Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Electronic Arts Reports Q4 and FY22 Financial Results By: Electronic Arts Inc. via Business Wire May 10, 2022 at 16:01 PM EDT Electronic Arts Inc. (NASDAQ: EA) today announced preliminary financial results for its fourth quarter and fiscal year ended March 31, 2022. “FY22 was a record year, with hundreds of millions of players around the world joining in our games to play, watch, and create with one another,” said Andrew Wilson, CEO of Electronic Arts. “With amazing games, built around powerful IP, made by incredibly talented teams, and outstanding engagement in our live services, FY23 is set to be a year of innovation and growth for Electronic Arts.” “We finished the year with another strong quarter of revenue and profit growth, driven by our live services business which was 85% of our net bookings in Q4,” said CFO Chris Suh. “We have a strong foundation of deeply engaged players, rich IP and a resilient business model, which we will continue to invest in to deliver growth in FY23 and beyond.” Selected Operating Highlights and Metrics Net bookings1 for fiscal 2022 was $7.515 billion, up 21% year-over-year. Live services and other net bookings were up 17% year-over-year and represent 71% of total net bookings in fiscal 2022. The EA player network grew 16% year-over-year to more than 580 million unique active accounts. During FY22, EA SPORTS™ FIFA had more than 150 million accounts. FIFA Mobile just had the biggest quarter ever with new unique players surging nearly 80% year-over-year. Apex Legends™ Season 12 set records for the highest engagement since launch. It Takes Two won over 90 awards during FY22. Selected Financial Highlights and Metrics Net cash provided by operating activities was $444 million for the quarter and $1.899 billion for the fiscal year. EA repurchased 2.5 million shares for $325 million during the quarter, bringing the total for the fiscal year to 9.5 million shares for $1.300 billion. EA paid a cash dividend of $0.17 per share during the quarter, bringing the total for the fiscal year to $193 million. Dividend EA has declared a quarterly cash dividend of $0.19 per share of the Company’s common stock, which represents a 12% increase from prior quarter. The dividend is payable on June 22, 2022 to shareholders of record as of the close of business on June 8, 2022. Quarterly Financial Highlights Three Months Ended March 31, 2022 2021 (in $ millions, except per share amounts) Full game 438 250 Live services and other 1,387 1,096 Total net revenue 1,825 1,346 Net income 225 76 Diluted earnings per share 0.80 0.26 Operating cash flow 444 371 Value of shares repurchased 325 325 Number of shares repurchased 2.5 2.4 Cash dividend paid 48 49 The following GAAP-based financial data2 and tax rate of 18% was used internally by company management to adjust its GAAP results in order to assess EA’s operating results: Three Months Ended March 31, 2022 GAAP-Based Financial Data (in $ millions) Statement ofOperations Acquisition-relatedexpenses Change indeferred netrevenue(online-enabled games) Stock-basedcompensation Total net revenue 1,825 - (74 ) - Cost of revenue 419 (45 ) - (2 ) Gross profit 1,406 45 (74 ) 2 Total operating expenses 1,041 (52 ) - (123 ) Operating income 365 97 (74 ) 125 Interest and other income (expense), net (9 ) - - - Income before provision for income taxes 356 97 (74 ) 125 Number of shares used in computation: Diluted 283 Fiscal Year Financial Highlights Twelve Months Ended March 31, 2022 2021 (in $ millions) Full game 1,993 1,613 Live services and other 4,998 4,016 Total net revenue 6,991 5,629 Net income 789 837 Diluted earnings per share 2.76 2.87 Operating cash flow 1,899 1,934 Value of shares repurchased 1,300 729 Number of shares repurchased 9.5 5.6 Cash dividend paid 193 98 The following GAAP-based financial data2 and tax rate of 18% was used internally by company management to adjust its GAAP results in order to assess EA’s operating results: Twelve Months Ended March 31, 2022 GAAP-Based Financial Data (in $ millions) Statement ofOperations Acquisition-relatedexpenses Change indeferred netrevenue(online-enabled games) Stock-basedcompensation Total net revenue 6,991 - 524 - Cost of revenue 1,859 (133 ) - (6 ) Gross profit 5,132 133 524 6 Total operating expenses 4,003 (183 ) - (522 ) Operating income 1,129 316 524 528 Interest and other income (expense), net (48 ) - - - Income before provision for income taxes 1,081 316 524 528 Number of shares used in computation: Diluted 286 Operating Metric The following is a calculation of our total net bookings1 for the periods presented: Three Months Ended Twelve Months Ended March 31, March 31, 2022 2021 2022 2021 (in $ millions) Total net revenue 1,825 1,346 6,991 5,629 Change in deferred net revenue (online-enabled games) (74) 144 524 561 Net bookings 1,751 1,490 7,515 6,190 Business Outlook as of May 10, 2022 Fiscal Year 2023 Expectations – Ending March 31, 2023 Financial metrics: Net revenue is expected to be approximately $7.600 to $7.800 billion. Change in deferred net revenue (online-enabled games) is expected to be approximately $300 million. Net income is expected to be approximately $793 to $815 million. Diluted earnings per share is expected to be approximately $2.79 to $2.87. Operating cash flow is expected to be approximately $1.600 to $1.650 billion. The Company estimates a share count of 284 million for purposes of calculating fiscal year 2023 diluted earnings per share. Operational metric: Net bookings1 is expected to be approximately $7.900 to $8.100 billion. In addition, the following outlook for GAAP-based financial data2 and updated long-term tax rate of 19% are used internally by EA to adjust our GAAP expectations to assess EA’s operating results and plan for future periods: Twelve Months Ending March 31, 2023 GAAP-Based Financial Data* GAAP Guidance Range Acquisition- related expenses Change in deferred net revenue (online-enabled games) Stock-based compensation (in $ millions) Total net revenue 7,600 – 7,800 - 300 - Cost of revenue 2,020 – 2,065 (110 ) - (5 ) Operating expense 4,200 – 4,315 (140 ) - (595 ) Income before provision for income taxes 1,321 – 1,358 250 300 600 Net income 793 – 815 Number of shares used in computation: Diluted shares 284 *The mid-point of the range has been used for purposes of presenting the reconciling items. First Quarter Fiscal Year 2023 Expectations – Ending June 30, 2022 Financial metrics: Net revenue is expected to be approximately $1.675 to $1.725 billion. Change in deferred net revenue (online-enabled games) is expected to be approximately $(475) million. Net income is expected to be approximately $216 to $240 million. Diluted earnings per share is expected to be approximately $0.76 to $0.85. The Company estimates a share count of 283 million for purposes of calculating first quarter fiscal 2023 diluted earnings per share. Operational metric: Net bookings1 is expected to be approximately $1.200 to $1.250 billion. In addition, the following