Electronic Arts Reports Strong Q2 FY24 Results

Company exceeds expectations on the strength of EA SPORTS portfolio; Successfully launches EA SPORTS FC 24

Electronic Arts Inc. (NASDAQ: EA) today announced preliminary financial results for its second quarter ended September 30, 2023.

“We delivered a strong Q2 and successfully launched EA SPORTS FC, transforming one of the largest franchises in the world into a powerful, interactive platform for the future of football fandom,” said Andrew Wilson, CEO of EA. “Looking ahead, our incredible teams will continue to innovate and expand across our world-class IP, building experiences that entertain our massive online communities, celebrate fandom, and increase connection for our growing global player base.”

“EA SPORTS strength, driven by new releases and ongoing live services, delivered Q2 results ahead of expectations,” said Stuart Canfield, CFO of EA. “We remain focused on delivering for our growing player communities and building upon the momentum across our portfolio, while prioritizing investments that execute against our largest opportunities to drive long term growth.”

Selected Operating Highlights and Metrics1

  • Net bookings2 for Q2 was $1.820 billion, up 4% year-over-year (up 5% in constant currency).
  • Live services and other net bookings for Q2 was $1.129 billion, up 1% year-over-year (up 2% in constant currency). On a trailing twelve-month basis, live services were 73% of our business.
  • EA SPORTS Madden NFL franchise outperformed Q2 expectations, delivering net bookings growth of 6% year-over-year.
  • EA SPORTS global football franchise outperformed Q2 expectations driven by the continued strength of EA SPORTS FIFA 23 and demand for the release of EA SPORTS FC 24.
  • EA SPORTS FC 24, within the first four weeks of global launch, had over 14.5 million active accounts.

Selected Financial Highlights and Metrics

  • Net revenue was $1.914 billion for the quarter.
  • Net cash provided by operating activities was $112 million for the quarter and $2.211 billion for the trailing twelve months.
  • EA repurchased 2.6 million shares for $325 million during the quarter, bringing the total for the trailing twelve months to 10.5 million shares for $1.300 billion.

Dividend

EA has declared a quarterly cash dividend of $0.19 per share of the Company’s common stock. The dividend is payable on December 20, 2023 to shareholders of record as of the close of business on November 29, 2023.

Quarterly Financial Highlights

Three Months Ended

September 30,

2023

2022

(in $ millions, except per share amounts)

 

 

Full game

621

602

Live services and other

1,293

1,302

Total net revenue

1,914

1,904

 

 

 

Net income

399

299

Diluted earnings per share*

1.47

1.07

 

 

 

Operating cash flow

112

(112)

 

 

 

Value of shares repurchased

325

325

Number of shares repurchased

2.6

2.6

 

 

Cash dividend paid

51

53

* Diluted earnings per share includes $0.34 from a one-time non-cash tax benefit.

 

The following GAAP-based financial data3 and tax rate of 19% was used internally by company management to adjust its GAAP results in order to assess EA’s operating results:

Three Months Ended September 30, 2023

 

GAAP-Based Financial Data

(in $ millions)

 

 

 

Statement of

Operations

Acquisition-related

expenses

Change in deferred

net revenue

(online-enabled

games)

Restructuring

and related

charges

Stock-based

compensation

Total net revenue

1,914

-

 

(94

)

-

-

 

Cost of revenue

456

(15

)

-

 

-

(2

)

Gross profit

1,458

15

 

(94

)

-

2

 

Total operating expenses

1,081

(24

)

-

 

-

(153

)

Operating income

377

39

 

(94

)

-

155

 

Interest and other income (expense), net

14

-

 

-

 

-

-

 

Income before provision for income taxes

391

39

 

(94

)

-

155

 

Number of shares used in computation:

 

Diluted

272

 

 

 

 

Trailing Twelve Months Financial Highlights

 

Twelve Months Ended

September 30,

 

2023

 

2022

(in $ millions)

 

 

Full game

2,058

1,997

Live services and other

5,535

5,288

Total net revenue

7,593

7,285

 

 

Net income

993

901

 

 

 

Operating cash flow

2,211

1,788

 

 

 

Value of shares repurchased

1,300

1,295

Number of shares repurchased

10.5

10.0

The following GAAP-based financial data3 and a tax rate of 19% was used internally by company management to adjust its GAAP results in order to assess EA’s operating results.

