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Impressive Digital Revenues for Activision in 4Q15

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GAAP results for 4Q15 and fiscal 2015

On February 11, Activision (ATVI) announced its 4Q15 results and reported GAAP[1. generally accepted accounting principles] net revenues of $1.4 billion compared to $1.6 billion in 4Q14. Revenues from the digital segment were $724 million, or 54% of total revenues. Digital revenues rose 34% year-over-year. Earnings per share or EPS were $0.21 in 4Q15 compared to $0.49 in 4Q14.

In calendar 2015, Activision’s revenues were $4.7 billion compared to $4.4 billion in 2014. The digital segment accounted for 54% of total revenues at $2.5 billion. EPS for the year were $1.19 compared to $1.13 per diluted share in 2014.

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Non-GAAP results for 4Q15 and fiscal 2015

Activision reported non-GAAP net revenues of $2.1 billion in 4Q15 compared to $2.2 billion in 4Q14. Revenues from the digital segment were $780 million or 37% of total revenues. Digital revenues rose 14% year-over-year. Earnings per share were $0.83 in 4Q15 compared to $0.94 in 4Q14.

In calendar 2015, revenues were $4.6 billion compared to $4.5 billion in 2014. The digital segment accounted for 57% of total revenues at $2.6 billion. EPS for the year were $1.32 compared to $1.42 per diluted share in 2014.

Analysts estimated EPS of $0.86 and revenues of $2.20 billion in 4Q15. For calendar 2015, average EPS estimate and revenue estimates were $1.36 and $4.69, respectively. Activision missed analyst estimates for the first time in five years.

Activision is a leader in the gaming space with a market capitalization of $23.4 billion. Electronic Arts (EA), Take-Two Interactive (TTWO), and Zynga (ZNGA) have market caps of $18.2 billion, $3.0 billion, and $1.8 billion, respectively.

Activision is 4.3% of the iShares North American Tech-Software ETF (IGV).

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