Electronic Arts Reports Q1 Results
Live services drive Q1 expectation beat and builds momentum for FY25
Redwood City, CA — Electronic Arts announced preliminary financial results for its first quarter ended June 30, 2024.
“EA delivered a strong start to FY25, beating net bookings guidance as we continue to execute across our business,” said Andrew Wilson, CEO of EA. “Our focus on delivering bigger, bolder, and more connected experiences for our players has never been sharper and is illustrated by the record-breaking launch of EA SPORTS College Football 25 as we head into another historic Q2 sports season at EA.”
“Strong execution, live events and continued player engagement across our experiences, delivered Q1 results above expectations,” said Stuart Canfield, CFO of EA. “Looking ahead, the remarkable success of our launch week for College Football, combined with the upcoming launches for EA SPORTS Madden NFL, EA SPORTS FC and Dragon Age: The Veilguard, is building momentum for FY25 and beyond. We are well positioned to deliver our multi-year financial objectives.”
Selected Operating Highlights and Metrics
- Net bookings1 for the quarter totaled $1.262 billion, exceeding the high end of the guidance range of $1.250 billion. This was driven by stronger performance across Madden NFL 24, FC Online and FC Mobile.
- EA SPORTS FCTM celebrated real-world tournaments and events during Q1, attracting tens of millions of new fans and driving engagement across the franchise during the quarter.
- EA SPORTSTM Madden NFL delivered sustained momentum through the quarter, with weekly average users in Ultimate Team and total net bookings up double digits year-over-year.
- During the quarter, EA revealed Dragon Age: The Veilguard gameplay, which trended #1 on YouTube Gaming and received millions of views.
- After the quarter ended, EA SPORTSTM College Football 25 welcomed 5 million unique players into the game through its first week, with over 500,000 more playing via the EA Play trial.
Selected Financial Highlights and Metrics
- Net revenue was $1.660 billion for the quarter.
- Net cash provided by operating activities was $120 million for the quarter and $2.076 billion for the trailing twelve months.
- EA repurchased 2.8 million shares for $375 million during the quarter under the new stock repurchase program, bringing the total for the trailing twelve months to 10.2 million shares for $1.350 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 September 18, 2024 to stockholders of record as of the close of business on August 28, 2024.
Quarterly Financial Highlights
| Three Months Ended | ||||
| June 30, | ||||
| 2024 | 2023 | |||
| (in $ millions, except per share amounts) | ||||
| Full game | 250 | 443 | ||
| Live services and other | 1,410 | 1,481 | ||
| Total net revenue | 1,660 | 1,924 | ||
| Net income | 280 | 402 | ||
| Diluted earnings per share | 1.04 | 1.47 | ||
| Operating cash flow | 120 | 359 | ||
| Value of shares repurchased | 375 | 325 | ||
| Number of shares repurchased | 2.8 | 2.6 | ||
| Cash dividend paid | 50 | 52 | ||
Trailing Twelve Months Financial Highlights
| Twelve Months Ended | ||||
| June 30, | ||||
| 2024 | 2023 | |||
| (in $ millions) | ||||
| Full game | 1,822 | 2,039 | ||
| Live services and other | 5,476 | 5,544 | ||
| Total net revenue | 7,298 | 7,583 | ||
| Net income | 1,151 | 893 | ||
| Operating cash flow | 2,076 | 1,987 | ||
| Value of shares repurchased | 1,350 | 1,300 | ||
| Number of shares repurchased | 10.2 | 10.5 | ||
Operating Metric
The following is a calculation of our total net bookings1 for the periods presented:
| Three Months Ended | Twelve Months Ended | ||||||||||
| June 30, | June 30, | ||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||
| (in $ millions) | |||||||||||
| Total net revenue | 1,660 | 1,924 | 7,298 | 7,583 | |||||||
| Change in deferred net revenue (online-enabled games) | (398 | ) | (346 | ) | (184 | ) | 37 | ||||
| Total net bookings | 1,262 | 1,578 | 7,114 | 7,620 | |||||||
Business Outlook as of July 30, 2024
Fiscal Year 2025 Expectations – Ending March 31, 2025
Financial outlook metrics:
- Net revenue is expected to be approximately $7.100 billion to $7.500 billion.
