Electronic Arts Inc. (NASDAQ: EA) today announced preliminary financial results for its second fiscal quarter ended September 30, 2022.
“In Q2, EA delivered strong engagement and deeply immersive experiences across our portfolio, with new EA SPORTS titles and multi-platform live services powering the business,” said CEO Andrew Wilson. “More people than ever before are turning to games as their primary platform for social connection and creativity. With EA’s unrivaled IP, talented teams, and growing player network, we are well-positioned to lead the future of entertainment.”
“Q2 was a solid quarter. We again delivered on our revenue and profit commitments, driven by our EA SPORTS portfolio and our multi-platform live services business,” said CFO Chris Suh. “With our resilient business model, disciplined execution, and healthy underlying fundamentals, we are poised to deliver long-term growth.”
Selected Operating Highlights and Metrics
- Net bookings1 for the trailing twelve months was $7.381 billion, up 4% year-over-year.
- Live services and other net bookings for the trailing twelve months were up 7% year-over-year and represent 73% of total net bookings.
- The EA player network grew to more than 600 million active accounts at quarter end.
- EA SPORTS™ FIFA 23 was the most successful launch in franchise history with more than 10.3 million players joining the game within the first week.
- Based on the first four weeks following launch, EA SPORTS™ FIFA 23 units (sell-through) are up 10% and Ultimate Team players up 6% on the comparable period for FIFA 22.
Selected Financial Highlights and Metrics
- Net cash (used in)/provided by operating activities was $(112) million for the quarter and $1.788 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 10.0 million shares for $1.295 billion.
- EA paid a cash dividend of $0.19 per share during the quarter, for a total of $53 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 December 21, 2022 to shareholders of record as of the close of business on November 30, 2022.
Quarterly Financial Highlights
| Three Months Ended | |||||
| September 30, | |||||
|
2022 |
2021 |
||||
| (in $ millions, except per share amounts) | |||||
| Full game |
602 |
|
617 |
||
| Live services and other |
1,302 |
|
1,209 |
||
|
Total net revenue |
1,904 |
|
1,826 |
||
| Net income |
299 |
|
294 |
||
| Diluted earnings per share |
1.07 |
|
1.02 |
||
| Operating cash flow |
(112 |
) |
64 |
||
| Value of shares repurchased |
325 |
|
325 |
||
| Number of shares repurchased |
2.6 |
|
2.3 |
||
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:
| Three Months Ended September 30, 2022 | ||||||||||
| GAAP-Based Financial Data | ||||||||||
| (in $ millions) | Statement of Operations | Acquisition-related expenses | Change in deferred net revenue (online-enabled games) | Stock-based compensation |
||||||
| Total net revenue |
1,904 |
– |
|
(150 |
) |
– |
|
|||
| Cost of revenue |
462 |
(39 |
) |
– |
|
(1 |
) |
|||
| Gross profit |
1,442 |
39 |
|
(150 |
) |
1 |
|
|||
| Total operating expenses |
1,015 |
(43 |
) |
– |
|
(139 |
) |
|||
| Operating income |
427 |
82 |
|
(150 |
) |
140 |
|
|||
| Interest and other income (expense), net |
– |
– |
|
– |
|
– |
|
|||
| Income before provision for income taxes |
427 |
82 |
|
(150 |
) |
140 |
|
|||
| Number of shares used in computation: | ||||||||||
| Diluted |
279 |
|||||||||
Trailing Twelve Months Financial Highlights
| Twelve Months Ended | ||||
| September 30, | ||||
|
2022 |
2021 |
|||
| (in $ millions) | ||||
| Full game |
1,997 |
1,911 |
||
| Live services and other |
5,288 |
4,485 |
||
| Total net revenue |
7,285 |
6,396 |
||
| Net income |
901 |
785 |
||
| Operating cash flow |
1,788 |
1,416 |
||
| Value of shares repurchased |
1,295 |
1,301 |
||
| Number of shares repurchased |
10.0 |
9.5 |
||
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%.
