Redwood City, CA — Electronic Arts Inc.  announced preliminary financial results for its third fiscal quarter ended December 31, 2022.

“In Q3, EA delivered high-quality experiences, driving record engagement across some of our biggest franchises and growing our player network. While our teams delivered for our players, the current macro environment impacted Q3 results,” said Andrew Wilson, CEO of Electronic Arts. “As we navigate the short-term, we’re focused on building for the long-term and remain confident about our future. With amazing talent, proven IP and growing player network, EA is operating from a position of strength.”

“As market uncertainty mounted during the quarter, we took measures to protect underlying profitability,” said Chris Suh, CFO. “We are prioritizing the player experience, directing investment to where it can have the most positive impact for our players and on growth.”

Selected Operating Highlights and Metrics

• Net bookings1 for the trailing twelve months was $7.146 billion, down 1% year-over-year.
• Live services and other net bookings for the trailing twelve months were up 4% year-over-year and represent 75% of total net bookings.
• The EA player network grew to more than 650 million at quarter end.
• EA SPORTS FIFA 23 is pacing to be the biggest title in franchise history and delivered record engagement in Q3.
• Our teams delivered two AAA titles, NHL 23 and Need for Speed Unbound, at quality, and provided 128 content updates across 36 titles.
• The Sims welcomed over 10 million new players into the community during the quarter, with daily active users, weekly active users and monthly active users all up double digits year-over-year.

Selected Financial Highlights and Metrics

• Net cash provided by operating activities was $1.123 billion for the quarter and $1.377 billion for the trailing twelve months.
• EA repurchased 2.6 million shares for $325 million during the quarter, bringing the total for the trailing twelve months to 10.2 million shares for $1.295 billion.
• EA paid a cash dividend of $0.19 per share during the quarter, for a total of $52 million.

Dividend

EA has declared a quarterly cash dividend of $0.19 per share of the Company’s common stock. The dividend is payable on March 22, 2023 to shareholders of record as of the close of business on March 1, 2023.

Quarterly Financial Highlights

The following GAAP-based financial data2 and tax rate of 19% was used internally by company management to adjust its GAAP results in order to assess EA’s operating results:

Trailing Twelve Months Financial Highlights

The following GAAP-based financial data2 was used internally by company management to adjust its GAAP results in order to assess EA’s operating results. During fiscal 2022, management used a tax rate of 18% and in fiscal 2023 a tax rate of 19%.

Operating Metric

The following is a calculation of our total net bookings1 for the periods presented:

Business Outlook as of January 31, 2023

EA announced a new release date for Star Wars Jedi: Survivor, which will launch globally on April 28th. More information is provided on EA’s blog at www.ea.com/news.

Fourth Quarter Fiscal Year 2023 Expectations – Ending March 31, 2023

Financial metrics:

• Net revenue is expected to be approximately $1.700 billion to $1.800 billion.
  • Change in deferred net revenue (online-enabled games) is expected to be approximately ($25) million.
• Net income is expected to be approximately $14 million to $55 million.
• Diluted earnings per share is expected to be approximately $0.05 to $0.20.
• The Company estimates a share count of 277 million for purposes of calculating fourth quarter fiscal 2023 diluted earnings per share.

Operational metric:

• Net bookings1 is expected to be approximately $1.675 billion to $1.775 billion.
  • This guidance includes the shift of Star Wars Jedi: Survivor to Q1 FY24.

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 GAAP expectations to assess EA’s operating results and plan for future periods:

Fiscal Year 2023 Expectations – Ending March 31, 2023

Financial metrics:

• Net revenue is expected to be approximately $7.252 billion to $7.352 billion.
  • Change in deferred net revenue (online-enabled games) is expected to be approximately ($182) million.
• Net income is expected to be approximately $828 million to $869 million.
• Diluted earnings per share is expected to be approximately $2.97 to $3.11.
• Operating cash flow is expected to be approximately $1.400 billion to $1.450 billion.
• The Company estimates a share count of 279 million for purposes of calculating fiscal year 2023 diluted earnings per share.

Operational metric:

• Net bookings1 is expected to be approximately $7.070 billion to $7.170 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 GAAP expectations to assess EA’s operating results and plan for future periods:

Results (in $ millions, except per share data)

The following table reports the variance of the actuals versus our guidance provided on November 1, 2022 for the three months ended December 31, 2022 plus a comparison to the actuals for the three months ended December 31, 2021.