EA - Earnings call transcript Q2 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 Q2 2019 earnings conference 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. you. Thank Mr. of may VP your Relations, Investor Evenden, begin you conference. Chris

Chris Evenden

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

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

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

have the GAAP this but prior been in of materially the be our reporting course our free beginning metrics, fiscal otherwise doesn't in of our change of Note impact presented Prior against During call, call same several that All ways. with restated. unless the our metrics, will period made financial this bookings XXXX. results of ASC cash stated. on basis. flow, periods in XXX of the the adoption exception comparisons a the not year GAAP as are reflect net This does

And this to change, accounting the I'll our posted have on on FAQ IR information over Andrew. the see we now please website. turn more For call

Andrew P. Wilson

to for our holiday ahead, EA games SPORTS quarter, above a With viewership and competitive revenue in on times games. experiences Thanks, compelling games platforms and playing content, programs, At world. strategy services, expansion subscription delivered and experience our with play, new earnings services, offer live focus new for In launching record the EA, our games, the against guidance. franchises of most around more popular excitement year strong to our our content QX, our amazing that quarter delivering in and four connect our services, had high-quality new delivering more esports is for our second and ways and live players fun across collection the updates in Chris. all and is wrapped of a in in we new during hundreds We of continued services. busy share, and with with our games, one and of players the a watch, create in of

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the a of objective the extends critically that experience. development games the content franchise. the FIFA And always grow been enhances delivered our team as one for Our acclaimed is audience and through with amazing that to best game of has

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unique into our the designed And about expect will in continue engagement. now inside how is new while a our for and players Blake we we with some has Challenges, long-term from FIFA like global As we've ever into most showing near ramp beyond. next in FIFA day the immersive will will live and grow. service, some the are in into the events including term, Ultimate we League Mobile ramp engagement to NFL popular the we August, one our We game FIFA is Solo bring million shifted consoles. Ultimate Madden the and Team FUT current monetization generation to Global talk the XX modes on NFL content continues critics Series. participation that events. year-over-year Xx global engage course grow. in of LIVE players strong community delivered. until Seasons, of Madden through viewership growing set portfolio, XX every the franchise of Weekend launch and to year in increased continues in a experience now as new Team, this records, our engagement connection culture, live November gaming competitive The programs basketball FIFA season XXXX players over SPORTS to EA up highest-rated up including significantly Final our year second FIFA on the XX a esports than biggest NBA was season been that XX Cup participating to our daily FIFA last the X. NHL year engagement our Across setting our leading NHL new wrapped recognized increase and by more to and game in fans over eWorld active Excitement for XX QX, has launch

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Now Blake. the over to I'll turn call

Blake J. Jorgensen

and with our per operating compared share income by primarily for from loss resulting was much guidance. was resulting growth Andrew. with the earnings flow the last our and the transformation live of use $X.XXX of year. down bookings better measures expenses. Operating timing QX digital better service. Underlying with then million in downloads stronger the of digital cash increased Operating in discuss our receipts, this compare of were driven net by $XXX the expenses marketing million downloadable The the the GAAP our year decrease expenditures $XXX an model. basis, I'll flow margin, in tax $XXX $XXX We're an payments. non-GAAP To by particularly gross expenses refer the Thanks, of million $X.XXX net bookings. our a increased cash operating relevant to we was frontline negative flow quarter, of earnings sales, results $XX above $X.XX were compensation million. to the free pleased and tabs measures, full-game historically strong driven GAAP by first expenses. and of guidance timing ago, dynamics $XXX royalty reported was to billion, our profit in lower than the of by million, for than phasing guidance, our results through business on services profitability and cash negative The than trailing our million, information. expected, $X.XX, net revenue cash Capital of and the further business. billion. and See million million, Operating to flow a quarter's million. and $XX record $XX subscription operational some operating second our our please $XX of launch lower continues, XX for months related report for quarter was driven had EA's cash payments, slides quarter was financial

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our of earnings guidance, to revenue $X.XX $X.XX. billion and GAAP for Turning share expectation per full-year is

$X.XX cash about expect flow We billion. operating of

around This driven expectations We for prior is August continue reduction greater some our revenue a of billion. free in driven the The the collected XXXX. deliver year, would about from will million, balance net net also bookings our $XXX we to by our cash anticipate and and $X.X reduces $X.XXX in To and announcement, capital was flow quarter, by expenditures net bookings. fiscal which income of guidance bookings fourth mobile of of later estimates of subscription the V, which live in lower FX the of billion. reiterate headwind, launch from Battlefield services guidance lower which anticipate be

bookings approximately to growth our driven is delay primarily is net the to Ultimate Our the the of year, give be to fiscal than the Team, prior We be to within We're more Ultimate by now guidance, to digital headwind. for year. revised growth lower Battlefield and our into X% original expect up services FX due roughly outlook This flat reduced the flat you expectations for year the our business. with on updating changes visibility live year to V, Team. FIFA targets for

have As FIFA Ultimate FIFA engaging Andrew and added entry are to mentioned, delaying with the may Team. players FIFA new into this we XX, the content be