- Change in deferred net revenue (online-enabled games) is expected to be approximately $200 million.
- Net income is expected to be approximately $904 million to $1.085 billion.
- Diluted earnings per share is expected to be approximately $3.34 to $4.00.
- Operating cash flow is expected to be approximately $2.050 billion to $2.250 billion.
- The Company estimates a share count of 271 million for purposes of calculating diluted earnings per share.
Operational outlook metric:
- Net bookings1 is expected to be approximately $7.300 billion to $7.700 billion.
Second Quarter Fiscal Year 2025 Expectations – Ending September 30, 2024
Financial outlook metrics:
- Net revenue is expected to be approximately $1.900 billion to $2.000 billion.
- Change in deferred net revenue (online-enabled games) is expected to be approximately $50 million.
- Net income is expected to be approximately $204 million to $248 million.
- Diluted earnings per share is expected to be approximately $0.76 to $0.93.
- The Company estimates a share count of 267 million for purposes of calculating diluted earnings per share.
Operational outlook metric:
- Net bookings1 is expected to be approximately $1.950 billion to $2.050 billion.
1 Net bookings is defined as the net amount of products and services sold digitally or sold-in physically in the period. Net bookings is calculated by adding total net revenue to the change in deferred net revenue for online-enabled games.
| ELECTRONIC ARTS INC. AND SUBSIDIARIES | ||||
| Unaudited Condensed Consolidated Statements of Operations | ||||
| (in $ millions, except per share data) | ||||
| Three Months Ended June 30, |
||||
| 2024 | 2023 | |||
| Net revenue | 1,660 | 1,924 | ||
| Cost of revenue | 263 | 368 | ||
| Gross profit | 1,397 | 1,556 | ||
| Operating expenses: | ||||
| Research and development | 629 | 596 | ||
| Marketing and sales | 205 | 229 | ||
| General and administrative | 180 | 163 | ||
| Amortization of intangibles | 17 | 25 | ||
| Restructuring | 2 | 1 | ||
| Total operating expenses | 1,033 | 1,014 | ||
| Operating income | 364 | 542 | ||
| Interest and other income (expense), net | 30 | 14 | ||
| Income before provision for income taxes | 394 | 556 | ||
| Provision for income taxes | 114 | 154 | ||
| Net income | 280 | 402 | ||
| Earnings per share | ||||
| Basic | 1.05 | 1.48 | ||
| Diluted | 1.04 | 1.47 | ||
| Number of shares used in computation | ||||
| Basic | 266 | 272 | ||
| Diluted | 268 | 274 | ||
Results (in $ millions, except per share data)
The following table reports the variance of the actuals versus our guidance provided on May 7, 2024 for the three months ended June 30, 2024 plus a comparison to the actuals for the three months ended June 30, 2023.
