Electronic Arts Reports Q2 FY20 Financial Results

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

“It was an excellent second quarter for Electronic Arts. Our new EA SPORTS titles are thrilling core fans and bringing in new players, and our ongoing live services are growing with deeply-engaged communities,” said CEO Andrew Wilson. “With new games like Star Wars Jedi: Fallen Order, Need for Speed, Plants vs. Zombies and more great content across our top franchises, we’re set to deliver a lot of fun and excitement to players this holiday season, and continue our momentum in this fiscal year.”

“The strong results this quarter illustrate the power of our live services and our core franchises. Strength in Ultimate Team, The Sims 4 and FIFA Online drove live services performance above our expectations,” said COO and CFO Blake Jorgensen. “Looking ahead, we are doubling down on live services combined with our core franchises. We’re investing in games that people play for longer and engage with much more deeply. This focus will continue to drive growth and profitability for the company through the remainder of this year and beyond.”

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 a record $3.883 billion, up 8% year-over-year and represents 78% of total net bookings.
  • The number of FIFA Ultimate Team unique players increased 22% year-over-year.
  • The number of Madden Ultimate Team unique players increased 19% year-over-year.
  • Apex Legends™ has had 70 million players life to date.
  • The Sims 4 monthly average players are up more than 40% year-over-year.

* 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 $37 million for the quarter and $1.748 billion for the trailing twelve months.
  • EA repurchased 3.3 million shares for $306 million during the quarter, bringing the total to 12.9 million shares for $1.204 billion during the trailing twelve months.

Impact of Certain Tax Matters

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

  1. During the three months ended June 30, 2019, EA completed an internal transfer of some of its intellectual property rights to its Swiss subsidiary, where EA’s international business is headquartered;
  2. Also during the three months ended June 30, 2019, 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. During the three months ended September 30, 2019, Switzerland changed its income tax rates.

As a result of these events, EA has recognized an income tax benefit of $1.705 billion, or $5.74 of earnings per share, during the fiscal year ending March 31, 2020. EA recognized $1.080 billion, or $3.61 of earnings per share, of this income tax benefit during the three months ended June 30, 2019 and $625 million, or $2.11 of earnings per share, during the three months ended September 30, 2019.

Quarterly Financial Highlights

Three Months Ended

September 30,

2019

2018

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

922

780

 

Packaged goods and other net revenue

426

506

 

Total net revenue

1,348

1,286

 

 
Net income 854*

255

 

Earnings per share 2.89*

0.83

 

 
Operating cash flow

37

(126

)

 
Value of shares repurchased

306

299

 

Number of shares repurchased

3.3

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 fiscal GAAP results in order to assess EA’s operating results:

Three Months Ended September 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

1,348

 

(35

)

(36

)

 

Cost of revenue

405

(2

)

 

(36

)

(1

)

Gross profit

943

2

 

(35

)

 

1

 

Total operating expenses

675

(8

)

 

 

(91

)

Operating income

268

10

 

(35

)

 

92

 

Interest and other income, net

16

 

 

 

 

Income before provision for income taxes

284

10

 

(35

)

 

92

 

Number of shares used in computation:
Diluted

296

For more information about the nature of the GAAP-based financial data, please refer to EA’s Form 10-Q for the fiscal quarter ended June 30, 2019.

TTM Financial Highlights

Twelve Months Ended
September 30,

2019

2018

(in $ millions)
Digital net revenue

3,944

3,619

Packaged goods and other net revenue

1,140

1,546

Total net revenue

5,084

5,165

 
Net income 2,746*

969

 
Operating cash flow

1,748

1,458

 
Value of shares repurchased

1,204

897

Number of shares repurchased

12.9

7.2

*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 September 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

5,084

 

79

(170

)

 

Cost of revenue

1,281

(6

)

(170

)

(4

)

Gross profit

3,803

6

 

79

 

4

 

Total operating expenses

2,682

(37

)

 

(309

)

Operating income

1,121

43

 

79

 

313

 

Interest and other income, net

83

 

 

 

Income before provision for income taxes

1,204

43

 

79

 

313

 

For more information about the nature of the GAAP-based financial data, please refer to EA’s Form 10-Q for the fiscal quarter ended June 30, 2019.

Operating Metric

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

Three Months Ended TTM Ended
September 30, September 30,

2019

2018

2019

2018

(in $ millions)
Total net revenue

1,348

 

1,286

 

5,084

 

5,165

 

Change in deferred net revenue (online-enabled games)

(35

)

(20

)

79

 

125

 

Mobile platform fees

(36

)

(44

)

(170

)

(93

)

Net bookings

1,277

 

1,222

 

4,993

 

5,197

 

Business Outlook as of October 29, 2019

The following forward-looking statements reflect expectations as of October 29, 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 $5.410 billion.

