Core Viewpoint - Electronic Arts (EA) has shown strong performance in the stock market, with a year-to-date gain of 21.7%, outperforming both the broader Zacks Consumer Discretionary sector and the Zacks Gaming industry [1] Financial Performance - EA's revenue from live services and other sources increased by 1.2% year-over-year to $1.3 billion, while full-game download revenues surged by 37% year-over-year to $475 million during Q2 of fiscal 2025 [2] - For Q3 fiscal 2025, EA anticipates GAAP revenues between $1.875 billion and $2.025 billion, with earnings per share expected to range from 85 cents to $1.02 [6] - The company projects fiscal 2025 revenues between $7.4 billion and $7.7 billion, with earnings per share expected between $3.34 and $4 [6][10] - The consensus estimate for Q3 fiscal 2025 earnings is $3.43 per share, reflecting a 15.88% year-over-year growth [9] - The consensus for fiscal 2025 earnings is $7.82 per share, indicating a 12.52% year-over-year growth [10] Product Development and Innovations - EA has introduced Strand Hair Technology in Dragon Age: The Veilguard, enhancing character realism with 50,000 individual strands for over 100 hairstyles [3] - The company launched Cranium Technology in EA SPORTS FC 25, improving character customization and animation [4] - EA's ongoing research and development in titles like Battlefield and skate aims to boost customer engagement and satisfaction [5] Market Position and Valuation - EA shares are currently considered overvalued, with a forward 12-month Price/Earnings (P/E) ratio of 20.18, higher than the Zacks Consumer Discretionary sector's 19.14 [12] - The company has a Zacks Rank 3 (Hold), suggesting that investors should wait for a more favorable entry point [13]

Core Viewpoint - Electronic Arts (EA) has experienced a significant stock price increase of over 25% since early 2022, attributed to revenue growth and share repurchases, despite a general decline in gaming demand [1][2][3]. Financial Performance - EA's revenue rose by 30% from $5.6 billion in fiscal 2021 to $7.3 billion currently, although revenue growth was only 2% in fiscal 2024 due to declining gaming demand [1][3]. - The company's operating margin improved to 20.9% in fiscal 2024 from 18.6% in 2021, indicating enhanced profitability [2]. - EA reported total bookings of $2.1 billion in Q2'25, reflecting a 14% year-over-year increase, with earnings per share rising to $2.15 from $1.46 in the prior-year quarter [3]. Market Position and Valuation - EA's stock is currently priced fairly at an estimated valuation of $165 per share, based on a forward P/E ratio of 21x expected earnings of $7.79 for 2025 [5]. - The company has a solid financial position, with a debt to equity ratio of 4.5% and cash constituting 24.3% of its assets, indicating low financial risk [2]. Industry Trends - The U.S. total video game sales in 2023 reached $57.2 billion, showing only a modest 1% year-over-year growth, reflecting broader industry challenges [1]. - The average quarterly playtime for gamers has decreased by 26% from 2021 to 2023, contributing to the overall decline in gaming demand [3]. Stock Performance - EA stock has risen 20% this year, slightly underperforming the S&P 500 index, which rose by 25% [4]. - Historical returns for EA stock have been less volatile compared to the S&P 500, with annual returns of -8% in 2021, -7% in 2022, and 13% in 2023 [4].

Core Viewpoint - Electronic Arts (EA) is a prominent company in the gaming industry, known for its development and distribution of games across various platforms including consoles, PCs, and mobile devices [1]. Group 1: Company Overview - EA's portfolio includes well-known franchises such as Battlefield, Mass Effect, Dragon Age, The Sims, Need for Speed, EA Sports FC (formerly FIFA), and Madden NFL Series [1]. Group 2: Investment Philosophy - The investment philosophy is based on fundamental bottom-up analysis and quantitative modeling, focusing on identifying perception gaps to exploit over-pessimism and excessive exuberance in the market [1].