| Twelve Months Ended September 30, 2022 | ||||||||||
| GAAP-Based Financial Data | ||||||||||
| (in $ millions) | Statement of Operations | Acquisition-related expenses | Change in deferred net revenue (online-enabled games) | Stock-based compensation |
||||||
| Total net revenue |
7,285 |
|
– |
|
96 |
– |
|
|||
| Cost of revenue |
1,826 |
|
(158 |
) |
– |
(6 |
) |
|||
| Gross profit |
5,459 |
|
158 |
|
96 |
6 |
|
|||
| Total operating expenses |
4,124 |
|
(195 |
) |
– |
(513 |
) |
|||
| Operating income |
1,335 |
|
353 |
|
96 |
519 |
|
|||
| Interest and other income (expense), net |
(25 |
) |
– |
|
– |
– |
|
|||
| Income before provision for income taxes |
1,310 |
|
353 |
|
96 |
519 |
|
|||
Operating Metric
The following is a calculation of our total net bookings1 for the periods presented:
| Three Months Ended | Twelve Months Ended | ||||||||
| September 30, | September 30, | ||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|||
| (in $ millions) | |||||||||
| Total net revenue |
1,904 |
|
1,826 |
7,285 |
6,396 |
||||
| Change in deferred net revenue (online-enabled games) |
(150 |
) |
25 |
96 |
681 |
||||
| Total net bookings |
1,754 |
|
1,851 |
7,381 |
7,077 |
||||
Business Outlook as of November 1, 2022
Fiscal Year 2023 Expectations – Ending March 31, 2023
Financial metrics:
-
Net revenue is expected to be approximately $7.550 billion to $7.750 billion.
- Change in deferred net revenue (online-enabled games) is expected to be approximately $100 million.
- Net income is expected to be approximately $871 million to $934 million
- Diluted earnings per share is expected to be approximately $3.11 to $3.34.
- Operating cash flow is expected to be approximately $1.600 billion to $1.650 billion.
- The Company estimates a share count of 280 million for purposes of calculating fiscal year 2023 diluted earnings per share.
Operational metric:
- The US dollar has strengthened since the time of our initial FY23 guidance. As a result, we now expect an FX impact of approximately ($200) million versus our initial full year net bookings guide.
- Net bookings1 is expected to be approximately $7.650 billion to $7.850 billion, up 2% to 4% year-over-year, or 6% to 9% in constant currency.
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 | 7,550 to 7,750 |
– |
|
100 |
– |
|
||||
| Cost of revenue | 1,845 to 1,890 |
(125 |
) |
– |
(5 |
) |
||||
| Operating expense | 4,245 to 4,295 |
(155 |
) |
– |
(565 |
) |
||||
| Income before provision for income taxes | 1,452 to 1,556 |
280 |
|
100 |
570 |
|
||||
| Net income | 871 to 934 | |||||||||
| Number of shares used in computation: | ||||||||||
| Diluted shares |
280 |
|||||||||
| * The mid-point of the range has been used for purposes of presenting the reconciling items. | ||||||||||
Third Quarter Fiscal Year 2023 Expectations – Ending December 31, 2022
Financial metrics:
-
Net revenue is expected to be approximately $1.825 billion to $1.925 billion.
- Change in deferred net revenue (online-enabled games) is expected to be approximately $600 million.
- Net income is expected to be approximately $120 million to $164 million.
- Diluted earnings per share is expected to be approximately $0.43 to $0.59.
- The Company estimates a share count of 279 million for purposes of calculating third quarter fiscal 2023 diluted earnings per share.
