EA - Earnings call transcript Q1 2019

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Operator

Good afternoon. My name is Erica, and I will be your conference operator today. At this time, I would like to welcome everyone to the Electronic Arts Q1 2019 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Mr. you, Thank President Vice Relations. Chris of Evenden, Investor

may your conference. You begin

Chris Evenden

CEO; to first Erica. today XXXX SEC our filings our are that conference earnings at Please Thanks, and are Blake fiscal COO. CFO Wilson, and call call. EA's our the ir.ea.com. quarter Welcome note Jorgensen, on With Andrew release our and available me

In remarks. addition, our accompany prepared we have to posted earnings slides

cause transcript, an August Meeting will for be and here could our differ call, we future comments Shores; statements on updated Annual discussed XXXX financial and Electronic is presentation will audio Thursday, and remarks, future fiscal our scheduled replay events the expectations. most earnings events include discussion July actual This prepared to our call our for that the any and to risks from those company. refer a of update X, QX XX, forward-looking these Redwood after regarding of may regards of XX. recent you Lastly, Actual today, October model, duty Tuesday, in With performance our them. differ to Arts as our a our materially statements an FAQ. and XX-K We materially today. calendar, disclaims to call, this post and results makes our Shareholder financial Form the from XXXX of results

year cash made are unless presented prior flow, During this in be free call period of call, All the course this same stated. against in will of with financial a exception the GAAP metrics, otherwise on the the the basis. comparisons

XXX, change periods impact net QX reporting several our results bookings been reflect metric, Prior ASC this not does materially does our our not ways. Now GAAP in restated. but have our adoption that of

see FAQ please accounting For posted IR our change, the we've website. on on this more information

to Andrew. I'll call Now, the over turn

Andrew P. Wilson

had to We've Thanks, FYXXXX. a Chris. start strong

platform, the mobile forward and communities in a this above guidance, with and are We our our new games, our had network Revenue players on were live to new continue to engaged creative game we QX year. experiences launched services. fiscal WeChat and new expand our more to for throughout deeply bringing earnings looking

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update in arrives QX. introduced momentum experiences, Champions amazing FIFA for FIFA quarter. Mobile our new have the season From to FIFA titles we launched our have we as We content League just our platforms latest and this network all existing including XX, throughout to unique franchise, across later

part Our live new content Sims X in and service. to we packs community ongoing year-over-year deliver of grew our continue unique as players XX% as updates

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to Anthem BioWare we sessions ahead, fans continuing pre-launch demo to end, the to PLAY depth wanting opportunities forward packed and beginning world the incredible new see and anticipation is into EA Our and gameplay jump interest to experience, learn we're to sharing game. from for great were from our in with shared more. more look and including innovation months much this players building into

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broadcasts this kicks of with Our Championship off and competitive quarter, NFL Madden network. Madden also year second ESPN next gaming season for XX-team set the of the NFL Club the

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the over hand Blake. to call I'll Now,

Blake J. Jorgensen

Thanks, started bookings years We with quarter on profitability. and on Andrew. strongly, beat net a first another

on strategies, on to new China, our genres, live growth and services. on on with deliver a focus new continued We building

were earnings the was $XX information. See $XXX expenditures as measures, our specifics and on and billion last the please new EA's dynamics a Operating $XXX to $X.XX from Operating million. reported GAAP the million. guidance. Mobile across cash the million and Capital above vectors. results use to downloadable the And in free last measure announced compared product report cash of all To include results million, was flow $X.XX subscription million gave the historically flow by compared games invest guidance that in access million diluted platform three This slides our a resulting will for driven EA above quarter, to PLAY, Anthem, expenses players investments We $XX to quarter our announced billion, model. or taxes. of quarter's Operating FIFA Origin R&D, a the $XXX then more operational was significant net in ago to $X.X were flow non-GAAP our ago the a income action financial earlier. for $XX for of we bookings China. new per we from cash by timing to earnings to flow a look relevant deep months a in our we quarter refer year IP. cash down launched in service on at Premier, EA continue Access day $X.XX, I'll new million share compare million launch driven $XX business. cash was primarily this the Operating higher development $X.XX our at We of upcoming year received was game. $XXX cash WeChat progress of XX revenue year billion. our by basis of additional discuss net tab for our

our During of quarter at we repurchased program. a also leaving shares cost million on available $XXX buyback X.X X.X the billion million

XX% end investments quarter were short-term billion, year-over-year. and cash Our $X at up of the the

this million like by was year the guidance. $XX Online the A Way driven on FIFA Sims X, Now The million Net were our Way up quarter. key Online the FIFA Andromeda $XXX partially and business The the from for to the Sims by Out, million offset period. by year $XX X, by $XXX A to in our delta and drivers Mass million Effect X. down quarter bookings year-on-year driven offset the to Way driven FIFA The Online relative outperformance were $XX bookings I'd partially The and X, above quarter Out, captured increase prior million, but by net Digital Mass ago Out. was The Battlefield turn X, of guidance Effect: was X, Andromeda. year-ago A sales

now digital ago. basis, year XX-month trailing a XX% to of represent the compared net bookings business XX% On our