 

Twelve Months Ended September 30, 2023

 

GAAP-Based Financial Data

(in $ millions)

Statement of

Operations

Acquisition-related

expenses

Change in deferred

net revenue

(online-enabled

games)

Restructuring

and related

charges

Stock-based

compensation

Total net revenue

7,593

-

 

93

-

 

-

 

Cost of revenue

1,840

(82

)

-

-

 

(8

)

Gross profit

5,753

82

 

93

-

 

8

 

Total operating expenses

4,370

(125

)

-

(158

)

(560

)

Operating income

1,383

207

 

93

158

 

568

 

Interest and other income (expense), net

27

-

 

-

-

 

-

 

Income before provision for income taxes

1,410

207

 

93

158

 

568

 

Operating Metric

The following is a calculation of our total net bookings2 for the periods presented:

 

Three Months Ended

September 30,

Twelve Months Ended

September 30,

 

2023

 

2022

 

2023

2022

(in $ millions)

 

 

 

 

Total net revenue

1,914

 

1,904

 

7,593

7,285

Change in deferred net revenue (online-enabled games)

(94

)

(150

)

93

96

Total net bookings

1,820

 

1,754

 

7,686

7,381

Business Outlook as of November 1, 2023

Fiscal Year 2024 Expectations – Ending March 31, 2024

Financial outlook metrics:

  • Net revenue is expected to be approximately $7.300 billion to $7.700 billion.
    • No change in deferred net revenue (online-enabled games) is expected.
  • Net income is expected to be approximately $1.118 billion to $1.273 billion.
  • Diluted earnings per share is expected to be approximately $4.10 to $4.66.
  • Operating cash flow is expected to be approximately $1.950 billion to $2.100 billion.
  • The Company estimates a share count of 273 million for purposes of calculating fiscal year 2024 diluted earnings per share.

Operational outlook metric:

  • Net bookings2 is expected to be approximately $7.300 billion to $7.700 billion.

In addition, the following outlook for GAAP-based financial data3 and long-term tax rate of 19% are used internally by EA to adjust GAAP expectations to assess EA’s operating results and plan for future periods:

 

Twelve Months Ended March 31, 2024

 

GAAP-Based Financial Data*

(in $ millions)

GAAP

Guidance

Range

Acquisition-related

expenses

Change in deferred

net revenue

(online-enabled

games)

Restructuring

and related

charges

Stock-based

compensation

Total net revenue

7,300 to 7,700

-

 

-

-

 

-

 

Cost of revenue

1,670 to 1,750

(65

)

-

-

 

(5

)

Operating expense

4,213 to 4,333

(95

)

-

(3

)

(595

)

Income before provision for income taxes

1,462 to 1,664

160

 

-

3

 

600

 

Net income

1,118 to 1,273

 

 

 

 

Number of shares used in computation:

 

 

 

 

 

Diluted shares

273

 

 

 

 

*The mid-point of the range has been used for purposes of presenting the reconciling items.

Third Quarter Fiscal Year 2024 Expectations – Ending December 31, 2023

Financial outlook metrics:

  • Net revenue is expected to be approximately $1.825 billion to $2.025 billion.
    • Change in deferred net revenue (online-enabled games) is expected to be approximately $425 million.
  • Net income is expected to be approximately $203 million to $275 million.
  • Diluted earnings per share is expected to be approximately $0.75 to $1.01.
  • The Company estimates a share count of 272 million for purposes of calculating third quarter fiscal 2024 diluted earnings per share.

Operational outlook metric:

  • Net bookings2 is expected to be approximately $2.250 billion to $2.450 billion.