Operational metric:
- Net bookings1 is expected to be approximately $2.425 billion to $2.525 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 December 31, 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 | 1,825 to 1,925 |
– |
|
600 |
– |
|
||||
| Cost of revenue | 560 to 580 |
(30 |
) |
– |
– |
|
||||
| Operating expense | 1,080 to 1,090 |
(35 |
) |
– |
(150 |
) |
||||
| Income before provision for income taxes | 184 to 253 |
65 |
|
600 |
150 |
|
||||
| Net income | 120 to 164 | |||||||||
| Number of shares used in computation: | ||||||||||
| Diluted shares |
279 |
|||||||||
| * The mid-point of the range has been used for purposes of presenting the reconciling items. | ||||||||||
Conference Call and Supporting Documents
Electronic Arts will host a conference call on November 1, 2022 at 2:00 pm PT (5:00 pm ET) to review its results for the second quarter ended September 30, 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 (888) 330-2446 (domestic) or (240) 789-2732 (international), using the conference code 5939891 or via webcast at EA’s IR Website at http://ir.ea.com.
EA has posted a slide presentation with a financial model of EA’s historical results and guidance on EA’s IR Website. EA will also post the prepared remarks and a transcript from the conference call on EA’s IR Website.
A dial-in replay of the conference call will be available until November 15, 2022 at (800) 770-2030 (domestic) or (647) 362-9199 (international) using pin code 5939891. An audio webcast replay of the conference call will be available for one year on EA’s IR Website.
Forward-Looking Statements
Some statements set forth in this release, including the information relating to EA’s expectations under the heading “Business Outlook as of November 1, 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, 2022.
These forward-looking statements are current as of November 1, 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 Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2022. Electronic Arts assumes no obligation and does not intend to update these estimates prior to filing its Form 10-Q for the fiscal quarter ended September 30, 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, 2022.
|
ELECTRONIC ARTS INC. AND SUBSIDIARIES |
|||||||
|
Unaudited Condensed Consolidated Statements of Operations |
|||||||
|
(in $ millions, except per share data) |
|||||||
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
||||
|
|
|
||||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
Net revenue |
1,904 |
|
1,826 |
|
3,671 |
|
3,377 |
|
Cost of revenue |
462 |
|
494 |
|
776 |
|
809 |
|
Gross profit |
1,442 |
|
1,332 |
|
2,895 |
|
2,568 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
Research and development |
565 |
|
553 |
|
1,137 |
|
1,068 |
|
Marketing and sales |
233 |
|
233 |
|
467 |
|
423 |
|
General and administrative |
174 |
|
176 |
|
341 |
|
345 |
|
Amortization and impairment of intangibles |
43 |
|
30 |
|
82 |
|
70 |
|
Total operating expenses |
1,015 |
|
992 |
|
2,027 |
|
1,906 |
|
Operating income |
427 |
|
340 |
|
868 |
|
662 |
|
Interest and other income (expense), net |
— |
|
(14) |
|
(5) |
|
(28) |
|
Income before provision for income taxes |
427 |
|
326 |
|
863 |
|
634 |
|
Provision for income taxes |
128 |
|
32 |
|
253 |
|
136 |
|
Net income |
299 |
|
294 |
|
610 |
|
498 |
|
Earnings per share |
|
|
|
|
|
|
|
|
Basic |
1.08 |
|
1.03 |
|
2.19 |
|
1.75 |
|
Diluted |
1.07 |
|
1.02 |
|
2.18 |
|
1.73 |
|
Number of shares used in computation |
|
|
|
|
|
|
|
|
Basic |
278 |
|
285 |
|
279 |
|
285 |
|
Diluted |
279 |
|
287 |
|
280 |
|
288 |
Results (in $ millions, except per share data)
The following table reports the variance of the actuals versus our guidance provided on August 2, 2022 for the three months ended September 30, 2022 plus a comparison to the actuals for the three months ended September 30, 2021.