as This million. reached adding delivered growth so in components mode launches, the we was bookings Origin due subscription million, in discussing started of very we'd And the Cup driven Sims Sales daily rose introducing Online were at highest bookings at The positions this X% digital but FIFA by to of in active FIFA the it expectations Looking users as the new players the Ultimate game's was game World net and revenue. of Ultimate lapsed and XX World due as ARPU had bringing Mobile with our titles focus players milestone Mobile up, quarter's to we of the strategy The and a that when to Access Premier. broaden partially service up, well X both consistent the Live Monetization FIFA up played was subscription. $XXX new X to declines than back history. Cup has launch FIFA were on turn, significant forward in and were pleased based above base to We're year-on-year FIFA July people $XXX acquiring FIFA in Team. in launch this we the Team. our the a expected mode players feedback successful game lower to content next by Access Engagements base players. down looked and the continues attractive the activities, recurring its millions Millions Sims prior kicking X% week continue net slight the of European Asia. result offset slowly, to prepare look performance Both off. ramp exciting franchise in of to as we year-on-year on other Sims Sims look leagues We to older XX game add team grow. EA grow the Mobile titles, new and Origin bookings events, fans. to to of the our community Access as we and new by XX careers, We of the from frontline on of

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guidance. to turning Now

since dollar $XXX to our prior tailwind the our We last year. At the million $XXX full suggesting guidance zero bookings exchange guidance. time, the rates, to despite At that were rates has today's to quarter. the of are relative for returned headwind the million reiterating exchange net year strengthening

assumes be there our noted or by that bottom-line offset should from of business. risk our improved hedging less strategy. headwind However, will bookings is current also the It our weakening because of dollar guidance the the to of general year remainder this through be the

guidance We flow free $X.X cash holding at $XXX be $X.XX cash are would billion. about expected flow our to be with and million billion CapEx so still operating approximately

how our does coming the have up continuing available Madden all cost in Asia, Series EA and NFL Anthem on launches. week, forward second operating FIFA FIFA our October, esports, we time to the strategies. of to and results continued the with per on is schedule $XXX V growth more. the Access timing in of We be bookings three year-on-year This will launch In a launch is We're $X.XX to OpEx recurring the February. coming for months. in and lot net decade in the the Global Battlefield be expect X in ramp $X.XX as build we Andrew For revenue August in for over days started the strength of we're final available XX XX% X quarter. our ahead FX. of as Origin we this anticipate net pleased the at FIFA of as Battlefield making investments FIFA a is driven This first of will in Online and second in bookings in share of Premier revenue end the and growth growth look are recognition We'll revenue, and to September. continued $XXX the of concluding in million. well quarter, Madden, slightly there's progress by Incidentally, earnings XX in billion, continues strategies, is by expenses Mobile. their year, making we with mentioned, next coming for for be down prior the we our driven sales SPORTS billion. Madden the And several excitement $X.XX FIFA, million of to XX PC. and of year and its of on to are quarter as the be a London of full Asia events the we ahead up the

advanced other our further and technologies. continue gaming cloud pioneering the in we Looking into work future,

Now I'll turn the call back to Andrew.

Andrew P. Wilson

is entertainment. This an making to time and amazing be Blake. Thanks, games

break from inspire to stronger world, into and moves In in is create, that saw that ways the experiences, quickly unique games energy us our players to last digital EA share, to expand the that thread communities. creativity compete, games grow an transformation players. finite through continues this incredible day the to turn Through play. billions. entertainment watch, at to even more constantly we games we enabling becoming bringing new and opportunity this ideas to of reach accessibility EX, The on focus Innovation is into As and global our of PLAY is to to infinite and audience play, world and month industry heights. barriers the social creativity and will defines keep deeper and connection EA each at to the is take

New lifeblood. IP and fresh new experiences our are

this to SPORTS platforms. new all and Command Across & like FY titles is amazing Star developing pipeline. for Fallen year latest another V, development new Respawn Jedi project Wars: Motive we the rivals, coming Anthem, IP. EA addition with in games Battlefield IP XXXX In have Studios, our along EA for Worldwide Conquer developing is new Order

be more will and ensure for mobile player Our we working the value, broad every and delivering titles, fun fairness, diverse At studios audience. foundation under our on way. and are are experience choice, have new we several of that projects

leading as are And Premier, friction, and transformation add gaming, continue audience through that pushing, Technology cloud more global competitions, the IP are we and also ever breaking like will into and We Access broadcasts, will world the ground will expand industry. and is learnings have choice, new of are played. with we expansion I value the more games massive change competitive think, that in bringing games continues. Esports a for new excitement the and bring our machine reduce we farther of advanced of new partners. content. gaming, and momentum Subscriptions way Origin with made increasing AI, to

excited of areas leading seek players the around these core industry. players to in for to each the future our of we amaze the our Player to Network invest and transformation and entertainment We're to continue great to continuing the growth world this are best as We the of connect other. and

Blake your for questions. I here are and Now

Operator

Stanley. from comes Your first question from Nowak Brian Morgan

Unknown Speaker

a Thanks I Brian. taking for on have our Hi. It's Matt for Costa few. (XX:XX) questions.

was players? dollar about in second you then new subscriptions, how female the are with quarter? connected you and Fortnite the is services how trends a live and IP contributor impact et are large of as next to Ultimate seeing thinking is obviously of into year And of areas investment this to First biggest And what that, between younger the Thanks. and year the Team cetera?