outlook for GAAP-based financial data2 and updated long-term tax rate of 19% are used internally by EA to adjust our GAAP expectations to assess EA’s operating results and plan for future periods: Three Months Ending June 30, 2022 GAAP-Based Financial Data* GAAP Guidance Range Acquisition- related expenses Change in deferred net revenue (online-enabled games) Stock-based compensation (in $ millions) Total net revenue 1,675 – 1,725 - (475 ) - Cost of revenue 309 – 321 (30 ) - (2 ) Operating expense 1,013 (40 ) - (123 ) Income before provision for income taxes 337 – 375 70 (475 ) 125 Net income 216 – 240 Number of shares used in computation: Diluted shares 283 *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 May 10, 2022 at 2:00 pm PT (5:00 pm ET) to review its results for the fiscal quarter and year ended March 31, 2022 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 (866) 324-3683 (domestic) or (509) 844-0959 (international), using the conference code 8277667 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 May 24, 2022 at 855-859-2056 (domestic) or 404-537-3406 (international) using pin code 8277667. 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 May 10, 2022” and other information regarding EA's fiscal 2023 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, 2021. These forward-looking statements are current as of May 10, 2022. 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 Annual Report on Form 10-K for the fiscal year ended March 31, 2022. Electronic Arts assumes no obligation and does not intend to update these estimates prior to filing its Form 10-K for the fiscal year ended March 31, 2022. 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 2022, EA posted GAAP net revenue of approximately $7 billion. Headquartered in Redwood City, California, EA is recognized for a portfolio of critically acclaimed, high-quality brands such as EA SPORTS™ FIFA, Battlefield™, Apex Legends™, The Sims™, Madden NFL, Need for Speed™, Titanfall™, Plants vs. Zombies™ and F1®. More information about EA is available at www.ea.com/news. EA SPORTS, Battlefield, Need for Speed, Apex Legends, The Sims, Titanfall and Plants vs. Zombies are trademarks of Electronic Arts Inc. STAR WARS © & TM 2015 Lucasfilm Ltd. All rights reserved. John Madden, NFL, FIFA and F1 are the property of their respective owners and used with permission. 1 Net bookings is defined as the net amount of products and services sold digitally or sold-in physically in the period. Net bookings is calculated by adding total net revenue to the change in deferred net revenue for online-enabled games. 2 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, 2021. ELECTRONIC ARTS INC. AND SUBSIDIARIES Unaudited Condensed Consolidated Statements of Operations (in $ millions, except per share data) Three Months Ended March 31, Twelve Months Ended March 31, 2022 2021 2022 2021 Net revenue 1,825 1,346 6,991 5,629 Cost of revenue 419 319 1,859 1,494 Gross profit 1,406 1,027 5,132 4,135 Operating expenses: Research and development 579 468 2,186 1,778 Marketing and sales 245 196 961 689 General and administrative 165 174 673 592 Amortization and impairment of intangibles 52 14 183 30 Total operating expenses 1,041 852 4,003 3,089 Operating income 365 175 1,129 1,046 Interest and other income (expense), net (9 ) (10 ) (48 ) (29 ) Income before provision for income taxes 356 165 1,081 1,017 Provision for income taxes 131 89 292 180 Net income 225 76 789 837 Earnings per share Basic 0.80 0.26 2.78 2.90 Diluted 0.80 0.26 2.76 2.87 Number of shares used in computation Basic 281 288 284 289 Diluted 283 290 286 292 Results (in $ millions, except per share data) The following table reports the variance of the actuals versus our guidance provided on February 1, 2022 for the three months ended March 31, 2022 plus a comparison to the actuals for the three months ended March 31, 2021. Three Months Ended March 31, 2022 2022 2021 Guidance Variance Actuals Actuals Net revenue Net revenue 1,759 66 1,825 1,346 GAAP-based financial data Change in deferred net revenue (online-enabled games)1 2 (76 ) (74 ) 144 Cost of revenue Cost of revenue 404 15 419 319 GAAP-based financial data Acquisition-related expenses (42 ) (3 ) (45 ) (4 ) Stock-based compensation (1 ) (1 ) (2 ) (1 ) Operating expenses Operating expenses 1,086 (45 ) 1,041 852 GAAP-based financial data Acquisition-related expenses (49 ) (3 ) (52 ) (14 ) Stock-based compensation (126 ) 3 (123 ) (108 ) Income before tax Income before tax 259 97 356 165 GAAP-based financial data Acquisition-related expenses 91 6 97 18 Change in deferred net revenue (online-enabled games)1 2 (76 ) (74 ) 144 Stock-based compensation 127 (2 ) 125 109 Tax rate used for management reporting 18 % 18 % 18 % Earnings per share Basic 0.46 0.34 0.80 0.26 Diluted 0.46 0.34 0.80 0.26 Number of shares used in computation Basic 282 (1 ) 281 288 Diluted 284 (1 ) 283 290 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) March 31, 2022 March 31, 20212 ASSETS Current assets: Cash and cash equivalents 2,732 5,260 Short-term investments 330 1,106 Receivables, net 650 521 Other current assets 439 326 Total current assets 4,151 7,213 Property and equipment, net 550 491 Goodwill 5,387 2,868 Acquisition-related intangibles, net 962 309 Deferred income taxes, net 2,243 2,045 Other assets 507 362 TOTAL ASSETS 13,800 13,288 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable 101 96 Accrued and other current liabilities 1,388 1,341 Deferred net revenue (online-enabled games) 2,024 1,527 Total current liabilities 3,513 2,964 Senior notes, net 1,878 1,876 Income tax obligations 386 315 Deferred income taxes, net 1 43 Other liabilities 397 250 Total liabilities 6,175 5,448 Stockholders’ equity: Common stock 3 3 Retained earnings 7,607 7,887 Accumulated other comprehensive income (loss) 15 (50 ) Total stockholders’ equity 7,625 7,840 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY 13,800 13,288 2Derived from audited consolidated financial statements. ELECTRONIC ARTS INC. AND SUBSIDIARIES Unaudited Condensed Consolidated Statements of Cash Flows (in $ millions) Three Months Ended March 31, Twelve Months Ended March 31, 2022 2021 2022 2021 OPERATING ACTIVITIES Net income 225 76 789 837 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, amortization, accretion and impairment 141 58 486 181 Stock-based compensation 125 109 528 435 Change in assets and liabilities Receivables, net 313 268 (77 ) (41 ) Other assets (82 ) (42 ) (157 ) (70 ) Accounts payable 2 (11 ) (7 ) 18 Accrued and other liabilities (14 ) (109 ) 169 136 Deferred income taxes, net (189 ) (125 ) (329 ) (143 ) Deferred net revenue (online-enabled games) (77 ) 147 497 581 Net cash provided by operating activities 444 371 1,899 1,934 INVESTING ACTIVITIES Capital expenditures (53 ) (31 ) (188 ) (124 ) Proceeds from maturities and sales of short-term investments 136 1,598 1,329 3,686 Purchase of short-term investments (116 ) (772 ) (554 ) (2,828 ) Acquisitions, net of cash acquired — (1,239 ) (3,391 ) (1,239 ) Net cash used in investing activities (33 ) (444 ) (2,804 ) (505 ) FINANCING ACTIVITIES Proceeds from issuance of senior notes, net of issuance costs — 1,478 — 1,478 Payment of senior notes — (600 ) — (600 ) Proceeds from issuance of common stock 33 30 77 86 Cash dividends paid (48 ) (49 ) (193 ) (98 ) Cash paid to taxing authorities for shares withheld from employees (11 ) (8 ) (204 ) (152 ) Repurchase and retirement of common stock (325 ) (325 ) (1,300 ) (729 ) Net cash provided by (used in) financing activities (351 ) 526 (1,620 ) (15 ) Effect of foreign exchange on cash and cash equivalents 2 35 (3 ) 78 Change in cash and cash equivalents 62 488 (2,528 ) 1,492 Beginning cash and cash equivalents 2,670 4,772 5,260 3,768 Ending cash and cash equivalents 2,732 5,260 2,732 5,260 ELECTRONIC ARTS INC. AND SUBSIDIARIES Unaudited Supplemental Financial Information and Business Metrics (in $ millions, except per share data) Q4 Q1 Q2 Q3 Q4 YOY % FY21 FY22 FY22 FY22 FY22 Change Net revenue Net revenue 1,346 1,551 1,826 1,789 1,825 36 % GAAP-based financial data Change in deferred net revenue (online-enabled games)1 144 (215 ) 25 788 (74 ) Gross profit Gross profit 1,027 1,236 1,332 1,158 1,406 37 % Gross profit (as a % of net revenue) 76 % 80 % 73 % 65 % 77 % GAAP-based financial data Acquisition-related expenses 4 22 22 44 45 Change in deferred net revenue (online-enabled games)1 144 (215 ) 25 788 (74 ) Stock-based compensation 1 1 2 1 2 Operating income Operating income 175 322 340 102 365 109 % Operating income (as a % of net revenue) 13 % 21 % 19 % 6 % 20 % GAAP-based financial data Acquisition-related expenses 18 62 52 105 97 Change in deferred net revenue (online-enabled games)1 144 (215 ) 25 788 (74 ) Stock-based compensation 109 125 149 129 125 Net income Net income 76 204 294 66 225 196 % Net income (as a % of net revenue) 6 % 13 % 16 % 4 % 12 % GAAP-based financial data Acquisition-related expenses 18 62 52 105 97 Change in deferred net revenue (online-enabled games)1 144 (215 ) 25 788 (74 ) Stock-based compensation 109 125 149 129 125 Tax rate used for management reporting 18 % 18 % 18 % 18 % 18 % Diluted earnings per share 0.26 0.71 1.02 0.23 0.80 208 % Number of shares used in computation Basic 288 286 285 283 281 Diluted 290 289 287 285 283 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) Q4 Q1 Q2 Q3 Q4 YOY % FY21 FY22 FY22 FY22 FY22 Change QUARTERLY NET REVENUE PRESENTATIONS Net revenue by composition Full game downloads 185 233 337 400 312 69 % Packaged goods 65 89 280 216 126 94 % Full game 250 322 617 616 438 75 % Live services and other 1,096 1,229 1,209 1,173 1,387 27 % Total net revenue 1,346 1,551 1,826 1,789 1,825 36 % Full game 19 % 21 % 34 % 34 % 24 % Live services and other 81 % 79 % 66 % 66 % 76 % Total net revenue % 100 % 100 % 100 % 100 % 100 % GAAP-based financial data Full game downloads (19 ) (5 ) 35 179 (103 ) Packaged goods (44 ) (35 ) 44 105 (68 ) Full game (63 ) (40 ) 79 284 (171 ) Live services and other 207 (175 ) (54 ) 504 97 Total change in deferred net revenue (online-enabled games) by composition1 144 (215 ) 25 788 (74 ) Net revenue by platform Console 879 972 1,198 1,138 1,092 24 % PC & Other 295 361 377 374 420 42 % Mobile 172 218 251 277 313 82 % Total net revenue 1,346 1,551 1,826 1,789 1,825 36 % GAAP-based financial data Console 71 (278 ) (29 ) 608 (86 ) PC & Other 51 9 26 137 3 Mobile 22 54 28 43 9 Total change in deferred net revenue (online-enabled games) by platform1 144 (215 ) 25 788 (74 ) 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) Q4 Q1 Q2 Q3 Q4 YOY % FY21 FY22 FY22 FY22 FY22 Change CASH FLOW DATA Operating cash flow 371 (143 ) 64 1,534 444 20 % Operating cash flow - TTM 1,934 1,413 1,416 1,826 1,899 (2 %) Capital expenditures 31 44 43 48 53 71 % Capital expenditures - TTM 124 130 148 166 188 52 % Repurchase and retirement of common stock 325 325 325 325 325 — Cash dividends paid 49 49 48 48 48 (2 %) DEPRECIATION Depreciation expense 38 40 39 41 42 11 % BALANCE SHEET DATA Cash and cash equivalents 5,260 2,838 1,630 2,670 2,732 Short-term investments 1,106 881 342 346 330 Cash and cash equivalents, and short-term investments 6,366 3,719 1,972 3,016 3,062 (52 %) Receivables, net 521 557 1,031 965 650 25 % STOCK-BASED COMPENSATION Cost of revenue 1 1 2 1 2 Research and development 71 85 101 86 84 Marketing and sales 12 12 15 14 13 General and administrative 25 27 31 28 26 Total stock-based compensation 109 125 149 129 125 View source version on businesswire.com: https://www.businesswire.com/news/home/20220509006274/en/Contacts Chris Evenden Vice President, Investor Relations 650-628-0255 cevenden@ea.com John Reseburg Vice President, Global Communications 650-628-3601 jreseburg@ea.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. 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Electronic Arts Reports Q4 and FY22 Financial Results By: Electronic Arts Inc. via Business Wire May 10, 2022 at 16:01 PM EDT Electronic Arts Inc. (NASDAQ: EA) today announced preliminary financial results for its fourth quarter and fiscal year ended March 31, 2022. “FY22 was a record year, with hundreds of millions of players around the world joining in our games to play, watch, and create with one another,” said Andrew Wilson, CEO of Electronic Arts. “With amazing games, built around powerful IP, made by incredibly talented teams, and outstanding engagement in our live services, FY23 is set to be a year of innovation and growth for Electronic Arts.” “We finished the year with another strong quarter of revenue and profit growth, driven by our live services business which was 85% of our net bookings in Q4,” said CFO Chris Suh. “We have a strong foundation of deeply engaged players, rich IP and a resilient business model, which we will continue to invest in to deliver growth in FY23 and beyond.” Selected Operating Highlights and Metrics Net bookings1 for fiscal 2022 was $7.515 billion, up 21% year-over-year. Live services and other net bookings were up 17% year-over-year and represent 71% of total net bookings in fiscal 2022. The EA player network grew 16% year-over-year to more than 580 million unique active accounts. During FY22, EA SPORTS™ FIFA had more than 150 million accounts. FIFA Mobile just had the biggest quarter ever with new unique players surging nearly 80% year-over-year. Apex Legends™ Season 12 set records for the highest engagement since launch. It Takes Two won over 90 awards during FY22. Selected Financial Highlights and Metrics Net cash provided by operating activities was $444 million for the quarter and $1.899 billion for the fiscal year. EA repurchased 2.5 million shares for $325 million during the quarter, bringing the total for the fiscal year to 9.5 million shares for $1.300 billion. EA paid a cash dividend of $0.17 per share during the quarter, bringing the total for the fiscal year to $193 million. Dividend EA has declared a quarterly cash dividend of $0.19 per share of the Company’s common stock, which represents a 12% increase from prior