For calendar year 2009, Activision Blizzard's GAAP net revenues were $4.28 billion. On a non-GAAP basis, the company's net revenues were $4.78 billion.
For calendar year 2009, Activision Blizzard's GAAP earnings per diluted share were $0.09. The results include a $0.19 per share reduction in the valuation of intangible assets reflecting the impact of a weaker market on the casual and music genres. Excluding this charge, GAAP earnings per diluted share would have been $0.28 per share. On a non-GAAP basis, the company's earnings per diluted share were $0.69.
For the quarter ended December 31, 2009, Activision Blizzard's GAAP net revenues were $1.56 billion. On a non-GAAP basis, the company's net revenues were $2.50 billion.
For the quarter ended December 31, 2009, Activision Blizzard had a GAAP loss per diluted share of $0.23. The results include the $0.19 per share reduction in the valuation of intangible assets described above. Excluding this charge, GAAP loss per share would have been $0.04. On a non-GAAP basis, the company's earnings per diluted share were $0.49.
Activision Blizzard reports results on both a GAAP and a non-GAAP basis. Please refer to the tables at the back of this press release for a reconciliation of the company's GAAP and non-GAAP results.
Separately, Activision Blizzard also announced that its Board of Directors has authorized a stock repurchase program under which the company can repurchase up to $1 billion of the company's common stock. The Board of Directors also declared an annual cash dividend of $0.15 per common share payable on April 2, 2010 to shareholders of record at the close of business on February 22, 2010.
Robert Kotick, CEO of Activision Blizzard, stated, "We delivered better-than-expected calendar year non-GAAP financial results and our fourth quarter non-GAAP net revenues and non-GAAP earnings per share were the highest in our company's history. On a non-GAAP basis, our performance enabled us to deliver the most profitable year in our company's history and record operating margin. We generated approximately $1.2 billion in operating cash flow and ended the year with approximately $3.3 billion in cash and investments. For the calendar year, in the U.S. and Europe, Call of Duty: Modern Warfare 2 was the #1 best-selling title overall and DJ Hero was the highest grossing new IP launched in 2009. Additionally, through Blizzard Entertainment's World of Warcraft we remain #1 in the subscription-based massively multiplayer online role-playing game category worldwide, according to The NPD Group and internal Activision Blizzard estimates."
Kotick continued, "Despite these challenging times, in 2010 we remain focused on expanding operating margins by growing our high-margin digital/online revenues, directing our resources to the largest and most profitable opportunities and realizing operational efficiencies globally. On a non-GAAP basis, we expect to deliver a year of record net earnings and operating margins and are taking another step towards our long-term objective of operating margins of 30% or more. In calendar year 2010, we expect our net earnings and operating margin growth will be driven by our product slate that includes Blizzard Entertainment's Starcraft II and the World of Warcraft expansion pack, Cataclysm, as well as a diversified lineup based on Activision Publishing's best-selling franchises including Call of Duty, Guitar Hero and Tony Hawk , together with other well-known titles such as True Crime, Spider-Man and Bakugan."
"Our significant accomplishments in 2009 are the result of the expertise and skills of our employees around the world. Their hard work and commitment to excellence made us stronger even during difficult times. Our strategy and capabilities are supported by a very strong financial position. We continue to put our cash to work, including the announcements we made today - the authorization of our second billion dollar stock buyback program in two years and our first cash dividend, both of which reflect our confidence in the future and our 18-year commitment to industry leading shareholder value creation," Kotick added.
In the U.S. and Europe, for calendar year 2009, Activision Blizzard increased its share 1.8 points over the previous year across all platforms to 16% and had two of the top-five best-selling franchises on the consoles across all platforms -- Call of Duty and Guitar Hero, according to The NPD Group, Charttrack and Gfk. Additionally, the company was the #1 U.S. publisher overall for the PlayStation 3 computer entertainment system and the Xbox 360 video game system from Microsoft and the #1 third-party publisher for the Nintendo Wii, according to The NPD Group, Charttrack and Gfk.
