Financial Performance - Total net revenue for the fiscal quarter ended June 30, 2024, was $1,660 million, a decrease of 14 percent year-over-year[128] - Live services and other net revenue was $1,410 million, down 5 percent year-over-year[128] - Operating income decreased by 33 percent year-over-year to $364 million[128] - Net income was $280 million, with diluted earnings per share of $1.04[128] - Net bookings for the three months ended June 30, 2024, were $1,262 million, a decrease of 20 percent compared to the same period in 2023[138] - Live services and other net bookings were $1,094 million, down 7 percent year-over-year[138] - Digital full game downloads generated net revenue of $1,343 million, an increase from $1,262 million in 2023[131] - Full game net revenue for the three months ended June 30, 2024, was $250 million, down $193 million or 44% from the prior year, primarily due to the previous year's release of Star Wars Jedi: Survivor[164] - The decrease in net revenue was primarily driven by a $368 million decline due to the prior year release of Star Wars Jedi: Survivor and decreased sales of extra content for Apex Legends[162] Cost and Expenses - Cost of revenue decreased by $105 million, or 29%, from $368 million in Q2 2023 to $263 million in Q2 2024, representing 16% of net revenue[168] - Research and development expenses increased by $33 million, or 6%, from $596 million in Q2 2023 to $629 million in Q2 2024, representing 38% of net revenue[169] - Marketing and sales expenses decreased by $24 million, or 10%, from $229 million in Q2 2023 to $205 million in Q2 2024, maintaining 12% of net revenue[170] - General and administrative expenses increased by $17 million, or 10%, from $163 million in Q2 2023 to $180 million in Q2 2024, representing 11% of net revenue[172] Cash Flow and Shareholder Returns - Net cash provided by operating activities decreased by $239 million, from $359 million in Q2 2023 to $120 million in Q2 2024[176] - Net cash used in investing activities increased by $25 million, from $44 million in Q2 2023 to $69 million in Q2 2024, primarily due to a $22 million increase in capital expenditures[177] - Net cash used in financing activities increased by $64 million, from $482 million in Q2 2023 to $546 million in Q2 2024, driven by a $50 million increase in common stock repurchases[177] - The company returned $425 million to stockholders during the three months ended June 30, 2024, including $375 million in share repurchases and $50 million in dividends[182] Tax and Currency Risks - The effective tax rate increased from 28% in Q2 2023 to 29% in Q2 2024, primarily due to a partial release of valuation allowance in the prior year[173] - As of June 30, 2024, a hypothetical adverse foreign currency exchange rate movement of 10% would have resulted in potential declines in the fair value of cash flow hedging foreign currency forward contracts of $219 million[193] - A hypothetical adverse foreign currency exchange rate movement of 20% would have resulted in potential declines of $439 million on cash flow hedging contracts[193] - For balance sheet hedging, a 10% adverse foreign currency exchange rate movement would lead to potential losses of $72 million, while a 20% movement would result in losses of $143 million[193] - As of June 30, 2024, a hypothetical 150 basis point increase in interest rates would have resulted in a $4 million, or 1% decrease in the fair market value of short-term investments[197] Investment and Hedging Strategies - The company uses foreign currency forward contracts to hedge a portion of foreign currency risk related to forecasted sales and expenses, with maturities generally of 18 months or less[191] - The company maintains a short-term investment portfolio primarily consisting of high credit quality debt instruments, which are subject to market fluctuations[195] - As of June 30, 2024, short-term investments were classified as available-for-sale securities and recorded at fair value, with changes reported in accumulated other comprehensive income[196] - The company does not hedge its short-term investment portfolio against interest rate risks, but manages exposure through established policies[189] Internal Controls and Governance - The effectiveness of the company's disclosure controls and procedures was evaluated as effective by the CEO and CFO as of the end of the reporting period[199] - There were no changes in internal controls over financial reporting that materially affected the company's reporting during the fiscal quarter ended June 30, 2024[200] Restructuring and Strategic Plans - The restructuring plan approved in February 2024 aims to align the portfolio and resources with strategic priorities, expected to be completed by December 31, 2024[137]

