Activision Blizzard — Q4 2012 Earnings Presentation
16 slides from Activision Blizzard's earnings presentation, Feb 7, 2013
Slide 1: Fourth Quarter 2012 Results
Fourth Quarter 2012 Results February 7, 2013
Slide 2: Safe Harbor Disclosure
Safe Harbor Disclosure Please review our SEC filings on Form 10-K and Form 10-Q The statements contained in this presentation that are not historical facts are forward-looking statements. The company generally uses words such as “outlook,” “will,” “could,” “should,” “would,” “might,” “remains,” “to
Slide 3: Activision Blizzard 2012 Results Summary
Activision Blizzard 2012 Results Summary Record performance driven by innovation and quality GAAP 2011 Original 2012 Outlook1 2012 Year-over-Year Net Revenues $4,755M $4,150M $4,856M 2% EPS $0.92 $0.63 $1.01 10% Non-GAAP2 2011 Original 2012 Outlook1 2012 Year-over-Year Net Revenues $4,489M $4,500M $
Slide 4: Activision Blizzard 2012 Highlights
Activision Blizzard 2012 Highlights Better-than-expected, record $1.18 Non-GAAP1 EPS, Operating Cash Flow of $1.34B • Incredible financial performance: • Non-GAAP1 Revenues of approximately $5B • Non-GAAP1 Operating Margin was a record 34% • Non-GAAP1 EPS grew 27% to a record $1.18 • Operating Cash
Slide 5: Activision Blizzard Q4 Results Summary
Activision Blizzard Q4 Results Summary Record performance driven by innovation and quality GAAP Q4 2011 Prior Q4 2012 Outlook1 Q4 2012 Year-over-Year Net Revenues $1,407M $1,485M $1,768M 26% EPS $0.08 $0.19 $0.31 288% Non-GAAP2 Q4 2011 Prior Q4 2012 Outlook1 Q4 2012 Year-over-Year Net Revenues $2,40
Slide 6: Earnings Per Share
Earnings Per Share 20% Non-GAAP* EPS CAGR from 2009 to 2012 and 27% increase in 2012 GAAP EPS Non-GAAP* EPS $1.18 $1.01 $0.92 $0.93 $0.79 $0.69 $0.33 $0.09 2009 2010 2011 2012 2009 2010 2011 2012 * Non-GAAP information reconciliation tables in the appendix of the earnings release, which is available
Slide 7: Operating Margins
Operating Margins Non-GAAP* Operating Margins increased 380 basis points in 2012 GAAP Operating Margin Non-GAAP* Operating Margin 34.0% 29.9% 30.3% 27.9% 28.5% 25.8% 10.5% -0.6% 2009 2010 2011 2012 2009 2010 2011 2012 * Non-GAAP information reconciliation tables in the appendix of the earnings relea
Slide 8: Cash Flow
Cash Flow Operating Cash Flow increased 41% in 2012, Free Cash Flow* increased 45% Operating Cash Flow ($M) Free Cash Flow* ($M) 1,376 1,345 1,183 Avg. 1,279 1,272 Avg. 1,214 1,114 1,136 952 880 2009 2010 2011 2012 2009 2010 2011 2012 * Non-GAAP information reconciliation tables in the appendix of t
Slide 9: Key 2013 Priorities
Key 2013 Priorities Focused on our largest and highest margin opportunities Activision Publishing Blizzard Entertainment Call of Duty 2013 and Call of Duty Online Heart of the Swarm March 12, 2013 Skylanders 2013: SWAP Force New content for World of Warcraft Development of Bungie’s new universe Cont
Slide 10: Financial Outlook, as of February 7, 2013
Financial Outlook, as of February 7, 2013 2013 Q1 2013 GAAP Non-GAAP* GAAP Non-GAAP* Net Revenues $4,085M $4,175M $1,160M $690M COGS (Prod/Online) 26% 26% 28% 27% Operating Expense, incl. Royalties 48% 43% 34% 51% Operating Margin, may not foot due to rounding 26% 30% 38% 22% Tax Rate 26% 27% 24% 21
Slide 11: Record Call of Duty Online Engagement
Record Call of Duty Online Engagement Record engagement in December; multiple titles with multi-year engagement Call of Duty Monthly Active Users (MAU) Black Ops 2 Modern Warfare 3 Black Ops Modern Warfare 2 World at War Modern Warfare Feb-09 Feb-10 Feb-11 Feb-12 Oct-08 Oct-09 Oct-10 Oct-11 Oct-12 A
Slide 12: Skylanders SWAP Force
Skylanders SWAP Force Innovation continues with a great new game for 2013 Skylanders franchise: • Revenues >$1B thru 2012 • Over 100M toys sold to date SWAP Force, our 2013 game: • Puts the power of choice in the hands of the Portal Master • First time in HD for the franchise • All figures sold to d
Slide 13: Activision Publishing Highlights & Pipeline
Activision Publishing Highlights & Pipeline #1 Publisher in North America and Europe in 20121 Fastest ever to $1 billion, breaking MW3’s record. Highest share ever, and highest online engagement with record MAU in December. Microtransaction-based game licensed to Tencent for the large and fast growi
Slide 14: Blizzard Entertainment Highlights
Blizzard Entertainment Highlights 2012 was a busy and successful year for Blizzard; 2013 will be a year of investment World of Warcraft: Mists of Pandaria • Over 9.6M subscribers as of 12/31/12 Diablo III • Over 12M players as of 12/31/12 StarCraft II: Heart of the Swarm • Expected to launch March 1
Slide 15: Use of Non-GAAP Measures
Use of Non-GAAP Measures As a supplement to our financial measures presented in accordance with GAAP, Activision Blizzard presents certain non-GAAP measures of financial performance. These non-GAAP financial measures are not intended to be considered in isolation from, as a substitute for, or as mor
Slide 16: 2012 Fourth Quarter Results: Q&A
2012 Fourth Quarter Results: Q&A February 7, 2013