quarter. The dividend is payable on June 22, 2022 to shareholders of record as of the close of business on June 8, 2022. Quarterly Financial Highlights Three Months Ended March 31, 2022 2021 (in $ millions, except per share amounts) Full game 438 250 Live services and other 1,387 1,096 Total net revenue 1,825 1,346 Net income 225 76 Diluted earnings per share 0.80 0.26 Operating cash flow 444 371 Value of shares repurchased 325 325 Number of shares repurchased 2.5 2.4 Cash dividend paid 48 49 The following GAAP-based financial data2 and tax rate of 18% was used internally by company management to adjust its GAAP results in order to assess EA’s operating results: Three Months Ended March 31, 2022 GAAP-Based Financial Data (in $ millions) Statement ofOperations Acquisition-relatedexpenses Change indeferred netrevenue(online-enabled games) Stock-basedcompensation Total net revenue 1,825 - (74 ) - Cost of revenue 419 (45 ) - (2 ) Gross profit 1,406 45 (74 ) 2 Total operating expenses 1,041 (52 ) - (123 ) Operating income 365 97 (74 ) 125 Interest and other income (expense), net (9 ) - - - Income before provision for income taxes 356 97 (74 ) 125 Number of shares used in computation: Diluted 283 Fiscal Year Financial Highlights Twelve Months Ended March 31, 2022 2021 (in $ millions) Full game 1,993 1,613 Live services and other 4,998 4,016 Total net revenue 6,991 5,629 Net income 789 837 Diluted earnings per share 2.76 2.87 Operating cash flow 1,899 1,934 Value of shares repurchased 1,300 729 Number of shares repurchased 9.5 5.6 Cash dividend paid 193 98 The following GAAP-based financial data2 and tax rate of 18% was used internally by company management to adjust its GAAP results in order to assess EA’s operating results: Twelve Months Ended March 31, 2022 GAAP-Based Financial Data (in $ millions) Statement ofOperations Acquisition-relatedexpenses Change indeferred netrevenue(online-enabled games) Stock-basedcompensation Total net revenue 6,991 - 524 - Cost of revenue 1,859 (133 ) - (6 ) Gross profit 5,132 133 524 6 Total operating expenses 4,003 (183 ) - (522 ) Operating income 1,129 316 524 528 Interest and other income (expense), net (48 ) - - - Income before provision for income taxes 1,081 316 524 528 Number of shares used in computation: Diluted 286 Operating Metric The following is a calculation of our total net bookings1 for the periods presented: Three Months Ended Twelve Months Ended March 31, March 31, 2022 2021 2022 2021 (in $ millions) Total net revenue 1,825 1,346 6,991 5,629 Change in deferred net revenue (online-enabled games) (74) 144 524 561 Net bookings 1,751 1,490 7,515 6,190 Business Outlook as of May 10, 2022 Fiscal Year 2023 Expectations – Ending March 31, 2023 Financial metrics: Net revenue is expected to be approximately $7.600 to $7.800 billion. Change in deferred net revenue (online-enabled games) is expected to be approximately $300 million. Net income is expected to be approximately $793 to $815 million. Diluted earnings per share is expected to be approximately $2.79 to $2.87. Operating cash flow is expected to be approximately $1.600 to $1.650 billion. The Company estimates a share count of 284 million for purposes of calculating fiscal year 2023 diluted earnings per share. Operational metric: Net bookings1 is expected to be approximately $7.900 to $8.100 billion. In addition, the following outlook for GAAP-based financial data2 and updated long-term tax rate of 19% are used internally by EA to adjust our GAAP expectations to assess EA’s operating results and plan for future periods: Twelve Months Ending March 31, 2023 GAAP-Based Financial Data* GAAP Guidance Range Acquisition- related expenses Change in deferred net revenue (online-enabled games) Stock-based compensation (in $ millions) Total net revenue 7,600 – 7,800 - 300 - Cost of revenue 2,020 – 2,065 (110 ) - (5 ) Operating expense 4,200 – 4,315 (140 ) - (595 ) Income before provision for income taxes 1,321 – 1,358 250 300 600 Net income 793 – 815 Number of shares used in computation: Diluted shares 284 *The mid-point of the range has been used for purposes of presenting the reconciling items. First Quarter Fiscal Year 2023 Expectations – Ending June 30, 2022 Financial metrics: Net revenue is expected to be approximately $1.675 to $1.725 billion. Change in deferred net revenue (online-enabled games) is expected to be approximately $(475) million. Net income is expected to be approximately $216 to $240 million. Diluted earnings per share is expected to be approximately $0.76 to $0.85. The Company estimates a share count of 283 million for purposes of calculating first quarter fiscal 2023 diluted earnings per share. Operational metric: Net bookings1 is expected to be approximately $1.200 to $1.250 billion. In addition, the following outlook for GAAP-based financial data2 and updated long-term tax rate of 19% are used internally by EA to adjust our GAAP expectations to assess EA’s operating results and plan for future periods: Three Months Ending June 30, 2022 GAAP-Based Financial Data* GAAP Guidance Range Acquisition- related expenses Change in deferred net revenue (online-enabled games) Stock-based compensation (in $ millions) Total net revenue 1,675 – 1,725 - (475 ) - Cost of revenue 309 – 321 (30 ) - (2 ) Operating expense 1,013 (40 ) - (123 ) Income before provision for income taxes 337 – 375 70 (475 ) 125 Net income 216 – 240 Number of shares used in computation: Diluted shares 283 *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 May 10, 2022 at 2:00 pm PT (5:00 pm ET) to review its results for the fiscal quarter and year ended March 31, 2022 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 (866) 324-3683 (domestic) or (509) 844-0959 (international), using the conference code 8277667 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 May 24, 2022 at 855-859-2056 (domestic) or 404-537-3406 (international) using pin code 8277667. 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 May 10, 2022” and other information regarding EA's fiscal 2023 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, 2021. These forward-looking statements are current as of May 10, 2022. 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 Annual Report on Form 10-K for the fiscal year ended March 31, 2022. Electronic Arts assumes no obligation and does not intend to update these estimates prior to filing its Form 10-K for the fiscal year ended March 31, 2022. 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 2022, EA posted GAAP net revenue of approximately $7 billion. Headquartered in Redwood City, California, EA is recognized for a portfolio of critically acclaimed, high-quality brands such as EA SPORTS™ FIFA, Battlefield™, Apex Legends™, The Sims™, Madden NFL, Need for Speed™, Titanfall™, Plants vs. Zombies™ and F1®. More information about EA is available at www.ea.com/news. EA SPORTS, Battlefield, Need for Speed, Apex Legends, The Sims, Titanfall and Plants vs. Zombies are trademarks of Electronic Arts Inc. STAR WARS © & TM 2015 Lucasfilm Ltd. All rights reserved. John Madden, NFL, FIFA and F1 are the property of their respective owners and used with permission. 