Core Viewpoint - Electronic Arts (EA) has experienced a significant boost from the launch of its College Football franchise, but concerns remain regarding the performance of its non-sports games and overall growth trajectory [2][5]. Financial Performance - EA reported earnings per share (EPS) of 45 cents for the first quarter of its 2025 fiscal year, exceeding the consensus estimate of 41 cents [3]. - Revenue for the quarter was $1.26 billion, surpassing the forecast of $1.22 billion [3]. - The company provided guidance for upcoming quarter bookings between $1.95 billion and $2.05 billion, with the midpoint exceeding analysts' estimates [4]. Market Reaction - EA's stock has seen a 9.9% increase over the last month and a 10% rise in 2024, but early price action suggests that this momentum may already be priced into the stock [2]. - Following the earnings report, EA stock initially climbed 4.7% but has since retraced most of those gains [2]. Growth Prospects - The upcoming quarters are expected to benefit from the College Football title, the launch of Madden NFL 25, and FC 25, which have strong fan bases [4]. - Despite the positive outlook, there are concerns about the performance of non-sports titles like Apex Legends, which has reported lower bookings [5]. Analyst Sentiment - EA has a "Moderate Buy" rating among analysts, with a projected upside of 7.9% [6]. - Nine analysts have raised their price targets for EA stock since the earnings report, with the consensus price at $158.95, indicating a 6.9% upside [6]. - Institutional buying has decreased after strong buying in the first quarter, likely in anticipation of the College Football release [7].

Electronic Arts Inc. EA shares are trading higher on Wednesday.Yesterday, the company reported first-quarter net bookings of $1.26 billion, down from $1.58 billion in last year’s first quarter total of $1.58 billion. However, the net bookings came in ahead of company guidance of $1.25 billion. The results came amid an exciting earnings season. Here are some key analyst takeaways.Check out other analyst stock ratings.Goldman Sachs analyst Eric Sheridan reiterated a Neutral rating, raising the price forecast ...

Core Insights - Electronic Arts (EA) reported a significant decline in first-quarter fiscal 2025 earnings, with earnings per share at 52 cents, down 54.4% year over year, and revenues decreased by 13.7% to $1.26 billion due to weaknesses in Live services and full-game revenues [1][2] Financial Performance - Net bookings for the fiscal first quarter were $1.262 billion, reflecting a 20% year-over-year decline in both actual and constant currency [1] - Full-game revenues, accounting for 15.1% of total revenues, fell 43.6% year over year to $250 million, with full-game download revenues down 37% to $190 million and packaged goods revenues plunging 58% to $60 million [2] - Live services and other revenues, which represent 84.9% of total revenues, decreased 4.8% year over year to $1.41 billion [2] - Operating income on a GAAP basis decreased 32.8% year over year to $364 million, with an operating margin contraction of 620 basis points to 21.9% [5] Gaming Metrics - EA SPORTS Madden NFL showed strong performance, driven by new in-game innovations that enhanced player acquisition and engagement [3] - EA SPORTS FC franchise results were better than expected but down compared to the previous year, which had benefited from World Cup-related growth [3] - EA SPORTS College Football achieved record engagement in its first week, contributing to the expansion of the EA SPORTS community [3] Operating Details - EA's GAAP gross profit declined 10.2% year over year to $1.39 billion, while gross margin expanded by 330 basis points to 84.2% [5] - Operating expenses increased by 1.9% year over year to $1.03 billion, with operating expenses as a percentage of revenues rising by 950 basis points to 62.2% [5] Balance Sheet and Cash Flow - As of June 30, 2024, EA had $2.76 billion in cash and short-term investments, down from $3.2 billion as of March 31, 2024 [6] - The company repurchased 2.8 million shares for $375 million during the quarter, totaling 10.2 million shares for $1.350 billion over the trailing 12 months [6] - EA declared a quarterly cash dividend of 19 cents per share, payable on September 18, 2024 [6] Guidance - For the second quarter of fiscal 2025, EA expects GAAP revenues between $1.9 billion and $2 billion, with earnings per share projected in the range of 76-93 cents [7] - For fiscal 2025, EA anticipates revenues between $7.1 billion and $7.5 billion and net bookings between $7.3 billion and $7.7 billion [7]

Electronic Arts Inc. (NASDAQ:EA) Q1 2025 Earnings Conference Call July 30, 2024 5:00 PM ET Company Participants Andrew Uerkwitz - VP, IR Andrew Wilson - CEO Stuart Canfield - CFO Conference Call Participants Eric Sheridan - Goldman Sachs Matthew Cost - Morgan Stanley Chris Schoell - UBS Cory Carpenter - JPMorgan Andrew Marok - Raymond James Colin Sebastian - Baird Clay Griffin - MoffettNathanson Operator Good afternoon. My name is Robin. I will be your conference operator today. At this time, I'd like to we ...