In addition, the following outlook for GAAP-based financial data3 and long-term tax rate of 19% are used internally by EA to adjust GAAP expectations to assess EA’s operating results and plan for future periods:

 

Three Months Ended December 31, 2023

 

GAAP-Based Financial Data*

(in $ millions)

GAAP

Guidance

Range

Acquisition-related

expenses

Change in deferred

net revenue

(online-enabled

games)

Restructuring

and related

charges

Stock-based

compensation

Total net revenue

1,825 to 2,025

-

 

425

-

-

 

Cost of revenue

495 to 535

(15

)

-

-

-

 

Operating expense

1,050 to 1,110

(25

)

-

-

(155

)

Income before provision for income taxes

286 to 387

40

 

425

-

155

 

Net income

203 to 275

 

 

 

 

Number of shares used in computation:

 

 

 

 

 

Diluted shares

272

 

 

 

 

*The mid-point of the range has been used for purposes of presenting the reconciling items.

Conference Call and Supporting Documents

Electronic Arts will host a conference call on November 1, 2023 at 2:00 pm PT (5:00 pm ET) to review its results for the second quarter ended September 30, 2023 and its outlook for the future. During the course of the call, Electronic Arts may disclose material developments affecting its business and/or financial performance. Listeners may access the conference call live through the following dial-in number (888) 330-2446 (domestic) or (240) 789-2732 (international), using the conference code 5939891 or via webcast at EA’s IR Website at http://ir.ea.com.

EA has posted a slide presentation with a financial model of EA’s historical results and guidance on EA’s IR Website. EA will also post the prepared remarks and a transcript from the conference call on EA’s IR Website.

A dial-in replay of the conference call will be available until November 15, 2023 at (800) 770-2030 (domestic) or (647) 362-9199 (international) using pin code 5939891. An audio webcast replay of the conference call will be available for one year on EA’s IR Website.

Forward-Looking Statements

Some statements set forth in this release, including the information relating to EA’s expectations under the heading “Business Outlook as of November 1, 2023” and other information regarding EA's expectations contain forward-looking statements that are subject to change. Statements including words such as “anticipate,” “believe,” “expect,” “intend,” “estimate,” “plan,” “predict,” “seek,” “goal,” “will,” “may,” “likely,” “should,” “could” (and the negative of any of these terms), “future” and similar expressions also identify forward-looking statements. These forward-looking statements are not guarantees of future performance and reflect management’s current expectations. Our actual results could differ materially from those discussed in the forward-looking statements.

Some of the factors which could cause the Company’s results to differ materially from its expectations include the following: sales of the Company’s products and services; the Company’s ability to develop and support digital products and services, including managing online security and privacy; outages of our products, services and technological infrastructure; the Company’s ability to manage expenses; the competition in the interactive entertainment industry; governmental regulations; the effectiveness of the Company’s sales and marketing programs; timely development and release of the Company’s products and services; the Company’s ability to realize the anticipated benefits of, and integrate, acquisitions; the consumer demand for, and the availability of an adequate supply of console hardware units; the Company’s ability to predict consumer preferences among competing platforms; the Company’s ability to develop and implement new technology; foreign currency exchange rate fluctuations; economic and geopolitical conditions; changes in our tax rates or tax laws; and other factors described in Part II, Item 1A of Electronic Arts’ latest Quarterly Report on Form 10-Q under the heading “Risk Factors”, as well as in other documents we have filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the fiscal year ended March 31, 2023.

These forward-looking statements are current as of November 1, 2023. Electronic Arts assumes no obligation to revise or update any forward-looking statement for any reason, except as required by law. In addition, the preliminary financial results set forth in this release are estimates based on information currently available to Electronic Arts.

While Electronic Arts believes these estimates are meaningful, they could differ from the actual amounts that Electronic Arts ultimately reports in its Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2023. Electronic Arts assumes no obligation and does not intend to update these estimates prior to filing its Form 10-Q for the fiscal quarter ended September 30, 2023.

About Electronic Arts

Electronic Arts (NASDAQ: EA) is a global leader in digital interactive entertainment. The Company develops and delivers games, content and online services for Internet-connected consoles, mobile devices and personal computers.

