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.

Income Statement

The income statement presents information on the financial results of a company business activities over a period of time. The income statement communicates how much revenue the company generated during a period and what cost it incurred in connection with generating that revenue.

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Activision Blizzard Inc., consolidated income statement

US$ in millions

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).

Net Revenues
The net revenues exhibit a fluctuating trend over the five-year period. After a decline from $7,500 million in 2018 to $6,489 million in 2019, revenues rose significantly to peak at $8,803 million in 2021, before dropping again to $7,528 million in 2022. This indicates variability in sales performance with a notable recovery in 2020 and 2021, followed by a retreat in the most recent year.
Product Sales and In-game Revenues
Product sales decreased overall, starting at $2,255 million in 2018 and falling sharply to $1,642 million by 2022, with periodic spikes in 2020 and 2021. In contrast, in-game, subscription, and other revenues initially declined in 2019 but then rose consistently through 2021, peaking at $6,492 million, before decreasing slightly to $5,886 million in 2022. This suggests a shift in revenue composition favoring in-game and subscription models over traditional product sales.
Cost of Revenues and Gross Profit
Cost of revenues decreased from $2,517 million in 2018 to a low of $2,094 million in 2019, then rose modestly and stabilized around $2,300 million for subsequent years. Gross profit aligns with revenue patterns; it declined in 2019 alongside revenues but recovered strongly to $6,486 million in 2021 before dropping to $5,306 million in 2022. The gross profit margin trends show efficiency in cost management during periods of revenue growth but pressure during the latest decline in revenues.
Operating Expenses
Product development expenses increased steadily each year, rising from $1,101 million in 2018 to $1,421 million in 2022, reflecting ongoing investment in new content or technology. Sales and marketing costs fluctuated but generally increased, particularly in 2022 where costs reached $1,217 million. General and administrative expenses also trended upward, notably climbing to $1,001 million in 2022 from $822 million in 2018. These increases indicate growing operating costs, which may be related to expansion or increased operational complexity.
Operating Income
Operating income fluctuated in line with revenue trends, peaking at $3,259 million in 2021 before declining sharply to $1,670 million in 2022. The substantial dip in 2022 indicates margin compression possibly due to the combination of lower revenues and rising operating expenses.
Interest and Other Income
Interest expense from debt remained relatively stable around $100 million annually after declining from $140 million in 2018. Interest income was volatile, reaching a notable $165 million in 2022 after lower values in prior years. Other income (expense) was generally minor and mixed in direction but showed a significant positive jump to $182 million net in 2022, driven likely by the rise in interest income and other gains.
Income Taxes and Net Income
Income tax expense increased notably in 2020 and 2021 to over $400 million but decreased to $231 million in 2022. Net income followed a similar trend as operating income, rising to a peak of $2,699 million in 2021 and falling to $1,513 million in 2022, reflecting the impact of lower operating income and changes in tax expense. The overall trend indicates profitability challenges in the latest year after strong earnings in previous years.
Summary
The overall financial data reflects a company experiencing variability in revenue streams, with a shift towards increased reliance on in-game and subscription revenues and declining traditional product sales. Profitability peaked in 2021 fueled by strong revenues and controlled costs but was notably challenged in 2022 due to declining revenues and rising operating expenses. Investment in product development persisted consistently, indicating a focus on future growth, while other income components improved in 2022. The company faces pressure on margins and net income in the latest period, highlighting the need for strategic adjustments.