    • Change in deferred net revenue (online-enabled games) is expected to be approximately $(130) million.
    • Mobile platform fees are expected to be approximately $(155) million.
  • Net income is expected to be approximately $2.841 billion, approximately $1.705 billion of which is related to the one-time income tax benefits discussed above.
  • Diluted earnings per share is expected to be approximately $9.57, approximately $5.74 of which is related to the one-time income tax benefits discussed above.
  • Operating cash flow is expected to be approximately $1.625 billion.
  • The Company estimates a share count of 297 million for purposes of calculating fiscal year 2020 diluted earnings per share.

Operational metric:

  • Net bookings is expected to be approximately $5.125 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

4,230

 

(75

)

(155

)

 

Packaged goods & other net revenue

1,180

 

(55

)

 

 

Total net revenue

5,410

 

(130

)

(155

)

 

Cost of revenue

1,332

(12

)

 

(155

)

(2

)

Operating expense

2,746

(23

)

 

 

(353

)

Income before provision for income taxes

1,387

35

 

(130

)

 

355

 

Net income

2,841

Number of shares used in computation:
Diluted shares

297

Third Quarter Fiscal Year 2020 Expectations – Ending December 31, 2019

Financial metrics:

  • Net revenue is expected to be approximately $1.510 billion.

    • Change in deferred net revenue (online-enabled games) is expected to be approximately $470 million.
    • Mobile platform fees are expected to be approximately $(40) million.
  • Net income is expected to be approximately $272 million.
  • Diluted earnings per share is expected to be approximately $0.92.
  • The Company estimates a share count of 295 million for purposes of calculating third quarter fiscal year 2020 diluted earnings per share.

Operational metric:

  • Net bookings is expected to be approximately $1.940 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 December 31, 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

1,510

 

470

(40

)

 

Cost of revenue

482

(6

)

(40

)

 

Operating expense

733

(5

)

 

(95

)

Income before provision for income taxes

306

11

 

470

 

95

 

Net income

272

Number of shares used in computation:
Diluted shares

295

For more information about the nature of the GAAP-based financial data, please refer to EA’s Form 10-Q for the fiscal quarter ended June 30, 2019.

Conference Call and Supporting Documents

Electronic Arts will host a conference call on October 29, 2019 at 2:00 pm PT (5:00 pm ET) to review its results for the second quarter ended September 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 conference code 9877505 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 Investor Accounting FAQ 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 13, 2019 at 855-859-2056 (domestic) or 404-537-3406 (international) using pin code 9877505. 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 October 29, 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 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, 2019.

These forward-looking statements are current as of October 29, 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 September 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 September 30, 2019, except as required by law.

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, Apex Legends, Battlefield, Need for Speed, Titanfall, 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.

ELECTRONIC ARTS INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Operations

(in $ millions, except per share data)

 

 

 

 

 

 

 

 

Three Months Ended

September 30,

 

Six Months Ended

September 30,

 

2019

 

2018

 

2019

2018

Net revenue

 

 

 

 

 

 

Product

568

 

 

623

 

 

734

 

825

 

Service and other

780

 

 

663

 

 

1,823

 

1,598

 

Total net revenue

1,348

 

 

1,286

 

 

2,557

 

2,423

 

Cost of revenue

 

 

 

 

 

 

Product

193

 

 

222

 

 

228

 

290

 

Service and other

212

 

 

196

 

 

364

 

343

 

Total cost of revenue

405

 

 

418

 

 

592

 

633

 

Gross profit

943

 

 

868

 

 

1,965

 

1,790

 

Operating expenses:

 

 

 

 

 

 

Research and development

387

 

 

339

 

 

768

 

701

 

Marketing and sales

152

 

 

146

 

 

262

 

286

 

General and administrative

128

 

 

117

 

 

238

 

231

 

Acquisition-related contingent consideration

2

 

 

2

 

 

3

 

2

 

Amortization of intangibles

6

 

 

6

 

 

11

 

12

 

Total operating expenses

675

 

 

610

 

 

1,282

 

1,232

 

Operating income

268

 

 

258

 

 

683

 

558

 

Interest and other income (expense), net

16

 

 

18

 

 

37

 

37

 

Income before provision for (benefit from) income taxes

284

 

 

276

 

 

720

 

595

 

Provision for (benefit from) income taxes

(570

)

 

21

 

 

(1,555

)

47

 

Net income

854

 

