Electronic Arts(EA) - 2025 Q2 - Quarterly Results

Financial Performance - Q2 net bookings reached a record $2.079 billion, exceeding the high end of the guidance range of $2.050 billion[3] - Net revenue for Q2 was $2.025 billion, with net cash provided by operating activities at $234 million[4] - FY25 net revenue is expected to be approximately $7.400 billion to $7.700 billion, with net income projected between $1.019 billion and $1.156 billion[9] - Q3 FY25 net bookings are expected to be approximately $2.400 billion to $2.550 billion[11] - Net revenue for Q2 FY25 increased to $2,025 million, up 6% year-over-year (YoY) from $1,914 million in Q2 FY24[24] - Gross profit for Q2 FY25 rose to $1,569 million, an 8% YoY increase from $1,458 million in Q2 FY24[24] - Operating income for Q2 FY25 grew to $384 million, a 2% YoY increase from $377 million in Q2 FY24[24] - Net income for Q2 FY25 decreased to $294 million, down 26% YoY from $399 million in Q2 FY24[24] - Diluted earnings per share (EPS) for Q2 FY25 dropped to $1.11, a 24% YoY decline from $1.47 in Q2 FY24[24] - Q2 FY25 net revenue increased by 6% YoY to $2,025 million, driven by a 37% YoY growth in full game downloads to $475 million[26] - Live services and other revenue remained stable with a 1% YoY increase to $1,309 million, contributing 65% of total net revenue in Q2 FY25[26] - Console revenue grew 16% YoY to $1,374 million, while PC & Other and Mobile revenues declined by 14% and 6% YoY, respectively[26] - Non-GAAP operating income rose 12% YoY to $637 million, with a non-GAAP operating margin of 31.5%, up from 29.8% in Q2 FY24[30] - FY25 net revenue guidance is projected between $7,400 million and $7,700 million, with a non-GAAP operating margin range of 30.7% to 32.1%[31] - Q3 FY25 net revenue guidance is estimated between $1,875 million and $2,025 million, with a projected change in deferred net revenue of $525 million[33] Cash Flow and Share Repurchases - Net cash provided by operating activities for Q2 FY25 was $234 million, compared to $112 million in Q2 FY24[23] - Free cash flow for Q2 FY25 was $184 million, with a trailing twelve-month (TTM) free cash flow of $1,978 million, down 2% YoY[27][28] - EA repurchased 2.6 million shares for $375 million during the quarter, totaling 10.2 million shares for $1.400 billion over the trailing twelve months[4] - The company repurchased $375 million worth of common stock in Q2 FY25, a 15% increase from the previous quarter[27] Game Performance and Player Engagement - American Football is on track to exceed $1 billion in net bookings for FY25, with total hours played in Q2 up over 140% year over year[3] - The Sims™ 4 added more than 15 million players over the past year, driving higher-than-expected net bookings[3] - College Football 25 was the best-selling HD title in North America through September, contributing to EA having three of the top ten HD bestsellers in the region[3] - Global Football franchise net bookings in FY25 are on track to grow over the record FY24 performance[3] Balance Sheet and Capital Expenditures - Cash and cash equivalents decreased to $2,197 million as of September 30, 2024, down from $2,900 million on March 31, 2024[21] - Deferred net revenue (online-enabled games) decreased to $1,475 million as of September 30, 2024, from $1,814 million on March 31, 2024[22] - Total assets as of September 30, 2024, were $13,136 million, slightly down from $13,420 million on March 31, 2024[21] - Capital expenditures increased 15% YoY to $220 million on a TTM basis, reflecting ongoing investments in infrastructure and technology[27] Dividends and Stock-Based Compensation - EA declared a quarterly cash dividend of $0.19 per share, payable on December 18, 2024[5] - Stock-based compensation for Q2 FY25 increased to $174 million, up from $155 million in Q2 FY24[24] Non-GAAP Financial Measures - Non-GAAP financial measures exclude acquisition-related expenses, stock-based compensation, restructuring charges, and capital expenditures[34] - Non-GAAP measures are used by management to understand ongoing financial and business performance, excluding items not indicative of core business[34] - Investors are encouraged to review GAAP financial measures and reconciliations of non-GAAP measures to GAAP[35] - Non-GAAP financial measures do not reflect a comprehensive system of accounting and differ from GAAP measures[34] Tax Rate - The company maintains a tax rate of 19% for internal performance evaluation and future planning[31][33] - The company uses a tax rate of 19% internally for evaluating operating performance and forecasting future periods[35]