Shulou(Shulou.com)11/24 Report--

Thanks to CTOnews.com netizen South China Wu Yanzu for the clue delivery! Beijing time on April 27 morning news, Activision Blizzard yesterday evening announced the first quarter of fiscal year 2023 financial results. Activision Blizzard reported net revenue of $2.383 billion in the first quarter, compared with $1.768 billion a year earlier; net booking revenue of $1.86 billion, compared with $1.48 billion a year earlier; and net profit of $740 million, up 87% from $395 million a year earlier.

In terms of results, Activision Blizzard's first-quarter net scheduled revenue and adjusted earnings per share exceeded Wall Street analysts 'expectations. At the same time, Activision Blizzard disclosed in its earnings report that the UK Competition and Markets Authority (CMA) announced that it would not allow Microsoft to acquire the company, but Microsoft had appealed the ruling and Activision Blizzard would fully support Microsoft's actions.

Key results for the first quarter: Activision Blizzard's net income for the quarter ended March 31 was $740 million, or $0.93 diluted earnings per share, which was significantly better than a year earlier. Activision Blizzard's net income for the first quarter of fiscal 2022 was $395 million, or $0.50 per diluted share.

Excluding certain one-time items (not in accordance with GAAP), Activision Blizzard's adjusted net income for the first quarter was $866 million, compared with $501 million a year ago; adjusted diluted earnings per share were $1.09, compared with $0.64 a year ago, both of which were significantly higher than analysts 'expectations. Activision's average of 21 analysts had expected first-quarter earnings of $0.52 per share, according to data provided by Yahoo Finance.

Activision Blizzard's net revenue for the first quarter was $2.383 billion, compared with $1.768 billion a year earlier. Activision Blizzard's net revenue from digital channels for the quarter was $2.16 billion.

By business segment, Activision Blizzard reported net revenue of $695 million from product sales in the first quarter, compared with $386 million a year earlier; revenue from subscriptions, licensing and other businesses was $1.688 billion, compared with $1.382 billion a year earlier.

Activision's Net bookings (net revenue excluding deferred revenue) for the first quarter were $1.86 billion, compared with $1.48 billion a year earlier, beating analysts 'expectations. Nineteen analysts, on average, had expected Activision Blizzard to earn $1.8 billion in net bookings in the first quarter, according to data provided by Yahoo Finance. Activision Blizzard's net bookings from in-game channels were $1.29 billion for the quarter, compared with $1.01 billion a year earlier.

Activision Blizzard's operating profit for the first quarter was $800 million, compared with $479 million a year earlier. Activision Blizzard's operating margin for the first quarter was 34%; excluding certain one-time items (not in accordance with GAAP), Activision Blizzard's adjusted operating margin for the first quarter was 40%.

Activision Blizzard's operating cash flow for the first quarter was $577 million, compared with $642 million a year earlier.

Activision Blizzard's total costs and expenses for the first quarter were $1.583 billion, compared with $1.289 billion a year earlier. Of that total, product costs were $136 million, compared with $91 million a year earlier, and software royalties, amortization and intellectual property licensing costs were $101 million, compared with $81 million a year earlier. In terms of in-game, subscription and other revenue costs, game operating and distribution costs were $363 million, compared to $288 million a year ago; software royalties, amortization and intellectual property licensing costs were $65 million, compared to $19 million a year ago.

In terms of expenses, Activision Blizzard's fourth-quarter product development expenses were $402 million, compared with $346 million in the same period last year; sales and marketing expenses were $278 million, compared with $252 million in the same period last year; general and administrative expenses were $238 million, compared with $212 million in the same period last year.

Activision Blizzard's overall monthly active users in the first quarter were 368 million, compared with 372 million a year earlier. By segment, Activision had 98 million overall MAUs compared to 100 million a year ago; Blizzard had 27 million MAUs compared to 22 million a year ago; and King had 243 million MAUs compared to 250 million a year ago.

As of the end of the first quarter of fiscal 2023, Activision Blizzard held cash and short-term investments totaling $12.6 billion. Activision Blizzard had a net cash head of approximately $8.9 billion at the end of the first quarter.

Microsoft acquisition deal: Microsoft announced on January 18, 2022 that it plans to acquire Activision Blizzard for $95.00 per share in full cash. The deal has been approved by Activision Blizzard and Microsoft's boards of directors and has been approved by Activision Blizzard shareholders.

On April 26, 2023, the UK Competition and Markets Authority (CMA) announced its decision to block the merger, saying it raised competition-related concerns in the cloud gaming space and that Microsoft's remedies for any cloud gaming concerns were insufficient. Activision Blizzard believes that this decision by the UK Competition and Markets Authority is disproportionate to the facts, unreasonable and inconsistent with the relevant evidence. Microsoft has announced its decision to appeal the Competition and Markets Authority ruling, and Activision Blizzard plans to fully support Microsoft's efforts in this appeal. Activision still believes the deal is competitive, will bring Activision content to more gamers, and will deliver substantial benefits to consumers and developers in the UK and globally. Both companies will continue to engage fully with other regulators reviewing the merger transaction to obtain any necessary regulatory approvals.

Share price movements: Activision Blizzard shares fell $9.93, or 11.45%, to close at $76.81 in regular Nasdaq trading. Activision shares fell $0.21, or 0.27 percent, to $76.60 in after-hours trading as of 7:52 p.m. ET on Monday. Over the past 52 weeks, Activision Blizzard has had a high of $87.01 and a low of $70.94.

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