Exhibit 99.1
Electronic Arts Reports Q3 FY25 Results |  | ||||||||||||||||||||||
EA plans $1 billion accelerated stock repurchase further demonstrating conviction in long-term
growth of the business
REDWOOD CITY, CA – February 4, 2025 – Electronic Arts Inc. (NASDAQ: EA) today announced preliminary financial results for its third quarter ended December 31, 2024.
“The record success of our EA SPORTS FC 25 Team of the Year event demonstrates our creative teams’ ability to adapt, innovate, and execute at scale,” said Andrew Wilson, CEO of Electronic Arts. “As we build on this momentum across EA, we are confident in a return to growth in FY26 and beyond as we bring our next wave of iconic entertainment to players and fans worldwide.”
“Today, we announced plans for a $1 billion accelerated share repurchase, which is expected to bring total stock repurchases to $2.5 billion within the first year of our $5 billion authorization,” said Stuart Canfield, CFO of Electronic Arts. “This reflects both our confidence in EA’s long-term strategy and our ability to balance investment in growth with capital returns.”
Selected Operating Highlights and Metrics
•Net bookings1 for the quarter totaled $2.215 billion.
•Our Global Football franchise net bookings have grown more than 70% over the last five fiscal years, making it one of the biggest sports entertainment properties in the world.
•Our gameplay update for EA SPORTS FCTM 25, released on January 16th, drove engagement levels above our expectations, with over two million Ultimate Team players re-activated from earlier in the launch cycle.
•EA SPORTS FC Mobile saw a double-digit increase in new players and engagement year-over-year.
•American Football saw double-digit growth in weekly active users year-over-year in the third quarter, and remains on pace to surpass $1 billion in net bookings for fiscal year 2025.
•EA unveiled BattlefieldTM Labs, a new initiative allowing player-driven testing and innovation ahead of the franchise’s expected fiscal year 2026 release.
Selected Financial Highlights and Metrics
•Net revenue was $1.883 billion.
•Net cash provided by operating activities was $1.176 billion for the quarter and $2.110 billion for the trailing twelve months.
•EA repurchased 2.4 million shares for $375 million during the quarter under the stock repurchase program, bringing the total for the trailing twelve months to 10.1 million shares for $1.450 billion.
•EA plans for an accelerated stock repurchase program of $1 billion, which is expected to bring the total stockholder return to $2.5 billion within the first year of our $5 billion authorization.
Dividend
EA has declared a quarterly cash dividend of $0.19 per share of the Company’s common stock. The dividend is payable on March 19, 2025 to stockholders of record as of the close of business on February 26, 2025.
Quarterly Financial Highlights
| Three Months Ended | |||||||||||
| December 31, | |||||||||||
| (in $ millions, except per share amounts) | 2024 | 2023 | |||||||||
| Full game | 599 | 618 | |||||||||
| Live services and other | 1,284 | 1,327 | |||||||||
| Total net revenue | 1,883 | 1,945 | |||||||||
| Net income | 293 | 290 | |||||||||
| Diluted earnings per share | 1.11 | 1.07 | |||||||||
| Operating cash flow | 1,176 | 1,264 | |||||||||
| Value of shares repurchased | 375 | 325 | |||||||||
| Number of shares repurchased | 2.4 | 2.5 | |||||||||
| Cash dividend paid | 50 | 51 | |||||||||
Trailing Twelve Months Financial Highlights
| Twelve Months Ended | |||||||||||
| December 31, | |||||||||||
| (in $ millions) | 2024 | 2023 | |||||||||
| Full game | 1,898 | 2,054 | |||||||||
| Live services and other | 5,449 | 5,603 | |||||||||
| Total net revenue | 7,347 | 7,657 | |||||||||
| Net income | 1,049 | 1,079 | |||||||||
| Operating cash flow | 2,110 | 2,352 | |||||||||
| Value of shares repurchased | 1,450 | 1,300 | |||||||||
| Number of shares repurchased | 10.1 | 10.4 | |||||||||
Operating Metric
The following is a calculation of our total net bookings1 for the periods presented:
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||||||||
| (in $ millions) | 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||
| Total net revenue | 1,883 | 1,945 | 7,347 | 7,657 | |||||||||||||||||||
| Change in deferred net revenue (online-enabled games) | 332 | 421 | (125) | 53 | |||||||||||||||||||
| Total net bookings | 2,215 | 2,366 | 7,222 | 7,710 | |||||||||||||||||||
Business Outlook as of February 4, 2025
Fiscal Year 2025 Expectations – Ending March 31, 2025
Financial outlook metrics:
•Net revenue is expected to be approximately $7.250 billion to $7.400 billion.
◦Change in deferred net revenue (online-enabled games) is expected to be approximately ($250) million.
•Net income is expected to be approximately $1.038 billion to $1.130 billion.
•Diluted earnings per share is expected to be approximately $3.90 to $4.25.
•Operating cash flow is expected to be approximately $1.800 billion to $1.900 billion.
