EA
$98.48
Electronic Arts
$.14
.14%
Earnings Details
1st Quarter June 2019
Tuesday, July 30, 2019 4:01:00 PM
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Summary

Electronic Arts Misses

Electronic Arts (EA) reported a 1st Quarter June 2019 loss of $0.10 per share on revenue of $1.2 billion. The consensus estimate was for breakeven results on revenue of $724.9 million. The Earnings Whisper number was $0.04 per share. Revenue grew 6.3% on a year-over-year basis.

The company said it expects second quarter earnings of approximately $0.52 per share, excluding a one-time tax benefit, on revenue of approximately $1.315 billion. The current consensus earnings estimate is $0.68 per share on revenue of $1.23 billion for the quarter ending September 30, 2019. The company also said it now expects fiscal 2020 earnings of approximately $3.61 per share on revenue of approximately $5.375 billion. The company's previous guidance was earnings of approximately $3.56 per share on revenue of approximately $5.25 billion and the current consensus earnings estimate is $3.79 per share on revenue of $5.19 billion for the year ending March 31, 2020.

Electronic Arts Inc develops, markets, publishes and distributes video game software and content that can be played by consumers on various platforms.

Results
Reported Earnings
($0.10)
Earnings Whisper
$0.04
Consensus Estimate
$0.00
Reported Revenue
$1.21 Bil
Revenue Estimate
$724.9 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Electronic Arts Reports Q1 FY20 Financial Results

REDWOOD CITY, Calif.--(BUSINESS WIRE)--Electronic Arts Inc. (NASDAQ: EA) today announced preliminary financial results for its first fiscal quarter ended June 30, 2019.

“We had a strong start to FY20, bringing rich new experiences to our growing communities for Apex Legends, EA SPORTS, The Sims and more,” said CEO Andrew Wilson. “From great new games to live services with longevity, subscriptions on more platforms and competitive gaming for more franchises, we’re pushing to lead with innovation, quality and choice for our players.”

“We delivered operating results significantly above our expectations, driven by broad strength across our core franchises. This quarter shows how the power of our portfolio strategy, combined with live services, delivers strong results,” said COO and CFO Blake Jorgensen. “We believe we have the right ingredients in place to deliver fun for our players and success for our business.”

News and ongoing updates regarding EA and its games are available on EA’s blog at www.ea.com/news.

Selected Operating Highlights and Metrics

  • Digital net bookings* for the trailing twelve months was $3.730 billion, up 5% year-over-year and represents 76% of total net bookings.
  • During the quarter, FIFA Ultimate TeamTM had more than three million players logging in daily during the Team of the Season in-game event.
  • During the quarter, The Sims 4TM expansion packs and game pack downloads increased 55% year-over-year.
  • At quarter end, Star Wars TM: Galaxy of Heroes had nearly 80 million players life-to-date.
  • Season 2 in Apex Legends TM began on July 2.
  • On July 24, EA Access launched on PlayStation® 4.

* 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 and mobile platform fees.

Selected Financial Highlights and Metrics

  • Net cash provided by operating activities was $158 million for the quarter and $1.585 billion for the trailing twelve months.
  • EA repurchased 3.2 million shares for $305 million during the quarter, bringing the total to 11.9 million shares for $1.197 billion during the trailing twelve months.

Impact of Certain Tax Matters

During the three months ended June 30, 2019, three separate tax events occurred:

  1. EA completed an internal transfer of some of its intellectual property rights to its Swiss subsidiary, where EA’s international business is headquartered;
  2. A decision by the Ninth Circuit Court of Appeals in Altera Corp. v. Commissioner regarding stock-based compensation expenses required EA to record a tax accrual; and
  3. A referendum was passed in Switzerland, which will change the Swiss income tax rates once enacted.

As a result of these events, EA expects to recognize an income tax benefit of $1.700 billion, or $5.61 of earnings per share, during the fiscal year ending March 31, 2020. EA recognized $1.080 billion of this income tax benefit during the three months ended June 30, 2019 and expects to recognize the remaining $620 million once the referendum is enacted, which we expect during the three months ending September 30, 2019.