|
|
Three Months Ended September 30, |
||||||||||
|
|
2022 Guidance |
|
Variance |
|
2022 |
|
2021 |
||||
|
|
|
|
|
||||||||
|
Net revenue |
|
|
|
|
|
|
|
||||
|
Net revenue |
1,875 |
|
|
29 |
|
|
1,904 |
|
|
1,826 |
|
|
GAAP-based financial data |
|
|
|
|
|
|
|
||||
|
Change in deferred net revenue (online-enabled games)1 |
(125 |
) |
|
(25 |
) |
|
(150 |
) |
|
25 |
|
|
Cost of revenue |
|
|
|
|
|
|
|
||||
|
Cost of revenue |
474 |
|
|
(12 |
) |
|
462 |
|
|
494 |
|
|
GAAP-based financial data |
|
|
|
|
|
|
|
||||
|
Acquisition-related expenses |
(30 |
) |
|
(9 |
) |
|
(39 |
) |
|
(22 |
) |
|
Stock-based compensation |
(2 |
) |
|
1 |
|
|
(1 |
) |
|
(2 |
) |
|
Operating expenses |
|
|
|
|
|
|
|
||||
|
Operating expenses |
1,039 |
|
|
(24 |
) |
|
1,015 |
|
|
992 |
|
|
GAAP-based financial data |
|
|
|
|
|
|
|
||||
|
Acquisition-related expenses |
(40 |
) |
|
(3 |
) |
|
(43 |
) |
|
(30 |
) |
|
Stock-based compensation |
(148 |
) |
|
9 |
|
|
(139 |
) |
|
(147 |
) |
|
Income before tax |
|
|
|
|
|
|
|
||||
|
Income before tax |
356 |
|
|
71 |
|
|
427 |
|
|
326 |
|
|
GAAP-based financial data |
|
|
|
|
|
|
|
||||
|
Acquisition-related expenses |
70 |
|
|
12 |
|
|
82 |
|
|
52 |
|
|
Change in deferred net revenue (online-enabled games)1 |
(125 |
) |
|
(25 |
) |
|
(150 |
) |
|
25 |
|
|
Stock-based compensation |
150 |
|
|
(10 |
) |
|
140 |
|
|
149 |
|
|
Tax rate used for management reporting |
19 |
% |
|
|
|
19 |
% |
|
18 |
% |
|
|
Earnings per share |
|
|
|
|
|
|
|
||||
|
Basic |
0.83 |
|
|
0.25 |
|
|
1.08 |
|
|
1.03 |
|
|
Diluted |
0.82 |
|
|
0.25 |
|
|
1.07 |
|
|
1.02 |
|
|
Number of shares used in computation |
|
|
|
|
|
|
|
||||
|
Basic |
279 |
|
|
(1 |
) |
|
278 |
|
|
285 |
|
|
Diluted |
281 |
|
|
(2 |
) |
|
279 |
|
|
287 |
|
|
1The change in deferred net revenue (online-enabled games) in the unaudited condensed consolidated statements of cash flows does not necessarily equal the change in deferred net revenue (online-enabled games) in the unaudited condensed consolidated statements of operations primarily due to the impact of unrecognized gains/losses on cash flow hedges. |
|
ELECTRONIC ARTS INC. AND SUBSIDIARIES |
|||
|
Unaudited Condensed Consolidated Balance Sheets |
|||
|
(in $ millions) |
|||
|
|
|
|
|
|
|
September 30, 2022 |
|
March 31, 20222 |
|
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
1,539 |
|
2,732 |
|
Short-term investments |
335 |
|
330 |
|
Receivables, net |
919 |
|
650 |
|
Other current assets |
649 |
|
439 |
|
Total current assets |
3,442 |
|
4,151 |
|
Property and equipment, net |
531 |
|
550 |
|
Goodwill |
5,375 |
|
5,387 |
|
Acquisition-related intangibles, net |
811 |
|
962 |
|
Deferred income taxes, net |
2,395 |
|
2,243 |
|
Other assets |
525 |
|
507 |
|
TOTAL ASSETS |
13,079 |
|
13,800 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
136 |
|
101 |
|
Accrued and other current liabilities |