•The Company estimates a share count of 266 million for purposes of calculating diluted earnings per share.
Operational outlook metric:
•Net bookings1 is expected to be approximately $7.000 billion to $7.150 billion.
Fourth Quarter Fiscal Year 2025 Expectations – Ending March 31, 2025
Financial outlook metrics:
•Net revenue is expected to be approximately $1.682 billion to $1.832 billion.
◦Change in deferred net revenue (online-enabled games) is expected to be approximately ($238) million.
•Net income is expected to be approximately $171 million to $263 million.
•Diluted earnings per share is expected to be approximately $0.65 to $1.00.
•The Company estimates a share count of 264 million for purposes of calculating diluted earnings per share.
Operational outlook metric:
•Net bookings1 is expected to be approximately $1.444 billion to $1.594 billion.
Conference Call and Supporting Documents
Electronic Arts will host a conference call on February 4, 2025 at 2:00 pm PT (5:00 pm ET) to review its results for the third fiscal quarter ended December 31, 2024 and its outlook for the future. During the course of the call, Electronic Arts may disclose material developments affecting its business and/or financial performance. Listeners may access the conference call live through the following dial-in number (855) 761-5600 (domestic) or (646) 307-1097 (international), using the conference code 5939891 or via webcast at EA’s IR Website at http://ir.ea.com.
EA has posted a slide presentation with a financial model of EA’s historical results and guidance on EA’s IR Website. EA will also post the prepared remarks and a transcript from the conference call on EA’s IR Website.
A dial-in replay of the conference call will be available until February 11, 2025 at (800) 770-2030 (domestic) or (609) 800-9099 (international) using conference code 5939891. An audio webcast replay of the conference call will be available for one year on EA’s IR Website.
Forward-Looking Statements
Some statements set forth in this release, including the information relating to EA’s expectations under the heading “Business Outlook as of February 4, 2025” and other information regarding EA's expectations contain forward-looking statements that are subject to change. Statements including words such as “anticipate,” “believe,” “expect,” “intend,” “estimate,” “plan,” “predict,” “seek,” “goal,” “will,” “may,” “likely,” “should,” “could” (and the negative of any of these terms), “future” and similar expressions also identify forward-looking statements. These forward-looking statements are not guarantees of future performance and reflect management’s current expectations. Our actual results could differ materially from those discussed in the forward-looking statements.
Some of the factors which could cause the Company’s results to differ materially from its expectations include the following: sales of the Company’s products and services; the Company’s ability to develop and support digital products and services, including managing online security and privacy; outages of our products, services and technological infrastructure; the Company’s ability to manage expenses; the competition in the interactive entertainment industry; governmental regulations; the effectiveness of the Company’s sales and marketing programs; timely development and release of the Company’s products and services; the Company’s ability to realize the anticipated benefits of, and integrate, acquisitions; the consumer demand for, and the availability of an adequate supply of console hardware units; the Company’s ability to predict consumer preferences and trends; the Company’s ability to develop and implement new technology; foreign currency exchange rate fluctuations; economic and geopolitical conditions; changes in our tax rates or tax laws; and other factors described in Part II, Item 1A of Electronic Arts’ latest Quarterly Report on Form 10-Q under the heading “Risk Factors”, as well as in other documents we have filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the fiscal year ended March 31, 2024.
These forward-looking statements are current as of February 4, 2025. Electronic Arts assumes no obligation to revise or update any forward-looking statement, except as required by law. In addition, the preliminary financial results set forth in this release are estimates based on information currently available to Electronic Arts.
While Electronic Arts believes these estimates are meaningful, they could differ from the actual amounts that Electronic Arts ultimately reports in its Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2024. Electronic Arts assumes no obligation and does not intend to update these estimates prior to filing its Form 10-Q for the fiscal quarter ended December 31, 2024.
About Electronic Arts
Electronic Arts (NASDAQ: EA) is a global leader in digital interactive entertainment. The Company develops and delivers games, content and online services for Internet-connected consoles, mobile devices and personal computers.
In fiscal year 2024, EA posted GAAP net revenue of approximately $7.6 billion. Headquartered in Redwood City, California, EA is recognized for a portfolio of critically acclaimed, high-quality brands such as EA SPORTS FC™, Battlefield™, Apex Legends™, The Sims™, EA SPORTS™ Madden NFL, EA SPORTS™ College Football, Need for Speed™, Dragon Age™, Titanfall™, Plants vs. Zombies™ and EA SPORTS F1®. More information about EA is available at www.ea.com/news.
EA, EA SPORTS, EA SPORTS FC, Battlefield, Need for Speed, Apex Legends, The Sims, Dragon Age, Titanfall, and Plants vs. Zombies are trademarks of Electronic Arts Inc. John Madden, NFL, FIFA and F1 are the property of their respective owners and used with permission.