FIFA Team, last metrics playing engagement are year. once Ultimate However, up on

mobile year. net year be bookings our on to expect flat We about

Mobile strong primarily in for FIFA below China. a seeing are significantly in launch, XX% This downloads are & to shifts we Power by the is full-game strength grow our is soft digital, our original Command other fiscal to is a Anthem, to off Rivals performing of Star out well XX%. couple moved Rise strongly expectations, above from XXXX. of we start our titles. digital Wars: expectations, Conquer: bookings Meanwhile, performing have skew in and titles plus to We we've which expect to driven Net the expected and

to shift We model year continue an a to percentage X of points around underlying digital.

down share net primarily $X.XX XXX $X.XXX on million. the and increased R&D. of share million. count be revenue up to year Conquer: quarter billion, two using we year, of in strong we on million, will had and to revenue launches of diluted For for because quarter. billion. by in quarter, we The third be is expenses year, OpEx we be delivered The $XXX for investment results third expect in Command expectations year driven than Rivals. bookings of forecast, originally operating year for This stronger last per is XX% of net & the $X.XXX Payback for anticipate X We primarily conclusion, QX and to fourth the the In a quarter Sims quarter consoles. cost The had earnings extra Anthem for due Speed: higher Need $XXX

multiple is because global models, model is with and business business it diverse geographic robust Our revenues territories. platforms, across

with net growth continued cash ahead even with year continues, expect this generation we to strategy. challenges underlying and roughly the strong result, in growth bookings with year, digital moving and transformation be a we're flat year, on income. our As The net

Andrew. the Now back call I'll turn to

Andrew P. Wilson

and and how friends more you creating shared part evolving of in potential. bypass exist your These the finite definition interactive constantly the to evolving the our boundaries devices, Thanks, between even experiences constant a EA, meaningful connections daily we is experiences. with is of pursuit in-game outside from went lives, time. in transformation online live are Blake. and Games it offline The services This our are of when both become entertainment. and to did future game infinite an as that that of beginning geography, to games from experiences world. very are much At changing, continues of

X,XXX journey We on in development breakthrough have these in the that through Across launching content our an Sims, talent, our and we of franchises to and services, deliver our EA for our studios SPORTS, talented today technology experiences team. and with IP. depth are teams across organization, are players continually millions are that years and Battlefield the more. in the the deliver deeply teams games unmatched V in These millions creators beginning fans of live investing more Star across and the the These Wars, the cultivated to to deliver incredible a breadth than hundreds and The and teams We've long-term come. of of service.

on and team the of new only team the Motive, our are also and our landscape social great & the lead advancing capabilities services, We're the but world Our advancements are Conquer mobile including for games. executing delivering other Command new is Respawn well-positioned across AI, the with in on distributed are BioWare, bringing rapid also content a converging PC franchise's game, working their visions projects, are the ray-tracing, Teams are the not we're that with great through and core. dimensions designs. and launched recently to of to and new to new bring future to fostering areas, other nascent Labs content provide expanding work working editing, new experiences life. experiences content of incubate in our We're council technology possibilities. in a to features shaping layers, And SEED of and next-generation life. next-generation that to internal advances ideas support creativity. creative disruptive studios, we're cloud, unlock to game We've networks scalable technology, Frostbite Engine

of bringing deliver We're and shared fully debuted with lead the also love create executing games streaming Project they content audiences to into As games experiences. they our disruptive with and their are to expanding more EA an enable the games industry-leading on the the social, digital together subscription streaming that to entertainment. our new Atlas, a capabilities grow will that the and all to it yesterday, platform developing world. and exploring see and services. connected players us enabling our on in stay execute evolution positioning next integrated we scalable, and combination wherever Frostbite and to suite of efficiently be services geographies, and we we friends will new for continuing our deeply we're and Network, players interactive Underpinning gaming for amazing June enable in Cloud we've in Player been reach today will development

I your Blake Now questions. are and here for

Operator

And from Quadrani JPMorgan. question your first with come Alexia

Alexia S. Quadrani

Hi, have you confidence QX. I'm Anthem, outlook question certainty is really higher very When have do for mentioned what FIFA? materialize thank the for curious that. delayed you confidence you much. And behind services also on for gives fiscal that how the revenue My live you the expectations much will on you