1 Net bookings is defined as the net amount of products and services sold digitally or sold-in physically in the period. Net bookings is calculated by adding total net revenue to the change in deferred net revenue for online-enabled games. 2 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, 2021. ELECTRONIC ARTS INC. AND SUBSIDIARIES Unaudited Condensed Consolidated Statements of Operations (in $ millions, except per share data) Three Months Ended March 31, Twelve Months Ended March 31, 2022 2021 2022 2021 Net revenue 1,825 1,346 6,991 5,629 Cost of revenue 419 319 1,859 1,494 Gross profit 1,406 1,027 5,132 4,135 Operating expenses: Research and development 579 468 2,186 1,778 Marketing and sales 245 196 961 689 General and administrative 165 174 673 592 Amortization and impairment of intangibles 52 14 183 30 Total operating expenses 1,041 852 4,003 3,089 Operating income 365 175 1,129 1,046 Interest and other income (expense), net (9 ) (10 ) (48 ) (29 ) Income before provision for income taxes 356 165 1,081 1,017 Provision for income taxes 131 89 292 180 Net income 225 76 789 837 Earnings per share Basic 0.80 0.26 2.78 2.90 Diluted 0.80 0.26 2.76 2.87 Number of shares used in computation Basic 281 288 284 289 Diluted 283 290 286 292 Results (in $ millions, except per share data) The following table reports the variance of the actuals versus our guidance provided on February 1, 2022 for the three months ended March 31, 2022 plus a comparison to the actuals for the three months ended March 31, 2021. Three Months Ended March 31, 2022 2022 2021 Guidance Variance Actuals Actuals Net revenue Net revenue 1,759 66 1,825 1,346 GAAP-based financial data Change in deferred net revenue (online-enabled games)1 2 (76 ) (74 ) 144 Cost of revenue Cost of revenue 404 15 419 319 GAAP-based financial data Acquisition-related expenses (42 ) (3 ) (45 ) (4 ) Stock-based compensation (1 ) (1 ) (2 ) (1 ) Operating expenses Operating expenses 1,086 (45 ) 1,041 852 GAAP-based financial data Acquisition-related expenses (49 ) (3 ) (52 ) (14 ) Stock-based compensation (126 ) 3 (123 ) (108 ) Income before tax Income before tax 259 97 356 165 GAAP-based financial data Acquisition-related expenses 91 6 97 18 Change in deferred net revenue (online-enabled games)1 2 (76 ) (74 ) 144 Stock-based compensation 127 (2 ) 125 109 Tax rate used for management reporting 18 % 18 % 18 % Earnings per share Basic 0.46 0.34 0.80 0.26 Diluted 0.46 0.34 0.80 0.26 Number of shares used in computation Basic 282 (1 ) 281 288 Diluted 284 (1 ) 283 290 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) March 31, 2022 March 31, 20212 ASSETS Current assets: Cash and cash equivalents 2,732 5,260 Short-term investments 330 1,106 Receivables, net 650 521 Other current assets 439 326 Total current assets 4,151 7,213 Property and equipment, net 550 491 Goodwill 5,387 2,868 Acquisition-related intangibles, net 962 309 Deferred income taxes, net 2,243 2,045 Other assets 507 362 TOTAL ASSETS 13,800 13,288 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable 101 96 Accrued and other current liabilities 1,388 1,341 Deferred net revenue (online-enabled games) 2,024 1,527 Total current liabilities 3,513 2,964 Senior notes, net 1,878 1,876 Income tax obligations 386 315 Deferred income taxes, net 1 43 Other liabilities 397 250 Total liabilities 6,175 5,448 Stockholders’ equity: Common stock 3 3 Retained earnings 7,607 7,887 Accumulated other comprehensive income (loss) 15 (50 ) Total stockholders’ equity 7,625 7,840 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY 13,800 13,288 2Derived from audited consolidated financial statements. ELECTRONIC ARTS INC. AND SUBSIDIARIES Unaudited Condensed Consolidated Statements of Cash Flows (in $ millions) Three Months Ended March 31, Twelve Months Ended March 31, 2022 2021 2022 2021 OPERATING ACTIVITIES Net income 225 76 789 837 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, amortization, accretion and impairment 141 58 486 181 Stock-based compensation 125 109 528 435 Change in assets and liabilities Receivables, net 313 268 (77 ) (41 ) Other assets (82 ) (42 ) (157 ) (70 ) Accounts payable 2 (11 ) (7 ) 18 Accrued and other liabilities (14 ) (109 ) 169 136 Deferred income taxes, net (189 ) (125 ) (329 ) (143 ) Deferred net revenue (online-enabled games) (77 ) 147 497 581 Net cash provided by operating activities 444 371 1,899 1,934 INVESTING ACTIVITIES Capital expenditures (53 ) (31 ) (188 ) (124 ) Proceeds from maturities and sales of short-term investments 136 1,598 1,329 3,686 Purchase of short-term investments (116 ) (772 ) (554 ) (2,828 ) Acquisitions, net of cash acquired — (1,239 ) (3,391 ) (1,239 ) Net cash used in investing activities (33 ) (444 ) (2,804 ) (505 ) FINANCING ACTIVITIES Proceeds from issuance of senior notes, net of issuance costs — 1,478 — 1,478 Payment of senior notes — (600 ) — (600 ) Proceeds from issuance of common stock 33 30 77 86 Cash dividends paid (48 ) (49 ) (193 ) (98 ) Cash paid to taxing authorities for shares withheld from employees (11 ) (8 ) (204 ) (152 ) Repurchase and retirement of common stock (325 ) (325 ) (1,300 ) (729 ) Net cash provided by (used in) financing activities (351 ) 526 (1,620 ) (15 ) Effect of foreign exchange on cash and cash equivalents 2 35 (3 ) 78 Change in cash and cash equivalents 62 488 (2,528 ) 1,492 Beginning cash and cash equivalents 2,670 4,772 5,260 3,768 Ending cash and cash equivalents 2,732 5,260 2,732 5,260 ELECTRONIC ARTS INC. AND SUBSIDIARIES Unaudited Supplemental Financial Information and Business Metrics (in $ millions, except per share data) Q4 Q1 Q2 Q3 Q4 YOY % FY21 FY22 FY22 FY22 FY22 Change Net revenue Net revenue 1,346 1,551 1,826 1,789 1,825 36 % GAAP-based financial data Change in deferred net revenue (online-enabled games)1 144 (215 ) 25 788 (74 ) Gross profit Gross profit 1,027 1,236 1,332 1,158 1,406 37 % Gross profit (as a % of net revenue) 76 % 80 % 73 % 65 % 77 % GAAP-based financial data Acquisition-related expenses 4 22 22 44 45 Change in deferred net revenue (online-enabled games)1 144 (215 ) 25 788 (74 ) Stock-based compensation 1 1 2 1 2 Operating income Operating income 175 322 340 102 365 109 % Operating income (as a % of net revenue) 13 % 21 % 19 % 6 % 20 % GAAP-based financial data Acquisition-related expenses 18 62 52 105 97 Change in deferred net revenue (online-enabled games)1 144 (215 ) 25 788 (74 ) Stock-based compensation 109 125 149 129 125 Net income Net income 76 204 294 66 225 196 % Net income (as a % of net revenue) 6 % 13 % 16 % 4 % 12 % GAAP-based financial data Acquisition-related expenses 18 62 52 105 97 Change in deferred net revenue (online-enabled games)1 144 (215 ) 25 788 (74 ) Stock-based compensation 109 125 149 129 125 Tax rate used for management reporting 18 % 18 % 18 % 18 % 18 % Diluted earnings per share 0.26 0.71 1.02 0.23 0.80 208 % Number of shares used in computation Basic 