1,034 |
|
1,388 |
|
Deferred net revenue (online-enabled games) |
1,391 |
|
2,024 |
|
Total current liabilities |
2,561 |
|
3,513 |
|
Senior notes, net |
1,879 |
|
1,878 |
|
Income tax obligations |
478 |
|
386 |
|
Deferred income taxes, net |
1 |
|
1 |
|
Other liabilities |
362 |
|
397 |
|
Total liabilities |
5,281 |
|
6,175 |
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
Common stock |
3 |
|
3 |
|
Retained earnings |
7,658 |
|
7,607 |
|
Accumulated other comprehensive income |
137 |
|
15 |
|
Total stockholders’ equity |
7,798 |
|
7,625 |
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
13,079 |
|
13,800 |
|
2Derived from audited consolidated financial statements. |
|
ELECTRONIC ARTS INC. AND SUBSIDIARIES |
|||||||||||
|
Unaudited Condensed Consolidated Statements of Cash Flows |
|||||||||||
|
(in $ millions) |
|||||||||||
|
|
|
|
|
|
|
|
|
||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||
|
OPERATING ACTIVITIES |
|
|
|
|
|
|
|
||||
|
Net income |
299 |
|
|
294 |
|
|
610 |
|
|
498 |
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
|
||||
|
Depreciation, amortization, accretion and impairment |
127 |
|
|
94 |
|
|
241 |
|
|
199 |
|
|
Stock-based compensation |
140 |
|
|
149 |
|
|
265 |
|
|
274 |
|
|
Change in assets and liabilities |
|
|
|
|
|
|
|
||||
|
Receivables, net |
(346 |
) |
|
(458 |
) |
|
(276 |
) |
|
(446 |
) |
|
Other assets |
(10 |
) |
|
23 |
|
|
(25 |
) |
|
(51 |
) |
|
Accounts payable |
69 |
|
|
61 |
|
|
53 |
|
|
42 |
|
|
Accrued and other liabilities |
(164 |
) |
|
52 |
|
|
(269 |
) |
|
(250 |
) |
|
Deferred income taxes, net |
(70 |
) |
|
(168 |
) |
|
(156 |
) |
|
(140 |
) |
|
Deferred net revenue (online-enabled games) |
(157 |
) |
|
17 |
|
|
(633 |
) |
|
(205 |
) |
|
Net cash provided by (used in) operating activities |
(112 |
) |
|
64 |
|
|
(190 |
) |
|
(79 |
) |
|
|
|
|
|
|
|
|
|
||||
|
INVESTING ACTIVITIES |
|
|
|
|
|
|
|
||||
|
Capital expenditures |
(53 |
) |
|
(43 |
) |
|
(112 |
) |
|
(87 |
) |
|
Proceeds from maturities and sales of short-term investments |
79 |
|
|
621 |
|
|
166 |
|
|
1,128 |
|
|
Purchase of short-term investments |
(80 |
) |
|
(84 |
) |
|
(173 |
) |
|
(369 |
) |
|
Acquisitions, net of cash acquired |
— |
|
|
(1,405 |
) |
|
— |
|
|
(3,394 |
) |
|
Net cash used in investing activities |
(54 |
) |
|
(911 |
) |
|
(119 |
) |
|
(2,722 |
) |
|
|
|
|
|
|
|
|
|
||||
|
FINANCING ACTIVITIES |
|
|
|
|
|
|
|
||||
|
Proceeds from issuance of common stock |
43 |
|
|
41 |
|
|
44 |
|
|
41 |
|
|
Cash dividends paid |
(53 |
) |
|
(48 |
) |
|
(106 |
) |
|
(97 |
) |
|
Cash paid to taxing authorities for shares withheld from employees |
(13 |
) |
|
(16 |
) |
|
(117 |
) |
|
(121 |
) |
|
Repurchase and retirement of common stock |
(325 |
) |
|
(325 |
) |
|
(645 |
) |
|
(650 |
) |
|
Net cash used in financing activities |
(348 |
) |
|
(348 |
) |
|
(824 |
) |
|
(827 |
) |