[Part I - FINANCIAL INFORMATION](index=3&type=section&id=Part%20I%20-%20FINANCIAL%20INFORMATION) [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents Electronic Arts Inc.'s unaudited condensed consolidated financial statements for the periods ended September 30, 2024, detailing financial position, operating results, and cash flows [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet as of September 30, 2024, shows a decrease in total assets, liabilities, and stockholders' equity compared to March 31, 2024, primarily due to reduced cash and deferred net revenue Condensed Consolidated Balance Sheet Highlights (in millions) | Account | Sep 30, 2024 | Mar 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $2,197 | $2,900 | | Total current assets | $3,972 | $4,247 | | Goodwill | $5,381 | $5,379 | | **Total Assets** | **$13,136** | **$13,420** | | **Liabilities & Equity** | | | | Deferred net revenue (current) | $1,475 | $1,814 | | Total current liabilities | $2,787 | $3,090 | | Senior notes, net | $1,883 | $1,882 | | **Total Liabilities** | **$5,728** | **$5,907** | | **Total Stockholders' Equity** | **$7,408** | **$7,513** | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended September 30, 2024, net revenue increased while net income decreased due to higher operating expenses and taxes, with a similar trend for the six-month period Statement of Operations Highlights (in millions, except per share data) | Metric | Q2 2024 (Three Months) | Q2 2023 (Three Months) | H1 2024 (Six Months) | H1 2023 (Six Months) | | :--- | :--- | :--- | :--- | :--- | | Net Revenue | $2,025 | $1,914 | $3,685 | $3,838 | | Gross Profit | $1,569 | $1,458 | $2,966 | $3,014 | | Operating Income | $384 | $377 | $748 | $919 | | Net Income | $294 | $399 | $574 | $801 | | Diluted EPS | $1.11 | $1.47 | $2.15 | $2.93 | - Restructuring charges for the three and six months ended September 30, 2024 were **$51 million** and **$53 million**, respectively, compared to minimal charges in the prior year periods[8](index=8&type=chunk) [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Total comprehensive income for the three and six months ended September 30, 2024, decreased year-over-year, primarily due to lower net income and losses on derivative instruments Comprehensive Income Summary (in millions) | Metric | Q2 2024 (Three Months) | Q2 2023 (Three Months) | H1 2024 (Six Months) | H1 2023 (Six Months) | | :--- | :--- | :--- | :--- | :--- | | Net Income | $294 | $399 | $574 | $801 | | Other Comprehensive Income (Loss) | ($55) | $41 | ($43) | $33 | | **Total Comprehensive Income** | **$239** | **$440** | **$531** | **$834** | [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Stockholders' equity decreased from March 31 to September 30, 2024, primarily due to common stock repurchases and cash dividends, partially offset by net income and stock-based compensation - For the six months ended September 30, 2024, the company repurchased **5.4 million shares** for a total of **$750 million**[14](index=14&type=chunk)[113](index=113&type=chunk) - Cash dividends declared were **$0.19 per common share** in each of the first two quarters of fiscal 2025, totaling **$101 million** for the six-month period[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended September 30, 2024, net cash provided by operating activities decreased, while significant cash was used in financing activities, primarily for stock repurchases, leading to a net decrease in cash and cash equivalents Cash Flow Summary (Six Months Ended Sep 30, in millions) | Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $354 | $471 | | Net cash used in investing activities | ($115) | ($107) | | Net cash used in financing activities | ($948) | ($833) | | **Net decrease in cash and cash equivalents** | **($703)** | **($478)** | - The decrease in operating cash flow was mainly due to changes in working capital, including a **$447 million** increase in receivables and a **$339 million** decrease in deferred net revenue[17](index=17&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes provide detailed disclosures on accounting policies, financial instruments, restructuring charges, and commitments, confirming the company operates as a single reportable segment - The company operates as a **single reportable segment**, as the Chief Operating Decision Maker reviews operating results on a total company basis to assess performance and allocate resources[116](index=116&type=chunk) - The 2024 Restructuring Plan is estimated to incur total charges of **$125 million to $165 million**, with actions expected to be substantially completed by March 31, 2025, and **$119 million** in net charges incurred to date[56](index=56&type=chunk)[57](index=57&type=chunk)[58](index=58&type=chunk) - As of September 30, 2024, the company had unrecognized commitments of approximately **$1,760 million** for developer/licensor agreements and **$1,265 million** for marketing[89](index=89&type=chunk) - In