 

255

 

 

2,275

 

548

 

Earnings per share

 

 

 

 

 

 

Basic

2.89

 

0.84

 

7.69

 

1.80

Diluted

2.89

 

0.83

 

7.66

 

1.77

 

Number of shares used in computation

 

 

 

 

 

 

Basic

295

 

 

305

 

 

296

 

305

 

Diluted

296

 

 

307

 

 

297

 

309

 

Results (in $ millions, except per share data)

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

 

 

Three Months Ended September 30,

 

2019

 

 

 

2019

 

2018

 

Guidance

 

Variance

 

Actuals

 

Actuals

Net revenue

 

 

 

 

 

 

 

Net revenue

1,315

 

 

33

 

 

1,348

 

 

1,286

 

GAAP-based financial data

 

 

 

 

 

 

 

Change in deferred net revenue (online-enabled games)

(50

)

 

15

 

 

(35

)

 

(20

)

Mobile platform fees

(35

)

 

(1

)

 

(36

)

 

(44

)

Cost of revenue

 

 

 

 

 

 

 

Cost of revenue

407

 

 

(2

)

 

405

 

 

418

 

GAAP-based financial data

 

 

 

 

 

 

 

Acquisition-related expenses

(2

)

 

 

 

(2

)

 

(1

)

Stock-based compensation

(1

)

 

 

 

(1

)

 

(1

)

Mobile platform fees

(35

)

 

(1

)

 

(36

)

 

(44

)

Operating expenses

 

 

 

 

 

 

 

Operating expenses

679

 

 

(4

)

 

675

 

 

610

 

GAAP-based financial data

 

 

 

 

 

 

 

Acquisition-related expenses

(5

)

 

(3

)

 

(8

)

 

(8

)

Stock-based compensation

(89

)

 

(2

)

 

(91

)

 

(65

)

Income before tax

 

 

 

 

 

 

 

Income before tax

243

 

 

41

 

 

284

 

 

276

 

GAAP-based financial data

 

 

 

 

 

 

 

Acquisition-related expenses

7

 

 

3

 

 

10

 

 

9

 

Change in deferred net revenue (online-enabled games)

(50

)

 

15

 

 

(35

)

 

(20

)

Mobile platform fees

 

 

 

 

 

 

 

Stock-based compensation

90

 

 

2

 

 

92

 

 

66

 

Tax rate used for management reporting

18

%

 

 

 

18

%

 

18

%

Earnings per share

 

 

 

 

 

 

 

Basic

2.62

 

 

0.27

 

 

2.89

 

 

0.84

 

Diluted

2.60

 

 

0.29

 

 

2.89

 

 

0.83

 

Number of shares

 

 

 

 

 

 

 

Basic

296

 

 

(1

)

 

295

 

 

305

 

Diluted

298

 

 

(2

)

 

296

 

 

307

 

ELECTRONIC ARTS INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated Balance Sheets

(in $ millions)

 

 

 

 

 

September 30, 2019

 

March 31, 20191

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

2,940

 

 

4,708

 

Short-term investments

1,943

 

 

737

 

Receivables, net

856

 

 

623

 

Other current assets

301

 

 

313

 

Total current assets

6,040

 

 

6,381

 

Property and equipment, net

442

 

 

448

 

Goodwill

1,890

 

 

1,892

 

Acquisition-related intangibles, net

72

 

 

87

 

Deferred income taxes, net

1,835

 

 

35

 

Other assets

314

 

 

114

 

TOTAL ASSETS

10,593

 

 

8,957

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

148

 

 

113

 

Accrued and other current liabilities

1,024

 

 

1,052

 

Deferred net revenue (online-enabled games)

646

 

 

1,100

 

Total current liabilities

1,818

 

 

2,265

 

Senior notes, net

995

 

 

994

 

Income tax obligations

361

 

 

233

 

Deferred income taxes, net

2

 

 

2

 

Other liabilities

259

 

 

132

 

Total liabilities

3,435

 

 

3,626

 

 

 

 

 

Stockholders’ equity:

 

 

 

Common stock

3

 

 

3

 

Retained earnings

7,165

 

 

5,358

 

Accumulated other comprehensive loss

(10

)

 

(30

)

Total stockholders’ equity

7,158

 

 

5,331

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

10,593

 

 

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

September 30,

 

Six Months Ended

September 30,

 

2019

 

2018

 

2019

 

2018

OPERATING ACTIVITIES

 

 

 

 

 

 

 

Net income

854

 

 

255

 

 

2,275

 

 

548

 

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

Depreciation, amortization and accretion

35

 

 

36

 

