Core Viewpoint - Electronic Arts (EA) announced a workforce reduction of 6% and lowered its full-year bookings guidance, primarily due to challenges with its soccer franchise, leading to a significant drop in its stock price [1][2]. Financial Performance - For the fiscal third quarter ending December 31, EA expects net bookings of approximately $2.215 billion, down from previous guidance of $2.4 billion to $2.55 billion [3]. - Revenue for the December quarter was reported at about $1.88 billion, with diluted earnings per share of $1.11 [3]. - EA anticipates full fiscal year net bookings between $7 billion and $7.15 billion, a decrease from prior guidance of $7.5 billion to $7.8 billion [4]. Product Performance - The company's soccer franchise, which transitioned from FIFA branding to EA Sports FC, has shown significant weakness, impacting overall performance [4]. - The role-playing game "Dragon Age" had 1.5 million players during the quarter, approximately 50% below expectations [5]. - EA expects Global Football sales to decline year-over-year and anticipates a decrease in bookings from online sales in fiscal 2025, with the soccer franchise being a major contributor to the shortfall [5].

Core Viewpoint - Electronic Arts (EA) has reported disappointing preliminary results for its fiscal 2025 third quarter, leading to a significant downward revision of its full-year bookings forecast, resulting in an over 18% drop in stock price [1][2]. Financial Performance - For the fiscal third quarter, EA expects revenue of approximately $1.883 billion and earnings of roughly $1.11 per share, down from previous guidance of $1.875 billion to $2.025 billion in revenue and earnings between $0.85 and $1.02 per share [2]. - For the full fiscal year, EA anticipates a mid-single-digit decline in net bookings, a shift from its earlier guidance of mid-single-digit growth, primarily due to underperformance in its Global Football unit [3][4]. Market Reaction - EA's stock was the worst performer in the S&P 500 on the day of the announcement, reflecting investor concerns over the company's financial outlook [1]. - Despite recent struggles, Wall Street analysts remain generally bullish, with an average target price of $153.18, indicating an implied upside of over 30% from current levels [6][7]. Analyst Opinions - Financial services firm Wedbush has maintained an Outperform rating and a price target of $173, suggesting confidence in a rebound despite the current challenges [8]. - Analysts express that EA may face a period of stagnation, referred to as "dead money," until the company provides clearer visibility into its future release schedule for fiscal years 2026 and 2027 [9].

Electronic Arts Inc. (NASDAQ:EA) stock is near the bottom of the Nasdaq today, last seen down 17.3% to trade at $117.62. The video game company cut its third-quarter and 2025 bookings forecast, citing a slowdown in the popular FIFA franchise. In response, three brokerages issued downgrades, while four more brokerages issued price-target cuts, the worst coming from Stifel to $133 from $159. There could be more adjustments on the way, considering EA's 12-month consensus price target of $154.01 is a 31.4% prem ...

About this content About Josh Lamb After graduating from the University of Kent in the summer of 2022 with a degree in History, Josh joined Proactive later that year as a journalist in the UK editorial team. Josh has reported on a range of areas whilst at Proactive, including energy companies during a time of global crisis, aviation and airlines as the sector recovers from the pandemic, as well as covering economic, social and governance issues. Read more About the publisher Proactive financial news and ...

Key TakeawaysElectronic Arts shares are tumbling 15% in premarket trading Thursday, a day after slumping demand for its EA SPORTS FC 25 video game prompted the company to cut its outlook.The company projected net bookings to be $2.22 billion for the fiscal third quarter, down from $2.4 billion to $2.55 billion previously.EA also cut its fiscal 2025 net bookings forecast to a range of $7 billion to $7.15 billion, down from $7.5 billion to $7.8 billion. Electronic Arts (EA) shares are tumbling in premarket tr ...

