Activision Blizzard — Q2 2011 Earnings Presentation
16 slides from Activision Blizzard's earnings presentation, Aug 3, 2011
Slide 1: Second Quarter CY 2011 Results
Second Quarter CY 2011 Results August 3, 2011
Slide 2: Safe Harbor Disclosure
Safe Harbor Disclosure The statements contained in this presentation that are not historical facts are forward-looking statements. The company generally uses words such “outlook,” “will,” “could,” “should,” “would,” “might,” “remains,” “to be,” “plans,” “believes,” “may,” “expects,” “intends as,” "a
Slide 3: Activision Blizzard Highlights
Activision Blizzard Highlights 2Q results, ahead of expectations1, ahead of prior year – Revenues up vs. prior year – Established new 2Q records for operating margin and EPS 41% GAAP operating margin, 24% Non-GAAP operating margin 71% GAAP EPS growth Y/Y, 67% Non-GAAP EPS growth Y/Y First ha
Slide 4: Positioned for Continued Success
Positioned for Continued Success Currently developing for, and supporting, two of the largest online communities in consumer entertainment Digital Majority of employees dedicated to online development and Leadership service operations IP Focused on improving the experiences delivered to our “a
Slide 5: 2Q 2011 Results
Activision Blizzard 2Q 2011 Results GAAP 2Q 2010 Prior Outlook1 2Q 2011 Net Revenues $967M $985M $1.146B EPS $0.17 $0.19 $0.29 Non-GAAP2 2Q 2010 Prior Outlook1 2Q 2011 Net Revenues $683M $575M $699M EPS $0.06 $0.04 $0.10 As of 3/31/11 As of 6/30/11 Cash & Investments $3.4B $3.0B Total Purchases Unde
Slide 6: 1st Half 2011 Results (GAAP)
Activision Blizzard 1st Half 2011 Results Growth in Digital Revenue Has Driven Profitability* (GAAP) Record 1H $851M Operating Margin $663M Up $600M 2400bps from 1H09 44% 36% 20% Digital Revs. Op. Margin Digital Revs. Op. Margin Digital Revs. Op. Margin 1H 2009 1H 2010 1H 2011 *Digital includes reve
Slide 7: 1st Half 2011 Results (Non-GAAP)
Activision Blizzard 1st Half 2011 Results Growth in Digital Revenue Has Driven Profitability* (Non-GAAP) $864M Record 1H11 $713M Operating Margin $619M Up 800bps 26% from 1H09 19% 18% Digital Revs. Op. Margin Digital Revs. Op. Margin Digital Revs. Op. Margin 1H 2009 1H 2010 1H 2011 *Digital includes
Slide 8: 2Q 2011 Results: Cash, Receivables and Inventories
Activision Blizzard 2Q 2011 Results Cash, Receivables and Inventories* Reflects $3.1B of share repurchase/dividend cumulative payments over entire period $2.9B $2.9B $3.0B $268M $190M $198M $157M $140M $93M 6/09 6/10 6/11 6/09 6/10 6/11 6/09 6/10 6/11 Cash** Receivables Inventories *For periods ende
Slide 9: 2011 Operating Margin Initiatives
2011 Operating Margin Initiatives 1st Half Results • Revenues from digital channels1 up over prior year Continue to focus on high • GAAP revenues up 28%, Non-GAAP revenues up 21% margin digital business • More online content, larger community, and bigger installed base than ever before for Call of
Slide 10: Financial Outlook
Activision Blizzard Financial Outlook GAAP Non-GAAP GAAP Non-GAAP Outlook 20111,2 20111,2 3Q 20111 3Q 20111 Net Revenues $4.18B $4.05B $650M $530M COGS (Prod/MMOG) 26% 27% 27% 31% Op Ex incl. Royalties 47% 42% 60% 66% EPS $0.68 $0.77 $0.05 $0.01 Share Count3 1.2B 1.2B 1.2B 1.2B 1 3Q 2011 and FY 2011
Slide 11: NA/EUR Hardware Outlook
NA/EUR Hardware Outlook NA and Europe Installed Base* Estimated Estimated Current Gen. 12/31/10 Estimated 12/31/11 Growth Platforms Installed Base CY2011 Increase Installed Base Y/Y +24% Wii 64M 8M 72M Handhelds 130M 17M 147M Total 268M 44M 312M +16% *Installed Base of listed platforms as of 6/30/11
Slide 12: Publishing Highlights
Activision Publishing Highlights YTD Call of Duty: Black Ops was the #1 title overall* YTD maintained retail share over prior year* with significantly fewer mainline titles released this year YTD Call of Duty digital content revenues ranked among top 5 titles** Q2 revenues generated from C
Slide 13: Coming November 8th… Connect Compete Improve
Coming November 8th… Connect Compete Improve
Slide 14: 2011 Back Half Product Lineup
2011 Back Half Product Lineup Still to Come!
Slide 15: Blizzard Entertainment Highlights
Blizzard Entertainment Highlights World of Warcraft • Launched World of Warcraft: Starter Edition, first 20 levels free to play • Launched Cataclysm in China in mid July • Launched several new value-added services in China in Q2 • Plan to continue delivering new content to further energize our commu
Slide 16: Reconciliation tables are in the earnings release
*The reconciliation tables are in the earnings release and on www.activisionblizzard.com along with the replay webcast.