For additional information, please contact:
| Andrew Uerkwitz | Justin Higgs | ||||
| Vice President, Investor Relations | Vice President, Corporate Communications | ||||
| 650-674-7191 | 925-502-9253 | ||||
| auerkwitz@ea.com | jhiggs@ea.com | ||||
1 Net bookings is defined as the net amount of products and services sold digitally or sold-in physically in the period. Net bookings is calculated by adding total net revenue to the change in deferred net revenue for online-enabled games.
| ELECTRONIC ARTS INC. AND SUBSIDIARIES | ||||||||||||||||||||||||||
| Unaudited Condensed Consolidated Statements of Operations | ||||||||||||||||||||||||||
| (in $ millions, except per share data) | ||||||||||||||||||||||||||
| Three Months Ended December 31, | Nine Months Ended December 31, | |||||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||||||
| Net revenue | 1,883 | 1,945 | 5,568 | 5,783 | ||||||||||||||||||||||
| Cost of revenue | 456 | 529 | 1,175 | 1,353 | ||||||||||||||||||||||
| Gross profit | 1,427 | 1,416 | 4,393 | 4,430 | ||||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||
| Research and development | 606 | 584 | 1,883 | 1,782 | ||||||||||||||||||||||
| Marketing and sales | 251 | 276 | 728 | 785 | ||||||||||||||||||||||
| General and administrative | 176 | 170 | 553 | 506 | ||||||||||||||||||||||
| Amortization of intangibles | 16 | 21 | 50 | 70 | ||||||||||||||||||||||
| Restructuring | 1 | — | 54 | 3 | ||||||||||||||||||||||
| Total operating expenses | 1,050 | 1,051 | 3,268 | 3,146 | ||||||||||||||||||||||
| Operating income | 377 | 365 | 1,125 | 1,284 | ||||||||||||||||||||||
| Interest and other income (expense), net | 28 | 17 | 73 | 45 | ||||||||||||||||||||||
| Income before provision for income taxes | 405 | 382 | 1,198 | 1,329 | ||||||||||||||||||||||
| Provision for income taxes | 112 | 92 | 331 | 238 | ||||||||||||||||||||||
| Net income | 293 | 290 | 867 | 1,091 | ||||||||||||||||||||||
| Earnings per share | ||||||||||||||||||||||||||
| Basic | 1.12 | 1.08 | 3.28 | 4.03 | ||||||||||||||||||||||
| Diluted | 1.11 | 1.07 | 3.26 | 4.01 | ||||||||||||||||||||||
| Number of shares used in computation | ||||||||||||||||||||||||||
| Basic | 262 | 269 | 264 | 271 | ||||||||||||||||||||||
| Diluted | 265 | 271 | 266 | 272 | ||||||||||||||||||||||
Results (in $ millions, except per share data)
The following table reports the variance of the actuals versus our guidance provided on October 29, 2024 for the three months ended December 31, 2024 plus a comparison to the actuals for the three months ended December 31, 2023.
| Three Months Ended December 31, | |||||||||||||||||||||||
| 2024 Guidance (Mid-Point) | 2024 Actuals | 2023 Actuals | |||||||||||||||||||||
| Variance | |||||||||||||||||||||||
| Net revenue | |||||||||||||||||||||||
| Net revenue | 1,950 | (67) | 1,883 | 1,945 | |||||||||||||||||||
| GAAP-based financial data | |||||||||||||||||||||||
Change in deferred net revenue (online-enabled games)1 | 525 | (193) | 332 | 421 | |||||||||||||||||||
| Cost of revenue | |||||||||||||||||||||||
| Cost of revenue | 465 | (9) | 456 | 529 | |||||||||||||||||||
| GAAP-based financial data | |||||||||||||||||||||||
| Acquisition-related expenses | (10) | — | (10) | (16) | |||||||||||||||||||
| Stock-based compensation | (5) | 2 | (3) | (2) | |||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| Operating expenses | 1,125 | (75) | 1,050 | 1,051 | |||||||||||||||||||
| GAAP-based financial data | |||||||||||||||||||||||
| Acquisition-related expenses | (20) | 4 | (16) | (21) | |||||||||||||||||||
| Restructuring and related charges | (5) | 5 | — | — | |||||||||||||||||||
| Stock-based compensation | (165) | 5 | (160) | (149) | |||||||||||||||||||
| Income before tax | |||||||||||||||||||||||
| Income before tax | 371 | 34 | 405 | 382 | |||||||||||||||||||
| GAAP-based financial data | |||||||||||||||||||||||
| Acquisition-related expenses | 30 | (4) | 26 | 37 | |||||||||||||||||||
Change in deferred net revenue (online-enabled games)1 | 525 | (193) | 332 | 421 | |||||||||||||||||||
| Restructuring and related charges | 5 | (5) | — | — | |||||||||||||||||||
| Stock-based compensation | 170 | (7) | 163 | 151 | |||||||||||||||||||
| Tax rate used for management reporting | 19 | % | 19 | % | 19 | % | |||||||||||||||||
| Earnings per share | |||||||||||||||||||||||
| Basic | 0.94 | 0.18 | 1.12 | 1.08 | |||||||||||||||||||
| Diluted | 0.94 | 0.17 | 1.11 | 1.07 | |||||||||||||||||||
| Number of shares used in computation | |||||||||||||||||||||||
| Basic | 264 | (2) | 262 | 269 | |||||||||||||||||||
| Diluted | 266 | (1) | 265 | 271 | |||||||||||||||||||
1The change in deferred net revenue (online-enabled games) in the unaudited condensed consolidated statements of cash flows does not necessarily equal the change in deferred net revenue (online-enabled games) in the unaudited condensed consolidated statements of operations primarily due to the impact of unrecognized gains/losses on cash flow hedges.