 

72

 

 

74

 

Stock-based compensation

92

 

 

66

 

 

165

 

 

136

 

Change in assets and liabilities

 

 

 

 

 

 

 

Receivables, net

(529

)

 

(591

)

 

(235

)

 

(422

)

Other assets

9

 

 

(28

)

 

33

 

 

20

 

Accounts payable

91

 

 

124

 

 

51

 

 

132

 

Accrued and other liabilities

144

 

 

60

 

 

88

 

 

(25

)

Deferred income taxes, net

(626

)

 

(20

)

 

(1,800

)

 

(94

)

Deferred net revenue (online-enabled games)

(33

)

 

(28

)

 

(454

)

 

(375

)

Net cash provided by (used in) operating activities

37

 

 

(126

)

 

195

 

 

(6

)

INVESTING ACTIVITIES

 

 

 

 

 

 

 

Capital expenditures

(27

)

 

(31

)

 

(72

)

 

(63

)

Proceeds from maturities and sales of short-term investments

435

 

 

239

 

 

793

 

 

446

 

Purchase of short-term investments

(721

)

 

(801

)

 

(1,984

)

 

(1,029

)

Acquisitions, net of cash acquired

 

 

(8

)

 

 

 

(58

)

Net cash used in investing activities

(313

)

 

(601

)

 

(1,263

)

 

(704

)

FINANCING ACTIVITIES

 

 

 

 

 

 

 

Proceeds from issuance of common stock

30

 

 

35

 

 

33

 

 

36

 

Cash paid to taxing authorities for shares withheld from employees

(4

)

 

(7

)

 

(55

)

 

(96

)

Repurchase and retirement of common stock

(306

)

 

(299

)

 

(611

)

 

(599

)

Payment of contingent consideration

(32

)

 

 

 

(64

)

 

 

Net cash used in financing activities

(312

)

 

(271

)

 

(697

)

 

(659

)

Effect of foreign exchange on cash and cash equivalents

(5

)

 

3

 

 

(3

)

 

(8

)

Change in cash and cash equivalents

(593

)

 

(995

)

 

(1,768

)

 

(1,377

)

Beginning cash and cash equivalents

3,533

 

 

3,876

 

 

4,708

 

 

4,258

 

Ending cash and cash equivalents

2,940

 

 

2,881

 

 

2,940

 

 

2,881

 

ELECTRONIC ARTS INC. AND SUBSIDIARIES

Unaudited Supplemental Financial Information and Business Metrics

(in $ millions, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

Q2

 

Q3

 

Q4

 

Q1

 

Q2

 

YOY %

 

FY19

 

FY19

 

FY19

 

FY20

 

FY20

 

Change

Net revenue

 

 

 

 

 

 

 

 

 

 

 

Net revenue

1,286

 

 

1,289

 

 

1,238

 

 

1,209

 

 

1,348

 

 

5

%

GAAP-based financial data

 

 

 

 

 

 

 

 

 

 

 

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

(20

)

 

368

 

 

173

 

 

(427

)

 

(35

)

 

 

Mobile platform fees

(44

)

 

(48

)

 

(47

)

 

(39

)

 

(36

)

 

 

Gross profit

 

 

 

 

 

 

 

 

 

 

 

Gross profit

868

 

 

876

 

 

962

 

 

1,022

 

 

943

 

 

9

%

Gross profit (as a % of net revenue)

67

%

 

68

%

 

78

%

 

85

%

 

70

%

 

 

GAAP-based financial data

 

 

 

 

 

 

 

 

 

 

 

Acquisition-related expenses

1

 

 

1

 

 

1

 

 

2

 

 

2

 

 

 

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

(20

)

 

368

 

 

173

 

 

(427

)

 

(35

)

 

 

Mobile platform fees

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

1

 

 

1

 

 

1

 

 

1

 

 

1

 

 

 

Operating income

 

 

 

 

 

 

 

 

 

 

 

Operating income

258

 

 

242

 

 

196

 

 

415

 

 

268

 

 

4

%

Operating income (as a % of net revenue)

20

%

 

19

%

 

16

%

 

34

%

 

20

%

 

 

GAAP-based financial data

 

 

 

 

 

 

 

 

 

 

 

Acquisition-related expenses

9

 

 

8

 

 

17

 

 

8

 

 

10

 

 

 

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

(20

)

 

368

 

 

173

 

 

(427

)

 

(35

)

 

 

Stock-based compensation

66

 

 

75

 

 

73

 

 

73

 

 

92

 

 

 

Net income

 

 

 

 

 

 

 

 

 

 

 

Net income

255

 