| Three Months Ended June 30, | ||||||||||||
| 2024 Guidance (Mid-Point) |
2024 Actuals |
2023 Actuals |
||||||||||
| Variance | ||||||||||||
| Net revenue | ||||||||||||
| Net revenue | 1,625 | 35 | 1,660 | 1,924 | ||||||||
| GAAP-based financial data | ||||||||||||
| Change in deferred net revenue (online-enabled games)1 | (425 | ) | 27 | (398 | ) | (346 | ) | |||||
| Cost of revenue | ||||||||||||
| Cost of revenue | 245 | 18 | 263 | 368 | ||||||||
| GAAP-based financial data | ||||||||||||
| Acquisition-related expenses | (10 | ) | — | (10 | ) | (16 | ) | |||||
| Stock-based compensation | (5 | ) | 1 | (4 | ) | (2 | ) | |||||
| Operating expenses | ||||||||||||
| Operating expenses | 1,075 | (42 | ) | 1,033 | 1,014 | |||||||
| GAAP-based financial data | ||||||||||||
| Acquisition-related expenses | (20 | ) | 3 | (17 | ) | (25 | ) | |||||
| Restructuring and related charges | (65 | ) | 59 | (6 | ) | (3 | ) | |||||
| Stock-based compensation | (135 | ) | (4 | ) | (139 | ) | (128 | ) | ||||
| Income before tax | ||||||||||||
| Income before tax | 324 | 70 | 394 | 556 | ||||||||
| GAAP-based financial data | ||||||||||||
| Acquisition-related expenses | 30 | (3 | ) | 27 | 41 | |||||||
| Change in deferred net revenue (online-enabled games)1 | (425 | ) | 27 | (398 | ) | (346 | ) | |||||
| Restructuring and related charges | 65 | (59 | ) | 6 | 3 | |||||||
| Stock-based compensation | 140 | 3 | 143 | 130 | ||||||||
| Tax rate used for management reporting | 19 | % | 19 | % | 19 | % | ||||||
| Earnings per share | ||||||||||||
| Basic | 0.83 | 0.22 | 1.05 | 1.48 | ||||||||
| Diluted | 0.82 | 0.22 | 1.04 | 1.47 | ||||||||
| Number of shares used in computation | ||||||||||||
| Basic | 268 | (2 | ) | 266 | 272 | |||||||
| Diluted | 270 | (2 | ) | 268 | 274 | |||||||
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) | ||||||
| June 30, 2024 | March 31, 20242 | |||||
| ASSETS | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | 2,400 | 2,900 | ||||
| Short-term investments | 366 | 362 | ||||
| Receivables, net | 433 | 565 | ||||
| Other current assets | 388 | 420 | ||||
| Total current assets | 3,587 | 4,247 | ||||
| Property and equipment, net | 558 | 578 | ||||
| Goodwill | 5,379 | 5,379 | ||||
| Acquisition-related intangibles, net | 373 | 400 | ||||
| Deferred income taxes, net | 2,393 | 2,380 | ||||
| Other assets | 418 | 436 | ||||
| TOTAL ASSETS | 12,708 | 13,420 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
| Current liabilities: | ||||||
| Accounts payable | 80 | 110 | ||||
| Accrued and other current liabilities | 976 | 1,166 | ||||
| Deferred net revenue (online-enabled games) | 1,412 | 1,814 | ||||
| Total current liabilities | 2,468 | 3,090 | ||||
| Senior notes, net | 1,882 | 1,882 | ||||
| Income tax obligations | 525 | 497 | ||||
| Deferred income taxes, net | 1 | 1 | ||||
| Other liabilities | 432 | 437 | ||||
| Total liabilities | 5,308 | 5,907 | ||||
| Stockholders’ equity: | ||||||
| Common stock | 3 | 3 | ||||
| Retained earnings | 7,457 | 7,582 | ||||
| Accumulated other comprehensive loss | (60 | ) | (72 | ) | ||
| Total stockholders’ equity | 7,400 | 7,513 | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 12,708 | 13,420 | ||||
2Derived from audited consolidated financial statements.