| ELECTRONIC ARTS INC. AND SUBSIDIARIES | |||||||||||
| Unaudited Condensed Consolidated Balance Sheets | |||||||||||
| (in $ millions) | |||||||||||
| December 31, 2024 | March 31, 20242 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | 2,776 | 2,900 | |||||||||
| Short-term investments | 379 | 362 | |||||||||
| Receivables, net | 742 | 565 | |||||||||
| Other current assets | 375 | 420 | |||||||||
| Total current assets | 4,272 | 4,247 | |||||||||
| Property and equipment, net | 566 | 578 | |||||||||
| Goodwill | 5,376 | 5,379 | |||||||||
| Acquisition-related intangibles, net | 320 | 400 | |||||||||
| Deferred income taxes, net | 2,467 | 2,380 | |||||||||
| Other assets | 450 | 436 | |||||||||
| TOTAL ASSETS | 13,451 | 13,420 | |||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable, accrued, and other current liabilities | 1,298 | 1,276 | |||||||||
| Deferred net revenue (online-enabled games) | 1,806 | 1,814 | |||||||||
| Total current liabilities | 3,104 | 3,090 | |||||||||
| Senior notes, net | 1,883 | 1,882 | |||||||||
| Income tax obligations | 573 | 497 | |||||||||
| Other liabilities | 479 | 438 | |||||||||
| Total liabilities | 6,039 | 5,907 | |||||||||
| Stockholders’ equity: | |||||||||||
| Common stock | 3 | 3 | |||||||||
| Retained earnings | 7,472 | 7,582 | |||||||||
| Accumulated other comprehensive loss | (63) | (72) | |||||||||
| Total stockholders’ equity | 7,412 | 7,513 | |||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 13,451 | 13,420 | |||||||||
2Derived from audited consolidated financial statements.
| ELECTRONIC ARTS INC. AND SUBSIDIARIES | |||||||||||||||||||||||
| Unaudited Condensed Consolidated Statements of Cash Flows | |||||||||||||||||||||||
| (in $ millions) | |||||||||||||||||||||||
| Three Months Ended December 31, | Nine Months Ended December 31, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| OPERATING ACTIVITIES | |||||||||||||||||||||||
| Net income | 293 | 290 | 867 | 1,091 | |||||||||||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||||||||
| Depreciation, amortization, accretion and impairment | 75 | 82 | 277 | 255 | |||||||||||||||||||
| Stock-based compensation | 163 | 151 | 480 | 436 | |||||||||||||||||||
| Change in assets and liabilities | |||||||||||||||||||||||
| Receivables, net | 268 | 183 | (179) | (184) | |||||||||||||||||||
| Other assets | 41 | 112 | 21 | 186 | |||||||||||||||||||
| Accounts payable, accrued, and other liabilities | 44 | 45 | 161 | (155) | |||||||||||||||||||
| Deferred income taxes, net | (39) | (20) | (89) | 88 | |||||||||||||||||||
| Deferred net revenue (online-enabled games) | 331 | 421 | (8) | 18 | |||||||||||||||||||
| Net cash provided by operating activities | 1,176 | 1,264 | 1,530 | 1,735 | |||||||||||||||||||
| INVESTING ACTIVITIES | |||||||||||||||||||||||
| Capital expenditures | (50) | (52) | (167) | (148) | |||||||||||||||||||
| Proceeds from maturities and sales of short-term investments | 127 | 148 | 366 | 450 | |||||||||||||||||||
| Purchase of short-term investments | (139) | (147) | (376) | (460) | |||||||||||||||||||
| Net cash used in investing activities | (62) | (51) | (177) | (158) | |||||||||||||||||||
| FINANCING ACTIVITIES | |||||||||||||||||||||||
| Proceeds from issuance of common stock | 1 | 3 | 43 | 43 | |||||||||||||||||||
| Cash dividends paid | (50) | (51) | (151) | (154) | |||||||||||||||||||
| Cash paid to taxing authorities for shares withheld from employees | (72) | (58) | (211) | (178) | |||||||||||||||||||
| Common stock repurchases and excise taxes paid | (383) | (325) | (1,133) | (975) | |||||||||||||||||||
| Net cash used in financing activities | (504) | (431) | (1,452) | (1,264) | |||||||||||||||||||
| Effect of foreign exchange on cash and cash equivalents | (31) | 14 | (25) | 5 | |||||||||||||||||||