Blake J. Jorgensen

do out don't Brian, over component in – live should I'm if basis, in We you. typically thanks, out. just quarter is that. a services you certainly break Ultimate take the that closed of Yeah. crack the Fortnite any like XX% and Team And Andrew one the assume question at that going let We a yeah, thank Ultimate to quarterly on Team to but we quarter you'd

Andrew P. Wilson

Sure.

that the seen in we saw we So quarter. We what our Fortnite continues what is have to incredible the believe engagement expand games audience. for

As about, XX we people FIFA. talked Cup we million our over mode had join in World

expand we And to that launching expectation think a opportunity is and as so is audience. that Battlefield Madden into and they into tremendous what provides season, us holiday going FIFA continued particularly the our growing as audience the for player about

Blake J. Jorgensen

games Can across are and But we will the shooter means games the part in write in sorry second a Yeah. time to would in but to it games industry. a people I also I'm particular it's know And doubt your first-person to repeat and industry, I'm taking where more down exactly of play up only had hard the pointing the sure a that it's future, didn't question? taken impacted down. I'm is sure without that's your that road. been our that and thing more people's you people's in We up I brought enjoy it is phenomenon that add business, time the time.

Unknown Speaker

problem. Yeah. No

thinking you new and year the how the dollar about areas biggest investment subscriptions this between streaming? of So are IP next year

Blake J. Jorgensen

biggest with people building That new That's driven the new of the more IP. business help and I been i.e., spend in new studios bulk build the to going, it's mean, IP. dollar new feeds content. Yeah. ultimately subscription where has around bringing

of extra of of most are IP, things that We are for how on bring like that based on in. we i.e., content outside the our is content the looking subscription. expenses content it's much Warner Bros. the used own – inside based And

And And security just new while a it's including future. of network spend the in respects. critical not variable big be important IP we development, base. infrastructure as underlying of to operate continues that's all now company our an then So to it's that our some as more networked as which is and our how part in

Andrew P. Wilson

infrastructure, that to security. like And also five add platform, is The on to on AI, years that I in what one as piece sized we're some learning. of had machine is working that over reprioritizing our build data we've like resources those platform, meaningfully last continued have terms increased ID, in that things a like the on team subscription would they to digital against gaming, addition like commerce, investment, cloud

up and having area of some technical issues doesn't as an the now and And against investment, foundational a so strategic it opportunities. that talent by we're completed of the incremental ID, able commerce, in while number show of of these virtue new broader to repurpose data,

Unknown Speaker

you. Thank Great.

Chris Evenden

question. Next

Operator

next Your from comes from Chris Goldman Sachs. Merwin question

Christopher Merwin

you Thank Okay. questions. my taking for

hoping of for the were games? mobile it about First subscription. spending more successful relative and then Just understand the very the just in your very more you Are the during of playing could little Mobile it's how bit your that business And progressing. your expectations, adopters contributing been in about thinking help impact the of you the the they you're games? only they're bookings talk year-on-year FIFA slightly down of curious was how the those in guidance? a to frontline know early early China it days. the I what I year you. secondly, performed I how quarter, finding in for Thank context launch Origin title noticed had net rest quarter. still think Can that's from a of Are just but you that of us you've you

Blake J. Jorgensen

Yeah.

be that's experience titles subscription. don't that non-frontline as before easy. very what EA our one's our though on people Access to well twice as find We and believe they we for advantageous know spend many experience money they as did and do the that until long outside twice the it know because Access users also that led that doesn't We the Let And turned play me would help week. hit next subscription, games new Origin as get frontline yet twice titles joined first or as because into system. drive much to for us as from

So months. over we'll couple next that of over say to have the more

we've February. the then in Anthem August, I Madden four are go in And titles Battlefield think Access got Those remember we PC-based that FIFA and in in going October, September, into Origin Premier. really updates in sense won't that try after those in meaningful four but along new have people titles way to and information. full until all the give a and of we'll of are the extent will that they're

everyone these strong longer build you've to these Mobile exact. it be future implies all In exciting early excited we've Mobile, term. as a The Mobile. a because FIFA We've quarter we're takes terms to be for certainly incredibly guidance the but But is into it's that the but early what rollout. that large days. and saw it positions we was impact the of most still importantly, was the guidance with stated, But we of built above to our to would Tencent, our we in going partner, models from well caution and them the around number year. time the of for the still We some believe and size it's saw, feedback chart to a FIFA the get got clearly, we're globe, FIFA both getting But our contributor as careful. as as I very days seen probably tune that that not consumer

what So historically. we've they seen just really outperform

days very but exciting to on it. So early are that on come more

Christopher Merwin

All you. right. Thank

Operator

Thornton And your from comes next Matthew question from SunTrust.

Matthew C. Thornton

about afternoon. guess, question, XXXX I Good the taking Thanks think for Hey. guys. fiscal you first, slate. when the

talked little title You the a releasing Jedi year. bit that Respawn about

Premier another portfolio. the there to terms consolidation. streaming, other any Origin those Thanks, announced conversations Is Origin EX, industry we just what And of or at and fiscal I'm Premier, and block Access to just you just back obviously curious there coming with secondly, there release in be were out just chatter. of PLAY between Respawn room like been lot XXXX? Access kind helpful. is conversations for a curious, out of events the Just around would subscription, EA and should have room the sports any color Any conversations coming and guys. that publishers since then major of

Blake J. Jorgensen

Yeah.

careful Andrew things on we're be to you don't yet. because say not XXXX coming. I as it, giving that guidance Andrew did described XXXX think So other be literal, there take And are

And and want we'll into that. give coming. get year first. this everything give like Andrew? deliver titles So up first touch more give year We got one year. of the in But come more we quarter or two likely there's to -- that to this titles other trust sizable on that We on to I sizable we'll don't we don't next we see as give other at know as on this of before color guidance year. start some ultimately you subscription, later guidance the to if most