May 2024, a new stock repurchase program was authorized for up to **$5.0 billion**, expiring in May 2027, replacing the previous program[112](index=112&type=chunk) [Report of Independent Registered Public Accounting Firm](index=28&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) KPMG LLP reviewed the interim financial information and found no material modifications needed for conformity with U.S. GAAP, noting the review's scope is less than an audit - The accounting firm **KPMG LLP** conducted a review, not an audit, of the interim financial statements[128](index=128&type=chunk) - **KPMG LLP** stated they are not aware of any material modifications needed for the financial information to conform with U.S. GAAP[125](index=125&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial results, business trends, critical accounting policies, and liquidity, highlighting increased net revenue and bookings for Q2 2025 [Overview](index=29&type=section&id=Overview) This section summarizes EA's business, recent financial performance, and key trends, including a 6% year-over-year increase in net revenue and a 14% increase in net bookings for the quarter Q2 2025 Financial Highlights | Metric | Value | Change (YoY) | | :--- | :--- | :--- | | Total net revenue | $2,025 million | +6% | | Live services and other net revenue | $1,309 million | +1% | | Operating income | $384 million | +2% | | Diluted earnings per share | $1.11 | - | | Net cash provided by operating activities | $234 million | +109% | - Key business trends include focusing on **live services**, the shift to **digital game delivery**, intense competition, reliance on major franchises (**EA SPORTS FC**, **Madden NFL**, **Apex Legends**), and building re-occurring revenue streams[135](index=135&type=chunk)[136](index=136&type=chunk)[139](index=139&type=chunk)[140](index=140&type=chunk)[141](index=141&type=chunk) Net Bookings (in millions) | Period | 2024 | 2023 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Three Months Ended Sep 30** | $2,079 | $1,820 | $259 | 14% | | **Six Months Ended Sep 30** | $3,341 | $3,398 | ($57) | -2% | [Critical Accounting Policies and Estimates](index=32&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section details critical accounting policies and estimates, primarily focusing on revenue recognition judgments for 'Games with Services' and significant estimates required for income taxes, including deferred tax assets - For 'Games with Services', the sales price is generally allocated **75%** to the software license (recognized at a point in time) and **25%** to future update rights and online hosting (recognized ratably over the Estimated Offering Period)[150](index=150&type=chunk) - The Estimated Offering Period for recognizing service-related revenue is a key judgment, estimated to be **8 months** for digital sales, **10 months** for retail sales, and **12 months** for free-to-play games[159](index=159&type=chunk) - The realizability analysis for the **Swiss deferred tax asset** is a critical estimate, relying on judgments about future Swiss taxable income and interest rates[164](index=164&type=chunk) [Results of Operations](index=35&type=section&id=Results%20of%20Operations) For the three months ended September 30, 2024, net revenue increased 6% year-over-year, driven by full game sales, while operating expenses rose due to higher R&D and G&A costs Net Revenue by Composition - Q2 (Three Months Ended Sep 30, in millions) | Composition | 2024 | 2023 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Full game | $716 | $621 | $95 | 15% | | Live services and other | $1,309 | $1,293 | $16 | 1% | | **Total net revenue** | **$2,025** | **$1,914** | **$111** | **6%** | - The increase in Q2 full game revenue was primarily due to the **American football franchises**, driven by the release of **EA SPORTS College Football 25**[173](index=173&type=chunk) Operating Expenses - Q2 (Three Months Ended Sep 30, in millions) | Expense Category | 2024 | 2023 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Cost of Revenue | $456 | $456 | $0 | 0% | | Research and development | $648 | $602 | $46 | 8% | | Marketing and sales | $272 | $280 | ($8) | (3)% | | General and administrative | $197 | $173 | $24 | 14% | [Liquidity and Capital Resources](index=40&type=section&id=Liquidity%20and%20Capital%20Resources) As of September 30, 2024, cash and equivalents decreased due to significant cash used in financing activities, primarily stock repurchases, though the company believes its liquidity remains sufficient Cash Flow Summary (Six Months Ended Sep 30, in millions) | Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $354 | $471 | | Net cash used in investing activities | ($115) | ($107) | | Net cash used in financing activities | ($948) | ($833) | - During the six months ended September 30, 2024, the company returned **$851 million** to stockholders, consisting of **$750 million** in share repurchases