|
|
|
|
|
|
|
|
|
||||
|
Effect of foreign exchange on cash and cash equivalents |
(29 |
) |
|
(13 |
) |
|
(60 |
) |
|
(2 |
) |
|
Change in cash and cash equivalents |
(543 |
) |
|
(1,208 |
) |
|
(1,193 |
) |
|
(3,630 |
) |
|
Beginning cash and cash equivalents |
2,082 |
|
|
2,838 |
|
|
2,732 |
|
|
5,260 |
|
|
Ending cash and cash equivalents |
1,539 |
|
|
1,630 |
|
|
1,539 |
|
|
1,630 |
|
|
ELECTRONIC ARTS INC. AND SUBSIDIARIES |
||||||||||||||||
|
Unaudited Supplemental Financial Information and Business Metrics |
||||||||||||||||
|
(in $ millions, except per share data) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
Q2 |
|
Q3 |
|
Q4 |
|
Q1 |
|
Q2 |
|
YOY % |
|||||
|
|
FY22 |
|
FY22 |
|
FY22 |
|
FY23 |
|
FY23 |
|
Change |
|||||
|
Net revenue |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Net revenue |
1,826 |
|
|
1,789 |
|
|
1,825 |
|
|
1,767 |
|
|
1,904 |
|
|
4% |
|
GAAP-based financial data |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Change in deferred net revenue (online-enabled games)1 |
25 |
|
|
788 |
|
|
(74 |
) |
|
(468 |
) |
|
(150 |
) |
|
|
|
Gross profit |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Gross profit |
1,332 |
|
|
1,158 |
|
|
1,406 |
|
|
1,453 |
|
|
1,442 |
|
|
8% |
|
Gross profit (as a % of net revenue) |
73 |
% |
|
65 |
% |
|
77 |
% |
|
82 |
% |
|
76 |
% |
|
|
|
GAAP-based financial data |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Acquisition-related expenses |
22 |
|
|
44 |
|
|
45 |
|
|
30 |
|
|
39 |
|
|
|
|
Change in deferred net revenue (online-enabled games)1 |
25 |
|
|
788 |
|
|
(74 |
) |
|
(468 |
) |
|
(150 |
) |
|
|
|
Stock-based compensation |
2 |
|
|
1 |
|
|
2 |
|
|
2 |
|
|
1 |
|
|
|
|
Operating income |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Operating income |
340 |
|
|
102 |
|
|
365 |
|
|
441 |
|
|
427 |
|
|
26% |
|
Operating income (as a % of net revenue) |
19 |
% |
|
6 |
% |
|
20 |
% |
|
25 |
% |
|
22 |
% |
|
|
|
GAAP-based financial data |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Acquisition-related expenses |
52 |
|
|
105 |
|
|
97 |
|
|
69 |
|
|
82 |
|
|
|
|
Change in deferred net revenue (online-enabled games)1 |
25 |
|
|
788 |
|
|
(74 |
) |
|
(468 |
) |
|
(150 |
) |
|
|
|
Stock-based compensation |
149 |
|
|
129 |
|
|
125 |
|
|
125 |
|
|
140 |
|
|
|
|
Net income |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Net income |
294 |
|
|
66 |
|
|
225 |
|
|
311 |
|
|
299 |
|
|
2% |
|
Net income (as a % of net revenue) |
16 |
% |
|
4 |
% |
|
12 |
% |
|
18 |
% |
|
16 |
% |
|
|
|
GAAP-based financial data |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Acquisition-related expenses |
52 |
|
|
105 |
|
|
97 |
|
|
69 |
|
|
82 |
|
|
|
|
Change in deferred net revenue (online-enabled games)1 |
25 |
|
|
788 |
|
|
(74 |
) |
|
(468 |
) |
|
(150 |
) |
|
|
|
Stock-based compensation |
149 |
|
|
129 |
|
|
125 |
|
|
125 |
|
