THQ today reported record revenue and net income for the fiscal year ended March 31. The publisher's net sales grew 27 percent to $1.0269 billion, up from $806.6 million last year. Net income for the year more than doubled from $32.1 million to $68.0 million. The company proudly announced that its revenue has now grown for 12 consecutive years.
In the fourth quarter, net income reached almost $6.5 million, representing a major improvement year-over-year compared to an $8.6 million loss. Net sales in Q4 also climbed year-over-year from $148.1 million to $172.1 million. Driving results were new releases Supreme Commander and S.T.A.L.K.E.R.: Shadow of Chernobyl for Windows PC, as well as continued strong performances by WWE SmackDown vs. RAW 2007 and Disney/Pixar's Cars.
The latter two were really major contributors to THQ's bottom line, as Cars reached almost 8 million shipped during fiscal 2007 and WWE SmackDown vs. RAW 2007 shipped 4 million. Overall THQ had eight titles that shipped more than a million units.
Other achievements for THQ over the last year include gaining market share in North America, Europe and Australia; expanding its studio system to include more than 1,500 people based in 16 studios across those same regions; and growing its operating cash flow by over 50 percent despite substantial investment in next-generation game development.
"We are very pleased to report record revenues and net income in fiscal 2007. Additionally, our non-GAAP operating margin reached 10%, already meeting our peak margin in the last cycle. We expect continued revenue and margin expansion in each of the next several years," said Brian Farrell, president and CEO, THQ. "During a challenging hardware transition, THQ significantly outperformed the market in our major territories. Our success in fiscal 2007 was driven primarily by multi-million unit sellers Cars and WWE SmackDown vs. RAW 2007 and the successful launch of Saints Row, a new internally developed and owned intellectual property with sales in excess of one million units."
THQ also reaffirmed its previous guidance for fiscal 2008. The company expects net sales in the range of $1.12 billion to $1.15 billion and net income in the range of $1.34 to $1.44 per share. For the current quarter ending June 30, THQ has provided initial guidance of net sales of approximately $110 million and a net loss of approximately $0.26 per share.
Looking to the future, Farrell remains quite optimistic about the video game landscape and his company's presence on the new platforms. "The industry is entering an exciting growth period as the new hardware reaches critical mass. In fiscal 2008, we plan to release an increasing number of titles for the growing base of new hardware, including owned original properties Frontlines: Fuel of War, Juiced: Hot Import Nights and Stuntman: Ignition. With three 30-million unit licensed franchises and a growing portfolio of internally developed original franchises, we are well positioned to expand our leadership position in the video game industry," he concluded.
[UPDATE] It's not very surprising considering how well the first Saints Row performed, but THQ just confirmed that a new game in the Saints Row franchise is in development for PS3 and 360. THQ's internal studio Volition will use its proprietary open-world engine to "deliver an all-new, cross platform gaming experience."
"The original Saints Row earned critical acclaim for its stunning graphics, unparalleled customization options and the genre's first-ever online multiplayer," said Kelly Flock, executive vice president of worldwide publishing, THQ. "The game's worldwide success shows the growing fanaticism for open-world gaming and our talented team at Volition is now using their proprietary technology to revolutionize the genre yet again."
The game is currently slated for release some time in 2008.
[UPDATE 2] During the company's earnings conference call, while talking about the new Saints Row officials revealed that the once planned PS3 version of the original Saints Row has been canceled. The team that had been working on it has been moved to join those working on the sequel.