Andrew P. Wilson

sure. Yeah,

on potential take subscription from time. with we it the to conversation access very that plus to will a big EA over we opportunity value like time Premier. TV, So, for was true that there at certainly Origin to in terms in more reduced positive And the long-term a we gamer be Access a games build, music. was great standpoint, but that believe of – with And linear the again of feedback coming PLAY, movies, seen based have out and lot very, will of expect gamers be friction. great of businesses, media And as like

we've the that publishers, the feedback say In mixed. with other would conversation terms developers is I of and had

we to of the own many leading portfolio and and unique and this do the forward the industry. by hours virtue depth with of a our are can we hundreds industry, think take in and portfolio for I many, step of offer the our for of many, position breadth believe gameplay pioneering we're we that

that this into Some publishers base live and opportunity spoken engagement lifetime to other wait-and-see in about approach. excited service. deliver this would that engaged very, developers I have the to developers are access will player very And and highly we are tremendous a say, publishers,

is of said for entertainment five TAM and services the with consumption with plus streaming the the of term. the grow that engage like in this, and sense longer think see last to over investing starting my the we're in uptake As the long combination streaming And participation media, players continued we'll greatest disruption greater as we're years there, a lower able leading from at we're in I of and of this. that we're friction subscription result before, I've as subscription, of value

Chris Evenden

question, Next Erica.

Operator

next comes Ryan Barclays. Your Gee from question with

Ryan Gee

Thanks questions. Yes, taking for hi. my

the First your quarter, guys remains you unchanged. believe this outperformed significantly for one, guidance I outlook I guess, but for earnings full year the

to the lot know not for your a Anthem down one conservatism. come whether still I confirm But and and back so you any follow-up. or that it'd I you Battlefield, just could for in specifically for and outlook Ultimate I May have if guys be Team, come, has especially since there's titles great Now appreciate guided

Unknown Speaker

Sure.

while, So a you've I been think around for Ryan.

in of once think coming guidance raised out five I quarter. first the last we've years

First approach, of quarter do business is XX% so you and we to tend know conservative our our not that.

much underlying seen the a a trade other as pound both headwind in We came we due quarter tailwind. that's not a our FX. believe, the the mentioned I outlook have a well us on and titles. into thinking euro, We is on chatter say further caution war chatter FX. Brexit, and and on And have finally versus gave the changed and would I what the the to, dramatic of as we've on change maybe I currencies, guidance created tailwind for

will view not overall how But the we're not our versus market or on think certain view because I business. last. on it's changing the fundamental guidance that long we're title specific any a Now

Ryan Gee

full for the services XX% you to sense. Great. year. and then during was believe live Okay. Makes I XX% X% to I And quarter, the guess guided up

those, it the puts you together. it's two if the So to as back live half, you of you going to come great are Origin, in be that rates into subscriptions XQ? growth be great. rank Battlefield, out takes help could the services kind fiscal Maybe maybe bridge would whether drive us or if can reacceleration Team what like those Ultimate And and order from for that'd get holidays, then it's going in

Blake J. Jorgensen

order rank forecasts. hard all because probably not we tend It's Yeah. for of individual to those. to I mean, give me live it's service

is you but first NBA coming You start season well and FIFA Madden know, the hockey the for peak services live for that should of think quarters and – real and both sports, sports of for matter. out the two as I all

that as are you tend the to so out. rolled products see And

quarter call, half second first was engagement, but tends a We to Cup of quarter. on only Andrew And in just quarter. remember, World the slowest mentioned be the less as the the had actually The mentioned and lot the in versus I quarter about of design as because Cup. of half World monetization

live still where that still don't new bring as very So market. them guidance excited by but I well as roll to by as about services particularly with the out our provided it's We that would we're say comfortable live on going we and we're start we'll sector, services we're sticking. esports, that on we've change guidance driven new to products

Blake J. Jorgensen

Next question.

Operator

UBS. And your Sheridan question next comes Eric from with

Eric J. Sheridan

engagement as on remarks, Thanks, Can time again about acquisition, turning knob engagement. mechanism to going give also how you on up that on spent? guys. on driving up services, monetization the opposed you on dial Thanks for following think user live purely it the question. the to following monetization and prepared for versus through you us live growth from interesting a services user the your turning hear as it use commentary color on from and some can user that was taking just against either Maybe

Andrew P. Wilson

Eric. Thanks,

Cup Team, the typically whole had play been game they players mind What in World was knew And that of engagement. FIFA. can monetization is this had to to we the of seen transformative highly And transforming bring we over business opportunity our point-to-point lot services and had at of was launching in Team great a to designed what a been about a and the certainly think player reacquiring and acquisition And Team how the the as nature I've think for into time unit as Ultimate lifetime looked pageantry certainly players interactive opportunity of of Ultimate introduce broadly FIFA lower of sale. new we later live into do the the move content. of out World aspects a that work part League of spectacle in of to certainly about back successful, group and it of of we introducing new Champions lot certainly our with around, engagement players through that lot of since to about the and we the say, meant Cup come And many, what game. we're is newly through and the business previous we back might simply players well I as to FIFA it's at years working process it coming mode bring in as the the core FIFA time. went soccer as as new year Ultimate have them or certainly, think of the acquiring on an typically player was I world soccer the millions World and of transaction that World over a experience, would a than a a acquired value we a question. and was we of and as and new looked Cups, And I and say and and of came that to our world this we XXXX, versus many less players players, an point-to-point more new excited understand many players core that them those through engagement we that we continue two lifetime we but them as Cup part include

Eric J. Sheridan

Thank you.