Other highlights are as follows:
- For calendar year 2009, Activision Blizzard had the highest share point gain of any publisher in Europe from 11.9% to 13.9%, according to Charttrack and Gfk.
- Guitar Hero was a top-four franchise overall and the #1 music franchise in the U.S. and Europe for the calendar year, according to The NPD Group, Charttrack and Gfk.
- In the U.S. and Europe, DJ Hero was the highest grossing new intellectual property launched in 2009, according to The NPD Group, Charttrack and Gfk.
- Activision Blizzard had two of the top five best-selling PC titles in dollars in the U.S. and Europe for the calendar year -- Call of Duty: Modern Warfare 2 and Blizzard Entertainment's World of Warcraft: Wrath of the Lich King, according to The NPD Group, Charttrack and Gfk.
- For the December quarter, Activision Blizzard was the #1 publisher overall in the U.S. and Europe and grew its share 1.7 points over the previous year across all platforms to 20.1%, according to The NPD Group, Charttrack and Gfk.
- During the December quarter, in the U.S. and Europe, Call of Duty: Modern Warfare 2 was the #1 best-selling console title in dollars and the Call of Duty franchise was the #1 franchise overall, according to The NPD Group, Charttrack and Gfk.
- In November 2009, Call of Duty: Modern Warfare 2 became the first video game ever to surpass $550 million in retail sales in its first five days of release, according to Activision Publishing's internal estimates. To date, the game has sold more than $1 billion in retail sales worldwide, according to The NPD, Charttrack and Gfk.
- On November 17, 2009, Activision Publishing announced the appointments of industry veterans Glen A. Schofield as Vice President and General Manager and Michael Condrey as Vice President and COO of Sledgehammer Games, a new wholly-owned game development studio located in Foster City, California.
- On December 14, 2009, Activision Publishing announced that the company is currently in development on a new open world True Crime game inspired by classic Hollywood and Asian cinema-style action thrillers. The game which is being developed by United Front Games is expected to launch later this year.
- As of December 31, 2009, approximately 11.5 million gamers worldwide are subscribed to play Blizzard Entertainment's World of Warcraft.
- As of December 31, 2009, Activision Blizzard completed its $1.25 billion authorized stock repurchase program. The company purchased approximately 115 million shares of common stock at an average price of $10.87 per share since the program's inception in November 2008.
- On February 2, 2010, Activision Publishing announced that David Haddad, Chief Operating Officer of Guitar Hero, has assumed the operational responsibilities for the Guitar Hero business unit.
For the first quarter of calendar year 2010, Activision Publishing expects to release one title during the last week of March, How To Train Your Dragon. The game is based on DreamWorks Animation's upcoming 3D movie and is expected to be published for the PlayStation 3 computer entertainment system, Xbox 360 video game system from Microsoft, Nintendo Wii and Nintendo DS.
Activision Blizzard's outlook is subject to significant risks and uncertainties including declines in demand for its products, competition, fluctuations in foreign exchange and tax rates, counterparty risks relating to customers, licensees, licensors and manufacturers and risks relating to the ongoing ability of Blizzard Entertainment's licensee, NetEase.com, Inc., to operate World of Warcraft in China on a paying basis without interruption.
The company's outlook is also based on assumptions about sell through rates for its products, and the launch timing, success and pricing of its new slate of products. Current macroeconomic conditions increase those risks and uncertainties. As a result of these and other factors, actual results may deviate materially from the outlook presented below.
For calendar year 2010, Activision Blizzard expects GAAP net revenues of $4.2 billion, and GAAP earnings per diluted share of $0.47. On a non-GAAP basis, the company expects net revenues of $4.4 billion and non-GAAP earnings per diluted share of $0.70 for the calendar year.
For the first quarter 2010, Activision Blizzard expects GAAP net revenues of $1.1 billion, and GAAP earnings per diluted share of $0.20. On a non-GAAP basis, the company expects net revenues of $525 million and $0.02 earnings per diluted share for the March quarter.