Electronic Arts Q2 Earnings and Revenues Rise Year Over Year

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].