| ELECTRONIC ARTS INC. AND SUBSIDIARIES | ||||||
| Unaudited Condensed Consolidated Statements of Cash Flows | ||||||
| (in $ millions) | ||||||
| Three Months Ended June 30, | ||||||
| 2024 | 2023 | |||||
| OPERATING ACTIVITIES | ||||||
| Net income | 280 | 402 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
| Depreciation, amortization, accretion and impairment | 80 | 88 | ||||
| Stock-based compensation | 143 | 130 | ||||
| Change in assets and liabilities | ||||||
| Receivables, net | 132 | 167 | ||||
| Other assets | 58 | 96 | ||||
| Accounts payable | (11 | ) | (18 | ) | ||
| Accrued and other liabilities | (147 | ) | (92 | ) | ||
| Deferred income taxes, net | (13 | ) | (93 | ) | ||
| Deferred net revenue (online-enabled games) | (402 | ) | (321 | ) | ||
| Net cash provided by operating activities | 120 | 359 | ||||
| INVESTING ACTIVITIES | ||||||
| Capital expenditures | (67 | ) | (45 | ) | ||
| Proceeds from maturities and sales of short-term investments | 128 | 151 | ||||
| Purchase of short-term investments | (130 | ) | (150 | ) | ||
| Net cash used in investing activities | (69 | ) | (44 | ) | ||
| FINANCING ACTIVITIES | ||||||
| Cash dividends paid | (50 | ) | (52 | ) | ||
| Cash paid to taxing authorities for shares withheld from employees | (121 | ) | (105 | ) | ||
| Common stock repurchases | (375 | ) | (325 | ) | ||
| Net cash used in financing activities | (546 | ) | (482 | ) | ||
| Effect of foreign exchange on cash and cash equivalents | (5 | ) | 2 | |||
| Change in cash and cash equivalents | (500 | ) | (165 | ) | ||
| Beginning cash and cash equivalents | 2,900 | 2,424 | ||||
| Ending cash and cash equivalents | 2,400 | 2,259 | ||||
| ELECTRONIC ARTS INC. AND SUBSIDIARIES | ||||||||||||||||||
| Unaudited Supplemental Financial Information and Business Metrics | ||||||||||||||||||
| (in $ millions, except per share data) | ||||||||||||||||||
| Q1 | Q2 | Q3 | Q4 | Q1 | YOY % | |||||||||||||
| FY24 | FY24 | FY24 | FY24 | FY25 | Change | |||||||||||||
| Net revenue | ||||||||||||||||||
| Net revenue | 1,924 | 1,914 | 1,945 | 1,779 | 1,660 | (14 | %) | |||||||||||
| GAAP-based financial data | ||||||||||||||||||
| Change in deferred net revenue (online-enabled games)1 | (346 | ) | (94 | ) | 421 | (113 | ) | (398 | ) | |||||||||
| Gross profit | ||||||||||||||||||
| Gross profit | 1,556 | 1,458 | 1,416 | 1,422 | 1,397 | (10 | %) | |||||||||||
| Gross profit (as a % of net revenue) | 81 | % | 76 | % | 73 | % | 80 | % | 84 | % | ||||||||
| GAAP-based financial data | ||||||||||||||||||
| Acquisition-related expenses | 16 | 15 | 16 | 29 | 10 | |||||||||||||
| Change in deferred net revenue (online-enabled games)1 | (346 | ) | (94 | ) | 421 | (113 | ) | (398 | ) | |||||||||
| Stock-based compensation | 2 | 2 | 2 | 2 | 4 | |||||||||||||
| Operating income | ||||||||||||||||||
| Operating income | 542 | 377 | 365 | 234 | 364 | (33 | %) | |||||||||||