In fiscal year 2023, EA posted GAAP net revenue of approximately $7.4 billion. Headquartered in Redwood City, California, EA is recognized for a portfolio of critically acclaimed, high-quality brands such as EA SPORTS FC™, Battlefield™, Apex Legends™, The Sims™, EA SPORTS Madden NFL, Need for Speed™, Titanfall™, Plants vs. Zombies™ and EA SPORTS F1®. More information about EA is available at www.ea.com/news.

EA, EA SPORTS, EA SPORTS FC, Battlefield, Need for Speed, Apex Legends, The Sims, Titanfall, and Plants vs. Zombies are trademarks of Electronic Arts Inc. John Madden, NFL, FIFA and F1 are the property of their respective owners and used with permission.

1 For more information on constant currency, please refer to the earnings slides available on EA’s IR Website.

 

2 Net bookings is defined as the net amount of products and services sold digitally or sold-in physically in the period. Net bookings is calculated by adding total net revenue to the change in deferred net revenue for online-enabled games.

 

3 For more information about the nature of the GAAP-based financial data, please refer to EA’s Form 10-K for the fiscal year ended March 31, 2023.

ELECTRONIC ARTS INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Operations

(in $ millions, except per share data)

 

 

 

 

 

 

 

 

 

Three Months Ended

September 30,

 

Six Months Ended

September 30,

 

 

 

2023

 

2022

 

2023

 

2022

 

Net revenue

1,914

 

1,904

 

3,838

 

3,671

 

Cost of revenue

456

 

462

 

824

 

776

 

Gross profit

1,458

 

1,442

 

3,014

 

2,895

 

Operating expenses:

 

 

 

 

 

 

 

Research and development

602

 

565

 

1,198

 

1,137

 

Marketing and sales

280

 

233

 

509

 

467

 

General and administrative

173

 

174

 

336

 

341

 

Amortization and impairment of intangibles

24

 

43

 

49

 

82

 

Restructuring

2

 

 

3

 

 

Total operating expenses

1,081

 

1,015

 

2,095

 

2,027

 

Operating income

377

 

427

 

919

 

868

 

Interest and other income (expense), net

14

 

 

28

 

(5

)

Income before provision for (benefit from) income taxes

391

 

427

 

947

 

863

 

Provision for income taxes

(8)

 

128

 

146

 

253

 

Net income

399

 

299

 

801

 

610

 

Earnings per share

 

 

 

 

 

 

 

Basic

1.47

 

1.08

 

2.94

 

2.19

 

Diluted

1.47

 

1.07

 

2.93

 

2.18

 

Number of shares used in computation

 

 

 

 

 

 

 

Basic

271

 

278

 

272

 

279

 

Diluted

272

 

279

 

273

 

280

 

Results (in $ millions, except per share data)

The following table reports the variance of the actuals versus our guidance provided on August 1, 2023 for the three months ended September 30, 2023 plus a comparison to the actuals for the three months ended September 30, 2022.

 

Three Months Ended September 30,

 

2023 Guidance

(Mid-Point)

 

 

 

2023 Actuals

 

2022 Actuals

 

 

Variance

 

 

Net revenue

 

 

 

 

 

 

 

Net revenue

1,875

 

 

39

 

 

1,914

 

 

1,904

 

GAAP-based financial data

 

 

 

 

 

 

 

Change in deferred net revenue (online-enabled games)1

(125

)

 

31

 

 

(94

)

 

(150

)

Cost of revenue

 

 

 

 

 

 

 

Cost of revenue

440

 

 

16

 

 

456

 

 

462

 

GAAP-based financial data

 

 

 

 

 

 

 

Acquisition-related expenses

(15

)

 

 

 

(15

)

 

(39

)

Stock-based compensation

 

 

(2

)

 

(2

)

 

(1

)

Operating expenses

 

 

 

 

 

 

 

Operating expenses

1,115

 

 

(34

)

 

1,081

 

 

1,015

 

GAAP-based financial data

 

 