Operator

Benchmark comes Your next Hickey Company. question with Mike from

Mike Hickey

taking for a Thanks Congrats you. QX my for on guys. Hey, strong questions.

potential V ones if in have Just follow-up. Battlefield two monies little had from Curious you I in here. VR any XXXX. fiscal a quick guidance your

Blake J. Jorgensen

that Did VR for a experience we Battlefield? planning you are mean

Mike Hickey

No. referring I Royale. Battle to was

Blake J. Jorgensen

I'm sorry. sorry. Oh, I'm

EX with Battle talked about bringing out for we Royale Battlefield. think mode I

when one. we have did would that that exactly say will we come but out, announced haven't We

Mike Hickey

Okay. Fair is enough. now player, And it mode all franchise a seems want. Battle which like adding a aspects obviously Battlefield you're that V, the you've created Royale a multiplayer fairly addition. player new single full And the value proposition,

I and, guess, talked these basically terms of strong player communities have of about, creating games which TAM think before, strong a are and or Battle how expanding couple Fortnite you course, really about with of incumbents in when you've Royale curious, monetizing they're often you Just PUBG.

Battle or stand-alone So how to at perhaps price appears Fortnite, we a free-to-play you're a with a sort what free-to-play do going V I Battlefield tethered similar you a to similar about, guess, and versus offering reduced monetization. to be a offering the maximize PUBG Royale to which do could Thanks. of think TAM

Blake J. Jorgensen

Yeah. a right mean, in on for we're creating game. the I other other of may game. mode than over modes have different we No out now – focused as in time the Battlefield, on things We have lots that we're the focused that Battlefield. for come

I see don't possibly we we're how in think stuff genre all say we're the build that standalone and you'll how now. game of that But once really but Battlefield in free-to-play years. released. come essentially to live of experimenting that on And a another services our games. a with on the do that's interested is or the genre, focused months think and Battlefield months right coming comings continually in looking game some see would around for I I in at you'll more we're shooter be might the

Andrew P. Wilson

to other components a are come that and innovative we components what would the game, more we'll game again be that is it's play Royale a into featured newly expect we And of and DICE that we're just is continuing all through developed the multiplayer that be build be play game traditional to player, we'll want not of through the over but as do in this, one multiplayer and a new deliver able ways game. time. modes Battlefield to might or most about through get modalities we traditional to single that mode. talking live what features that diverse that say to We're community to studios. And for which including context October, to you should a of what modes Battle be delivering in Battlefield that Royale service delivered who of full excited there. we in developing, believe you addition And looking Battle might There we're way in also many are growing new at different launch what our about discussed a we're of but is our might play innovative look about be I and community

Mike Hickey

luck. Thanks, of guys. All Best right.

Chris Evenden

Thanks.

question. Next

Operator

those Inc. Your across on Hi. you Thatcher next particularly leverage Ben Ed or platform that Alter Alter scale how Capital Macquarie Can Macquarie. any mobile (USA), time? Ed Ben. can you commission differ and consoles to question from the - from opportunities you This for comes China? And holders to there's discuss see paid if over rates improve rate

Blake J. Jorgensen

disclose across think and on Tencent perspective are Apple similar pretty model Tencent. that. have and people all think are I a I that Microsoft what a but And others the good don't but it's Eastern, and We for different, most Chinese rates have and the Google levels within but effectively ones. different sense Sony people a will The of western

So...

Operator

from Stephen - thanks. Your next Suisse. Credit (USA) Suisse LLC Securities Ju comes Ju Stephen Hey, question Credit from

differences it's versus that's in Western how the know monetization better you be available might presumably about early, Mobile I what's China available talk Blake, versus can might So, of game else? FIFA lower or in everywhere In China be different, but markets. worse ARPU the between the terms

there midweek the or conversion to to Is the going wondering purely this just parameters? is you Thanks. the So are games planning, you're different modes more that Also, cetera? guidance materially paying rate around think League different? the users if about be help for impact et events to can the us Champions

Blake J. Jorgensen

you of I'm in how is giving first just China the different, so don't in intricacies rules football. statistics. days of much more of part I why done the then uniqueness terms let play that I'll uniqueness fact is of the say it's I part all So hold And League do many going and general game the yet and other piece. localized It's any Champions or and early we've on markets. in the But in off take the Andrew the than of people Chinese don't know the to of in market that would

part do sometimes are FIFA how of It which X is so we respective content more X much Online played. to Online make game around local and try the And understandable in had well, what and games more did markets. much Chinese-centric FIFA their as

there localization marketplace Tencent Asia that with the where we component ourselves, benefit that potential opportunity that West. markets. more of our so the individual much a say This going tuning better and are game But been And has on all, biggest is that seen a base large. in game be. path the what the drive think, versus We'll can understanding too other has without would will and of as depth it's did guys so we I think a we of size get that all the to metrics, probably sort have from in localization for about that in metrics because which a how crazy. in teams driver early sense And start of with the of it we've we've the been describe you dealing internationally still huge getting I down we the to is all localization. helped But been

Andrew P. Wilson

league, And tournament. and the in sport together is sports not League, many popular a clubs Champions follow magnificent world, maybe in soccer the the who for Europe powerful Champions the best in League, best footballers in what of if bringing the terms most and league,

way League experiences remix theme doing Champions progressive in console what something and and this we've talked through has given way general really about FIFA so, fan modes, across events generations It's year our enhance again time. million thinking extend think, we've the we the about we in in those should – we should be Champions and story the and had simple And also expected as players manifestations expect We're League believe delivered player, very that the across it, be time an and remarks, various I Ultimate have over all we And of the and you song the you FIFA. XXX I And first the us experience league, about platforms as live might service new into decade. the will excited with multiplayer in of platforms mode prepared the over of with base, how through and a inclusion are games. League. games all the That excited and in Team can how a interactive that done single Champions team completely popularity content. of over all

Blake J. Jorgensen

know, League that host. able that gives we add to new for And to as driven And obviously events new Champions you the be by the a Ultimate to Team roster. weekly is us opportunity events whole

This time. So, Stephen exciting that's play. Credit is one-year help very LLC a just not Ju evolve is us. for to that this FIFA continue And something over you. we will Thank (USA) think Suisse - Securities

Blake J. Jorgensen

Next question.