Quarterly Financial Highlights

Three Months Ended

June 30,

2019

 

2018

(in $ millions, except per share amounts)
Digital net revenue

1,049

957

Packaged goods and other net revenue

160

180

Total net revenue

1,209

1,137

 
Net income

1,421*

293

Diluted earnings per share

4.75*

0.95

 
Operating cash flow

158

120

 
Value of shares repurchased

305

300

Number of shares repurchased

3.2

2.3

*Refer to the above section titled "Impact of Certain Tax Matters" for additional details.

The following GAAP-based financial data 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 June 30, 2019

 

 

GAAP-Based Financial Data

(in $ millions)

Statement
of
Operations

 

Acquisition-
related
expenses

 

Change in
deferred
net revenue
(online-
enabled
games)

 

Mobile
platform
fees

 

Stock-based
compensation

Total net revenue

1,209

-

 

(427

)

(39

)

-

 

Cost of revenue

187

(2

)

-

 

(39

)

(1

)

Gross profit

1,022

2

 

(427

)

-

 

1

 

Total operating expenses

607

(6

)

-

 

-

 

(72

)

Operating income

415

8

 

(427

)

-

 

73

 

Interest and other income, net

21

-

 

-

 

-

 

-

 

Income before provision for (benefit from) income taxes

436

8

 

(427

)

-

 

73

 

Number of shares used in computation:
Diluted

299

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, 2019.

Trailing Twelve Months Financial Highlights

Twelve Months Ended

June 30,

2019

 

2018

(in $ millions)
Digital net revenue

3,802

3,528

Packaged goods and other net revenue

1,220

1,310

Total net revenue

5,022

4,838*

 
Net income

2,147**

692

 
Operating cash flow

1,585

1,636

 
Value of shares repurchased

1,197

751

Number of shares repurchased

11.9

6.2

*EA adopted FASB ASU 2014-09 (Topic 606), Revenue from Contracts with Customers on April 1, 2018. For more information about the adoption of Topic 606 please refer to the Investor Accounting FAQ on our IR website and our SEC filings. Financial data from prior periods has not been restated.
**Refer to the above section titled "Impact of Certain Tax Matters" for additional details.

The following GAAP-based financial data 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 June 30, 2019
GAAP-Based Financial Data
(in $ millions)Statement
of
Operations
Acquisition-
related
expenses
Change in
deferred net
revenue
(online-
enabled
games)
Mobile
platform
fees
Stock-based
compensation
Total net revenue

5,022

-

 

94

(178

)

-

 

Cost of revenue

1,294

(5

)

-

(178

)

(4

)

Gross profit

3,728

5

 

94

-

 

4

 

Total operating expenses

2,617

(37

)

-

-

 

(283

)

Operating income

1,111

42

 

94

-

 

287

 

Interest and other income, net

85

-

 

-

-

 

-

 

Income before provision for (benefit from) income taxes

1,196

42

 

94

-

 

287

 

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, 2019.

Operating Metric

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

Three Months Ended

 

Twelve Months Ended

June 30,

 

June 30,

2019

 

2018

 

2019

 

2018

(in $ millions)
Total net revenue

1,209

 

1,137

 

5,022

 

4,838

 

Change in deferred net revenue (online-enabled games)

(427

)

(339

)

94

 

365

 

Mobile platform fees

(39

)

(49

)

(178

)

(49

)

Net bookings

743

 

749

 

4,938

 

5,154

 

Business Outlook as of July 30, 2019

The following forward-looking statements reflect expectations as of July 30, 2019. Electronic Arts assumes no obligation to update these statements. Results may be materially different and are affected by many factors detailed in this release and in EA’s annual and quarterly SEC filings.