and **$101 million** in dividends[210](index=210&type=chunk) - The company has a **$500 million unsecured revolving credit facility**, which was undrawn as of September 30, 2024[208](index=208&type=chunk) - As of September 30, 2024, approximately **$857 million** of cash and cash equivalents were held in foreign jurisdictions, all of which is available for repatriation without material tax cost[211](index=211&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=43&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks from foreign currency exchange rates and interest rates, using hedging strategies for currency risk and managing its short-term investment portfolio for interest rate risk - The company is exposed to **foreign currency risk** from international sales, where a strengthening U.S. dollar negatively impacts reported international net revenue[217](index=217&type=chunk) - EA uses **foreign currency forward contracts** to hedge a portion of forecasted foreign-currency-denominated sales and expenses and to mitigate risk from foreign-currency-denominated monetary assets and liabilities[218](index=218&type=chunk)[219](index=219&type=chunk) - A hypothetical adverse **10% foreign currency exchange rate movement** would result in a potential decline of **$229 million** in the fair value of cash flow hedges[221](index=221&type=chunk) - Interest rate risk primarily affects the short-term investment portfolio, where a hypothetical **150 basis point increase** in interest rates would decrease the fair market value by approximately **$3 million**[225](index=225&type=chunk) [Item 4. Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of September 30, 2024, with no material changes in internal control over financial reporting during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the company's **disclosure controls and procedures were effective** as of September 30, 2024[227](index=227&type=chunk) - There were **no changes in internal control over financial reporting** during the quarter that materially affected or are reasonably likely to materially affect such controls[228](index=228&type=chunk) [Part II - OTHER INFORMATION](index=46&type=section&id=Part%20II%20-%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=46&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to various claims and litigation in the ordinary course of business, which management does not expect to have a material adverse effect on its financial statements - The company is subject to claims and litigation arising in the ordinary course of business but does not expect any reasonably foreseeable disposition to have a **material adverse effect** on its financial statements[92](index=92&type=chunk)[231](index=231&type=chunk) [Item 1A. Risk Factors](index=46&type=section&id=Item%201A.%20Risk%20Factors) This section outlines the company's strategic, operational, legal, financial, and general risks, including intense competition, cybersecurity threats, regulatory compliance, and economic volatility [Strategic Risks](index=46&type=section&id=STRATEGIC%20RISKS) The company faces strategic risks from intense competition, reliance on a few popular franchises, potential failure to meet development schedules, and dependence on third-party intellectual property and partners - The business is intensely competitive, and a significant portion of revenue is derived from a few popular franchises, such as **EA SPORTS FC**, making the company vulnerable to the underperformance of a single major title[233](index=233&type=chunk)[235](index=235&type=chunk) - Failure to meet product development schedules can lead to **delayed revenue**, **increased expenses**, and harm to profitability, especially if key selling periods are missed[236](index=236&type=chunk)[237](index=237&type=chunk) - The business depends on the success of **third-party consoles and platforms**, and the ability to acquire and maintain licenses for key intellectual property (e.g., sports leagues, Star Wars) is critical[245](index=245&type=chunk)[252](index=252&type=chunk) [Operational Risks](index=49&type=section&id=OPERATIONAL%20RISKS) Operational risks include disruption from catastrophic events, security breaches, service outages, and challenges in retaining key talent, alongside significant reliance on major platform partners - The company has experienced and may continue to experience **security breaches and cyber threats**, which could lead to loss of data, business interruptions, and damage to brand reputation[256](index=256&type=chunk)[258](index=258&type=chunk) - The business depends on the ability to attract, train, and retain **key executive, technical, and creative talent** in a highly competitive market[262](index=262&type=chunk) - A significant percentage of digital net revenue comes from partners like **Sony, Microsoft, Apple, and Google**, who have significant control over distribution, promotion, and fees, exposing EA to risks associated with their