 

 

 

 

 

Acquisition-related expenses

(25

)

 

1

 

 

(24

)

 

(43

)

Restructuring and related charges

(10

)

 

10

 

 

 

 

 

Stock-based compensation

(155

)

 

2

 

 

(153

)

 

(139

)

Income before tax

 

 

 

 

 

 

 

Income before tax

324

 

 

67

 

 

391

 

 

427

 

GAAP-based financial data

 

 

 

 

 

 

 

Acquisition-related expenses

40

 

 

(1

)

 

39

 

 

82

 

Change in deferred net revenue (online-enabled games)1

(125

)

 

31

 

 

(94

)

 

(150

)

Restructuring and related charges

10

 

 

(10

)

 

 

 

 

Stock-based compensation

155

 

 

 

 

155

 

 

140

 

Tax rate used for management reporting

19

%

 

 

 

19

%

 

19

%

Earnings per share

 

 

 

 

 

 

 

Basic

0.81

 

 

0.66

 

 

1.47

 

 

1.08

 

Diluted

0.81

 

 

0.66

 

 

1.47

 

 

1.07

 

Number of shares used in computation

 

 

 

 

 

 

 

Basic

272

 

 

(1

)

 

271

 

 

278

 

Diluted

273

 

 

(1

)

 

272

 

 

279

 

1The change in deferred net revenue (online-enabled games) in the unaudited condensed consolidated statements of cash flows does not necessarily equal the change in deferred net revenue (online-enabled games) in the unaudited condensed consolidated statements of operations primarily due to the impact of unrecognized gains/losses on cash flow hedges.

ELECTRONIC ARTS INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated Balance Sheets

(in $ millions)

 

 

 

 

 

September 30, 2023

 

March 31, 20232

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

1,946

 

 

2,424

 

Short-term investments

359

 

 

343

 

Receivables, net

1,047

 

 

684

 

Other current assets

492

 

 

518

 

Total current assets

3,844

 

 

3,969

 

Property and equipment, net

542

 

 

549

 

Goodwill

5,378

 

 

5,380

 

Acquisition-related intangibles, net

538

 

 

618

 

Deferred income taxes, net

2,353

 

 

2,462

 

Other assets

484

 

 

481

 

TOTAL ASSETS

13,139

 

 

13,459

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

152

 

 

99

 

Accrued and other current liabilities

1,138

 

 

1,285

 

Deferred net revenue (online-enabled games)

1,498

 

 

1,901

 

Total current liabilities

2,788

 

 

3,285

 

Senior notes, net

1,881

 

 

1,880

 

Income tax obligations

458

 

 

607

 

Deferred income taxes, net

1

 

 

1

 

Other liabilities

436

 

 

393

 

Total liabilities

5,564

 

 

6,166

 

 

 

 

 

Stockholders’ equity:

 

 

 

Common stock

3

 

 

3

 

Retained earnings

7,606

 

 

7,357

 

Accumulated other comprehensive loss

(34

)

 

(67

)

Total stockholders’ equity

7,575

 

 

7,293

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

13,139

 

 

13,459

 

2Derived from audited consolidated financial statements.

ELECTRONIC ARTS INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Cash Flows

(in $ millions)

 

 

 

 

 

 

 

 

 

Three Months Ended

September 30,

 

Six Months Ended

September 30,

 

2023

 

2022

 

2023

 

2022

OPERATING ACTIVITIES

 

 

 

 

 

 

 

Net income

399

 

 

299

 

 

801

 

 

610

 

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

Depreciation, amortization, accretion and impairment

85

 

 

127

 

 

173

 

 

241

 

Stock-based compensation

155

 

 

140

 

 

285

 

 

265

 

Change in assets and liabilities

 

 

 

 

 

 

 

Receivables, net

(534

)

 

(346

)

 

(367

)

 

(276

)

Other assets

(22

)

 

(10

)

 

74

 

 

(25

)

Accounts payable

75

 

 

69

 

 

57

 

 

53

 

Accrued and other liabilities

(165

)

 