Fiscal Year 2020 Expectations – Ending March 31, 2020

Financial metrics:

  • Net revenue is expected to be approximately $5.375 billion.
    • Change in deferred net revenue (online-enabled games) is expected to be approximately $(125) million.
    • Mobile platform fees are expected to be approximately $(150) million.
  • Net income is expected to be approximately $2.795 billion, approximately $1.700 billion of which is related to the income tax benefits discussed above.
  • Diluted earnings per share is expected to be approximately $9.22, approximately $5.61 of which is related to the income tax benefits discussed above.
  • Operating cash flow is expected to be approximately $1.575 billion.
  • The Company estimates a share count of 303 million for purposes of calculating fiscal year 2020 diluted earnings per share.

Operational metric:

  • Net bookings is expected to be approximately $5.100 billion.

In addition, the following outlook for GAAP-based financial data and a long-term tax rate of 18% 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, 2020
GAAP-Based Financial Data
GAAP
Guidance
Acquisition-
related
expenses
Change in
deferred net
revenue
(online-
enabled
games)
Mobile
platform fees
Stock-based
compensation
(in $ millions)
Digital net revenue

4,175

-

 

(75

)

(150

)

-

 

Packaged goods & other net revenue

1,200

-

 

(50

)

-

 

-

 

Total net revenue

5,375

-

 

(125

)

(150

)

-

 

Cost of revenue

1,327

(12

)

-

 

(150

)

(2

)

Operating expense

2,746

(23

)

-

 

-

 

(353

)

Income before provision for (benefit from) income taxes

1,361

35

 

(125

)

-

 

355

 

Net income

2,795

Number of shares used in computation:
Diluted shares

303

Second Quarter Fiscal Year 2020 Expectations – Ending September 30, 2019

Financial metrics:

  • Net revenue is expected to be approximately $1.315 billion.
    • Change in deferred net revenue (online-enabled games) is expected to be approximately $(50) million.
    • Mobile platform fees are expected to be approximately $(35) million.
  • Net income is expected to be approximately $776 million, approximately $620 million of which is related to the income tax benefits discussed above.
  • Diluted earnings per share is expected to be approximately $2.60, approximately $2.08 of which is related to the income tax benefits discussed above.
  • The Company estimates a share count of 298 million for purposes of calculating second quarter fiscal year 2020 diluted earnings per share.

Operational metric:

  • Net bookings is expected to be approximately $1.230 billion.

In addition, the following outlook for GAAP-based financial data and a long-term tax rate of 18% are used internally by EA to adjust our GAAP expectations to assess EA’s operating results and plan for future periods:

Three Months Ending September 30, 2019

 

GAAP-Based Financial Data

GAAP
Guidance

Acquisition-
related
expenses

Change in
deferred net
revenue (online-
enabled games)

Mobile
platform
fees

Stock-based
compensation

(in $ millions)
Total net revenue

1,315

-

 

(50

)

(35

)

-

 

Cost of revenue

407

(2

)

-

 

(35

)

(1

)

Operating expense

679

(5

)

-

 

-

 

(89

)

Income before provision for (benefit from) income taxes

243

7

 

(50

)

-

 

90

 

Net income

776

Number of shares used in computation:
Diluted shares

298

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, 2019.

Conference Call and Supporting Documents

Electronic Arts will host a conference call on July 30, 2019 at 2:00 pm PT (5:00 pm ET) to review its results for the first fiscal quarter ended June 30, 2019 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) 393-4306 (domestic) or (734) 385-2616 (international), using the conference code 9998462 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 and an Investor Accounting FAQ document 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 August 13, 2019 at 855-859-2056 (domestic) or 404-537-3406 (international) using pin code 9998462. 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 fiscal 2020 expectations under the heading “Business Outlook as of July 30, 2019,” and other information regarding EA's fiscal 2020 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 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; general economic conditions; changes in our tax rates or tax laws; and other factors described in Part I, Item 1A of Electronic Arts’ latest Annual Report on Form 10-K under the heading “Risk Factors”, as well as in other documents we have filed with the Securities and Exchange Commission.

These forward-looking statements are current as of July 30, 2019. Electronic Arts assumes no obligation to revise or update any forward-looking statement for any reason, except as required by law. In addition, the preliminary financial results set forth in this release are estimates based on information currently available to Electronic Arts.