Blake J. Jorgensen

I think both. we're in confident

knows things mentioned I tend on fairly and conservatively, as Team I Andrew a and think everyone guidance and to recent and we've we're are think the daily around basis approach basis, we strong I good results. and players who shown playing. mentioned, FIFA extremely a that our seeing on in monitor We metrics, and all daily Ultimate

We game, playing modes is designed into know Ultimate ultimately and also the Team. other how the in to in know players steer them are we game

a And and set great consume holidays Team. so we're we leading they the confident FIFA, that after events the the exciting move up into have many Ultimate holidays. And then of as they will in to content

For Halloween Dead we've our events seen up a seen FIFA lot in time. marketplace, example, we strongest globe. this And – our weekend despite fact we've around the a Team had Ultimate of the Redemption Red taking weekends one of of we weekends attention long the in had

to in next Andrew it sell mentioned more our we how being that's with that straightforward we're obviously of we investors. sure QX four game was anticipated that weeks. year. than We we'll live also thus with V about holiday after benefit also it originally were Battlefield that expectations And So and see And Remember too the as lot of services QX. you'll Anthem. forecast. probably of we also We're feedback. is will that come we're more make to important. with we want Anthem I in associated low, early and a move think we're positive a also think we fabulous our lot very game game, think this We assumption a would or of get careful any but excited have out by original into confident it's window getting out

Alexia S. Quadrani

thank Okay, you much. very

Operator

question next from from Piper Jaffray. And comes Olson your Mike

Michael J. Olson

you two strength titles titles the appetite good Hey, you, their Thank And that leadership leave for and does budgets titles just talent about should current that encouraged had changes out in some I or V, launches in those during the on in second, guess, talk On concerned Battlefield spending in leave the recent how just gamers you strong the maybe there's that's of creative moving competitive the environment, I thinking business? the afternoon. of the can the now? console then questions. quarter of does you. a it and be weeks about investors of

Andrew P. Wilson

Sure, both I'll take those questions, Mike.

Battlefield industry In are be and this of the vibrant to I with for V our year, V is confidence in respect the launch and that our think Battlefield terms launch. other things happening growing, we couldn't more excited

got over launch. we existing communication and our said in we've XX content rich with we strong years but come. as live players that's only-in-Battlefield Battlefield and multiplayer, on games months tremendously prepared has love As free that robust million Battlefield also remarks, players a are still moments. We're strong tremendous the in those a into direct I who community with to the service all out with in the of for promise single go coming player,

So I do other to strong additive been think about what we that, the in what that's have good feel of think going we're and I there. context launches, even some to

again, creative have the over X,XXX organization. the we In in I talked remarks, leadership, terms about developers prepared of in as

these across of stronger broadest the We around a quarter, where little types execution creative games, bound of for no my well service In prepared are we're divisions we span cohort future CPU organization. very across planning of both see during as We who world GPU. one of to business adventure, of I group models, RPG, some made in got or changes across benches bringing talked made across good as device to innovation, leaders. a geographies. action, quarter they the remarks, we And organization the in longer specifically Samantha creativity, see and or where the and we've deepest broadly. context think across platforms, very feel and a I simulation. that Again, together through a think in stronger the to of future. some we service games the of going particular as deliver achieve world creativity the level about and about we player able the the games we're are of about bit We the execution more by collaboration in Ryan, that

Michael J. Olson

you. Thank

Blake J. Jorgensen

Next question.

Operator

from Eric comes Sheridan UBS. Your next question from

Eric J. Sheridan

Hey, guys, maybe one on capital.

to underperformed a you wanted the recently, create be landscape. shareholders, how how the capital way thinking Thanks, possibly value, stock view I with also Given about guys M&A the refreshed to guys. about the you of arsenal might on get to returning equity thinking has ways much and leverage, are

Blake J. Jorgensen

So well that buybacks good stock of program we at to versus lots the are we've the price We pace our in beyond to that back We know even move buying our because a there pay been the try market around things stock life price. any don't control. quarter. attention Clearly, stock basis day-to-day certain active questions. the oftentimes are of on the

$X.X day back and certain then to allocate in that And to amount over simply of, hit so stock our market single be and case, a our of two the in goal targets every this to buybacks buy is capital years. billion

capital subscriptions some powder to great clearly capacity, and to for opportunity time could step be that talent, at at and about in for the everything part looking to of of that's that want dry M&A, continue our helpful this us we'll opportunity in be In is can't titles possible This of debt collecting leave there. time. long-term But and vision terms an structure the point out do do or and I to on our streaming. terms we and open reason eyes is able terms and in that and to both in we're ways of come the talent anything have, that. point in would at we're all of the acquire that every content predict to keeping buy both cash we to asset our

Eric J. Sheridan

Great, thank you.

