Gaming company Activision Blizzard’s first-quarter results easily beat analysts’ estimates as its Call of Duty: Black Ops III game set a record for monthly active users and the recent acquisition of King Digital expanded its audience.
Activision on Thursday reported record non-GAAP revenue of $908 million, representing a gain of 29% on the year-ago period. King Digital, the company behind Candy Crush Saga that Activision acquired in February for $5.9 billion, contributed 23% of the revenue.
Non-GAAP earnings came in at 23 cents a share, compared with 16 cents a year ago. Analysts had expected earnings of 12 cents a share on revenue of $812 million.
Activision’s revenue under generally accepted accounting principles rose to $1.46 billion from $1.29 billion. But GAAP earnings fell to $0.45 per diluted share, down from $0.53 a year ago. The company said the decrease was “primarily due to purchase price accounting related to the acquisition of King Digital Entertainment.”
The earnings report sent the stock up as much as 6.8%, to $37.30, in after-hours trading Thursday. “This quarter we overperformed our non-GAAP February guidance by $108 million in revenue and $0.12 in earnings per share,” Activision CEO Bobby Kotick said in a news release. “We have a strong core business and more opportunities ahead of us than ever before, and talent continues to be our greatest asset.”
The company now has 544 million monthly active users, with Call of Duty setting another record. Activision did not disclose how many Call of Duty copies it sold since Black Ops III launched in November, but it did say the game is now number one in sales on next-generation consoles.
Analyst Michael Pachter of Wedbush Securities has estimated that Activision has sold more than 22 million copies of Black Ops III.
Activision is also benefiting from digital downloads. Revenue from content sold inside of Activision and Blizzard games rose 20% from a year earlier and the number of Call of Duty gamers who made in-game purchases doubled.
According to VentureBeat, observers are expecting Blizzard’s Overwatch first-person shooter game to be its next big hit. The multiplayer-only title is already available as an open beta test on consoles and PCs.