While Electronic Arts believes these estimates are meaningful, they could differ from the actual amounts that Electronic Arts ultimately reports in its Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2019. Electronic Arts assumes no obligation and does not intend to update these estimates prior to filing its Form 10-Q for the fiscal quarter ended June 30, 2019.

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 2019, EA posted GAAP net revenue of $4.95 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™ and Plants vs. Zombies™. More information about EA is available at www.ea.com/news.

EA SPORTS, Ultimate Team, Battlefield, Need for Speed, Apex Legends, The Sims and Plants vs. Zombies are trademarks of Electronic Arts Inc. John Madden, NFL and FIFA are the property of their respective owners and used with permission. STAR WARS © & TM 2015 Lucasfilm Ltd. All rights reserved.

ELECTRONIC ARTS INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Operations

(in $ millions, except per share data)

 

 

 

 

Three Months Ended
June 30,

 

2019

2018

Net revenue

 

 

Product

166

 

202

Service and other

1,043

 

935

Total net revenue

1,209

 

1,137

Cost of revenue

 

 

Product

35

 

68

Service and other

152

 

147

Total cost of revenue

187

 

215

Gross profit

1,022

 

922

Operating expenses:

 

 

Research and development

381

 

362

Marketing and sales

110

 

140

General and administrative

110

 

114

Acquisition-related contingent consideration

1

 

Amortization of intangibles

5

 

6

Total operating expenses

607

 

622

Operating income

415

 

300

Interest and other income (expense), net

21

 

19

Income before provision for (benefit from) income taxes

436

 

319

Provision for (benefit from) income taxes

(985

)

26

Net income

1,421

 

293

Earnings per share

 

 

Basic

4.78

0.96

Diluted

4.75

0.95

Number of shares used in computation

 

 

Basic

297

 

306

Diluted

299

 

310

Results (in $ millions, except per share data)

The following table reports the variance of the actuals versus our guidance provided on May 7, 2019 for the three months ended June 30, 2019 plus a comparison to the actuals for the three months ended June 30, 2018.

 

 

Three Months Ended June 30,

 

2019

 

 

 

2019

 

2018

 

Guidance

 

Variance

 

Actuals

 

Actuals

Net revenue

 

 

 

 

 

 

 

Net revenue

1,130

 

 

79

 

 

1,209

 

 

1,137

 

GAAP-based financial data

 

 

 

 

 

 

 

Change in deferred net revenue (online-enabled games)

(405

)

 

(22

)

 

(427

)

 

(339

)

Mobile platform fees

(35

)

 

(4

)

 

(39

)

 

(49

)

Cost of revenue

 

 

 

 

 

 

 

Cost of revenue

188

 

 

(1

)

 

187

 

 

215

 

GAAP-based financial data

 

 

 

 

 

 

 

Acquisition-related expenses

(2

)

 

 

 

(2

)

 

(1

)

Stock-based compensation

 

 

(1

)

 

(1

)

 

(1

)

Mobile platform fees

(35

)

 

(4

)

 

(39

)

 

(49

)

Operating expenses

 

 

 

 

 

 

 

Operating expenses

650

 

 

(43

)

 

607

 

 

622

 

GAAP-based financial data

 

 

 

 

 

 

 

Acquisition-related expenses

(5

)

 

(1

)

 

(6

)

 

(6

)

Stock-based compensation

(70

)

 

(2

)

 

(72

)

 

(69

)

Income before tax

 

 

 

 

 

 

 

Income before tax

310

 

 

126

 

 

436

 

 

319

 

GAAP-based financial data

 

 

 

 

 

 

 

Acquisition-related expenses

7

 

 

1

 

 

8

 

 

7

 

Change in deferred net revenue (online-enabled games)

(405

)

 

(22

)

 

(427

)

 

(339

)

Mobile platform fees

 

 

 

 

 

 

 

Stock-based compensation

70

 

 

3

 

 

73

 

 

70

 

Tax rate used for management reporting

18

%

 

 

 

18

%

 

18

%

Earnings per share

 

 

 

 

 

 

 

Basic

5.90

 