(164

)

 

(257

)

 

(269

)

Deferred income taxes, net

201

 

 

(70

)

 

108

 

 

(156

)

Deferred net revenue (online-enabled games)

(82

)

 

(157

)

 

(403

)

 

(633

)

Net cash provided by (used in) operating activities

112

 

 

(112

)

 

471

 

 

(190

)

 

 

 

 

 

 

 

 

INVESTING ACTIVITIES

 

 

 

 

 

 

 

Capital expenditures

(51

)

 

(53

)

 

(96

)

 

(112

)

Proceeds from maturities and sales of short-term investments

151

 

 

79

 

 

302

 

 

166

 

Purchase of short-term investments

(163

)

 

(80

)

 

(313

)

 

(173

)

Net cash used in investing activities

(63

)

 

(54

)

 

(107

)

 

(119

)

 

 

 

 

 

 

 

 

FINANCING ACTIVITIES

 

 

 

 

 

 

 

Proceeds from issuance of common stock

40

 

 

43

 

 

40

 

 

44

 

Cash dividends paid

(51

)

 

(53

)

 

(103

)

 

(106

)

Cash paid to taxing authorities for shares withheld from employees

(15

)

 

(13

)

 

(120

)

 

(117

)

Repurchase and retirement of common stock

(325

)

 

(325

)

 

(650

)

 

(645

)

Net cash used in financing activities

(351

)

 

(348

)

 

(833

)

 

(824

)

 

 

 

 

 

 

 

 

Effect of foreign exchange on cash and cash equivalents

(11

)

 

(29

)

 

(9

)

 

(60

)

Change in cash and cash equivalents

(313

)

 

(543

)

 

(478

)

 

(1,193

)

Beginning cash and cash equivalents

2,259

 

 

2,082

 

 

2,424

 

 

2,732

 

Ending cash and cash equivalents

1,946

 

 

1,539

 

 

1,946

 

 

1,539

 

ELECTRONIC ARTS INC. AND SUBSIDIARIES

Unaudited Supplemental Financial Information and Business Metrics

(in $ millions, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

Q2

 

Q3

 

Q4

 

Q1

 

Q2

 

YOY %

 

FY23

 

FY23

 

FY23

 

FY24

 

FY24

 

Change

Net revenue

 

 

 

 

 

 

 

 

 

 

 

Net revenue

1,904

 

 

1,881

 

 

1,874

 

 

1,924

 

 

1,914

 

 

1

%

GAAP-based financial data

 

 

 

 

 

 

 

 

 

 

 

Change in deferred net revenue (online-enabled games)1

(150

)

 

461

 

 

72

 

 

(346

)

 

(94

)

 

 

Gross profit

 

 

 

 

 

 

 

 

 

 

 

Gross profit

1,442

 

 

1,313

 

 

1,426

 

 

1,556

 

 

1,458

 

 

1

%

Gross profit (as a % of net revenue)

76

%

 

70

%

 

76

%

 

81

%

 

76

%

 

 

GAAP-based financial data

 

 

 

 

 

 

 

 

 

 

 

Acquisition-related expenses

39

 

 

26

 

 

25

 

 

16

 

 

15

 

 

 

Change in deferred net revenue (online-enabled games)1

(150

)

 

461

 

 

72

 

 

(346

)

 

(94

)

 

 

Stock-based compensation

1

 

 

2

 

 

2

 

 

2

 

 

2

 

 

 

Operating income

 

 

 

 

 

 

 

 

 

 

 

Operating income

427

 

 

289

 

 

175

 

 

542

 

 

377

 

 

(12

%)

Operating income (as a % of net revenue)

22

%

 

15

%

 

9

%

 

28

%

 

20

%

 

 

GAAP-based financial data

 

 

 

 

 

 

 

 

 

 

 

Acquisition-related expenses

82

 

 

76

 

 

51

 

 

41

 

 

39

 

 

 

Change in deferred net revenue (online-enabled games)1

(150

)

 

461

 

 

72

 

 

(346

)

 

(94

)

 