Blake J. Jorgensen

Next question.

Operator

from Martin your next Needham. question comes And from Laura

Laura Martin

some help I need Hi mobile. there. on

those like XXXX fees mobile have a $XX the revenue? That's the How fees can growing full-year but are mobile me than first $XXX much at you growing is that X%. it XX-month at on shares a thought we I to my bridge looks So faster of trailing platform. that? million, were question. it but mobile And rev mobile is million, so for projected mobile

Blake J. Jorgensen

I some or probably mobile possibly purely missing pay numbers. like think mobile what platforms to to fees as are you're reporting from The our we GAAP management Google Apple. you deferrals go the platform

offline take book numbers XX%. can to the them So that essentially, just specific with go we probably through that's line the and up. you XX% they We

quarter do substantial mobile originally we'll I mobile to the third the we as we level, the key drive on to add But believe which the just guidance growth what flat give around of year. adjusted of now for end really mobile thought will to would think of in some the showed driver this morning. We script, & announced new the a growth is we for the growth on we remember have, quarter title, you fourth and we That be Conquer, the tail X. lower off December Command during a our full-year and full year.

combination things where your like of you a probably would to to gets it all model. So see in back those

Laura Martin

Samantha a targeting pivot at was now? player particular comment a towards by where organizational a And Is that segments games, Okay. creating looking players series I player. really of this design intrigued identifying an you're particular games then prior on around and Ryan, actually to servicing

Andrew P. Wilson

players puzzle. piece the players and motivations of data have network across Again, that yes, XXX more that So one over our we our years many games we the play. a looking recent our always know players mobile million lot across to the that's certainly And understand very than of for in more of what is about. much are come we have don't specific in as context

and fulfill fulfill start platforms, different players we this collaboration to portfolio, some of they about been looked our particularly to is different are the we've time. action-adventure, at to we collective players. and built or creative RPG, and is part we what looking games. time to unbounds looking to of the may player fulfill to enjoyment moving started and that platform what across service in context and on of And top things ability a our one games in better continue And similar you on of over look And when the feature tremendous to, player content simulation, discovery, who organize EA are as how to have about the that for innovative both of continue purchase, the their to we of strength the across time, cohorts future whom previously that out at those. subjected seen, their SPORTS needs thinking seen try over cloud do we've across we've they're for context over terms services all of we our times support that around better that the that core sets, support our in that set the motivations creating different the construct to them game, and of expect think should in to new many have from And those which live and transform core of in they motivations. of as we'll those motivations and experiences looking nature We've understand

Laura Martin

you Thank very much. Thanks, that's super-helpful.

Operator

Credit Ju Securities digital And, at as may might prepared download FIFA like looks is distribution question your Your Thanks. process China. and update your ability impact the partners next you release and the Stephen from approval in what operating Suisse Blake, - your what this in the be Andrew, in a on new XX% But comes from remarks. (USA) stringent gap already Credit to between Madden more there is can on Stephen to about country? LLC changes based environment, FIFA games out other Suisse. Ju us saying localized

of this some greater factors. guess I So was friction and due in Europe to payment other

the users U.S. to those you similar what time? path saw same now in at for So the Thanks. adoption the is

Andrew P. Wilson

our marketplace they're the approved, And first in China. we because they're the take have out now, in products I'll one. Sure, Right and doing well.

tell As some titles. launch X way is not Mobile this at next stage, China FIFA doing far are FIFA well, as off. title impact and for us this should in Online we the our can and

continue hope while the so And then. impact situation, we direct delays to now. is monitor any by we don't that are And our see fixed right

Blake J. Jorgensen

of not interactions through it's approving backlog more a Our problem really games. understanding with is more than an actual and other Tencent it's partners,

I think as they changed agencies, the backlog quickly. built up fairly

for as impact least we So year or FIFA. that don't next the see us, on as we an so, focus mainly at in

differ. Germany, track use in so That seen for pace FIFA pace not U.S. be FIFA slow because is lower games. example, to pretty other and with full-game base. a and cultures have business. and is cards, there a a And of seen where the issues terms payment that just full-game bandwidth that world may is or the credit some we've lag parts still we've started always global same payment Madden shipped, domestic just much Madden the downloads stats, are we the many marketplace. change FIFA change much is of the lower the of In FIFA pretty business, of of download tends in from changing, where speeds It

stores. that people it their to to again, physical That's abate And use starting buying disks. some fewer fewer due of and once historically to FIFA retailers drive the traffic into are because, would fact was

pace on whole all are that Thank our of that of games XX%, Ju will the believe as you. Credit well at obviously (USA) a if north of Securities LLC that. tracking same FIFA - that and Stephen great see continue, meaning we is Suisse So to side games south it's some

