Earnings Release Is Activision Blizzard A Buy?


Activision Blizzard, Inc. (Nasdaq: ATVI) today announced first-quarter 2021 results. For the quarter ended March 31, 2021, Activision Blizzard’s net revenues presented in accordance with GAAP were $2.28 billion, as compared with $1.79 billion for the first quarter of 2020. GAAP net revenues from digital channels were $2.01 billion. GAAP operating margin was 35%. GAAP earnings per diluted share were $0.79, as compared with $0.65 for the first quarter of 2020. On a non-GAAP basis, Activision Blizzard’s operating margin was 43% and earnings per diluted share were $0.98, as compared with $0.76 for the first quarter of 2020.

For the quarter, operating cash flow was $844 million, as compared with $148 million for the first quarter of 2020. For the trailing twelve-month period, operating cash flow was $2.95 billion.

Please refer to the tables at the back of this press release for a reconciliation of the company’s GAAP and non-GAAP results.

Operating Metrics

For the quarter ended March 31, 2021, Activision Blizzard’s net bookingsB were $2.07 billion, as compared with $1.52 billion for the first quarter of 2020. In-game net bookingsC were $1.34 billion as compared with $0.96 billion for the first quarter of 2020.

For the quarter ended March 31, 2021, overall Activision Blizzard Monthly Active Users (MAUs)D were 435 million.

Selected Business Highlights

Activision Blizzard significantly exceeded its prior outlook for the first quarter, delivering very strong growth across our largest franchises. Our increased investment in our largest franchises is enabling us to connect and engage people in more ways than ever before. Despite ongoing challenges from working from home, our creative and commercial teams are executing strongly. Their work drove another quarter of fantastic results for Call of Duty®World of Warcraft®, and Candy CrushTM, and we continue to make great progress on our pipeline, positioning us for ongoing strong results through the remainder of this year and into 2022 and beyond.


  • Activision segment revenue grew 72% year-over-year, driven by Call of Duty: Black Ops Cold War and WarzoneTM in-game revenues, strong premium sales, and Call of Duty Mobile. Segment operating income more than doubled year-over-year.
  • The introduction of Call of Duty free-to-play and mobile experiences has transformed the franchise, more than tripling franchise MAUsD over the last two years, and leading Activision to a new record of 150 million MAUsD in the first quarter.
  • Call of Duty franchise MAUsD increased sequentially and grew over 40% year-over-year in the first quarter.
  • Following its integration with WarzoneCall of Duty: Black Ops Cold War saw premium sales well above the levels typically seen in the first quarter.
  • Call of Duty in-game net bookingsC on console and PC grew more than 60% year-over-year. The first two seasons of Black Ops Cold War and Warzone content were both in the top-three seasons in Call of Duty history for in-game net bookingsC. The third season, launched in April, is sustaining this strong run-rate, tracking in-line with the first two seasons.
  • Call of Duty Mobile saw strong year-over-year growth in reach, engagement, and player investment in the first quarter, benefiting from ongoing enhancements in the West and the launch of the title in China. In the West, the March season concluded as the highest for player investment yet. Momentum has continued into the second quarter, with the April season now the top-grossing to date at this point after launch. In China, Call of Duty Mobile brought tens of millions of new players to the franchise, with player investment in the first quarter on par with the rest of the world combined.
  • The 2021 season of the professional Call of Duty LeagueTM is off to a great start, enjoying strong year-over-year growth in average minute audience through the first two stages of competition.





  • Blizzard segment revenue grew 7% year-over-year, led by strong growth in the Warcraft® franchise, with World of Warcraft’s Shadowlands expansion building on the substantial increase in scale seen since the launch of World of Warcraft Classic in 2019. Blizzard had 27 million MAUsD in the first quarter.
  • World of Warcraft’s Shadowlands expansion continued to drive strong results following its record-setting release in November, with first quarter franchise net bookingsB growing sharply year-over-year. World of Warcraft saw strong reach, engagement and participation in value added services, along with a particularly high number of new players joining the community for the first time, boosted by initiatives to enhance the onboarding experience.
  • Hearthstone®’s latest expansion, Forged in the BarrensTM, launched on March 30 and is on track to deliver expansion-over-expansion net bookingsB growth for the second consecutive release.
  • Ahead of its launch later this year, Diablo® II: Resurrected saw very positive feedback during early testing in April and online viewership of the alpha test was the highest ever for a Blizzard game test.
  • On mobile, Diablo® ImmortalTM entered its second phase of testing and is on track for global release later this year.
  • April saw Overwatch® fans around the world return to celebrate players and city-based teams in the opening weekend of the 2021 season of Overwatch LeagueTM. The league signed a multi-year partnership with Bilibili Esports for exclusive rights to broadcast league games to the platform’s passionate and growing Overwatch League fanbase in China.


  • King segment revenue reached a new record, growing 22% year-over-year, driven by strong growth for Candy Crush. King had 258 million MAUsD in the first quarter.
  • King’s initiatives to broaden the payer base, deliver more frequent seasonal events and introduce compelling new features into Candy Crush and other portfolio titles drove in-game net bookingsC growth in the high-teens percentage year-over-year.
  • Candy Crush grew in-game net bookingsC very strongly year-over-year and was once again the top grossing franchise in the U.S. app stores1.
  • In-game net bookingsfor Farm HeroesTM, King’s second-largest franchise, also grew sharply year-over-year.
  • King’s in-game net bookingsC have remained strong into the second quarter, continuing to grow well year-over-year.
  • Crash Bandicoot: On The Run!TM launched on March 25 and has seen over 30 million downloads to-date.
  • King delivered 70% year-over-year growth in advertising net bookingsB in the first quarter, with significant increases across both direct brand advertisers and partner networks.

“Our employees continue to demonstrate exceptional performance under challenging circumstances,” said Bobby Kotick, CEO of Activision Blizzard. “That relentless drive across our franchises produced strong first quarter results that were well ahead of expectations. Our continued overperformance enables us to raise our outlook for the full year.”

CWEB Analyst’s have initiated a BUY Rating for  Activision Blizzard, Inc. (Nasdaq: ATVI) and potential upside of $148 in 2021. The fundamentals of the company are to strong and even after the hard hit post pandemic recovery Activision has provide strong Q1 well ahead of expectation. We believe that the Q2 will deliver bigger results for shareholders.


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