businesses and policies[265](index=265&type=chunk)[266](index=266&type=chunk)[267](index=267&type=chunk) [Legal and Compliance Risks](index=51&type=section&id=LEGAL%20AND%20COMPLIANCE%20RISKS) Legal and compliance risks include complex and evolving global regulations on data privacy and consumer protection, increased scrutiny on virtual items and AI, and challenges related to intellectual property infringement and protection - The business is subject to **complex and evolving global data privacy, security, and consumer-protection laws**, and non-compliance could result in significant penalties and brand damage[268](index=268&type=chunk)[269](index=269&type=chunk) - Business models involving **virtual items** and the use of **artificial intelligence** are subject to evolving laws and regulations that could limit offerings or increase compliance costs[273](index=273&type=chunk) - The company may be subject to costly claims of infringing **third-party intellectual property rights** and faces challenges in protecting its own IP from unauthorized copying, particularly in certain foreign countries[275](index=275&type=chunk)[279](index=279&type=chunk) [Financial Risks](index=53&type=section&id=FINANCIAL%20RISKS) Financial risks include exposure to foreign currency fluctuations, the impact of outstanding debt on cash flow, and potential adverse effects from changes in tax laws or audit outcomes - With **60% of total net revenue from international sales** in FY24, the company is significantly exposed to foreign currency exchange rate fluctuations[280](index=280&type=chunk) - The company has outstanding **senior notes and a credit facility**, and this indebtedness could impact financial condition by requiring dedication of cash flow to repayment and increasing vulnerability to downturns[281](index=281&type=chunk) - Changes in tax laws or interpretations, particularly in the **U.S. and Switzerland**, could adversely affect the company's effective tax rate and financial condition[283](index=283&type=chunk)[284](index=284&type=chunk) [General Risks](index=54&type=section&id=GENERAL%20RISKS) General risks include exposure to macroeconomic conditions like inflation and recession impacting consumer spending, and the inherent volatility of the company's stock price - The business is subject to **macroeconomic conditions** like inflation and recession that can negatively impact discretionary consumer spending[288](index=288&type=chunk) - The company's **stock price is historically volatile** and subject to significant fluctuations due to operating results, analyst estimates, and general market conditions[290](index=290&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=55&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) A new **$5.0 billion** stock repurchase program was authorized in May 2024, under which the company repurchased approximately **2.6 million shares** for **$375 million** during the quarter - In May 2024, the company authorized a new stock repurchase program for up to **$5.0 billion**, expiring May 9, 2027[291](index=291&type=chunk) Share Repurchases (Three Months Ended Sep 30, 2024) | Period | Total Shares Purchased | Average Price Paid | Total Cost (approx.) | | :--- | :--- | :--- | :--- | | **Total for Quarter** | **2,587,975** | **$144.83** | **$375 million** | [Item 3. Defaults Upon Senior Securities](index=55&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported - None[292](index=292&type=chunk) [Item 4. Mine Safety Disclosures](index=55&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - Not applicable[298](index=298&type=chunk) [Item 5. Other Information](index=55&type=section&id=Item%205.%20Other%20Information) This section discloses that several company executives adopted Rule 10b5-1 trading plans during the quarter to manage their personal equity holdings - CEO **Andrew Wilson**, CFO **Stuart Canfield**, and President of EA Entertainment & Technology **Laura Miele** each adopted a Rule 10b5-1 trading plan during the quarter[294](index=294&type=chunk)[295](index=295&type=chunk)[296](index=296&type=chunk) [Item 6. Exhibits](index=55&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q report, including corporate governance documents, CEO and CFO certifications, and financial data in Inline XBRL format - The report includes certifications from the CEO and CFO pursuant to Sections 302 and 906 of the **Sarbanes-Oxley Act**[302](index=302&type=chunk) - Financial statements and notes are provided in **Inline XBRL format** as part of the exhibits[302](index=302&type=chunk)

Group 1 - Proactive provides fast, accessible, informative, and actionable business and finance news content to a global investment audience [1][2] - The news team covers a wide range of sectors including biotech, pharma, mining, natural resources, battery metals, oil and gas, crypto, and emerging technologies [3] - Proactive has a presence in key finance and investing hubs with bureaus and studios located in major cities such as London, New York, and Sydney [2] Group 2 - The company utilizes technology to enhance workflows and has adopted automation and software tools, including generative AI, while ensuring all content is edited and authored by humans [4]