288 286 285 283 281 Diluted 290 289 287 285 283 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) Q4 Q1 Q2 Q3 Q4 YOY % FY21 FY22 FY22 FY22 FY22 Change QUARTERLY NET REVENUE PRESENTATIONS Net revenue by composition Full game downloads 185 233 337 400 312 69 % Packaged goods 65 89 280 216 126 94 % Full game 250 322 617 616 438 75 % Live services and other 1,096 1,229 1,209 1,173 1,387 27 % Total net revenue 1,346 1,551 1,826 1,789 1,825 36 % Full game 19 % 21 % 34 % 34 % 24 % Live services and other 81 % 79 % 66 % 66 % 76 % Total net revenue % 100 % 100 % 100 % 100 % 100 % GAAP-based financial data Full game downloads (19 ) (5 ) 35 179 (103 ) Packaged goods (44 ) (35 ) 44 105 (68 ) Full game (63 ) (40 ) 79 284 (171 ) Live services and other 207 (175 ) (54 ) 504 97 Total change in deferred net revenue (online-enabled games) by composition1 144 (215 ) 25 788 (74 ) Net revenue by platform Console 879 972 1,198 1,138 1,092 24 % PC & Other 295 361 377 374 420 42 % Mobile 172 218 251 277 313 82 % Total net revenue 1,346 1,551 1,826 1,789 1,825 36 % GAAP-based financial data Console 71 (278 ) (29 ) 608 (86 ) PC & Other 51 9 26 137 3 Mobile 22 54 28 43 9 Total change in deferred net revenue (online-enabled games) by platform1 144 (215 ) 25 788 (74 ) 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) Q4 Q1 Q2 Q3 Q4 YOY % FY21 FY22 FY22 FY22 FY22 Change CASH FLOW DATA Operating cash flow 371 (143 ) 64 1,534 444 20 % Operating cash flow - TTM 1,934 1,413 1,416 1,826 1,899 (2 %) Capital expenditures 31 44 43 48 53 71 % Capital expenditures - TTM 124 130 148 166 188 52 % Repurchase and retirement of common stock 325 325 325 325 325 — Cash dividends paid 49 49 48 48 48 (2 %) DEPRECIATION Depreciation expense 38 40 39 41 42 11 % BALANCE SHEET DATA Cash and cash equivalents 5,260 2,838 1,630 2,670 2,732 Short-term investments 1,106 881 342 346 330 Cash and cash equivalents, and short-term investments 6,366 3,719 1,972 3,016 3,062 (52 %) Receivables, net 521 557 1,031 965 650 25 % STOCK-BASED COMPENSATION Cost of revenue 1 1 2 1 2 Research and development 71 85 101 86 84 Marketing and sales 12 12 15 14 13 General and administrative 25 27 31 28 26 Total stock-based compensation 109 125 149 129 125 View source version on businesswire.com: https://www.businesswire.com/news/home/20220509006274/en/Contacts Chris Evenden Vice President, Investor Relations 650-628-0255 cevenden@ea.com John Reseburg Vice President, Global Communications 650-628-3601 jreseburg@ea.com
Electronic Arts Inc. (NASDAQ: EA) today announced preliminary financial results for its fourth quarter and fiscal year ended March 31, 2022. “FY22 was a record year, with hundreds of millions of players around the world joining in our games to play, watch, and create with one another,” said Andrew Wilson, CEO of Electronic Arts. “With amazing games, built around powerful IP, made by incredibly talented teams, and outstanding engagement in our live services, FY23 is set to be a year of innovation and growth for Electronic Arts.” “We finished the year with another strong quarter of revenue and profit growth, driven by our live services business which was 85% of our net bookings in Q4,” said CFO Chris Suh. “We have a strong foundation of deeply engaged players, rich IP and a resilient business model, which we will continue to invest in to deliver growth in FY23 and beyond.” Selected Operating Highlights and Metrics Net bookings1 for fiscal 2022 was $7.515 billion, up 21% year-over-year. Live services and other net bookings were up 17% year-over-year and represent 71% of total net bookings in fiscal 2022. The EA player network grew 16% year-over-year to more than 580 million unique active accounts. During FY22, EA SPORTS™ FIFA had more than 150 million accounts. FIFA Mobile just had the biggest quarter ever with new unique players surging nearly 80% year-over-year. Apex Legends™ Season 12 set records for the highest engagement since launch. It Takes Two won over 90 awards during FY22. Selected Financial Highlights and Metrics Net cash provided by operating activities was $444 million for the quarter and $1.899 billion for the fiscal year. EA repurchased 2.5 million shares for $325 million during the quarter, bringing the total for the fiscal year to 9.5 million shares for $1.300 billion. EA paid a cash dividend of $0.17 per share during the quarter, bringing the total for the fiscal year to $193 million. Dividend EA has declared a quarterly cash dividend of $0.19 per share of the Company’s common stock, which represents a 12% increase from prior quarter. The dividend is payable on June 22, 2022 to shareholders of record as of the close of business on June 8, 2022. Quarterly Financial Highlights Three Months Ended March 31, 2022 2021 (in $ millions, except per share amounts) Full game 438 250 Live services and other 1,387 1,096 Total net revenue 1,825 1,346 Net income 225 76 Diluted earnings per share 0.80 0.26 Operating cash flow 444 371 Value of shares repurchased 325 325 Number of shares repurchased 2.5 2.4 Cash dividend paid 48 49 The following GAAP-based financial data2 and tax rate of 18% was used internally by company management to adjust its GAAP results in order to assess EA’s operating results: Three Months Ended March 31, 2022 GAAP-Based Financial Data (in $ millions) Statement ofOperations Acquisition-relatedexpenses Change indeferred netrevenue(online-enabled games) Stock-basedcompensation Total net revenue 1,825 - (74 ) - Cost of revenue 419 (45 ) - (2 ) Gross profit 1,406 45 (74 ) 2 Total operating expenses 1,041 (52 ) - (123 ) Operating income 365 97 (74 ) 125 Interest and other income (expense), net (9 ) - - - Income before provision for income taxes 356 97 (74 ) 125 Number of shares used in computation: Diluted 283 Fiscal Year Financial Highlights Twelve Months Ended March 31, 2022 2021 (in $ millions) Full game 1,993 1,613 Live services and other 4,998 4,016 Total net revenue 6,991 5,629 Net income 789 837 Diluted earnings per share 2.76 2.87 Operating cash flow 1,899 1,934 Value of shares repurchased 1,300 729 Number of shares repurchased 9.5 5.6 Cash dividend paid 193 98 The following GAAP-based financial data2 and tax rate of 18% was used internally by company management to adjust its GAAP results in order to assess EA’s operating results: Twelve Months Ended March 31, 2022 GAAP-Based Financial Data (in $ millions) Statement ofOperations Acquisition-relatedexpenses Change indeferred netrevenue(online-enabled games) Stock-basedcompensation Total net revenue 6,991 - 524 - Cost of revenue 1,859 (133 ) - (6 ) Gross profit 5,132 133 524 6 Total operating expenses 4,003 (183 ) - (522 ) Operating income 1,129 316 524 528 Interest and other income (expense), net (48 ) - - - Income before provision for income taxes 1,081 316 524 528 Number of shares used in computation: Diluted 286 Operating Metric The following is a calculation of our total net bookings1 for the periods presented: Three Months Ended Twelve Months Ended March 31, March 31, 2022 2021 2022 2021 (in $ millions) Total net revenue 1,825 1,346 6,991 5,629 Change in deferred net revenue (online-enabled games) (74) 144 524 561 Net bookings 1,751 1,490 7,515 6,190 Business Outlook as of May 10, 2022 Fiscal Year 2023 Expectations – Ending March 31, 2023 Financial metrics: Net revenue is expected to be approximately $7.600 to $7.800 billion. Change in deferred net revenue (online-enabled games) is expected to be approximately $300 million. Net income is expected to be approximately $793 to $815 million. Diluted earnings per share is expected to be approximately $2.79 to $2.87. Operating cash flow is expected to be approximately $1.600 to $1.650 billion. The Company estimates a share count of 284 million for purposes of calculating fiscal year 2023 diluted earnings per share. Operational metric: Net bookings1 is expected to be approximately $7.900 to $8.100 billion. In addition, the following outlook for GAAP-based financial data2 and updated long-term tax rate of 19% are used internally by EA to adjust our GAAP expectations to assess EA’s operating results and plan for future periods: Twelve Months Ending March 31, 2023 GAAP-Based Financial Data* GAAP Guidance Range Acquisition- related expenses Change in deferred net revenue (online-enabled games) Stock-based compensation (in $ millions) Total net revenue 7,600 – 7,800 - 300 - Cost of revenue 2,020 – 2,065 (110 ) - (5 ) Operating expense 4,200 – 4,315 (140 ) - (595 ) Income before provision for income taxes 1,321 – 1,358 250 300 600 Net income 793 – 815 Number of shares used in computation: Diluted shares 284 *The mid-point of the range has been used for purposes of presenting the reconciling items. First Quarter Fiscal Year 2023 Expectations – Ending June 30, 2022 Financial metrics: Net revenue is expected to be approximately $1.675 to $1.725 billion. Change in deferred net revenue (online-enabled games) is expected to be approximately $(475) million. Net income is expected to be approximately $216 to $240 million. Diluted earnings per share is expected to be approximately $0.76 to $0.85. The Company estimates a share count of 283 million for purposes of calculating first quarter fiscal 2023 diluted earnings per share. Operational metric: Net bookings1 is expected to be approximately $1.200 to $1.250 billion. In addition, the following outlook for GAAP-based financial data2 and updated long-term tax rate of 19% are used internally by EA to adjust our GAAP expectations to assess EA’s operating results and plan for future periods: Three Months Ending June 30, 2022 GAAP-Based Financial Data* GAAP Guidance Range Acquisition- related expenses Change in deferred net revenue (online-enabled games) Stock-based compensation (in $ millions) Total net revenue 1,675 – 1,725 - (475 ) - Cost of revenue 309 – 321 (30 ) - (2 ) Operating expense 1,013 (40 ) - (123 ) Income before provision for income taxes 337 – 375 70 (475 ) 125 Net income 216 – 240 Number of shares used in computation: Diluted shares 283 *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 May 10, 2022 at 2:00 pm PT (5:00 pm ET) to review its results for the fiscal quarter and year ended March 31, 2022 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 (866) 324-3683 (domestic) or (509) 844-0959 (international), using the conference code 8277667 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 May 24, 2022 at 855-859-2056 (domestic) or 404-537-3406 (international) using pin code 8277667. 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 May 10, 2022” and other information regarding EA's fiscal 2023 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, 2021. These forward-looking statements are current as of May 10, 2022. 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 Annual Report on Form 10-K for the fiscal year ended March 31, 2022. Electronic Arts assumes no obligation and does not intend to update these estimates prior to filing its Form 10-K for the fiscal year ended March 31, 2022. 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 2022, EA posted GAAP net revenue of approximately $7 billion. Headquartered in Redwood City, California, EA is recognized for a portfolio of critically acclaimed, high-quality brands such as EA SPORTS™ FIFA, Battlefield™, Apex Legends™, The Sims™, Madden NFL, Need for Speed™, Titanfall™, Plants vs. Zombies™ and F1®. More information about EA is available at www.ea.com/news. EA SPORTS, Battlefield, Need for Speed, Apex Legends, The Sims, Titanfall and Plants vs. Zombies are trademarks of Electronic Arts Inc. STAR WARS © & TM 2015 Lucasfilm Ltd. All rights reserved. John Madden, NFL, FIFA and F1 are the property of their respective owners and used with permission. 1 Net bookings is defined as the net amount of products and services sold digitally or sold-in physically in the period. Net bookings is calculated by adding total net revenue to the change in deferred net revenue for online-enabled games. 2 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, 2021. ELECTRONIC ARTS INC. AND SUBSIDIARIES Unaudited Condensed Consolidated Statements of Operations (in $ millions, except per share data) Three Months Ended March 31, Twelve Months Ended March 31, 2022 2021 2022 2021 Net revenue 1,825 1,346 6,991 5,629 Cost of revenue 419 319 1,859 1,494 Gross profit 1,406 1,027 5,132 4,135 Operating expenses: Research and development 579 468 2,186 1,778 Marketing and sales 245 196 961 689 General and administrative 165 174 673 592 Amortization and impairment of intangibles 52 14 183 30 Total operating expenses 1,041 852 4,003 3,089 Operating income 365 175 1,129 1,046 Interest and other income (expense), net (9 ) (10 ) (48 ) (29 ) Income before provision for income taxes 356 165 1,081 1,017 Provision for income taxes 131 89 292 180 Net income 225 76 789 837 Earnings per share Basic 0.80 0.26 2.78 2.90 Diluted 0.80 0.26 2.76 2.87 Number of shares used in computation Basic 281 288 284 289 Diluted 283 290 286 292 Results (in $ millions, except per share data) The following table reports the variance of the actuals versus our guidance provided on February 1, 2022 for the three months ended March 31, 2022 plus a comparison to the actuals for the three months ended March 31, 2021. Three Months Ended March 31, 2022 2022 2021 Guidance Variance Actuals Actuals Net revenue Net revenue 1,759 66 1,825 1,346 GAAP-based financial data Change in deferred net revenue (online-enabled games)1 2 (76 ) (74 ) 144 Cost of revenue Cost of revenue 404 15 419 319 GAAP-based financial data Acquisition-related expenses (42 ) (3 ) (45 ) (4 ) Stock-based compensation (1 ) (1 ) (2 ) (1 ) Operating expenses Operating expenses 1,086 (45 ) 1,041 852 GAAP-based financial data Acquisition-related expenses (49 ) (3 ) (52 ) (14 ) Stock-based compensation (126 ) 3 (123 ) (108 ) Income before tax Income before tax 259 97 356 165 GAAP-based financial data Acquisition-related expenses 91 6 97 18 Change in deferred net revenue (online-enabled games)1 2 (76 ) (74 ) 144 Stock-based compensation 127 (2 ) 125 109 Tax rate used for