| Operating income (as a % of net revenue) | 28 | % | 20 | % | 19 | % | 13 | % | 22 | % | ||||||||
| GAAP-based financial data | ||||||||||||||||||
| Acquisition-related expenses | 41 | 39 | 37 | 101 | 27 | |||||||||||||
| Change in deferred net revenue (online-enabled games)1 | (346 | ) | (94 | ) | 421 | (113 | ) | (398 | ) | |||||||||
| Restructuring and related charges | 3 | — | — | 61 | 6 | |||||||||||||
| Stock-based compensation | 130 | 155 | 151 | 148 | 143 | |||||||||||||
| Net income | ||||||||||||||||||
| Net income | 402 | 399 | 290 | 182 | 280 | (30 | %) | |||||||||||
| Net income (as a % of net revenue) | 21 | % | 21 | % | 15 | % | 10 | % | 17 | % | ||||||||
| GAAP-based financial data | ||||||||||||||||||
| Acquisition-related expenses | 41 | 39 | 37 | 101 | 27 | |||||||||||||
| Change in deferred net revenue (online-enabled games)1 | (346 | ) | (94 | ) | 421 | (113 | ) | (398 | ) | |||||||||
| Restructuring and related charges | 3 | — | — | 61 | 6 | |||||||||||||
| Stock-based compensation | 130 | 155 | 151 | 148 | 143 | |||||||||||||
| Tax rate used for management reporting | 19 | % | 19 | % | 19 | % | 19 | % | 19 | % | ||||||||
| Diluted earnings per share | 1.47 | 1.47 | 1.07 | 0.67 | 1.04 | (29 | %) | |||||||||||
| Number of shares used in computation | ||||||||||||||||||
| Basic | 272 | 271 | 269 | 267 | 266 | |||||||||||||
| Diluted | 274 | 272 | 271 | 270 | 268 | |||||||||||||
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) | ||||||||||||||||||
| Q1 | Q2 | Q3 | Q4 | Q1 | YOY % | |||||||||||||
| FY24 | FY24 | FY24 | FY24 | FY25 | Change | |||||||||||||
| QUARTERLY NET REVENUE PRESENTATIONS | ||||||||||||||||||
| Net revenue by composition | ||||||||||||||||||
| Full game downloads | 301 | 346 | 431 | 265 | 190 | (37 | %) | |||||||||||
| Packaged goods | 142 | 275 | 187 | 68 | 60 | (58 | %) | |||||||||||
| Full game | 443 | 621 | 618 | 333 | 250 | (44 | %) | |||||||||||
| Live services and other | 1,481 | 1,293 | 1,327 | 1,446 | 1,410 | (5 | %) | |||||||||||
| Total net revenue | 1,924 | 1,914 | 1,945 | 1,779 | 1,660 | (14 | %) | |||||||||||
| Full game | 23 | % | 32 | % | 32 | % | 19 | % | 15 | % | ||||||||
| Live services and other | 77 | % | 68 | % | 68 | % | 81 | % | 85 | % | ||||||||
| Total net revenue % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||
| GAAP-based financial data | ||||||||||||||||||
| Full game downloads | (21 | ) | 24 | 32 | (37 | ) | (47 | ) | ||||||||||
| Packaged goods | (21 | ) | 46 | 4 | (37 | ) | (35 | ) | ||||||||||
| Full game | (42 | ) | 70 | 36 | (74 | ) | (82 | ) | ||||||||||
| Live services and other | (304 | ) | (164 | ) | 385 | (39 | ) | (316 | ) | |||||||||
| Total change in deferred net revenue (online-enabled games) by composition1 | (346 | ) | (94 | ) | 421 | (113 | ) | (398 | ) | |||||||||
| Net revenue by platform | ||||||||||||||||||
| Console | 1,167 | 1,187 | 1,229 | 1,049 | 1,005 | (14 | %) | |||||||||||
| PC & Other | 451 | 423 | 420 | 423 | 365 | (19 | %) | |||||||||||