Operator

BMO from Johnson Markets. Your Gerrick comes with question next Capital

Gerrick L. Johnson

Is thought Andrew players. that or that million I afternoon. FIFA clarify. is I say just that SPORTS accurate XXX total had EA good franchise? heard want the to Hey, I

Andrew P. Wilson

accurate. that's No,

context. lot placed we that we're So, a on times in remember talked West being West. of in certainly about FIFA, think think when It's West, FIFA in But the about and the when FIFA to we easy the about the talk you also, and Mobile in of FIFA console context about in Asia. – the in

important that to Southeast And very, about platform, online a thought was China. have million as across free-to-play its it's think in we capacity over We successful and look players. very Asia the Korea, true we game and start XXX PC in franchise, the FIFA entire it across we

Gerrick L. Johnson

Thanks Great. clarification. the for

Operator

next Your with MKM comes question Handler Partners. from Eric

Eric O. Handler

Good Thank saying, by I'll the afternoon. this complaining. Yes. I'm Blake, not very preface question. for much you

million quarter. $XXX of stock purchased the in worth You

$XX cash flow. You generated million of free about

buyback really – At your to So, existing dip maybe take at about bit? a it are didn't what accelerate would you what into mean, cash I all. this have dip you didn't the thinking to point, little

Blake J. Jorgensen

the this on complaining. a requests getting two-year We're increased we'll our old We've you target billion with it prefaced move program, board only is it up. to program. our surprise. you focused it appreciate that every every our the just saying performs, how take have into right. year, investments program, program, end a or activities We're that to and to the revisit we've it every not. buy need to – started or at our I back of that capital is in an doubling cash brought from that to make opportunistic We view revised are coming quarter year. weren't level buyback No and that we're not And adjusting we We on systematic always already we're to of by for do hit year year. see our trying sure that new the and about that one balance And that that it trying which the returning shareholders. decide is shareholders. based for year, $X.X we We've compensation. to We I'm consistently return today. the continue always through dilution now that minimum we is M&A and about hope at balance But at to potential share-based stock thinking cash years more if think more than and a the versus clearly should will always covering

Eric O. Handler

the I us movement bit are secondly, you on seemingly companies environment? detail you lines, acquired? mean, to One, give you little M&A of bit those And along could see that a made acquisitions. in guys small you've little two those a So, more starting two have

Blake J. Jorgensen

do, a to no most one's is their well, a forced doing Halo the I the devices less a not into time. getting because it clearly The talked cases that in we're at opportunity based of And series. and the it's mobile to they're and us impressed try And rethink many a be think small. – that business Tel called the million. thought direction, staying they've that lot with mobile been is developed, original people is and studio, private we of out the of correct, people really – been have seeing innovative standalone the And working a to essentially it toy that people movement were over ideas that Industrial so very watching through, everyone's to we in that industry getting buy I in and they've a Israel the the then, different toy that streaming, fabulous are team in was an a of team that think people able that work-for-hire team as on all founders to people, piece the you're not And see on. deal for but studio. a you that's with, you group critical The streaming we've believe the we position Toys. the in of comes Aviv, acquisition than they're of working time of to few business, very stream and of next won't that. technology Unfortunately, what the as $XX they things business, of their team, opportunity to technology they're but company. GameFly something we're one very so product small for yet we've a in us at two unique a look and and panic. actually space. don't either couple the and working major of it's tell they're the second was the did, what We will and assets pretty public working the years every coming with may marketplace we're was looking a was so players. change I've been of buy But time, in that on, mobile from or acquisitions over That middleware always out in we at we to quality

look great people well a we're we've We that And partnering buying lot those per very se. with mobile So, we knew great and like specific opportunity them. product been excited. businesses for talent a at because versus of

back but, those and to keep we and And small But so those And any fairly return of want revisit aren't the powder are there the dry be that make go types change. longer constantly plan. we'll sure in find doing we vision. shareholders in we once of does that term we'll really unfortunately, things most to are if opportunities, enough again something case

Eric O. Handler

you Thank much. very

Operator

next comes Stifel, from Drew Crum And your from Nicolaus. question

Drew Crum

Good afternoon, everyone. Okay. Thanks.

you'd if So, to the run X. bookings for size Online FIFA willing be annual net wondered rate

playability. been Thanks. Battlefield you Online. Is the something I then, of think intend popular past other around of you've the EA games? some size any context in one separately, provided cross-platform in V to that in include features has the FIFA And or Fortnite

Blake J. Jorgensen

Sure.

a Online what I now, as it's the it's think growth China the early X. too FIFA size few looks very Online, Online to to ship markets, in need consumers tell transition period we've as a Korea. doesn't particularly in tracking to to FIFA talked about like. both their allow programs. you FIFA in off versus And them Right And translate still X always similar well there success both the there's because actually currency move across two to And that we're running the people on. immediately simultaneously slowly

to So, X.X very growing particularly small trust still billion X.XX in fast, and that billion guidance, China. or but our it's relative