|
140 |
|
|
|
|
Tax rate used for management reporting |
18 |
% |
|
18 |
% |
|
18 |
% |
|
19 |
% |
|
19 |
% |
|
|
|
Diluted earnings per share |
1.02 |
|
|
0.23 |
|
|
0.80 |
|
|
1.11 |
|
|
1.07 |
|
|
5% |
|
Number of shares used in computation |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Basic |
285 |
|
|
283 |
|
|
281 |
|
|
279 |
|
|
278 |
|
|
|
|
Diluted |
287 |
|
|
285 |
|
|
283 |
|
|
281 |
|
|
279 |
|
|
|
|
1The change in deferred net revenue (online-enabled games) in the unaudited condensed consolidated statements of cash flows does not necessarily equal the change in deferred net revenue (online-enabled games) in the unaudited condensed consolidated statements of operations primarily due to the impact of unrecognized gains/losses on cash flow hedges. |
|
ELECTRONIC ARTS INC. AND SUBSIDIARIES |
||||||||||||||||||
|
Unaudited Supplemental Financial Information and Business Metrics |
||||||||||||||||||
|
(in $ millions) |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
Q2 |
|
Q3 |
|
Q4 |
|
Q1 |
|
Q2 |
|
YOY % |
||||||
|
|
|
FY22 |
|
FY22 |
|
FY22 |
|
FY23 |
|
FY23 |
|
Change |
||||||
|
QUARTERLY NET REVENUE PRESENTATIONS |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Net revenue by composition |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Full game downloads |
|
337 |
|
|
400 |
|
|
312 |
|
|
237 |
|
|
328 |
|
|
(3 |
%) |
|
Packaged goods |
|
280 |
|
|
216 |
|
|
126 |
|
|
104 |
|
|
274 |
|
|
(2 |
%) |
|
Full game |
|
617 |
|
|
616 |
|
|
438 |
|
|
341 |
|
|
602 |
|
|
(2 |
%) |
|
Live services and other |
|
1,209 |
|
|
1,173 |
|
|
1,387 |
|
|
1,426 |
|
|
1,302 |
|
|
8 |
% |
|
Total net revenue |
|
1,826 |
|
|
1,789 |
|
|
1,825 |
|
|
1,767 |
|
|
1,904 |
|
|
4 |
% |
|
Full game |
|
34 |
% |
|
34 |
% |
|
24 |
% |
|
19 |
% |
|
32 |
% |
|
|
|
|
Live services and other |
|
66 |
% |
|
66 |
% |
|
76 |
% |
|
81 |
% |
|
68 |
% |
|
|
|
|
Total net revenue % |
|
100 |
% |
|
100 |
% |
|
100 |
% |
|
100 |
% |
|
100 |
% |
|
|
|
|
GAAP-based financial data |
|
|
|
|
|
|
||||||||||||
|
Full game downloads |
|
35 |
|
|
179 |
|
|
(103 |
) |
|
(111 |
) |
|
17 |
|
|
|
|
|
Packaged goods |
|
44 |
|
|
105 |
|
|
(68 |
) |
|
(65 |
) |
|
16 |
|
|
|
|
|
Full game |
|
79 |
|
|
284 |
|
|
(171 |
) |
|
(176 |
) |
|
33 |
|
|
|
|
|
Live services and other |
|
(54 |
) |
|
504 |
|
|
97 |
|
|
(292 |
) |
|
(183 |
) |
|
|
|
|
Total change in deferred net revenue (online-enabled games) by composition1 |
|
25 |
|
|
788 |
|
|
(74 |
) |
|
(468 |
) |
|
(150 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Net revenue by platform |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Console |
|
1,198 |
|
|
1,138 |
|
|
1,092 |
|
|
1,042 |
|
|
1,161 |
|
|
(3 |
%) |
|
PC & Other |
|
377 |
|
|
374 |
|
|
420 |
|
|
402 |
|
|
423 |
|
|
12 |
% |
|
Mobile |
|
251 |
|
|
277 |
|
|
313 |
|
|
323 |
|
|
320 |
|
|
27 |
% |
|
Total net revenue |
|