 

(1.12

)

 

4.78

 

 

0.96

 

Diluted

5.84

 

 

(1.09

)

 

4.75

 

 

0.95

 

Number of shares

 

 

 

 

 

 

 

Basic

299

 

 

(2

)

 

297

 

 

306

 

Diluted

302

 

 

(3

)

 

299

 

 

310

 

ELECTRONIC ARTS INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated Balance Sheets

(in $ millions)

 

 

 

 

 

June 30, 2019

 

March 31, 20191

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

3,533

 

4,708

Short-term investments

1,654

 

737

Receivables, net

329

 

623

Other current assets

284

 

313

Total current assets

5,800

 

6,381

Property and equipment, net

446

 

448

Goodwill

1,892

 

1,892

Acquisition-related intangibles, net

80

 

87

Deferred income taxes, net

1,208

 

35

Other assets

323

 

114

TOTAL ASSETS

9,749

 

8,957

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

56

 

113

Accrued and other current liabilities

915

 

1,052

Deferred net revenue (online-enabled games)

679

 

1,100

Total current liabilities

1,650

 

2,265

Senior notes, net

995

 

994

Income tax obligations

345

 

233

Deferred income taxes, net

2

 

2

Other liabilities

272

 

132

Total liabilities

3,264

 

3,626

 

 

 

 

Stockholders’ equity:

 

 

 

Common stock

3

 

3

Retained earnings

6,499

 

5,358

Accumulated other comprehensive loss

(17)

 

(30)

Total stockholders’ equity

6,485

 

5,331

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

9,749

 

8,957

1Derived from audited consolidated financial statements.

ELECTRONIC ARTS INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Cash Flows

(in $ millions)

 

 

 

 

Three Months Ended
June 30,

 

2019

2018

OPERATING ACTIVITIES

 

 

Net income

1,421

 

293

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

Depreciation, amortization and accretion

37

 

38

 

Stock-based compensation

73

 

70

 

Change in assets and liabilities

 

 

Receivables, net

294

 

169

 

Other assets

24

 

48

 

Accounts payable

(40

)

8

 

Accrued and other liabilities

(56

)

(85

)

Deferred income taxes, net

(1,174

)

(74

)

Deferred net revenue (online-enabled games)

(421

)

(347

)

Net cash provided by operating activities

158

 

120

 

INVESTING ACTIVITIES

 

 

Capital expenditures

(45

)

(32

)

Proceeds from maturities and sales of short-term investments

358

 

207

 

Purchase of short-term investments

(1,263

)

(228

)

Acquisitions, net of cash acquired

 

(50

)

Net cash used in investing activities

(950

)

(103

)

FINANCING ACTIVITIES

 

 

Proceeds from issuance of common stock

3

 

1

 

Cash paid to taxing authorities for shares withheld from employees

(51

)

(89

)

Repurchase and retirement of common stock

(305

)

(300

)

Payment of contingent consideration

(32

)

 

Net cash used in financing activities

(385

)

(388

)

Effect of foreign exchange on cash and cash equivalents

2

 

(11

)

Change in cash and cash equivalents

(1,175

)

(382

)

Beginning cash and cash equivalents

4,708

 

4,258

 

Ending cash and cash equivalents

3,533

 

3,876

 

ELECTRONIC ARTS INC. AND SUBSIDIARIES

Unaudited Supplemental Financial Information and Business Metrics

(in $ millions, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

Q1

 

Q2

 

Q3

 

Q4

 

Q1

 

YOY %

 

FY19

 

FY19

 

FY19

 

FY19

 

FY20

 

Change

Net revenue

 

 

 

 

 

 

 

 

 

 

 

Net revenue

1,137

 

 

1,286

 

 

1,289

 

 

1,238

 

 

1,209

 

 

6

%

GAAP-based financial data

 

 

 

 

 

 

 

 

 

 

 

Change in deferred net revenue (online-enabled games)2

(339

)

 

(20

)

 

368

 

 

173

 

 

(427

)

 

 

Mobile platform fees

(49

)

 

(44

)