| Mobile | 306 | 304 | 296 | 307 | 290 | (5 | %) | |||||||||||
| Total net revenue | 1,924 | 1,914 | 1,945 | 1,779 | 1,660 | (14 | %) | |||||||||||
| GAAP-based financial data | ||||||||||||||||||
| Console | (266 | ) | (35 | ) | 377 | (94 | ) | (328 | ) | |||||||||
| PC & Other | (77 | ) | (34 | ) | 33 | (10 | ) | (70 | ) | |||||||||
| Mobile | (3 | ) | (25 | ) | 11 | (9 | ) | — | ||||||||||
| Total change in deferred net revenue (online-enabled games) by platform1 | (346 | ) | (94 | ) | 421 | (113 | ) | (398 | ) | |||||||||
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) | ||||||||||||||||||
| Q1 | Q2 | Q3 | Q4 | Q1 | YOY % | |||||||||||||
| FY24 | FY24 | FY24 | FY24 | FY25 | Change | |||||||||||||
| CASH FLOW DATA | ||||||||||||||||||
| Investing cash flow | (44 | ) | (63 | ) | (51 | ) | (49 | ) | (69 | ) | ||||||||
| Investing cash flow – TTM | (196 | ) | (205 | ) | (195 | ) | (207 | ) | (232 | ) | (18 | %) | ||||||
| Financing cash flow | (482 | ) | (351 | ) | (431 | ) | (360 | ) | (546 | ) | ||||||||
| Financing cash flow – TTM | (1,606 | ) | (1,609 | ) | (1,622 | ) | (1,624 | ) | (1,688 | ) | (5 | %) | ||||||
| Operating cash flow | 359 | 112 | 1,264 | 580 | 120 | |||||||||||||
| Operating cash flow – TTM | 1,987 | 2,211 | 2,352 | 2,315 | 2,076 | 4 | % | |||||||||||
| Capital expenditures | 45 | 51 | 52 | 51 | 67 | |||||||||||||
| Capital expenditures – TTM | 193 | 191 | 195 | 199 | 221 | 15 | % | |||||||||||
| Free cash flow3 | 314 | 61 | 1,212 | 529 | 53 | |||||||||||||
| Free cash flow3 – TTM | 1,794 | 2,020 | 2,157 | 2,116 | 1,855 | 3 | % | |||||||||||
| Common stock repurchases | 325 | 325 | 325 | 325 | 375 | 15 | % | |||||||||||
| Cash dividends paid | 52 | 51 | 51 | 51 | 50 | (4 | %) | |||||||||||
| DEPRECIATION | ||||||||||||||||||
| Depreciation expense | 49 | 49 | 48 | 50 | 51 | 4 | % | |||||||||||
| BALANCE SHEET DATA | ||||||||||||||||||
| Cash and cash equivalents | 2,259 | 1,946 | 2,742 | 2,900 | 2,400 | |||||||||||||
| Short-term investments | 343 | 359 | 362 | 362 | 366 | |||||||||||||
| Cash and cash equivalents, and short-term investments | 2,602 | 2,305 | 3,104 | 3,262 | 2,766 | 6 | % | |||||||||||
| Receivables, net | 517 | 1,047 | 867 | 565 | 433 | (16 | %) | |||||||||||
| STOCK-BASED COMPENSATION | ||||||||||||||||||
| Cost of revenue | 2 | 2 | 2 | 2 | 4 | |||||||||||||
| Research and development | 93 | 113 | 108 | 104 | 101 | |||||||||||||
| Marketing and sales | 11 | 13 | 14 | 14 | 12 | |||||||||||||
| General and administrative | 24 | 27 | 27 | 28 | 26 | |||||||||||||
| Total stock-based compensation | 130 | 155 | 151 | 148 | 143 | |||||||||||||
| RESTRUCTURING AND RELATED CHARGES | ||||||||||||||||||
| Restructuring | 1 | 2 | — | 59 | 2 | |||||||||||||
| Office space reductions | 2 | (2 | ) | — | 2 | 4 | ||||||||||||
| Total restructuring and related charges | 3 | — | — | 61 | 6 | |||||||||||||
3Free cash flow is defined as Operating cash flow less Capital expenditures.