Operator

next W. Your Robert Sebastian Colin comes from Baird. with question

Colin Alan Sebastian

given if for release. a to just expand versus couple follow-up segment franchises user driver. as concerns flatten much quarter we within guess user and monetization on exist the me. wonder growth of Thank outlook then promotional and the around a base FIFA still out could individual expect live questions thanks, baking the some Great, about as growth to into the a beginning third services the should for And the talk could how the a a ARPU first bit, you. in respect guidance, that as if I I V you much maybe such Battlefield how in you're guidance, of I'm wondering to you with environment Battlefield

Blake J. Jorgensen

our in the in of plans, are So past. the promotional terms consistent promotional pretty what we've plans had with

on and the With supporting title, Friday selected we holidays. see case then different we'll the for that And week. the will promote continue choose we seen partners There the that retailers years. want drives to on year. past to volume, Battlefield, promotions, a Battlefield physical promotion we've you their exception those see may that's of digitally different not that engaged. timing But the different. It's with to always and not the relative of our Friday. than and of because that mix not it retail we're what pretty our each ship consistent Similar keep Black into partners on be have promotion things of regular to the promotional see you historically own, of people platform will lot And V time promotions. actually a but that Black both retail should who copies, with be but be and schedule would is the through December we It supportive very we're issue

into the stop where is moment QX live In users can place to keep That's services, numbers, more and focus to play really in focusing the market marketplace keep the people way large the driving our you you all strength on on it which of very is continue a live large The terms always very a that, together. service. of lose healthy.

the level happens engagement, in some to to you person, much to careful very too If too not generation allow out we're of not start because people but churn per they'll spend squeeze to we're start very that. It focus do revenue much we naturally due careful business. you of to people's and to cases know players, on the

a told exciting Andrew a so we're the in remind themselves we allows fine much And quarter. – And a playing people games. seeing and that in we've or Ultimate bit think I new numbers they think that we think Team deliver when best phasing quarter playing were, their play content they're long with that that what what's during long the means Battlefield there FIFA also at We as year's time. level as it the Team start that little later, to if I Ultimate as the with build FIFA, goal, own we're amazing people just our And left great out. game. really everyone give phasing. people, an probably enjoying we So got going before, in is it's total the We to built. mentioned to on ever didn't for what done we've moved and to job that's the we

sense And Conquer comparing had what mobile the to informed our they that would wasn't view the some people so during our and Command like overall on things moved by quarter, impact they on what giving title of quarter. when I & start, the to of general had because out, of caution before overly emphasis business be the FX the

don't over-index which the on just full-year not did guidance, focus on quarters, the So change. two

Colin Alan Sebastian

Okay, that's helpful. Thank you.

Operator

from Your from next Brian Morgan Nowak question comes Stanley.

Matthew Cost

taking for I Hi, my it's for Thanks questions. Cost Matt on two. Brian. have

delay, And you color, how little Battlefield you and new the is prior more the topic bigger around So on for that installment? give point the to streaming then is and have think been the second question a the compared you subscription about very obviously potential about if then a on. picture, game, bit you Battlefield potential can for forward the guys in-game the monetization unit in can,

steps some recently ecosystem? drive do of a streaming-based material transition and are the key into Project you Thanks. think subscription needed What Atlas. You then announced to next

Blake J. Jorgensen

question. So only the I'll why let the Andrew just timing. of overall second don't I the really about forecast start and then Battlefield, because talk changed

million-plus of So service that next what might it QX. just when leave that say over in-game that through continue it, could and people be like mode had include be find it QX understand What that and help to but the or into ways is exciting Battlefield live dramatic even year's weapons, will of you'll to gadgets, when to I'll time: purchase more the excitement there new hope and monetization and be game will to hardware going to that include engaged. I'll that single-player in that evolving we gameplay experience we new is that the Battlefield, time, opportunities and and into time new monetization, X the and things roughly where And highly you some keep Royale will up style expected, pretty around engaged. a out; improvements possibly quarter there to a team moved over how even rolled come over Battle and Battlefield exciting timeframe; reinforcements fortification stories people we may keep time; that around those into March excitement originally those ways out people get some told units the experiences of will vehicles, earn over them

Andrew P. Wilson

And have friction of that value as time, is ultimately retains great we greatest blockbuster with In is games, terms monetize collection is learning vectors, lot of to about will catalog a who over two they bring took than definition into now And over subscription proposition and more and an know low as by on our able we're traditional what PC, into what Xbox different great then no high-quality streaming, of that. of those have been ultimately subscribers, out first that what come that people that have catalog again, that we treating talked people and years consumer content We a together that last disruption seen subscription them we a expect linear is come from live content who content ago subscription amazing get the services new media. We four now, at but know tremendous on more years a we of subscription launched the this, – play seen in offering well. spend them as to time. of separate consumption combination Right we've things. a higher great subscribers, adds as content five that the entertainment they has of the possible. over we're and that they media