Andrew P. Wilson

the friends could console how you Households you offering. by console terms result the especially mobile. as types And to game X- of have the moving that cross-platform screen local to a you typically an a to be be remember, will that should being measured PC, session in to vision mobile player you the term, very game we families And and size way same console PC time of together. X-year of terms has, per be thing. by player it's that base. to drive console can of and can a terms also franchises that experience and CPU have measured And have games both play portion time in into – Fortnite In every in we on so deliver think a together, device base. to cloud appreciate near future mobile profile a in seeing console, horizon are have, tremendous we and won't and experiences liquidity part today of and we a titles development And bring gaming we experience similar up the have games of our we're In play, in pushed diverse of at to will in players different I of playable in a market ability we where and think one or the broad important great key bring deliver bring cloud cross-platform experience the exist and own. will a again have are PC se GPU but looking some

in expect more us future. on I the from that And so, front

Drew Crum

guys. Thanks, Okay.

Operator

from Your next Tim question comes O'Shea Jefferies. from

Timothy O'Shea

Yes. Thank you question. for taking my

billion So, a Andrew, you a talked about connecting people day.

just my connecting question And streaming is, does then, addressable cloud-based success contribute expanding the So, this people? great how does Mobile. market on in a how Obviously, a China. follow-up your eventually your service, to gaming, billion FIFA and

that Just opportunity about the see this you China over might we to time do in it that wondering might thinking that and launches expect type impact your see going you. how more success reasonable on of of is forward. Thank

Andrew P. Wilson

objective gaming I would believe to to us should people we day. expect every is a versus that people opportunity you in do that's And next beyond is Great people a day. question. do step them guess billion the that with billion verbiage billion getting very play And delivers my that. a a typically Certainly, a But getting to reaching tremendous in cloud our it that upon play. be play

depending So, devices. which on and somewhere on right probably playing people X now, there's billion but between you figures billion games mobile at, look X

minutes XX day. day; a of like a for the of playing part core Star that Wars: games population So, for Heroes are of playing minutes where discrete Galaxy experiences, couple they're and a

get to that with move right where PC seeing Fortnite players will we're player a over some We're up time seeing complexity that and spend time, HD on and screen to immersiveness base experience. on the of come mature. that belief more terms is Our in console a mobile down or continue of And games now, big devices. that, mobile to co-players of you

value we with TAM meaningful broadly, for in of Electronic a expanding to that capturing us, more to be the to as lower greater it's far about players friction. cloud a that So, And growth going – Arts across about the games, future. think more our opportunity TAM, tremendous our access portfolio, so delivering that's delivering for

Blake J. Jorgensen

titles titles In with able imagine the not what many terms been particularly Mobile, other sports because and we're progress in the there ourselves of Tencent might be are FIFA pleased title, into them titles of the sports clearly have both very a on can discussions you with that the we Also, put having marketplace. to market.

We have and some on worked Online PC them the game. obviously with FIFA with free-to-play time, worked them for on

that continuing the grow and our think. grow very that We work we're years, if of so other to build might try for of business coming around to fashion. some there our We're growth And players that in the mobile franchises culturalized think they were partnerships localized on other or one in focused at to market try you'll to more and looking Tencent and both products with world, see the it's opportunities the I footprint. us in marketplace biggest

think, is now, focus on FIFA. it's think the I there's because we beyond right do opportunity FIFA still but early,

has what Need there. to there's across Sims Zombies The been franchise, franchise if look And leverage Plants Speed the franchise popular been have popular vs. ways very franchises, China. those in we'll certainly our doing we're for For all always that. at example,

Andrew P. Wilson

And subscription, have But in business Asia and rise may of in we subscription we had a the Premier traditionally I also are of there. about an what engagement. portfolio Origin their free-to-play believe is premium not game More now. have more seeing there think games a that, believe relatively we audience nascent also. model broadly, is that guess, we we think about that opportunity Asia model as is we about right by there also that model as We Access business virtue of that think

Timothy O'Shea

you. Thank

Operator

Post next from Bank Justin of Merrill with your comes America And Lynch. question

Ryan Goodman

couple Thanks Justin. had on questions. Battlefield taking my one on a Ryan is for then and mobile. This I for Hey. Goodman

For pretty the play going Battlefield, tests early in actually the like commentary, it sounds are well.

that's then, content second Battlefront game pushback had the of So, on just your the the gate. curious it's how player color versus year, Last progression date, with initial and with question to in if you more a pre-order Battlefield, And system was activities any tracking strategy. little release on out II, there expectations.

there release Battlefield? thinking Pre-Alpha Rise had us months just & the and with the of in So, couple the content mobile, And you're then, Command strategy Conquer, about separately to can anything just Power or in Pre-Alpha. is we're with on a share you curious, cadence into you how –

like reception, feedback you're would to just player Thanks. there. seeing any anything there, Just share

Blake J. Jorgensen

of directly What excited where important there, really the it's going. allowed different the we to number be that. including purchase Yeah. about less pre-orders we gets saying We're that look an lots the communication people of of also around particularly but that look with at game in less are when we hearing excited, their the tend everything game, Command is intent forecast. game, that you people played of amazingly continue days early We're happy at is play is out don't It's do to Conquer, our about We people coming pre-orders, but on measures I'd it. world, components, comment to We unit and and a in fun digital observe to people tell it as EX what those. & we're game groups. but

so up game a maybe or beyond made esports it of game, opportunities. group more even individual And opportunities just and

it's you'll and in later excited finalized, this test So, it about year. see being full that, and now we're and