 

(48

)

 

(47

)

 

(39

)

 

 

Gross profit

 

 

 

 

 

 

 

 

 

 

 

Gross profit

922

 

 

868

 

 

876

 

 

962

 

 

1,022

 

 

11

%

Gross profit (as a % of net revenue)

81

%

 

67

%

 

68

%

 

78

%

 

85

%

 

 

GAAP-based financial data

 

 

 

 

 

 

 

 

 

 

 

Acquisition-related expenses

1

 

 

1

 

 

1

 

 

1

 

 

2

 

 

 

Change in deferred net revenue (online-enabled games)2

(339

)

 

(20

)

 

368

 

 

173

 

 

(427

)

 

 

Mobile platform fees

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

1

 

 

1

 

 

1

 

 

1

 

 

1

 

 

 

Operating income

 

 

 

 

 

 

 

 

 

 

 

Operating income

300

 

 

258

 

 

242

 

 

196

 

 

415

 

 

38

%

Operating income (as a % of net revenue)

26

%

 

20

%

 

19

%

 

16

%

 

34

%

 

 

GAAP-based financial data

 

 

 

 

 

 

 

 

 

 

 

Acquisition-related expenses

7

 

 

9

 

 

8

 

 

17

 

 

8

 

 

 

Change in deferred net revenue (online-enabled games)2

(339

)

 

(20

)

 

368

 

 

173

 

 

(427

)

 

 

Stock-based compensation

70

 

 

66

 

 

75

 

 

73

 

 

73

 

 

 

Net income

 

 

 

 

 

 

 

 

 

 

 

Net income

293

 

 

255

 

 

262

 

 

209

 

 

1,421

 

 

385

%

Net income (as a % of net revenue)

26

%

 

20

%

 

20

%

 

17

%

 

118

%

 

 

GAAP-based financial data

 

 

 

 

 

 

 

 

 

 

 

Acquisition-related expenses

7

 

 

9

 

 

8

 

 

17

 

 

8

 

 

 

Change in deferred net revenue (online-enabled games)2

(339

)

 

(20

)

 

368

 

 

173

 

 

(427

)

 

 

Stock-based compensation

70

 

 

66

 

 

75

 

 

73

 

 

73

 

 

 

Tax rate used for management reporting

18

%

 

18

%

 

18

%

 

18

%

 

18

%

 

 

Diluted earnings per share

0.95

 

 

0.83

 

 

0.86

 

 

0.69

 

 

4.75

 

 

400

%

Number of diluted shares used in computation

 

 

 

 

 

 

 

 

 

 

 

Basic

306

 

 

305

 

 

302

 

 

299

 

 

297

 

 

 

Diluted

310

 

 

307

 

 

304

 

 

301

 

 

299

 

 

 

2The 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 %

 

 

FY19

 

FY19

 

FY19

 

FY19

 

FY20

 

Change

QUARTERLY NET REVENUE PRESENTATIONS

 

 

 

 

 

 

 

 

 

 

 

 

Net revenue by composition

 

 

 

 

 

 

 

 

 

 

 

 

Full game downloads

 

116

 

 

148

 

 

247

 

 

169

 

 

132

 

 

14%

Live services

 

610

 

 

412

 

 

480

 

 

714

 

 

731

 

 

20%

Mobile

 

231

 

 

220

 

 

181

 

 

182

 

 

186

 

 

(19%)

Total digital

 

957

 

 

780

 

 

908

 

 

1,065

 

 

1,049

 

 

10%

Packaged goods and other

 

180

 

 

506

 

 

381

 

 

173

 

 

160

 

 

(11%)

Total net revenue

 

1,137

 

 

1,286

 

 

1,289

 

 

1,238

 

 

1,209

 

 

6%

Total digital

 

84

%

 

61

%

 

70

%

 

86

%

 

87

%

 

 

Packaged goods and other

 

16

%

 

39

%

 

30

%

 

14

%

 

13

%

 

 

Total net revenue %

 

100

%

 

100

%

 

100

%

 

100

%

 

100

%

 

 