For the quarter ended June 2024, Electronic Arts (EA) reported revenue of $1.26 billion, down 20% over the same period last year. EPS came in at $0.52, compared to $1.14 in the year-ago quarter.The reported revenue represents a surprise of +3.87% over the Zacks Consensus Estimate of $1.21 billion. With the consensus EPS estimate being $0.43, the EPS surprise was +20.93%.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine thei ...

Electronic Arts (EA) came out with quarterly earnings of $0.52 per share, beating the Zacks Consensus Estimate of $0.43 per share. This compares to earnings of $1.14 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 20.93%. A quarter ago, it was expected that this video game maker would post earnings of $1.54 per share when it actually produced earnings of $1.37, delivering a surprise of -11.04%.Over the last four quarters, the ...

Q1 FY25 Performance - Net bookings for Q1 FY25 were $1.262 billion, a 20% year-over-year decrease[14, 17, 50] - Live Services represented 75% of total TTM net bookings[10] - EA SPORTS FCTM Mobile reported record net bookings for Q1[10] - GAAP EPS for Q1 FY25 was $1.04[21] - Operating Cash Flow for Q1 FY25 was $120 million[21] - Free Cash Flow for Q1 FY25 was $53 million[42] FY25 Guidance - The company expects net revenue between $7.1 billion and $7.5 billion for FY25[21] - The company expects net bookings between $7.3 billion and $7.7 billion for FY25[22] - GAAP EPS is projected to be between $3.34 and $4.00 for FY25[21] - Operating Cash Flow is expected to be between $2.05 billion and $2.25 billion for FY25[21] Q2 FY25 Guidance - The company expects net revenue between $1.9 billion and $2.0 billion for Q2 FY25[21] - The company expects net bookings between $1.95 billion and $2.05 billion for Q2 FY25[22] - GAAP EPS is projected to be between $0.76 and $0.93 for Q2 FY25[21]

