic factors, including rising interest rates and supply chain issues[4]. - The company highlights the need to attract and retain skilled personnel amid competition and potential unionization efforts[4]. - Activision Blizzard's reliance on a small number of franchises for revenue concentration poses risks to its financial stability[4]. - The company is subject to various legal proceedings and regulatory scrutiny, which could affect its business operations and reputation[4]. - The company faces risks associated with conducting business outside the U.S., including regulatory compliance and cultural differences[4]. - Activision Blizzard's financial performance is influenced by consumer discretionary spending, which may fluctuate due to economic conditions[4]. - The company is currently under examination by the IRS for federal tax returns from 2012 to 2019, with several state and non-U.S. audits pending[112]. - The company anticipates resolving King's transfer pricing matters through a collaborative process with tax authorities, which may affect profit and loss allocations[112]. - The company is cooperating with an SEC investigation regarding disclosures on employment matters, including responding to subpoenas from the SEC[127]. - The company is involved in various legal proceedings, including a proposed consent decree with the EEOC that includes an 18millionsettlementfundforeligibleclaimants[122].−Thecompanyhasfacedmultipleshareholderderivativeactionsrelatedtoallegationsoffiduciarydutybreachesandotherclaims,whicharecurrentlyinvariousstagesoflitigation[126].−Thefinalresolutionofthecompany′sglobaltaxdisputesisuncertain,butmanagementdoesnotexpectamaterialadverseeffectonthecompany′sconsolidatedfinancialposition[114].MergersandAcquisitions−ThecompanyenteredintoaMergerAgreementwithMicrosoftfor95.00 per share, expected to close in Microsoft's fiscal year ending June 30, 2023[22]. - The company plans to continue its business operations in the ordinary course until the merger with Microsoft is completed[22]. - The company completed acquisitions of Proletariat Inc. and Peltarion AB for a total purchase price of 152million,enhancingresourcesfortheWarcraftfranchiseandAIcapabilities[40].RevenueStreamsandSegments−Blizzard′skeyproductofferingsincludepopularfranchisessuchasWorldofWarcraftandCandyCrush,contributingtoitsrevenuegenerationthroughin−gamesalesandsubscriptions[26][28].−Thecompanymaintainsaproprietaryonlinegamingplatform,Battle.net,facilitatingdigitaldistributionanduser−generatedcontent[26].−Digitalonlinechannelsgenerated1,852 million in net revenues for the three months ended September 30, 2022, compared to 1,606millioninthesameperiodof2021,reflectinga154,668 million in net revenues for the nine months ended September 30, 2022, compared to 5,626millioninthesameperiodof2021,representingadeclineof17999 million in net revenues, representing a 56% share of total revenues[78]. - The EMEA region generated 498millioninnetrevenues,showingasignificantcontributiontooverallperformance[78].−TheAsiaPacificregioncontributed285 million in net revenues, indicating a stable market presence[78]. - Segment net revenues for Activision were 2.32billion,whileBlizzardandKingreported1.41 billion and 1.90billion,respectively[76].−Thecompanyisfocusingonexpandingitsdigitalofferingsandenhancinguserengagementthroughnewproductdevelopmentsandmarketstrategies[76].UpcomingProductsandMarketStrategies−UpcomingtitlesincludeOverwatch2,CallofDuty:ModernWarfareII,andWorldofWarcraft:Dragonflight,withexpectedreleasesinQ42022[166].−ThecompanyisindiscussionsregardingtherenewaloflicensingagreementsforBlizzardtitlesinChina,whichcontributedapproximately30.47 per common share on February 3, 2022, resulting in an aggregate cash dividend payment of 367milliontoshareholdersonMay6,2022[120].−Thecompanyhasastockrepurchaseprogramauthorizedforupto4 billion, but as of September 30, 2022, no shares had been repurchased under this program[118].
AB(ATVI)2022-11-07 21:28