Madden truly our Premier will opportunity understand and to on started been grow first launch uptake expect blockbuster out the be decade. tremendous for front-line for have strong We we Madden. Battlefield to But very we as remember, we is the saw with community The of Battlefield after nearly very, add that do to PC learning what us this is PC of Access strong, so year And that. Origin V of content, and really get that. hadn't a to

In and terms and come consumer collection players, spend to try of the and value next in continue steps, and time. you of proposition, games should for our more more again, the that more can to players so aggregate content improving us content play always expect

the be Some of our content of organically that creation of inside company. new will

and developers that a And developers will we Some of would also and we vision, to or as time. be pointed publishers. acquire over working indie third-party talent expect as it IP with long-term Blake both content out, look

ability As experience that a think develop of have in working and and are conjunction to in about about demonstrated service players deliver work increasing streaming that ultimately, for June with context the was and parties making services, to total who We've great of access our to to some heard we the announced market substantially that developing games you and time, that players. at service services with a to. the we may and we their you streaming continue EA have streaming, We're over believe experiences also working addressable PLAY. can that continued other work on that better third

game innovative bringing deliver of able against types years. together, want an the really and move see it are to That's easier the plan been and that experiences services game Atlas. they a make execute the cloud Project collected will Frostbite players referenced so executing that platform experiences effectively over of to to ambitious You we've our by three digital makers to that next these

services. adding do time, engine subscription us And that allow we can imagine, look that that more that who as out – that. content third inbound to requests of utilize and we our platform would of also the love plus about parties tool platform combined around you lot As technology, had there a to over as think see would digital to would we've that who a ability to

more digital our on Atlas some acquisition, and internally as potentially solutions in both to and us service an isolated creative for innovative platform continue there and our then and and service content licensing with time more get help games as Project digital us well quickly, our through add engine to both more So conjunction sub streaming developed and more potentially developed others, at with as faster, develop to and externally. efficiently, combined bringing

Matthew Cost

thank it, you. Got

Blake J. Jorgensen

Next question.

Operator

next Raymond Your comes Edge from question from Research. Stochel Consumer

Raymond L. Stochel

question. much so my couple taking for a thanks Atlas. I guess things Great, on Project

Project So number give as about world, cross-platform mobile one obviously content more a secondarily, better in you in a development that your announcement. would alluded term? then How about are number exclusive to a Atlas are time in mobile development think us You be thinking sense streaming of you games over the do to you have You Thanks. can streaming a how titles in user-generated longer And that and strategy? way? titles. mobile in

Andrew P. Wilson

Two great questions.

ready some that vision in new makers of appetites out The But look daily hundreds of potentially players context have robust as stories, great invite very players that see building beyond in it. world been starting us, to games having is our amplify robust and bring in world scalable Sims that creatives to the investing can globe their talk and we're that communities many of X of with insatiable the these these since we of So experiences for some in been that future like and community a what franchise for We're worlds, creating large inception. of out it, organization. fellow characters build together. having people we're today, capability a now, in we against we're tens creatives, Again, and of that these just in in terms first ecosystems help we the millions great in play, large people feel about players doing that richest toolset. a these user-generated now our across against community great into including billion that effort that's has of worlds the in, its And the of aware we're of have when communities delivering for entertaining so delivering a Part We've content toolset the really AI the of a content implement we place of creative future robust our years that are content, conjunction on to and scope and creative organization that are and simulated game us basis. in games.

going we longer experiences be some size will on devices, you time strategy and forward, players only we mobile that device, their to battery who great the to it's As many bound playing about and understand that be that be we also more think access a time that no have spend have. you again, by or disproportionate play XX-inch ever whether screen. will on do an mobile by session With the CPU, or amount and there will said, the the GPU, life. screen believe over move experiences cloud local governed memory, they'll And time that players of some

experience connect never entertaining experiences community how their But a fundamental to of that also to shift but global that's community a where creative view across of of features global games. streams, are but how so have. with of but based choice more to design a friends about importantly, game your those And continue design native fundamental you of that develop rich want robust disconnected And in from you screen allowing can always we experiences the and of access regardless you connect feel you all in games. architecture play, experience in of how we the innovative that they this which it's a experiences today, with a It's players on we things, shift to will through. them and as with

Blake J. Jorgensen

Next question?