1,826 |
|
|
1,789 |
|
|
1,825 |
|
|
1,767 |
|
|
1,904 |
|
|
4 |
% |
|
GAAP-based financial data |
|
|
|
|
|
|
||||||||||||
|
Console |
|
(29 |
) |
|
608 |
|
|
(86 |
) |
|
(405 |
) |
|
(134 |
) |
|
|
|
|
PC & Other |
|
26 |
|
|
137 |
|
|
3 |
|
|
(54 |
) |
|
8 |
|
|
|
|
|
Mobile |
|
28 |
|
|
43 |
|
|
9 |
|
|
(9 |
) |
|
(24 |
) |
|
|
|
|
Total change in deferred net revenue (online-enabled games) by platform1 |
|
25 |
|
|
788 |
|
|
(74 |
) |
|
(468 |
) |
|
(150 |
) |
|
|
|
|
1The change in deferred net revenue (online-enabled games) in the unaudited condensed consolidated statements of cash flows does not necessarily equal the change in deferred net revenue (online-enabled games) in the unaudited condensed consolidated statements of operations primarily due to the impact of unrecognized gains/losses on cash flow hedges. |
|
ELECTRONIC ARTS INC. AND SUBSIDIARIES |
|||||||||||||||||
|
Unaudited Supplemental Financial Information and Business Metrics |
|||||||||||||||||
|
(in $ millions) |
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Q2 |
Q3 |
Q4 |
Q1 |
|
Q2 |
|
YOY % |
|||||||||
|
|
FY22 |
FY22 |
FY22 |
FY23 |
|
FY23 |
|
Change |
|||||||||
|
CASH FLOW DATA |
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Operating cash flow |
64 |
|
1,534 |
|
444 |
|
(78 |
) |
|
(112 |
) |
|
(275 |
%) |
|||
|
Operating cash flow – TTM |
1,416 |
|
1,826 |
|
1,899 |
|
1,964 |
|
|
1,788 |
|
|
26 |
% |
|||
|
Capital expenditures |
43 |
|
48 |
|
53 |
|
59 |
|
|
53 |
|
|
23 |
% |
|||
|
Capital expenditures – TTM |
148 |
|
166 |
|
188 |
|
203 |
|
|
213 |
|
|
44 |
% |
|||
|
Repurchase and retirement of common stock |
325 |
|
325 |
|
325 |
|
320 |
|
|
325 |
|
|
— |
|
|||
|
Cash dividends paid |
48 |
|
48 |
|
48 |
|
53 |
|
|
53 |
|
|
10 |
% |
|||
|
DEPRECIATION |
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Depreciation expense |
39 |
|
41 |
|
42 |
|
44 |
|
|
45 |
|
|
15 |
% |
|||
|
BALANCE SHEET DATA |
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Cash and cash equivalents |
1,630 |
|
2,670 |
|
2,732 |
|
2,082 |
|
|
1,539 |
|
|
|
||||
|
Short-term investments |
342 |
|
346 |
|
330 |
|
334 |
|
|
335 |
|
|
|
||||
|
Cash and cash equivalents, and short-term investments |
1,972 |
|
3,016 |
|
3,062 |
|
2,416 |
|
|
1,874 |
|
|
(5 |
%) |
|||
|
Receivables, net |
1,031 |
|
965 |
|
650 |
|
579 |
|
|
919 |
|
|
(11 |
%) |
|||
|
STOCK-BASED COMPENSATION |
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Cost of revenue |
2 |
|
1 |
|
2 |
|
2 |
|
|
1 |
|
|
|
||||
|
Research and development |
101 |
|
86 |
|
84 |
|
81 |
|
|
95 |
|
|
|
||||
|
Marketing and sales |
15 |
|
14 |
|
13 |
|
13 |
|
|
16 |
|
|
|
||||
|
General and administrative |
31 |
|
28 |
|
26 |
|
29 |
|
|
28 |
|
|
|
||||
|
Total stock-based compensation |
149 |
|
129 |
|
125 |
|
125 |
|
|
140 |
|
|
|
||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20221031005923/en/