Core Viewpoint - Electronic Arts (EA) has reduced its full-year bookings guidance due to underperformance in its soccer franchise, EA Sports FC, leading to a 7% drop in shares during extended trading [1][3]. Financial Performance - For the fiscal third quarter ending December 31, EA expects net bookings of approximately $2.215 billion, down from previous guidance of $2.4 billion to $2.55 billion [2]. - Revenue for the December quarter is projected to be around $1.88 billion, with diluted earnings per share of $1.11 [2]. - EA anticipates full fiscal year net bookings between $7 billion and $7.15 billion, a decrease from earlier guidance of $7.5 billion to $7.8 billion [3]. Game Performance - The soccer franchise, previously branded under FIFA, has shown weakness, with a noted slowdown in growth after two years of double-digit increases in net bookings [4]. - EA's role-playing game "Dragon Age" had 1.5 million players during the quarter, falling short of expectations by nearly 50% [4]. - The company expects Global Football sales to decline year-over-year and anticipates a decrease in bookings from online sales in fiscal 2025, primarily due to the soccer franchise's underperformance [4]. Recent Developments - EA recently updated FC 25 with new content and gameplay improvements, which received positive feedback from players [5].

Financial Reporting and Filing - Electronic Arts Inc. provided preliminary results for its third fiscal quarter ended December 31, 2024 [5] - The company updated its business outlook for the fiscal year ending March 31, 2025 [5] - A press release detailing the preliminary results and outlook was issued on January 22, 2025 [5] - The press release is attached as Exhibit 99.1 in the Form 8-K filing [7] - The information in Item 2.02 is not deemed "filed" under the Exchange Act unless specified otherwise [6] - The filing includes an Interactive Data File (Inline XBRL) as Exhibit 104 [7] - Stuart Canfield, Chief Financial Officer, signed the report on behalf of Electronic Arts Inc. [11] - The report was filed pursuant to the Securities Exchange Act of 1934 [9] Company Information - Electronic Arts Inc. is incorporated in Delaware with the IRS Employer Identification No. 94-2838567 [2] - The company's common stock is traded on the NASDAQ Global Select Market under the symbol "EA" [3]

Company Performance and Challenges - EA's subpar performance is attributed to fierce competition in the gaming industry, challenges in player engagement and retention, and weak monetization in freemium models [1][2] - EA faces lower-than-expected monetization in freemium models, particularly in Apex Legends Season 22 [2] - EA's shares have lost 8.5% in the past month, underperforming the Zacks Consumer Discretionary sector's decline of 0.4% and the Zacks Gaming industry's loss of 3.1% [8] - EA's stock has underperformed peers like Roblox (RBLX), Nintendo (NTDOY), and TakeTwo Interactive Software (TTWO) in the same time frame [8] Financial Estimates and Trends - For Q3 fiscal 2025, EA expects net revenues of $1.875-$2.025 billion and diluted earnings of 85 cents to $1.02 per share [3] - For full-year fiscal 2025, EA expects net revenues of $7.4-$7.7 billion and diluted earnings of $3.82-$4.33 per share [3] - The Zacks Consensus Estimate for Q3 fiscal 2025 revenues is $2.51 billion, indicating year-over-year growth of 6.02% [10] - The Zacks Consensus Estimate for Q3 fiscal 2025 earnings is $3.41 per share, indicating year-over-year growth of 15.2% [10] - The Zacks Consensus Estimate for full-year fiscal 2025 revenues is $7.69 billion, indicating year-over-year growth of 3.51% [11] - The Zacks Consensus Estimate for full-year fiscal 2025 earnings is $7.82 per share, indicating year-over-year growth of 12.52% [11] - EA's earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, with an average surprise of 4.29% [11] Gaming Portfolio and Innovations - EA benefits from an expanding portfolio with immersive offerings in sports, adventure, and life simulation games [6] - EA leverages GenAI and advanced technologies like ICE Q for enhanced gameplay and creative experiences [6] - In Q2 fiscal 2025, total hours played increased by 140% year over year [6] - EA's latest releases include Dragon Age: The Veil Guard, The Sims 4 Creator Kit, and My Sims Cozy bundle [9] - EA and Hazelight Studios announced Split Fiction, a co-op action-adventure game blending sci-fi and fantasy, set to release on March 6 [9] Industry and Competitive Landscape - EA faces fierce competition in the gaming industry, especially in the free-to-play (FPS) segment [2] - Challenges persist in maintaining consistent player engagement and retention across some franchises [2]

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].