 

262

 

 

209

 

 

1,421

 

 

854

 

 

235

%

Net income (as a % of net revenue)

20

%

 

20

%

 

17

%

 

118

%

 

63

%

 

 

GAAP-based financial data

 

 

 

 

 

 

 

 

 

 

 

Acquisition-related expenses

9

 

 

8

 

 

17

 

 

8

 

 

10

 

 

 

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

(20

)

 

368

 

 

173

 

 

(427

)

 

(35

)

 

 

Stock-based compensation

66

 

 

75

 

 

73

 

 

73

 

 

92

 

 

 

Tax rate used for management reporting

18

%

 

18

%

 

18

%

 

18

%

 

18

%

 

 

Diluted earnings per share

0.83

 

 

0.86

 

 

0.69

 

 

4.75

 

 

2.89

 

 

248

%

Number of diluted shares used in computation

 

 

 

 

 

 

 

 

 

 

 

Basic

305

 

 

302

 

 

299

 

 

297

 

 

295

 

 

 

Diluted

307

 

 

304

 

 

301

 

 

299

 

 

296

 

 

 

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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q2

 

Q3

 

Q4

 

Q1

 

Q2

 

YOY %

 

 

FY19

 

FY19

 

FY19

 

FY20

 

FY20

 

Change

QUARTERLY NET REVENUE PRESENTATIONS

 

 

 

 

 

 

 

 

 

 

 

 

Net revenue by composition

 

 

 

 

 

 

 

 

 

 

 

 

Full game downloads

 

148

 

 

247

 

 

169

 

 

132

 

 

180

 

 

22

%

Live services

 

412

 

 

480

 

 

714

 

 

731

 

 

573

 

 

39

%

Mobile

 

220

 

 

181

 

 

182

 

 

186

 

 

169

 

 

(23

%)

Total digital

 

780

 

 

908

 

 

1,065

 

 

1,049

 

 

922

 

 

18

%

Packaged goods and other

 

506

 

 

381

 

 

173

 

 

160

 

 

426

 

 

(16

%)

Total net revenue

 

1,286

 

 

1,289

 

 

1,238

 

 

1,209

 

 

1,348

 

 

5

%

Total digital

 

61

%

 

70

%

 

86

%

 

87

%

 

68

%

 

 

Packaged goods and other

 

39

%

 

30

%

 

14

%

 

13

%

 

32

%

 

 

Total net revenue %

 

100

%

 

100

%

 

100

%

 

100

%

 

100

%

 

 

GAAP-based financial data

 

 

 

 

 

 

Full game downloads

 

9

 

 

26

 

 

44

 

 

(57

)

 

(5

)

 

 

Live services

 

(84

)

 

304

 

 

131

 

 

(227

)

 

(80

)

 

 

Mobile

 

(24

)

 

9

 

 

 

 

(25

)

 

(11

)

 

 

Total digital

 

(99

)

 

339

 

 

175

 

 

(309

)

 

(96

)

 

 

Packaged goods and other

 

79

 

 

29

 

 

(2

)

 

(118

)

 

61

 

 

 

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

 

(20

)

 

368

 

 

173

 

 

(427

)

 

(35

)

 

 

Mobile platform fees

 

(44

)

 

(48

)

 

(47

)

 

(39

)

 

(36

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenue by platform

 

 

 

 

 

 

 

 

 

 

 

 

Console

 

917

 

 

885

 

 

826

 

 

760

 

 

923

 

 

1

%

PC/Browser

 

149

 

 

217

 

 

217

 

 

249

 

 

242

 

 

62

%

Mobile

 

220

 

 

181

 

 

190

 

 

196

 

 

177

 

 

(20

%)

Other

 

 

 

6

 

 

5

 

 

4

 

 

6

 

 

100

%

Total net revenue

 

1,286

 

 

1,289

 

 

1,238

 

 

1,209

 

 

1,348

 

 

5

%

GAAP-based financial data

 

 

 

 

 

 

Console

 

8

 

 

323

 

 

87

 

 

(344

)

 

8

 

 

 

PC/Browser

 

(4

)

 

33

 

 

88

 

 

(59

)

 

(31

)

 

 

Mobile

 

(24

)

 

11

 

 

(2

)

 

(25

)

 

(11

)

 

 

Other

 

 

 

1

 

 

 

 

1

 

 

(1

)

 

 

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

 

(20

)

 

368

 

 

173

 

 

(427

)

 

(35

)

 

 

Mobile platform fees

 

(44

)

 

(48

)

 

(47

)

 

(39

)

 

(36

)

 

 

Contacts

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

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