| Change in cash and cash equivalents | 579 | 796 | (124) | 318 | |||||||||||||||||||
| Beginning cash and cash equivalents | 2,197 | 1,946 | 2,900 | 2,424 | |||||||||||||||||||
| Ending cash and cash equivalents | 2,776 | 2,742 | 2,776 | 2,742 | |||||||||||||||||||
| ELECTRONIC ARTS INC. AND SUBSIDIARIES | |||||||||||||||||||||||||||||||||||
| Unaudited Supplemental Financial Information and Business Metrics | |||||||||||||||||||||||||||||||||||
| (in $ millions, except per share data) | |||||||||||||||||||||||||||||||||||
| Q3 | Q4 | Q1 | Q2 | Q3 | YOY % | ||||||||||||||||||||||||||||||
| FY24 | FY24 | FY25 | FY25 | FY25 | Change | ||||||||||||||||||||||||||||||
| Net revenue | |||||||||||||||||||||||||||||||||||
| Net revenue | 1,945 | 1,779 | 1,660 | 2,025 | 1,883 | (3 | %) | ||||||||||||||||||||||||||||
| GAAP-based financial data | |||||||||||||||||||||||||||||||||||
Change in deferred net revenue (online-enabled games)1 | 421 | (113) | (398) | 54 | 332 | ||||||||||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||||||||||||||
| Gross profit | 1,416 | 1,422 | 1,397 | 1,569 | 1,427 | 1 | % | ||||||||||||||||||||||||||||
| Gross profit (as a % of net revenue) | 73 | % | 80 | % | 84 | % | 78 | % | 76 | % | |||||||||||||||||||||||||
| GAAP-based financial data | |||||||||||||||||||||||||||||||||||
| Acquisition-related expenses | 16 | 29 | 10 | 10 | 10 | ||||||||||||||||||||||||||||||
Change in deferred net revenue (online-enabled games)1 | 421 | (113) | (398) | 54 | 332 | ||||||||||||||||||||||||||||||
| Stock-based compensation | 2 | 2 | 4 | 4 | 3 | ||||||||||||||||||||||||||||||
| Operating income | |||||||||||||||||||||||||||||||||||
| Operating income | 365 | 234 | 364 | 384 | 377 | 3 | % | ||||||||||||||||||||||||||||
| Operating income (as a % of net revenue) | 19 | % | 13 | % | 22 | % | 19 | % | 20 | % | |||||||||||||||||||||||||
| GAAP-based financial data | |||||||||||||||||||||||||||||||||||
| Acquisition-related expenses | 37 | 101 | 27 | 27 | 26 | ||||||||||||||||||||||||||||||
Change in deferred net revenue (online-enabled games)1 | 421 | (113) | (398) | 54 | 332 | ||||||||||||||||||||||||||||||
| Restructuring and related charges | — | 61 | 6 | 52 | — | ||||||||||||||||||||||||||||||
| Stock-based compensation | 151 | 148 | 143 | 174 | 163 | ||||||||||||||||||||||||||||||
| Net income | |||||||||||||||||||||||||||||||||||
| Net income | 290 | 182 | 280 | 294 | 293 | 1 | % | ||||||||||||||||||||||||||||
| Net income (as a % of net revenue) | 15 | % | 10 | % | 17 | % | 15 | % | 16 | % | |||||||||||||||||||||||||
| GAAP-based financial data | |||||||||||||||||||||||||||||||||||
| Acquisition-related expenses | 37 | 101 | 27 | 27 | 26 | ||||||||||||||||||||||||||||||
Change in deferred net revenue (online-enabled games)1 | 421 | (113) | (398) | 54 | 332 | ||||||||||||||||||||||||||||||
| Restructuring and related charges | — | 61 | 6 | 52 | — | ||||||||||||||||||||||||||||||
| Stock-based compensation | 151 | 148 | 143 | 174 | 163 | ||||||||||||||||||||||||||||||
| Tax rate used for management reporting | 19 | % | 19 | % | 19 | % | 19 | % | 19 | % | |||||||||||||||||||||||||
| Diluted earnings per share | 1.07 | 0.67 | 1.04 | 1.11 | 1.11 | 4 | % | ||||||||||||||||||||||||||||
| Number of shares used in computation | |||||||||||||||||||||||||||||||||||
| Basic | 269 | 267 | 266 | 264 | 262 | ||||||||||||||||||||||||||||||
| Diluted | 271 | 270 | 268 | 266 | 265 | ||||||||||||||||||||||||||||||
1The change in deferred net revenue (online-enabled games) in the unaudited condensed consolidated statements of cash flows does not necessarily equal the change in deferred net revenue (online-enabled games) in the unaudited condensed consolidated statements of operations primarily due to the impact of unrecognized gains/losses on cash flow hedges.