management reporting 18 % 18 % 18 % Earnings per share Basic 0.46 0.34 0.80 0.26 Diluted 0.46 0.34 0.80 0.26 Number of shares used in computation Basic 282 (1 ) 281 288 Diluted 284 (1 ) 283 290 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) March 31, 2022 March 31, 20212 ASSETS Current assets: Cash and cash equivalents 2,732 5,260 Short-term investments 330 1,106 Receivables, net 650 521 Other current assets 439 326 Total current assets 4,151 7,213 Property and equipment, net 550 491 Goodwill 5,387 2,868 Acquisition-related intangibles, net 962 309 Deferred income taxes, net 2,243 2,045 Other assets 507 362 TOTAL ASSETS 13,800 13,288 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable 101 96 Accrued and other current liabilities 1,388 1,341 Deferred net revenue (online-enabled games) 2,024 1,527 Total current liabilities 3,513 2,964 Senior notes, net 1,878 1,876 Income tax obligations 386 315 Deferred income taxes, net 1 43 Other liabilities 397 250 Total liabilities 6,175 5,448 Stockholders’ equity: Common stock 3 3 Retained earnings 7,607 7,887 Accumulated other comprehensive income (loss) 15 (50 ) Total stockholders’ equity 7,625 7,840 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY 13,800 13,288 2Derived from audited consolidated financial statements. ELECTRONIC ARTS INC. AND SUBSIDIARIES Unaudited Condensed Consolidated Statements of Cash Flows (in $ millions) Three Months Ended March 31, Twelve Months Ended March 31, 2022 2021 2022 2021 OPERATING ACTIVITIES Net income 225 76 789 837 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, amortization, accretion and impairment 141 58 486 181 Stock-based compensation 125 109 528 435 Change in assets and liabilities Receivables, net 313 268 (77 ) (41 ) Other assets (82 ) (42 ) (157 ) (70 ) Accounts payable 2 (11 ) (7 ) 18 Accrued and other liabilities (14 ) (109 ) 169 136 Deferred income taxes, net (189 ) (125 ) (329 ) (143 ) Deferred net revenue (online-enabled games) (77 ) 147 497 581 Net cash provided by operating activities 444 371 1,899 1,934 INVESTING ACTIVITIES Capital expenditures (53 ) (31 ) (188 ) (124 ) Proceeds from maturities and sales of short-term investments 136 1,598 1,329 3,686 Purchase of short-term investments (116 ) (772 ) (554 ) (2,828 ) Acquisitions, net of cash acquired — (1,239 ) (3,391 ) (1,239 ) Net cash used in investing activities (33 ) (444 ) (2,804 ) (505 ) FINANCING ACTIVITIES Proceeds from issuance of senior notes, net of issuance costs — 1,478 — 1,478 Payment of senior notes — (600 ) — (600 ) Proceeds from issuance of common stock 33 30 77 86 Cash dividends paid (48 ) (49 ) (193 ) (98 ) Cash paid to taxing authorities for shares withheld from employees (11 ) (8 ) (204 ) (152 ) Repurchase and retirement of common stock (325 ) (325 ) (1,300 ) (729 ) Net cash provided by (used in) financing activities (351 ) 526 (1,620 ) (15 ) Effect of foreign exchange on cash and cash equivalents 2 35 (3 ) 78 Change in cash and cash equivalents 62 488 (2,528 ) 1,492 Beginning cash and cash equivalents 2,670 4,772 5,260 3,768 Ending cash and cash equivalents 2,732 5,260 2,732 5,260 ELECTRONIC ARTS INC. AND SUBSIDIARIES Unaudited Supplemental Financial Information and Business Metrics (in $ millions, except per share data) Q4 Q1 Q2 Q3 Q4 YOY % FY21 FY22 FY22 FY22 FY22 Change Net revenue Net revenue 1,346 1,551 1,826 1,789 1,825 36 % GAAP-based financial data Change in deferred net revenue (online-enabled games)1 144 (215 ) 25 788 (74 ) Gross profit Gross profit 1,027 1,236 1,332 1,158 1,406 37 % Gross profit (as a % of net revenue) 76 % 80 % 73 % 65 % 77 % GAAP-based financial data Acquisition-related expenses 4 22 22 44 45 Change in deferred net revenue (online-enabled games)1 144 (215 ) 25 788 (74 ) Stock-based compensation 1 1 2 1 2 Operating income Operating income 175 322 340 102 365 109 % Operating income (as a % of net revenue) 13 % 21 % 19 % 6 % 20 % GAAP-based financial data Acquisition-related expenses 18 62 52 105 97 Change in deferred net revenue (online-enabled games)1 144 (215 ) 25 788 (74 ) Stock-based compensation 109 125 149 129 125 Net income Net income 76 204 294 66 225 196 % Net income (as a % of net revenue) 6 % 13 % 16 % 4 % 12 % GAAP-based financial data Acquisition-related expenses 18 62 52 105 97 Change in deferred net revenue (online-enabled games)1 144 (215 ) 25 788 (74 ) Stock-based compensation 109 125 149 129 125 Tax rate used for management reporting 18 % 18 % 18 % 18 % 18 % Diluted earnings per share 0.26 0.71 1.02 0.23 0.80 208 % Number of shares used in computation Basic 288 286 285 283 281 Diluted 290 289 287 285 283 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) Q4 Q1 Q2 Q3 Q4 YOY % FY21 FY22 FY22 FY22 FY22 Change QUARTERLY NET REVENUE PRESENTATIONS Net revenue by composition Full game downloads 185 233 337 400 312 69 % Packaged goods 65 89 280 216 126 94 % Full game 250 322 617 616 438 75 % Live services and other 1,096 1,229 1,209 1,173 1,387 27 % Total net revenue 1,346 1,551 1,826 1,789 1,825 36 % Full game 19 % 21 % 34 % 34 % 24 % Live services and other 81 % 79 % 66 % 66 % 76 % Total net revenue % 100 % 100 % 100 % 100 % 100 % GAAP-based financial data Full game downloads (19 ) (5 ) 35 179 (103 ) Packaged goods (44 ) (35 ) 44 105 (68 ) Full game (63 ) (40 ) 79 284 (171 ) Live services and other 207 (175 ) (54 ) 504 97 Total change in deferred net revenue (online-enabled games) by composition1 144 (215 ) 25 788 (74 ) Net revenue by platform Console 879 972 1,198 1,138 1,092 24 % PC & Other 295 361 377 374 420 42 % Mobile 172 218 251 277 313 82 % Total net revenue 1,346 1,551 1,826 1,789 1,825 36 % GAAP-based financial data Console 71 (278 ) (29 ) 608 (86 ) PC & Other 51 9 26 137 3 Mobile 22 54 28 43 9 Total change in deferred net revenue (online-enabled games) by platform1 144 (215 ) 25 788 (74 ) 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) Q4 Q1 Q2 Q3 Q4 YOY % FY21 FY22 FY22 FY22 FY22 Change CASH FLOW DATA Operating cash flow 371 (143 ) 64 1,534 444 20 % Operating cash flow - TTM 1,934 1,413 1,416 1,826 1,899 (2 %) Capital expenditures 31 44 43 48 53 71 % Capital expenditures - TTM 124 130 148 166 188 52 % Repurchase and retirement of common stock 325 325 325 325 325 — Cash dividends paid 49 49 48 48 48 (2 %) DEPRECIATION Depreciation expense 38 40 39 41 42 11 % BALANCE SHEET DATA Cash and cash equivalents 5,260 2,838 1,630 2,670 2,732 Short-term investments 1,106 881 342 346 330 Cash and cash equivalents, and short-term investments 6,366 3,719 1,972 3,016 3,062 (52 %) Receivables, net 521 557 1,031 965 650 25 % STOCK-BASED COMPENSATION Cost of revenue 1 1 2 1 2 Research and development 71 85 101 86 84 Marketing and sales 12 12 15 14 13 General and administrative 25 27 31 28 26 Total stock-based compensation 109 125 149 129 125 View source version on businesswire.com: https://www.businesswire.com/news/home/20220509006274/en/
Chris Evenden Vice President, Investor Relations 650-628-0255 cevenden@ea.com John Reseburg Vice President, Global Communications 650-628-3601 jreseburg@ea.com