[Q1 FY25 Performance Highlights](index=1&type=section&id=Q1%20FY25%20Performance%20Highlights) [Executive Summary](index=1&type=section&id=Executive%20Summary) Electronic Arts reported a strong start to fiscal year 2025, with Q1 results exceeding expectations, driven by strong live services performance and successful game launches - EA delivered a strong start to FY25, beating net bookings guidance, driven by live services and continued player engagement[1](index=1&type=chunk) - The successful launch of EA SPORTS College Football 25 and upcoming titles are expected to build momentum for FY25 and beyond[1](index=1&type=chunk) [Operating Highlights](index=1&type=section&id=Operating%20Highlights) Q1 operating performance was robust, with net bookings reaching $1.262 billion, exceeding guidance, fueled by strong Madden NFL 24, FC Online, and FC Mobile results Q1 FY25 Key Operating Metrics | Metric | Value | Driver | | :--- | :--- | :--- | | Net Bookings | $1.262 billion | Stronger performance from Madden NFL 24, FC Online, and FC Mobile | - EA SPORTS Madden NFL showed sustained momentum, with weekly average users in Ultimate Team and total net bookings up double digits year-over-year[2](index=2&type=chunk) - Post-quarter, EA SPORTS College Football 25 attracted 5 million unique players in its first week, with an additional 500,000 playing via the EA Play trial[2](index=2&type=chunk) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) For Q1, EA reported net revenue of $1.660 billion and $120 million in operating cash flow, while repurchasing 2.8 million shares for $375 million Q1 FY25 Key Financial Metrics | Metric | Value | | :--- | :--- | | Net Revenue | $1.660 billion | | Net Cash from Operating Activities | $120 million | | Trailing Twelve Months OCF | $2.076 billion | [Shareholder Returns](index=1&type=section&id=Shareholder%20Returns) [Dividend and Share Repurchases](index=1&type=section&id=Dividend%20and%20Share%20Repurchases) EA declared a quarterly cash dividend of $0.19 per share and actively repurchased 2.8 million shares for $375 million during the quarter - A quarterly cash dividend of **$0.19 per share** was declared, payable on September 18, 2024[4](index=4&type=chunk) Share Repurchase Activity | Period | Shares Repurchased (millions) | Value ($ millions) | | :--- | :--- | :--- | | Q1 FY25 | 2.8 | 375 | | TTM Ended June 30, 2024 | 10.2 | 1,350 | [Financial Results](index=2&type=section&id=Financial%20Results) [Selected Financial Highlights](index=2&type=section&id=Selected%20Financial%20Highlights) This section provides a comparative overview of key financial metrics for the three and twelve months ending June 30, 2024, versus the same periods in 2023 Q1 Financial Highlights (Three Months Ended June 30) | Metric (in $ millions, except per share) | 2024 | 2023 | | :--- | :--- | :--- | | Total net revenue | 1,660 | 1,924 | | Net income | 280 | 402 | | Diluted earnings per share | 1.04 | 1.47 | | Operating cash flow | 120 | 359 | Trailing Twelve Months Financial Highlights (Ended June 30) | Metric (in $ millions) | 2024 | 2023 | | :--- | :--- | :--- | | Total net revenue | 7,298 | 7,583 | | Net income | 1,151 | 893 | | Operating cash flow | 2,076 | 1,987 | Net Bookings Calculation (in $ millions) | Period | Total Net Revenue | Change in Deferred Net Revenue | Total Net Bookings | | :--- | :--- | :--- | :--- | | Q1 FY25 | 1,660 | (398) | 1,262 | | Q1 FY24 | 1,924 | (346) | 1,578 | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) For Q1 FY25, net revenue decreased to $1.660 billion, resulting in a net income of $280 million or $1.04 per diluted share, down from the prior year Q1 FY25 Statement of Operations (in $ millions, except per share) | Line Item | Q1 FY25 | Q1 FY24 | | :--- | :--- | :--- | | Net Revenue | 1,660 | 1,924 | | Gross Profit | 1,397 | 1,556 | | Operating Income | 364 | 542 | | Net Income | 280 | 402 | | Diluted EPS | $1.04 | $1.47 | [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2024, EA's balance sheet shows total assets of $12.708 billion, with cash and cash equivalents at $2.400 billion, and total stockholders' equity at $7.400 billion Balance Sheet Highlights (in $ millions) | Account | June 30, 2024 | March 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | 2,400 | 2,900 | | Total current assets | 3,587 | 4,247 | | TOTAL ASSETS | 12,708 | 13,420 | | Total current liabilities | 2,468 | 3,090 | | TOTAL LIABILITIES | 5,308 | 5,907 | | Total stockholders' equity | 7,400 | 7,513 | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For Q1 FY25, operating cash flow was $120 million, with significant cash usage in financing activities, leading to a $500 million decrease in cash and cash equivalents Q1 FY25 Cash Flow Summary (in $ millions) | Activity | Q1 FY25 | Q1 FY24 | | :--- | :--- | :--- | | Net cash provided by operating activities | 120 | 359 | | Net cash used in investing activities | (69) | (44) | | Net cash used in financing activities | (546) | (482) | | Change in cash and cash equivalents | (500) | (165) | [Supplemental Financial Information](index=10&type=section&id=Supplemental%20Financial%20Information) Q1 FY25 net revenue composition shows 85% from live services and 15% from full game sales, with console remaining the largest platform Q1 FY25 Net Revenue by Composition (in $ millions) | Composition | Q1 FY25 | Q1 FY24 | YoY % Change | | :--- | :--- | :--- | :--- | | Full game | 250 | 443 | (44%) | | Live services and other | 1,410 | 1,481 | (5%) | | **Total net revenue** | **1,660** | **1,924** | **(14%)** | - The composition of net revenue in Q1 FY25 was **85% from Live services and other**, and **15% from Full game sales**[29](index=29&type=chunk) Q1 FY25 Net Revenue by Platform (in $ millions) | Platform | Q1 FY25 | Q1 FY24 | YoY % Change | | :--- | :--- | :--- | :--- | | Console | 1,005 | 1,167 | (14%) | | PC & Other | 365 | 451 | (19%) | | Mobile | 290 | 306 | (5%) | [Business Outlook](index=3&type=section&id=Business%20Outlook%20as%20of%20July%2030%2C%202024) [Fiscal Year 2025 Guidance](index=3&type=section&id=Fiscal%20Year%202025%20Expectations%20%E2%80%93%20Ending%20March%2031%2C%202025) Electronic Arts provided its financial outlook for the full fiscal year 2025, projecting net bookings between $7.300 billion and $7.700 billion FY2025 Full Year Guidance | Metric | Expected Range (in billions, except per share) | | :--- | :--- | | Net Bookings | $7.300 to $7.700 | | Net Revenue | $7.100 to $7.500 | | Net Income | $0.904 to $1.085 | | Diluted EPS | $3.34 to $4.00 | | Operating Cash Flow | $2.050 to $2.250 | [Second Quarter FY25 Guidance](index=3&type=section&id=Second%20Quarter%20Fiscal%20Year%202025%20Expectations%20%E2%80%93%20Ending%20September%2030%2C%202024) For Q2 FY25, EA anticipates net bookings between $1.950 billion and $2.050 billion, with net revenue expected in the range of $1.900 billion to $2.000 billion Q2 FY2025 Guidance | Metric | Expected Range (in billions, except per share) | | :--- | :--- | | Net Bookings | $1.950 to $2.050 | | Net Revenue | $1.900 to $2.000 | | Net Income | $0.204 to $0.248 | | Diluted EPS | $0.76 to $0.93 | [GAAP to Non-GAAP Reconciliation](index=7&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliation) [Reconciliation of Financial Measures](index=7&type=section&id=Reconciliation%20of%20Financial%20Measures) This section details the reconciliation from GAAP to non-GAAP financial measures for historical results and future guidance, adjusting for specific non-core items Q1 GAAP to Non-GAAP Operating Income Reconciliation (in $ millions) | Line Item | Q1 FY25 | Q1 FY24 | | :--- | :--- | :--- | | GAAP operating income | 364 | 542 | | Acquisition-related expenses | 27 | 41 | | Restructuring and related charges | 6 | 3 | | Stock-based compensation | 143 | 130 | | **Non-GAAP operating income** | **540** | **716** | FY25 Guidance - GAAP vs. Non-GAAP Operating Margin | Metric | GAAP Range | Non-GAAP Range | | :--- | :--- | :--- | | Operating Margin | 18.0% to 20.6% | 29.6% to 31.7% | - The company uses an internal tax rate of **19%** to evaluate operating performance and for forecasting purposes[35](index=35&type=chunk)[37](index=37&type=chunk)[39](index=39&type=chunk) [Supporting Information](index=3&type=section&id=Supporting%20Information) [Conference Call and Forward-Looking Statements](index=3&type=section&id=Conference%20Call%20and%20Forward-Looking%20Statements) This section provides investor conference call details and a standard disclaimer regarding forward-looking statements, which are subject to risks and uncertainties - An investor conference call was held on July 30, 2024, to discuss the financial results, with replays available[11](index=11&type=chunk)[12](index=12&type=chunk) - The report includes forward-looking statements regarding future performance, which are not guarantees and are subject to risks and uncertainties[13](index=13&type=chunk)[14](index=14&type=chunk) [About Electronic Arts and Non-GAAP Measures](index=4&type=section&id=About%20Electronic%20Arts%20and%20Non-GAAP%20Measures) This section provides a corporate overview of Electronic Arts as a global leader in digital interactive entertainment and explains the rationale for using non-GAAP financial measures - Electronic Arts is a global leader in digital interactive entertainment, with key brands like EA SPORTS FC™, Apex Legends™, and The Sims™[16](index=16&type=chunk) - The company uses non-GAAP financial measures to supplement GAAP results, excluding items like acquisition-related expenses, stock-based compensation, and restructuring charges to better evaluate core operating performance[38](index=38&type=chunk)

Group 1 - Major videogame publishers like Electronic Arts and Take-Two are expected to avoid significant impacts from the strike by voice actors and motion-capture artists due to their in-house studios and lengthy game development cycles [1][2] - The strike comes at a critical time for the videogame industry, which is experiencing weak demand following a pandemic-driven boom, with gamers spending fewer hours on games and focusing on major titles [1] - Unlike previous strikes, the current action is anticipated to have minimal effects as the striking workers represent a small fraction of the overall videogame development process and budget [1] Group 2 - Larger publishers typically invest three to ten years in developing major titles, meaning upcoming releases like Take-Two's "Grand Theft Auto VI," scheduled for fall 2025, are unlikely to be impacted by the current strike [2] - The relatively small budget allocated for voice acting reduces the incentive for companies to delay projects, and the lack of a unified body among developers may lead to a domino effect if one developer agrees to terms [4] - The strike is expected to be a significant topic during upcoming earnings reports, reflecting broader issues in the industry, including layoffs and studio shutdowns [4]