Stock Analysis on Net
Stock Analysis on Net

Activision Blizzard Inc. (NASDAQ:ATVI)

$22.49

This company has been moved to the archive! The financial data has not been updated since July 31, 2023.

Common-Size Income Statement

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Activision Blizzard Inc., common-size consolidated income statement

Microsoft Excel
12 months ended: Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
Product sales
In-game, subscription, and other revenues
Net revenues
Product costs
Software royalties and amortization
Product sales
Game operations and distribution costs
Software royalties and amortization
In-game, subscription, and other
Cost of revenues
Gross profit
Product development
Sales and marketing
General and administrative
Restructuring and related costs
Operating income
Interest expense from debt
Interest income
Realized and unrealized gain (loss) on equity investment
Other income (expense)
Other income (expense), net
Loss on extinguishment of debt
Income before income tax expense
Income tax expense
Net income

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

Revenue Composition
The share of product sales in net revenues demonstrated a consistent decline from 30.07% in 2018 to 21.81% in 2022, indicating a reduced reliance on direct product sales. Conversely, in-game, subscription, and other revenues showed an increasing trend, rising from 69.93% to 78.19% over the same period, which suggests a strategic shift toward recurring revenue models and digital content monetization.
Cost of Revenues
Product costs as a percentage of net revenues steadily decreased from -9.59% in 2018 to -6.89% in 2022, reflecting improved cost efficiency or lower product-related expenses. Software royalties and amortization costs exhibited some fluctuation but overall decreased from -4.95% in 2018 to -3.07% in 2022. Costs specifically associated with product sales decreased significantly from -14.53% to -9.96%. However, game operations and distribution costs increased notably, reaching -17.59% in 2022 after a period of relative stability, which may indicate higher operational expenditures or increased investment in distribution. Costs tied to in-game, subscription, and other revenues also increased to -19.55% in 2022 from prior years. Overall, the cost of revenues declined from -33.56% in 2018 to a low of -26.32% in 2021 before rising again to -29.52% in 2022, suggesting variability in operational cost management.
Profitability
Gross profit margins improved from 66.44% in 2018 to a peak of 73.68% in 2021, followed by a decrease to 70.48% in 2022. Operating income as a percentage of net revenues showed a similar pattern, increasing markedly from 26.51% in 2018 to 37.02% in 2021, then declining sharply to 22.18% in 2022. This indicates that while operational profitability peaked in 2021, it faced significant pressure in the subsequent year.
Operating Expenses
Product development expenses fluctuated, generally increasing and peaking at -18.88% in 2022, possibly reflecting higher investment in innovation or content creation. Sales and marketing expenses initially decreased to -11.64% in 2021 but rose substantially to -16.17% in 2022, indicating increased promotional spending. General and administrative expenses declined from -10.96% in 2018 to a low of -8.95% in 2021 before increasing sharply to -13.3% in 2022. Restructuring and related costs remained minor, with some volatility but negligible impact overall.
Financial Income and Expenses
Interest expense from debt remained relatively stable, fluctuating slightly around -1.2% to -1.87% of net revenues across the period. Interest income varied, showing an overall increase to 2.19% in 2022, which might reflect improved investment returns or higher cash balances. Gains and losses on equity investments and other income/losses were generally minor and inconsistent, with a slight positive net effect in 2022. The loss on extinguishment of debt appeared only sporadically and did not constitute a significant trend.
Income Tax and Net Income
Income before income tax expense followed the pattern of operating income, reaching a peak in 2021 and then declining in 2022. Income tax expense increased in relative terms from -0.85% in 2018 to approximately -5% in 2020 and 2021, then decreased to -3.07% in 2022, possibly reflecting changes in tax rates or benefit utilization. Net income as a percentage of net revenues increased steadily from 24.17% in 2018 to 30.66% in 2021 before dropping to 20.1% in 2022, indicating that profit margins were under pressure in the most recent year despite earlier gains.