Core Viewpoint - Electronic Arts (EA) reported strong second-quarter fiscal 2025 earnings, with earnings per share of $2.15, a 47.3% increase year over year, and revenues of $2.02 billion, up 5.8% year over year, driven by recovery in Live services and full game revenues [1][2]. Financial Performance - Net bookings for the fiscal second quarter reached $2.07 billion, reflecting a 14.2% year-over-year increase, largely due to the positive reception of EA SPORTS College Football 25 [2]. - Full-game net bookings amounted to $832 million, a 20% increase year over year, supported by the expansion of the American Football ecosystem [3]. - Live services net bookings were $1.25 billion, up 10% year over year, with American Football Ultimate Team modes contributing significantly [3]. Revenue Breakdown - Full-game revenues, constituting 35.4% of total revenues, increased 15.3% year over year to $716 million, with full-game download revenues rising 37% to $475 million, while revenues from packaged goods fell 12% to $241 million [4]. - Live services and other revenues, making up 64.6% of total revenues, saw a modest increase of 1.2% year over year to $1.3 billion [4]. - Revenue from consoles grew 16% year over year to $1.37 billion, while revenues from PC & Other and mobile platforms declined by 14% and 5% respectively [5]. Operating Metrics - GAAP gross profit increased 7.6% year over year to $156 billion, with gross margin expanding by 130 basis points to 77.5% [6]. - Operating expenses rose 9.6% year over year to $1.18 billion, representing 58.5% of revenues, an increase of 200 basis points [6]. - Operating income on a GAAP basis increased 1.9% year over year to $384 million, with the operating margin contracting by 70 basis points to 19% [7]. Balance Sheet and Cash Flow - As of June 30, 2024, EA had $2.5 billion in cash and short-term investments, down from $2.76 billion a year earlier [8]. - Net cash provided by operating activities was $234 million for the quarter and $2.198 billion for the trailing 12 months [8]. - The company repurchased 2.6 million shares for $375 million during the quarter, totaling 10.2 million shares for $1.4 billion over the trailing 12 months [8]. Dividend and Guidance - EA declared a quarterly cash dividend of 19 cents per share, payable on December 18, 2024, to stockholders of record as of November 27, 2024 [9]. - For the third quarter of fiscal 2025, EA expects GAAP revenues between $1.875 billion and $2.025 billion, with earnings per share in the range of 85 cents to $1.02, and net bookings projected between $2.4 billion and $2.55 billion [11]. - For fiscal 2025, EA anticipates revenues between $7.4 billion and $7.7 billion, earnings per share between $3.34 and $4, and net bookings between $7.5 billion and $7.8 billion [11].

Core Insights - Electronic Arts (EA) reported revenue of $2.08 billion for the quarter ended September 2024, reflecting a year-over-year increase of 14.2% [1] - The earnings per share (EPS) for the quarter was $2.15, up from $1.46 in the same quarter last year, indicating a strong performance [1] - The reported revenue exceeded the Zacks Consensus Estimate of $2.03 billion by 2.40%, while the EPS also surpassed the consensus estimate of $2.03 by 5.91% [1] Financial Performance Metrics - Net Bookings for EA were $2.08 billion, slightly above the average estimate of $2.03 billion from seven analysts [3] - Live services and other Net Bookings reached $1.25 billion, exceeding the average estimate of $1.07 billion by 10.5% year-over-year [3] - Full game downloads Net Bookings were $832 million, significantly higher than the estimated $501.90 million, marking a 124.9% increase compared to the previous year [3] - Packaged goods Net Bookings totaled $545 million, surpassing the average estimate of $379.53 million, representing a 69.8% year-over-year growth [3] Stock Performance - Over the past month, EA's shares have returned +0.5%, while the Zacks S&P 500 composite has increased by +1.7% [4] - EA currently holds a Zacks Rank 3 (Hold), suggesting that its performance may align with the broader market in the near term [4]