 

Restructuring and related charges

 

 

 

 

155

 

 

3

 

 

 

 

 

Stock-based compensation

140

 

 

141

 

 

142

 

 

130

 

 

155

 

 

 

Net income (loss)

 

 

 

 

 

 

 

 

 

 

Net income (loss)

299

 

 

204

 

 

(12

)

 

402

 

 

399

 

 

33

%

Net income (loss) (as a % of net revenue)

16

%

 

11

%

 

(1

%)

 

21

%

 

21

%

 

 

GAAP-based financial data

 

 

 

 

 

 

 

 

 

 

 

Acquisition-related expenses

82

 

 

76

 

 

51

 

 

41

 

 

39

 

 

 

Change in deferred net revenue (online-enabled games)1

(150

)

 

461

 

 

72

 

 

(346

)

 

(94

)

 

 

Restructuring and related charges

 

 

 

 

155

 

 

3

 

 

 

 

 

Stock-based compensation

140

 

 

141

 

 

142

 

 

130

 

 

155

 

 

 

Tax rate used for management reporting

19

%

 

19

%

 

19

%

 

19

%

 

19

%

 

 

Diluted earnings (loss) per share

1.07

 

 

0.73

 

 

(0.04

)

 

1.47

 

 

1.47

 

 

37

%

Number of shares used in computation

 

 

 

 

 

 

 

 

 

 

 

Basic

278

 

 

276

 

 

274

 

 

272

 

 

271

 

 

 

Diluted

279

 

 

278

 

 

274

 

 

274

 

 

272

 

 

 

Anti-dilutive shares excluded for loss position3

 

 

 

 

1

 

 

 

 

 

 

 

1The change in deferred net revenue (online-enabled games) in the unaudited condensed consolidated statements of cash flows does not necessarily equal the change in deferred net revenue (online-enabled games) in the unaudited condensed consolidated statements of operations primarily due to the impact of unrecognized gains/losses on cash flow hedges.

 

 

3 Diluted earnings per share reflects the potential dilution from common shares (calculated using the treasury stock method), issuable through stock-based compensation plans. When the company incurs a loss, shares issuable though stock-based compensation plans are excluded from the diluted loss per share calculation as inclusion would be anti-dilutive.

ELECTRONIC ARTS INC. AND SUBSIDIARIES

Unaudited Supplemental Financial Information and Business Metrics

(in $ millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q2

 

Q3

 

Q4

 

Q1

 

Q2

 

YOY %

 

 

FY23

 

FY23

 

FY23

 

FY24

 

FY24

 

Change

QUARTERLY NET REVENUE PRESENTATIONS

 

 

 

 

 

 

 

 

 

 

 

 

Net revenue by composition

 

 

 

 

 

 

 

 

 

 

 

 

Full game downloads

 

328

 

 

423

 

 

274

 

 

301

 

 

346

 

 

5

%

Packaged goods

 

274

 

 

199

 

 

98

 

 

142

 

 

275

 

 

 

Full game

 

602

 

 

622

 

 

372

 

 

443

 

 

621

 

 

3

%

Live services and other

 

1,302

 

 

1,259

 

 

1,502

 

 

1,481

 

 

1,293

 

 

(1

%)

Total net revenue

 

1,904

 

 

1,881

 

 

1,874

 

 

1,924

 

 

1,914

 

 

1

%

Full game

 

32

%

 

33

%

 

20

%

 

23

%

 

32

%

 

 

Live services and other

 

68

%

 

67

%

 

80

%

 

77

%

 

68

%

 

 

Total net revenue %

 

100

%

 

100

%

 

100

%

 

100

%

 

100

%

 

 

GAAP-based financial data

 

 

 

 

 

 

Full game downloads

 

17

 

 

45

 

 

(24

)

 

(21

)

 

24

 

 

 

Packaged goods

 

16

 

 

20

 

 

(24

)

 

(21

)

 

46

 

 

 

Full game

 

33

 

 

65

 

 

(48

)

 

(42

)

 

70

 

 

 

