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Activision Blizzard (ATVI)
Q3 2012 Earnings Call
November 07, 2012 4:30 pm ET
Kristin Mulvihill Southey - Former Vice President of Investor Relations
Robert A. Kotick - Chief Executive Officer, President and Director
Dennis Durkin - Chief Financial Officer
Eric Hirshberg - Chief Executive Officer of Publishing Unit
Michael Morhaime - Chief Executive Officer of Blizzard Entertainment and President Blizzard Entertainment
Michael J. Olson - Piper Jaffray Companies, Research Division
Daniel Ernst - Hudson Square Research, Inc.
Brian Karimzad - Goldman Sachs Group Inc., Research Division
Neil A. Doshi - Citigroup Inc, Research Division
Brian J. Pitz - Jefferies & Company, Inc., Research Division
Colin A. Sebastian - Robert W. Baird & Co. Incorporated, Research Division
A. Justin Post - BofA Merrill Lynch, Research Division
Douglas Creutz - Cowen and Company, LLC, Research Division
Stephen Ju - Crédit Suisse AG, Research Division
Previous Statements by ATVI
» Activision Blizzard Management Discusses Q2 2012 Results - Earnings Call Transcript
» Activision Blizzard's CEO Discusses Q1 2012 Results - Earnings Call Transcript
» Activision Blizzard's CEO Discusses Q4 2011 Results - Earnings Call Transcript
Kristin Mulvihill Southey
Good afternoon, and thank you for joining us today for Activision Blizzard's Third Quarter 2012 conference call. With me today are Bobby Kotick, CEO of Activision Blizzard; Thomas Tippl, COO of Activision Blizzard; Dennis Durkin, CFO of Activision Blizzard; Eric Hirshberg, CEO of Activision Publishing; and Mike Morhaime, CEO of Blizzard Entertainment.
I would like to remind everyone that during this call, we will be making statements that are not historical facts. These are forward-looking statements that are based on current expectations and assumptions that are subject to risk and uncertainty. As indicated in this slide that is showing, a number of important factors could cause the company's actual future results and other future circumstances to differ materially from those expressed in any forward-looking statements.
Such factors include, without limitation, sales levels; current macroeconomic and industry conditions; increasing concentration of titles; shifts in consumer spending trends; our ability to predict consumer preferences among competing genres and hardware platforms; maintenance of key relationships, including the ability to attract, retain and develop key personnel and developers that can create high-quality hit titles; the seasonal and cyclical nature of our industry; changing business models, including digital delivery of content, competition, including from used games; possible declines in prices, product returns, price protection, product delays, adoption rate and availability of new hardware and related software; rapid changes in technology and industry standards; litigation and associated costs; protection of proprietary rights; counterparty risks; economic, financial and political conditions and policies; foreign exchange and tax rates; and potential changes associated with geographic expansion.
These important factors and other factors that potentially could affect the company's financial results are described in the company's annual report on Form 10-K for the period ending December 31, 2011, and in the company's other SEC filings. The company may change its intentions, beliefs or expectations made at any time and without notice based upon any changes in such factors in the company's assumptions or otherwise.
The forward-looking statements in this presentation are based on information available in the company as of the date of this presentation and, while we believe them to be true, may ultimately prove to be incorrect. The company undertakes no obligation to release publicly any revision to any forward-looking statements to reflect events or circumstances after today, November 7, 2012, or to reflect the occurrence of unanticipated events.
I'd like to note that certain numbers we will be presenting today will be made on a non-GAAP basis, excluding the impact of the change in deferred net revenues and related cost of sales with respect to certain of our online-enabled games, expenses related to stock-based compensation, expenses related to restructuring, the amortization of intangibles and impairment of intangible assets and goodwill and the associated tax benefits. Please refer to our earnings release which is posted at www.activisionblizzard.com for a full GAAP to non-GAAP reconciliation and further explanation.
There's also a PowerPoint overview, which you can access with the webcast and which will be posted to the website following the call. In addition, we will also be posting a 12-quarter financial overview, highlighting both GAAP and non-GAAP results on a one-page summary sheet.
And now I'd like introduce our CEO, Bobby Kotick.
Robert A. Kotick
Thank you, Kristin, and thank you for joining us today. 2012 is on track to be another record year for Activision Blizzard. For the first 9 months of 2012, we achieved new records for non-GAAP revenues, operating income and earnings per share. And for 3 consecutive years, we’ve produced over $1 billion of operating cash flow for the trailing 12-month period ending September 30.
We continue to strengthen our franchises and expand our portfolio of leading interactive brands. Year-to-date, Diablo III is the top-selling game overall based on an estimated digital and retail sales in North America and Europe. Diablo III has already sold an excess of 10 million copies, proving once again that investing in key talent and our top franchise is worth the wait.
Our newest intellectual property, Skylanders, is the top-selling console and handheld game at retail in North America and Europe and has already generated life-to-date revenues in excess of $500 million. Call of Duty is one of the world's most popular entertainment franchises and continues to set records for online engagement. And World of Warcraft remains the most successful massively multiplayer online game ever created. Our franchises and the extraordinarily talented Activision Blizzard employees around the world who oversee them drove our record results for the first 9 months, and their efforts and commitments to excellence will likely result in another year of record results for all of 2012.