| ELECTRONIC ARTS INC. AND SUBSIDIARIES | ||||||||||||||||||||||||||||||||||||||
| Unaudited Supplemental Financial Information and Business Metrics | ||||||||||||||||||||||||||||||||||||||
| (in $ millions) | ||||||||||||||||||||||||||||||||||||||
| Q3 | Q4 | Q1 | Q2 | Q3 | YOY % | |||||||||||||||||||||||||||||||||
| FY24 | FY24 | FY25 | FY25 | FY25 | Change | |||||||||||||||||||||||||||||||||
| QUARTERLY NET REVENUE PRESENTATIONS | ||||||||||||||||||||||||||||||||||||||
| Net revenue by composition | ||||||||||||||||||||||||||||||||||||||
| Full game downloads | 431 | 265 | 190 | 475 | 446 | 3 | % | |||||||||||||||||||||||||||||||
| Packaged goods | 187 | 68 | 60 | 241 | 153 | (18 | %) | |||||||||||||||||||||||||||||||
| Full game | 618 | 333 | 250 | 716 | 599 | (3 | %) | |||||||||||||||||||||||||||||||
| Live services and other | 1,327 | 1,446 | 1,410 | 1,309 | 1,284 | (3 | %) | |||||||||||||||||||||||||||||||
| Total net revenue | 1,945 | 1,779 | 1,660 | 2,025 | 1,883 | (3 | %) | |||||||||||||||||||||||||||||||
| Full game | 32 | % | 19 | % | 15 | % | 35 | % | 32 | % | ||||||||||||||||||||||||||||
| Live services and other | 68 | % | 81 | % | 85 | % | 65 | % | 68 | % | ||||||||||||||||||||||||||||
| Total net revenue % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||||||||||||||||||||
| GAAP-based financial data | ||||||||||||||||||||||||||||||||||||||
| Full game downloads | 32 | (37) | (47) | 70 | 25 | |||||||||||||||||||||||||||||||||
| Packaged goods | 4 | (37) | (35) | 46 | 9 | |||||||||||||||||||||||||||||||||
| Full game | 36 | (74) | (82) | 116 | 34 | |||||||||||||||||||||||||||||||||
| Live services and other | 385 | (39) | (316) | (62) | 298 | |||||||||||||||||||||||||||||||||
Total change in deferred net revenue (online-enabled games) by composition1 | 421 | (113) | (398) | 54 | 332 | |||||||||||||||||||||||||||||||||
| Net revenue by platform | ||||||||||||||||||||||||||||||||||||||
| Console | 1,229 | 1,049 | 1,005 | 1,374 | 1,215 | (1 | %) | |||||||||||||||||||||||||||||||
| PC & Other | 420 | 423 | 365 | 364 | 392 | (7 | %) | |||||||||||||||||||||||||||||||
| Mobile | 296 | 307 | 290 | 287 | 276 | (7 | %) | |||||||||||||||||||||||||||||||
| Total net revenue | 1,945 | 1,779 | 1,660 | 2,025 | 1,883 | (3 | %) | |||||||||||||||||||||||||||||||
| GAAP-based financial data | ||||||||||||||||||||||||||||||||||||||
| Console | 377 | (94) | (328) | 108 | 275 | |||||||||||||||||||||||||||||||||
| PC & Other | 33 | (10) | (70) | (37) | 33 | |||||||||||||||||||||||||||||||||
| Mobile | 11 | (9) | — | (17) | 24 | |||||||||||||||||||||||||||||||||
Total change in deferred net revenue (online-enabled games) by platform1 | 421 | (113) | (398) | 54 | 332 | |||||||||||||||||||||||||||||||||
1The change in deferred net revenue (online-enabled games) in the unaudited condensed consolidated statements of cash flows does not necessarily equal the change in deferred net revenue (online-enabled games) in the unaudited condensed consolidated statements of operations primarily due to the impact of unrecognized gains/losses on cash flow hedges.