Live services and other

 

(183

)

 

396

 

 

120

 

 

(304

)

 

(164

)

 

 

Total change in deferred net revenue (online-enabled games) by composition1

 

(150

)

 

461

 

 

72

 

 

(346

)

 

(94

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenue by platform

 

 

 

 

 

 

 

 

 

 

 

 

Console

 

1,161

 

 

1,152

 

 

1,088

 

 

1,167

 

 

1,187

 

 

2

%

PC & Other

 

423

 

 

435

 

 

469

 

 

451

 

 

423

 

 

 

Mobile

 

320

 

 

294

 

 

317

 

 

306

 

 

304

 

 

(5

%)

Total net revenue

 

1,904

 

 

1,881

 

 

1,874

 

 

1,924

 

 

1,914

 

 

1

%

GAAP-based financial data

 

 

 

 

 

 

Console

 

(134

)

 

423

 

 

11

 

 

(266

)

 

(35

)

 

 

PC & Other

 

8

 

 

29

 

 

47

 

 

(77

)

 

(34

)

 

 

Mobile

 

(24

)

 

9

 

 

14

 

 

(3

)

 

(25

)

 

 

Total change in deferred net revenue (online-enabled games) by platform1

 

(150

)

 

461

 

 

72

 

 

(346

)

 

(94

)

 

 

1The change in deferred net revenue (online-enabled games) in the unaudited condensed consolidated statements of cash flows does not necessarily equal the change in deferred net revenue (online-enabled games) in the unaudited condensed consolidated statements of operations primarily due to the impact of unrecognized gains/losses on cash flow hedges.

ELECTRONIC ARTS INC. AND SUBSIDIARIES

Unaudited Supplemental Financial Information and Business Metrics

(in $ millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

Q2

 

Q3

 

Q4

 

Q1

 

Q2

 

YOY %

 

FY23

 

FY23

 

FY23

 

FY24

 

FY24

 

Change

CASH FLOW DATA

 

 

 

 

 

 

 

 

 

 

 

Operating cash flow

(112

)

 

1,123

 

617

 

359

 

112

 

 

200

%

Operating cash flow - TTM

1,788

 

 

1,377

 

1,550

 

1,987

 

2,211

 

 

24

%

Capital expenditures

53

 

 

48

 

47

 

45

 

51

 

 

(4

%)

Capital expenditures - TTM

213

 

 

213

 

207

 

193

 

191

 

 

(10

%)

Repurchase and retirement of common stock

325

 

 

325

 

325

 

325

 

325

 

 

 

Cash dividends paid

53

 

 

52

 

52

 

52

 

51

 

 

(4

%)

DEPRECIATION

 

 

 

 

 

 

 

 

 

 

 

Depreciation expense

45

 

 

46

 

58

 

49

 

49

 

 

9

%

BALANCE SHEET DATA

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

1,539

 

 

2,202

 

2,424

 

2,259

 

1,946

 

 

 

Short-term investments

335

 

 

351

 

343

 

343

 

359

 

 

 

Cash and cash equivalents, and short-term investments

1,874

 

 

2,553

 

2,767

 

2,602

 

2,305

 

 

23

%

Receivables, net

919

 

 

836

 

684

 

517

 

1,047

 

 

14

%

STOCK-BASED COMPENSATION

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

1

 

 

2

 

2

 

2

 

2

 

 

 

Research and development

95

 

 

95

 

96

 

93

 

113

 

 

 

Marketing and sales

16

 

 

15

 

15

 

11

 

13

 

 

 

General and administrative

28

 

 

29

 

29

 

24

 

27

 

 

 

Total stock-based compensation

140

 

 

141

 

142

 

130

 

155

 

 

 

RESTRUCTURING AND RELATED CHARGES

 

 

 

 

 

 

 

 

 

 

 

Restructuring

 

 

 

111

 

1

 

2

 

 

 

Office space reductions

 

 

 

44

 

2

 

(2

)

 

 

Total restructuring and related charges

 

 

 

155

 

3

 

 

 

 

 

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