| ELECTRONIC ARTS INC. AND SUBSIDIARIES | ||||||||||
| Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures | ||||||||||
| (in $ millions) | ||||||||||
| The following table provides a reconciliation of non-GAAP operating income and margin to their most directly comparable GAAP financial measure for the three months ended June 30, 2024 plus a comparison to the actuals for the three months ended June 30, 2023. | ||||||||||
| Three Months Ended | ||||||||||
| June 30, | ||||||||||
| 2024 | 2023 | YOY % Change |
||||||||
| Net revenue | 1,660 | 1,924 | (14 | %) | ||||||
| GAAP operating income | 364 | 542 | (33 | %) | ||||||
| Acquisition-related expenses | 27 | 41 | ||||||||
| Restructuring and related charges | 6 | 3 | ||||||||
| Stock-based compensation | 143 | 130 | ||||||||
| Non-GAAP operating income | 540 | 716 | (25 | %) | ||||||
| GAAP operating margin | 21.9 | % | 28.2 | % | ||||||
| Non-GAAP operating margin | 32.5 | % | 37.2 | % | ||||||
| Impact from change in deferred net revenue (online-enabled games) | (2,120) bps | (1,380) bps | ||||||||
| ELECTRONIC ARTS INC. AND SUBSIDIARIES | |||||||||||||||||||||||
| GAAP Guidance to Non-GAAP Guidance | |||||||||||||||||||||||
| (in $ millions) | |||||||||||||||||||||||
| The following table provides GAAP to Non-GAAP reconciliation of the Company’s FY25 guidance. | |||||||||||||||||||||||
| Twelve Months Ending March 31, 2025 | |||||||||||||||||||||||
| GAAP-Based Financial Data | GAAP-Based Financial Data |
||||||||||||||||||||||
| A | B | C | D | ||||||||||||||||||||
| GAAP Guidance Range |
Acquisition related expenses2 |
Restructuring and related charges2 |
Stock-based compensation2 |
Non-GAAP Guidance Range = A + B +C + D |
Change in deferred net revenue (online- enabled games)2 |
||||||||||||||||||
| Net revenue | 7,100 | to | 7,500 | — | — | — | 7,100 | to | 7,500 | 200 | |||||||||||||
| Cost of revenue | 1,480 | to | 1,520 | (40 | ) | — | (10 | ) | 1,430 | to | 1,470 | — | |||||||||||
| Operating expense | 4,345 | to | 4,435 | (70 | ) | (95 | ) | (615 | ) | 3,565 | to | 3,655 | — | ||||||||||
| Operating margin | 18.0 | % | to | 20.6 | % | 150 bps | 130 bps | 860 bps | 29.6 | % | to | 31.7 | % | 200 bps to 170 bps | |||||||||
| Income before provision for income taxes | 1,329 | to | 1,596 | 110 | 95 | 625 | 2,159 | to | 2,426 | 200 | |||||||||||||
| Net income1 | 904 | to | 1,085 | ||||||||||||||||||||
| Number of shares used in computation: | |||||||||||||||||||||||
| Diluted | 271 | ||||||||||||||||||||||
1 The Company uses a tax rate of 19% internally to evaluate its operating performance and to forecast, plan and analyze future periods.
2 The mid-point of the range has been used for purposes of presenting reconciling items to operating margin.
| ELECTRONIC ARTS INC. AND SUBSIDIARIES | |||||||||||||||
| GAAP-Based Financial Data for Guidance | |||||||||||||||
| (in $ millions) | |||||||||||||||
| The following table provides supplemental information to the Company’s Q2 FY25 guidance. | |||||||||||||||
| Three Months Ending September 30, 2024 | |||||||||||||||
| GAAP-Based Financial Data | |||||||||||||||
| GAAP Guidance Range |
Acquisition -related expenses |
Restructuring and related charges |
Stock-based compensation |
Change in deferred net revenue (online -enabled games) |
|||||||||||
| Net revenue | 1,900 | to | 2,000 | — | — | — | 50 | ||||||||
| Cost of revenue | 420 | to | 450 | (10 | ) | — | (5 | ) | — | ||||||
| Operating expense | 1,190 | to | 1,200 | (20 | ) | (65 | ) | (160 | ) | — | |||||
| Income before provision for income taxes | 300 | to | 365 | 30 | 65 | 165 | 50 | ||||||||
| Net income1 | 204 | to | 248 | ||||||||||||
| Number of shares used in computation: | |||||||||||||||
| Diluted | 267 | ||||||||||||||
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