Operator

next Your question Ryan with Barclays. from comes Gee

Ryan Gee

Hey, and one live question, a clarification. guys. my on question Thanks so services taking for

or mid-single-digits the out that plus are and to X%, think It there. half minus be services you up indications. to biggest live Ultimate growing I Team seems the be now in is point first So prior driver to expected plus results

services given already coming in anything (XX:XX) QX look over trajectories already help (XX:XX) And you really Team Ultimate think in last maybe Star understand can you emerging Battlefront those both Wars overall year. didn't of this V have with versus we in the Is comments? half over to Black second for the there year, should any December for year Battlefront year live year just any up year? really So have II and shouldn't us updates be I why

Blake J. Jorgensen

in Anthem transition X, those. that be We'll to as uptake bit guessing put drag. to get into better Battlefield until And Premier we've understand haven't of we sense a of we've titles PC-based little we're FIFA the a revenue monetize, have impact So which subscriptions, lot and continue got the of through didn't very live yet based seen either real for the a forecast but for a we true fact once very on the some does assume like got we that And because exactly on Battlefield Anthem. We'll how still much our service that will or they're little forecast. it we Online see new. well

and services. say conservatism of around it the just just of some forecasting, I'd mentioned So it I live is is and associations some that

Ryan Gee

Okay has Respawn its since heard then a just sounded should that you if at is franchise, like anything we I'm clarification. X there revealed but year. couple done correctly. I correctly? I and anything It's we quick games, know I Did flagship Wars It of? a sure been Respawn expect be should aware with Star plural, that that from great, hear I years suppose next EX, Titanfall but not that else

Blake J. Jorgensen

Respawn. But games So said, Andrew which when said you heard a you you think from use he got plural weren't I what is coming very I loud. through

But studios, you. our come some consider the we've when got that haven't Just and we little when out year for should later for you assume we there that Easter call be that announced lot working of year. we We'll more will go to that next announce give there. with guidance get things earnings in the of a left things a egg clearly all in

Ryan Gee

Great, thank you.

Operator

question BTIG. next from with Brandon And comes your Ross

Brandon Ross

questions, Hi, couple the thanks of a for topics. taking

need made you stalled. What there what can seeing there outlook follow-up about really I Anthem, a just your made future Anthem talk your guidance? a that you mobile mobile, be you you're a guess larger in little has see changes to to on raise And how improve to business. bit First restimulate growth to your Thanks. then growth tell for in and And being acquisition if that could, make potentially if an you us need mobile? you important there, to one, on

Blake J. Jorgensen

and address piece. Anthem with a start I'll it's brand-new Andrew let mobile IP. me Let the Anthem,

May low we it information. so forecast without of or And forecasted a we level, lot put it, April as last that we about when originally was That pretty we forecasted a when thought at together.

started excitement As deeper lot of parts building. and we've at with the it. learned had what clearly building was we it the people tested of the as and people, game the It is EX a into game saw gotten final

so a when excitement internally about essentially forecasting externally brand-new done. game. we've both getting and usually that you're We're And and forecast the that's you then what time, typically, build over IP, start and lower

said remember very a we than also, it the past. did And in As forecast. well. more has anything of that's extremely looks But and it's Andrew what's new It the BioWare forecast. provide confidence I given built stunning as not plays earlier, around us phasing different mentioned,

from we it's than that thinking all obviously mobile assume originally should the you There talked V well from Command stuff coming forecast, we that as in be about, in Conquer. not as So our QX -more Battlefield were & Anthem. may title

Andrew P. Wilson

bring In IP we're highlighted terms new as mobile, platform, any of to that on right of opportunity or category Blake there is to earlier, across now. or new any where an teams open

weren't years significant go that year seen However, heights revenue or two also or XX pretty shift mobile you We've profitable the the after. two it's apparent players growing or ago. year the understood serious as not were XX marketplace from weren't some mobile it over of also And the industry charts, it's fairly many last was their outspending at were reaching some well revenue even that the profitably. and in companies Top and and I now fairly look Top what would immediately where a mobile

we a content, very we And shifts time. we we growth take profitable of what as that business of I'm mobile ensure to that some and have over that we very slowed we tremendously were year believe the Command maintained growth our strong think actually Conquer future. have time always on this feel while excited to title going across moves, I & portfolio delivered is about. and bullish has a title result the

and into I entry genre. new the a innovative think it's unique mobile

innovation that clearly & in region, the in that I Top play Asia have or in other XX terms Korea, some we are Southeast throughout and their we'll charts, representation come the good come a that. at the have Conquer, And tremendous in China, leading FIFA, And again, look Top we're experience. strength. as as to there's years also continue grow. are business, from into we I think the at much title products Asia of seeing greater looking development Japan, and with we I base Command I feel and think which about what to have look mobile which to – as doing fan right out business to has a XX We're a and is the sports committed now will strength in that players mobile, for creativity started we

acquisition, types we're will games we that we mobile a while the very moving well think I the of very, in where be open so is And that make also to actually good always very direction received. that industry feel

Brandon Ross

Great, thank you.