| ELECTRONIC ARTS INC. AND SUBSIDIARIES | |||||||||||||||||||||||||||||||||||
| Unaudited Supplemental Financial Information and Business Metrics | |||||||||||||||||||||||||||||||||||
| (in $ millions) | |||||||||||||||||||||||||||||||||||
| Q3 | Q4 | Q1 | Q2 | Q3 | YOY % | ||||||||||||||||||||||||||||||
| FY24 | FY24 | FY25 | FY25 | FY25 | Change | ||||||||||||||||||||||||||||||
| CASH FLOW DATA | |||||||||||||||||||||||||||||||||||
| Investing cash flow | (51) | (49) | (69) | (46) | (62) | ||||||||||||||||||||||||||||||
| Investing cash flow - TTM | (195) | (207) | (232) | (215) | (226) | (16 | %) | ||||||||||||||||||||||||||||
| Financing cash flow | (431) | (360) | (546) | (402) | (504) | ||||||||||||||||||||||||||||||
| Financing cash flow - TTM | (1,622) | (1,624) | (1,688) | (1,739) | (1,812) | (12 | %) | ||||||||||||||||||||||||||||
| Operating cash flow | 1,264 | 580 | 120 | 234 | 1,176 | ||||||||||||||||||||||||||||||
| Operating cash flow - TTM | 2,352 | 2,315 | 2,076 | 2,198 | 2,110 | (10 | %) | ||||||||||||||||||||||||||||
| Capital expenditures | 52 | 51 | 67 | 50 | 50 | ||||||||||||||||||||||||||||||
| Capital expenditures - TTM | 195 | 199 | 221 | 220 | 218 | 12 | % | ||||||||||||||||||||||||||||
Free cash flow3 | 1,212 | 529 | 53 | 184 | 1,126 | ||||||||||||||||||||||||||||||
Free cash flow3 - TTM | 2,157 | 2,116 | 1,855 | 1,978 | 1,892 | (12 | %) | ||||||||||||||||||||||||||||
| Common stock repurchases and excise taxes paid | 325 | 325 | 375 | 375 | 383 | 18 | % | ||||||||||||||||||||||||||||
| Cash dividends paid | 51 | 51 | 50 | 51 | 50 | (2 | %) | ||||||||||||||||||||||||||||
| DEPRECIATION | |||||||||||||||||||||||||||||||||||
| Depreciation expense | 48 | 50 | 51 | 51 | 51 | 6 | % | ||||||||||||||||||||||||||||
| BALANCE SHEET DATA | |||||||||||||||||||||||||||||||||||
| Cash and cash equivalents | 2,742 | 2,900 | 2,400 | 2,197 | 2,776 | ||||||||||||||||||||||||||||||
| Short-term investments | 362 | 362 | 366 | 366 | 379 | ||||||||||||||||||||||||||||||
| Cash and cash equivalents, and short-term investments | 3,104 | 3,262 | 2,766 | 2,563 | 3,155 | 2 | % | ||||||||||||||||||||||||||||
| Receivables, net | 867 | 565 | 433 | 1,012 | 742 | (14 | %) | ||||||||||||||||||||||||||||
| STOCK-BASED COMPENSATION | |||||||||||||||||||||||||||||||||||
| Cost of revenue | 2 | 2 | 4 | 4 | 3 | ||||||||||||||||||||||||||||||
| Research and development | 108 | 104 | 101 | 122 | 119 | ||||||||||||||||||||||||||||||
| Marketing and sales | 14 | 14 | 12 | 16 | 14 | ||||||||||||||||||||||||||||||
| General and administrative | 27 | 28 | 26 | 32 | 27 | ||||||||||||||||||||||||||||||
| Total stock-based compensation | 151 | 148 | 143 | 174 | 163 | ||||||||||||||||||||||||||||||
| RESTRUCTURING AND RELATED CHARGES | |||||||||||||||||||||||||||||||||||
| Restructuring | — | 59 | 2 | 51 | 1 | ||||||||||||||||||||||||||||||
| Office space reductions | — | 2 | 4 | 1 | (1) | ||||||||||||||||||||||||||||||
| Total restructuring and related charges | — | 61 | 6 | 52 | — | ||||||||||||||||||||||||||||||
3Free cash flow is defined as Operating cash flow less Capital expenditures.
| ELECTRONIC ARTS INC. AND SUBSIDIARIES | |||||||||||||||||
| Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures | |||||||||||||||||
| (in $ millions) | |||||||||||||||||
| The following table provides a reconciliation of non-GAAP operating income and margin to their most directly comparable GAAP financial measure for the three months ended December 31, 2024 plus a comparison to the actuals for the three months ended December 31, 2023. | |||||||||||||||||
| Three Months Ended | |||||||||||||||||
| December 31, | |||||||||||||||||
| 2024 | 2023 | YOY % Change | |||||||||||||||
| Net revenue | 1,883 | 1,945 | (3%) | ||||||||||||||
| GAAP operating income | 377 | 365 | 3% | ||||||||||||||
| Acquisition-related expenses | 26 | 37 | |||||||||||||||
| Stock-based compensation | 163 | 151 | |||||||||||||||
| Non-GAAP operating income | 566 | 553 | 2% | ||||||||||||||
| GAAP operating margin | 20.0% | 18.8% | |||||||||||||||
| Non-GAAP operating margin | 30.1% | 28.4% | |||||||||||||||
| Impact from change in deferred net revenue (online-enabled games) | 1040 bps | 1280 bps | |||||||||||||||
| ELECTRONIC ARTS INC. AND SUBSIDIARIES | |||||||||||||||||||||||||||||||||||||||||||||||
| GAAP Guidance to Non-GAAP Guidance | |||||||||||||||||||||||||||||||||||||||||||||||
| (in $ millions) | |||||||||||||||||||||||||||||||||||||||||||||||
| The following table provides GAAP to Non-GAAP reconciliation of the Company’s FY25 guidance. | |||||||||||||||||||||||||||||||||||||||||||||||
| Twelve Months Ending March 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||
| GAAP-Based Financial Data | GAAP-Based Financial Data | ||||||||||||||||||||||||||||||||||||||||||||||
| A | B | C | D | ||||||||||||||||||||||||||||||||||||||||||||