GAAP-based financial data

 

 

 

 

 

 

Full game downloads

 

(20

)

 

9

 

 

26

 

 

44

 

 

(57

)

 

 

Live services

 

(160

)

 

(84

)

 

304

 

 

131

 

 

(227

)

 

 

Mobile

 

(35

)

 

(24

)

 

9

 

 

 

 

(25

)

 

 

Total digital

 

(215

)

 

(99

)

 

339

 

 

175

 

 

(309

)

 

 

Packaged goods and other

 

(124

)

 

79

 

 

29

 

 

(2

)

 

(118

)

 

 

Total change in deferred net revenue (online-enabled games) by composition2

 

(339

)

 

(20

)

 

368

 

 

173

 

 

(427

)

 

 

Mobile platform fees

 

(49

)

 

(44

)

 

(48

)

 

(47

)

 

(39

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenue by platform

 

 

 

 

 

 

 

 

 

 

 

 

Console

 

705

 

 

917

 

 

885

 

 

826

 

 

760

 

 

8%

PC/Browser

 

197

 

 

149

 

 

217

 

 

217

 

 

249

 

 

26%

Mobile

 

233

 

 

220

 

 

181

 

 

190

 

 

196

 

 

(16%)

Other

 

2

 

 

 

 

6

 

 

5

 

 

4

 

 

100%

Total net revenue

 

1,137

 

 

1,286

 

 

1,289

 

 

1,238

 

 

1,209

 

 

6%

GAAP-based financial data

 

 

 

 

 

 

Console

 

(288

)

 

8

 

 

323

 

 

87

 

 

(344

)

 

 

PC/Browser

 

(9

)

 

(4

)

 

33

 

 

88

 

 

(59

)

 

 

Mobile

 

(42

)

 

(24

)

 

11

 

 

(2

)

 

(25

)

 

 

Other

 

 

 

 

 

1

 

 

 

 

1

 

 

 

Total change in deferred net revenue (online-enabled games) by platform2

 

(339

)

 

(20

)

 

368

 

 

173

 

 

(427

)

 

 

Mobile platform fees

 

(49

)

 

(44

)

 

(48

)

 

(47

)

 

(39

)

 

 

2The 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 %

 

FY19

 

FY19

 

FY19

 

FY19

 

FY20

 

Change

CASH FLOW DATA

 

 

 

 

 

 

 

 

 

 

 

Operating cash flow

120

 

(126)

 

954

 

599

 

158

 

32%

Operating cash flow - TTM

1,636

 

1,458

 

1,563

 

1,547

 

1,585

 

(3%)

Capital expenditures

32

 

31

 

21

 

35

 

45

 

41%

Capital expenditures - TTM

106

 

107

 

104

 

119

 

132

 

25%

Repurchase and retirement of common stock

300

 

299

 

292

 

301

 

305

 

2%

DEPRECIATION

 

 

 

 

 

 

 

 

 

 

 

Depreciation expense

30

 

30

 

30

 

31

 

30

 

BALANCE SHEET DATA

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

3,876

 

2,881

 

3,887

 

4,708

 

3,533

 

 

Short-term investments

1,095

 

1,664

 

1,274

 

737

 

1,654

 

 

Cash and cash equivalents, and short-term investments

4,971

 

4,545

 

5,161

 

5,445

 

5,187

 

4%

Receivables, net

371

 

966

 

806

 

623

 

329

 

(11%)

STOCK-BASED COMPENSATION

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

1

 

1

 

1

 

1

 

1

 

 

Research and development

47

 

39

 

49

 

49

 

49

 

 

Marketing and sales

7

 

9

 

8

 

9

 

7

 

 

General and administrative

15

 

17

 

17

 

14

 

16

 

 

Total stock-based compensation

70

 

66

 

75

 

73

 

73

 

 

 

For additional information, please contact:

Chris Evenden
Vice President, Investor Relations
650-628-0255
cevenden@ea.com

John Reseburg
Vice President, Corporate Communications
650-628-3601
jreseburg@ea.com

Source: Electronic Arts Inc.