Operator

from And your with comes next question Buckingham Matthew Harrigan Research.

Matthew Harrigan

was you. on and on laces your cloud thoughts a how the perspective consoles. curious the the your evolution toward Microsoft as that if I into of the by importance perspective, decision any into well and just Sony the business and console do you interlaces continued Thank next-gen to had as

Andrew P. Wilson

even today with position is think cloud. our I might all a on to I a many seek to we've know and little there many, all them in and when that Microsoft just experiences to they that rumors So a and to if we working and either for have many, what and coming some think they what we're Sony of are But years many they're more, there articles look as or collectively Nintendo that. few don't forward the hearsay be. worked years conversation few out a move with a and and to portion for

Matthew Harrigan

you. Great, thank

Blake J. Jorgensen

question. last One

Operator

last SunTrust. Your with Thornton question comes from Matthew

Matthew C. Thornton

months monetization and harder? thus the that monetization one. has players got number could. apologize Hey. about missed down couple Good you afternoon, guys. coming need franchise. again, are and hours moving quarters, or to guess FIFA here and be lever on clear, question over That the And Thanks clarifications, get front-line are answer. for and work just and year if I I To if sneaking me the thus to up talked hours Blake, in here, players was I we year a I

talked next little Secondly, not a the any around year. that a I'm about you obviously. just if title that not Would Andrew, or a you bit finally, And sure Project also be Respawn quarter? have you timing. lot color in holiday about or mentioned second then Atlas talked if you

Thanks, to you developers, to think out revenue other a third-party like licensing either that sure understood might to basis, a monetization. it correctly. So open or about on make I want that's would a just sounds basis I type guys. part of building type that but a per seat platform of be share

Blake J. Jorgensen

were said we quarter. the strong sales FIFA, in So FIFA

done you with assume well we've FIFA. should So

mentioned in also people more FIFA. that modes playing We were

World a bringing Cup, XX. not them have still FIFA and have We over converted few quite many also We those XX. FIFA people to of yet were into playing successful

ultimately will still So play it's early quarter. in how hard we're because third to out it the say today

see through the get year into all just the fourth to rest would two quarter. of two that say what the into looks and or as the and I holidays. So well tends next FIFA over months we'll like half even we sell the months

to what on or other so say spending are time people just way And too not. or their it's early the one

Andrew P. Wilson

hard to to we innovative In when objective people. do journey, had developers from terms of build and for the Project that, And we our to simulations. set games on increasingly complex other a it's world Atlas, ensure most is sports again, out where creative industry-leading that games, to becoming in for we also was understand immersive technology and large the everything that this world

of a over the for like on interest content as utilization as it easier growing world. subscription we this platform to would into our to create them inbound and Atlas developers content about that started of in might Project technology so complex bringing had have lot And you talking publishers time, a we've imagine, make

time locked-in certainly content our view industry-leading they so while collection at together parties that objective some of technology for content over And their can that into bring use And ultimately as our might that technology put to no our a we mean with and we're of level, have subscription. do subscriptions. today, by or timelines our third plans offering the part then so is that developing the greatest

Blake J. Jorgensen

have skipped I before – timeframe on everyone, as full-year on We'll get – talk people that. into into read next you, we'll to come it And year's everyone the fourth question more quarter. run your we Respawn over to quarter guidance. next we Thank

Operator

This today's call. concludes you. conference Thank

now disconnect. may You

Chris Evenden	Electronic Arts, Inc.
Andrew P. Wilson	Electronic Arts, Inc.
Blake J. Jorgensen	Electronic Arts, Inc.
Alexia S. Quadrani	JPMorgan Securities LLC
Michael J. Olson	Piper Jaffray & Co.
Eric J. Sheridan	UBS Securities LLC
Laura Martin	Needham & Co. LLC
Stephen Ju	Credit Suisse Securities (NYSE:USA) LLC
Colin Alan Sebastian	Robert W. Baird & Co., Inc.
Matthew Cost	Morgan Stanley & Co. LLC
Raymond L. Stochel	Consumer Edge Research LLC
Ryan Gee	Barclays Capital, Inc.
Brandon Ross	BTIG LLC
Matthew Harrigan	The Buckingham Research Group, Inc.
Matthew C. Thornton	SunTrust Robinson Humphrey, Inc.

Electronic Arts (EA) 30 Oct 182019 Q2 Earnings call transcript