| GAAP Guidance Range | Acquisition-related expenses5 | Restructuring and related charges5 | Stock-based compensation5 | Non-GAAP Guidance Range = A + B +C + D | Change in deferred net revenue (online-enabled games)5 | ||||||||||||||||||||||||||||||||||||||||||
| Net revenue | 7,250 | to | 7,400 | — | — | — | 7,250 | to | 7,400 | (250) | |||||||||||||||||||||||||||||||||||||
| Cost of revenue | 1,480 | to | 1,490 | (40) | — | (15) | 1,425 | to | 1,435 | — | |||||||||||||||||||||||||||||||||||||
| Operating expense | 4,380 | to | 4,390 | (70) | (65) | (630) | 3,615 | to | 3,625 | — | |||||||||||||||||||||||||||||||||||||
| Operating margin | 19.2% | to | 20.5% | 150 bps | 90 bps | 880 bps | 30.5% | to | 31.6% | (250) bps to (240) bps | |||||||||||||||||||||||||||||||||||||
| Income before provision for income taxes | 1,483 | to | 1,614 | 110 | 65 | 645 | 2,303 | to | 2,434 | (250) | |||||||||||||||||||||||||||||||||||||
Net income4 | 1,038 | to | 1,130 | ||||||||||||||||||||||||||||||||||||||||||||
| Number of shares used in computation: | |||||||||||||||||||||||||||||||||||||||||||||||
| Diluted | 266 | ||||||||||||||||||||||||||||||||||||||||||||||
4 The Company uses a tax rate of 19% internally to evaluate its operating performance and to forecast, plan and analyze future periods.
5 The mid-point of the range has been used for purposes of presenting reconciling items to operating margin.
| ELECTRONIC ARTS INC. AND SUBSIDIARIES | |||||||||||||||||||||||||||||||||||||||||||||||
| GAAP-Based Financial Data for Guidance | |||||||||||||||||||||||||||||||||||||||||||||||
| (in $ millions) | |||||||||||||||||||||||||||||||||||||||||||||||
| The following table provides supplemental information to the Company’s Q4 FY25 guidance. | |||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ending March 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||
| GAAP-Based Financial Data | |||||||||||||||||||||||||||||||||||||||||||||||
| GAAP Guidance Range | Acquisition-related expenses | Restructuring and related charges | Stock-based compensation | Change in deferred net revenue (online-enabled games) | |||||||||||||||||||||||||||||||||||||||||||
| Net revenue | 1,682 | to | 1,832 | — | — | — | (238) | ||||||||||||||||||||||||||||||||||||||||
| Cost of revenue | 305 | to | 315 | (10) | — | (4) | — | ||||||||||||||||||||||||||||||||||||||||
| Operating expense | 1,112 | to | 1,122 | (20) | (7) | (161) | — | ||||||||||||||||||||||||||||||||||||||||
| Income before provision for income taxes | 285 | to | 416 | 30 | 7 | 165 | (238) | ||||||||||||||||||||||||||||||||||||||||
Net income4 | 171 | to | 263 | ||||||||||||||||||||||||||||||||||||||||||||
| Number of shares used in computation: | |||||||||||||||||||||||||||||||||||||||||||||||
| Diluted | 264 | ||||||||||||||||||||||||||||||||||||||||||||||
4 The Company uses a tax rate of 19% internally to evaluate its operating performance and to forecast, plan and analyze future periods.
Non-GAAP Financial Measures
As a supplement to the Company’s financial measures presented in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), the Company presents certain non-GAAP measures of financial performance, including non-GAAP operating margin and free cash flow. These non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. In addition, these non-GAAP measures have limitations in that they do not reflect all of the items associated with the Company’s results of operations as determined in accordance with GAAP. These non-GAAP financial measures do not reflect a comprehensive system of accounting and differ from GAAP measures with the same names and may differ from non-GAAP financial measures with the same or similar names that are used by other companies.
The non-GAAP financial measures exclude acquisition-related expenses, stock-based compensation, restructuring and related charges, and capital expenditures, as applicable in any given reporting period and our outlook. The Company may consider whether other significant items that arise in the future should be excluded from our non-GAAP financial measures. Management believes that these non-GAAP financial measures provide investors with additional useful information to better understand and evaluate the Company’s operating results and future prospects because they exclude certain items that may not be indicative of the Company’s core business, operating results, or future outlook. These non-GAAP financial measures, with further adjustments are used by management to understand ongoing financial and business performance.
The Company uses a tax rate of 19% internally to evaluate its operating performance and to forecast, plan, and analyze future periods. Accordingly, the Company applies the same tax rate to its management reporting financial results.
Investors are encouraged to review the related GAAP financial measures and the reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measure.