Andrew P. Wilson

In Battlefield continue full to delivery content is that. continued objective a has referenced to featured we've the new time, II, terms Battlefront at engage for opportunity launch you players of II in Battlefront V, and experience content that to in our and large for deliver deliver to and fresh over

system some the we're result continued new since talked encouraged EA and at and we've system and of including before, monetization Wars completely and new had Clone in learned from by fixed, we PLAY, the launched teams the we as progression that. game. that issues content with a which and And about system announced a work, to we've we've progression As content that reception the had

think months and will delivery V, have understand to we that that featured to is as with content game years is objective sometimes service large, experience. modes featured, Royale, over again, launched later, and launch ongoing that multiplayer we play. that should base And about built have of player, Battle also for full for launch the including traditional learned modes, that you deep at new a these place players innovative and games our we modes that and be we full spectacularly the from expect that the So, play multiplayer single And long-term ongoing many where we and while a of Battlefield plan game imagine time. in

Blake J. Jorgensen

take one last we'll So, question.

Operator

comes Wingren KeyBanc last Evan Capital Your Markets. question from from

Evan Wingren

just give prepared live you than you follow-up. terms in about saw remarks of the bit mentioned thinking forward? in lower I color ARPU you wonder that I and could you then Blake, you're a more bit in there your how what that services in Thanks. going if have Team. was And you'd on expected a Ultimate components a

Blake J. Jorgensen

Yeah.

a spend because play and quarter, – just quarter, football people's little pickup or So, bit the or Andrew lot But years we for having as guidance this brought a of they don't first understand that. game Actually, we've have partially they're which before we huge lapsed enthusiasm more starts. mentioned, FIFA. play much oftentimes FIFA, is to the new the money, so gave people – number Ultimate was Team fun money. spend season of into that we a the Ultimate into in quarter people in we last think year had really remind and the a we've is how very But large we the users rare learning – they'll temper Ultimate they Madden fun tried and how in I very business not a to strong for That when months they're of they first enjoyed if Team Team. around before

that's Team we business grow than did And people And or coming so or what engage, that's the game money as money spend to because see have Ultimate not continuing Ultimate Cup. now all. the out post in post and – but real positive view we positive people still we much saw is more the Cup, expected, World World those and was we that at our of a think

Evan Wingren

than just clarify, in not actually to you're thought and didn't so do game, that decline? or people you pay things the for that implying And worse trend that see value

Blake J. Jorgensen

fun that people in came the And for that But Ultimate who that that Germany enjoyed of not continues played U.S. to I with now think Cup, core weren't Team. I really keep as or these only unknown No, probably you market thing players have who the playing in much. – is that's even engage you believe the can't we're Ultimate the World play the excited. we outcomes World in new after No. But someone through and some Cup. now lost. you Germans probably didn't assume excitement the And in but quantify core people have growing may Team could

Evan Wingren

is what really are free-to-play the contrast mentioned and about doing? Got be speak that follow-up of type that, guess, Is potentially at? the like looking Or I first a that towards kind that. offering? to against resources endeavor, time that's with – Could you're it. missed willing that like an Unless of I the thought moving heard effort I've And a you're you the that And it that? freemium experimenting with you perhaps, Thanks. put was, have separate there that you could the you subscription effort that.

Blake J. Jorgensen

Yeah.

years. think Asia I XX been – building remember, or we've games free-to-play in for XX

in that the have there, great other a had we've that years experience we there. and Online example but a FIFA free-to-play have We is long opportunities of over

mode business We inside have we free-to-play a (XX:XX:XX) that Star run as well. for Wars years

franchises or we next opportunity have and in older like we're question, version come, the You Battlefield. can We're year immediately there so. that lot to more we'll things, a that? So, you nothing few is announce will looking a either have we're something new looking at next subscribe asking quarters. that also over have testing a to see the sometime version. the at or of free-to-play you to implication start of my don't to an But or it going something do to was, the always franchises assume And models. assume free-to-play But should in

Blake J. Jorgensen

time, for the few of October. everyone the seeing everyone, great. over quarters we you, forward to everyone end Thank next your look and talking Well, at to and

Operator

Thank does call. conclude This you. today's conference

may disconnect. You now

Chris Evenden	Electronic Arts, Inc.
Andrew P. Wilson	Electronic Arts, Inc.
Blake J. Jorgensen	Electronic Arts, Inc.
Christopher Merwin	Goldman Sachs & Co. LLC
Matthew C. Thornton	SunTrust Robinson Humphrey, Inc.
Ryan Gee	Barclays Capital, Inc.
Eric J. Sheridan	UBS Securities LLC
Mike Hickey	The Benchmark Co. LLC
Ed Alter	Macquarie Capital (NYSE:USA), Inc.
Stephen Ju	Credit Suisse Securities (USA) LLC
Gerrick L. Johnson	BMO Capital Markets (United States)
Eric O. Handler	MKM Partners LLC
Drew Crum	Stifel, Nicolaus & Co., Inc.
Timothy O'Shea	Jefferies LLC
Ryan Goodman	Merrill Lynch, Pierce, Fenner & Smith, Inc.
Evan Wingren	KeyBanc Capital Markets, Inc.

Electronic Arts (EA) 26 Jul 182019 Q1 Earnings call transcript