Financial Data and Key Metrics Changes - Q2 net bookings reached $2.08 billion, up 14% year-over-year, exceeding expectations [29] - Full game net bookings were $832 million, up 20% year-over-year [29] - Live services net bookings were $1.25 billion, up 10% year-over-year, comprising 74% of the business on a trailing twelve-month basis [30][29] - Q2 net revenue was $2.03 billion, up 6% year-over-year, with gross margins increasing by 130 basis points [36] - Earnings per share was $1.11, with a record Q2 operating cash flow of $234 million, more than double the prior year [37] Business Line Data and Key Metrics Changes - The American Football segment saw significant growth, with new players more than doubling year-over-year, representing around 25% of the player base [11] - College Football 25 became the best-selling HD title in North America, driving engagement and community connection [12] - EA SPORTS FC reached over 130% more players worldwide, with significant engagement in both HD and mobile platforms [14][32] - Apex Legends experienced a decline in net bookings, attributed to changes in the Battle Pass structure, but is expected to recover with future innovations [20][33] Market Data and Key Metrics Changes - The EA SPORTS franchises demonstrated strong performance, particularly in American Football and Global Football, contributing to overall growth [27][32] - The company is well-positioned to capture more share of sports fandom as the industry shifts towards more social and interactive experiences [9] Company Strategy and Development Direction - The company aims to create a comprehensive football fan platform that engages fans year-round, integrating both NFL and College Football [51][53] - Plans to leverage generative AI to expand and transform entertainment experiences, focusing on social connection and self-expression [9] - The EA SPORTS APP is set to enhance fan engagement by combining real-world sports content with interactive gaming experiences [55][57] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term financial framework and the ability to significantly outperform the market through FY27 for net bookings growth [44] - The company raised its FY25 net bookings guidance to $7.5 billion to $7.8 billion, reflecting strong performance in the first half of the fiscal year [38] - Management highlighted the importance of community-driven events and engagement strategies to sustain growth in the American Football segment [54] Other Important Information - The Sims franchise is evolving to offer more options for player engagement, with new content and community-driven initiatives [22][23] - The upcoming launch of Dragon Age: The Veilguard is anticipated to be a significant success, building on the legacy of its predecessor [24][74] Q&A Session All Questions and Answers Question: How to capture momentum in American football on a long-term basis? - Management emphasized a thoughtful rollout plan, focusing on community engagement and building a symbiotic relationship between Madden and College Football [50][51] Question: What are the plans for the EA SPORTS app and its rollout? - The company plans a phased rollout, starting with Spain, leveraging partnerships to enhance the sports fan experience [55][57] Question: What is the expected growth for live services in sports? - Live services are expected to see mid-single-digit growth, driven primarily by the American Football segment [60][61] Question: How will Apex Legends evolve after recent challenges? - Management indicated a focus on meaningful innovation and systematic changes to enhance player engagement and retention [64][66] Question: What has been done to position BioWare for success with Veilguard? - The studio has returned to its strengths in storytelling and character development, focusing on delivering high-quality experiences [82][84]

Group 1 - Electronic Arts (EA) reported quarterly earnings of $2.15 per share, exceeding the Zacks Consensus Estimate of $2.03 per share, and up from $1.46 per share a year ago, representing an earnings surprise of 5.91% [1] - The company posted revenues of $2.08 billion for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 2.40%, and an increase from $1.82 billion year-over-year [2] - EA has surpassed consensus EPS estimates three times over the last four quarters and topped consensus revenue estimates two times in the same period [2] Group 2 - The stock's immediate price movement will depend on management's commentary during the earnings call, with EA shares having gained about 5.4% since the beginning of the year, compared to the S&P 500's gain of 22.1% [3] - The current consensus EPS estimate for the upcoming quarter is $3.48 on revenues of $2.54 billion, and for the current fiscal year, it is $7.80 on revenues of $7.65 billion [7] - The Zacks Industry Rank indicates that the Gaming industry is currently in the bottom 42% of over 250 Zacks industries, suggesting that the industry's outlook can significantly impact EA's stock performance [8]

49度的变 Electronic Arts Inc. Q2 FY25 Results October 29, 2024 Table of Contents Safe Harbor Statement Select Q2 FY25 Highlights Net Bookings Results Core Business and FY25 Title Slate Q2 FY25 Actuals & Guidance GAAP to Non-GAAP Reconciliation Appendix (三) Safe Harbor Statement Please review our risk factors on Form 10-Q filed with the SEC Some statements set forth in this document, including the information relating to EA's fiscal 2025 guidance information and title slate contain forward-looking statements th ...