REDWOOD CITY, Calif.–(BUSINESS WIRE)–Electronic Arts Inc. (NASDAQ:EA) today 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{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} year-over-year.
- Live services and other net bookings for the trailing twelve months were up 4{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} year-over-year and represent 75{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} 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
| Three Months Ended | ||||||
| December 31, | ||||||
|
2022 |
2021 |
|||||
| (in $ millions, except per share amounts) | ||||||
| Full game |
622 |
616 |
||||
| Live services and other |
1,259 |
|
1,173 |
|
||
| Total net revenue |
1,881 |
|
1,789 |
|
||
| Net income |
204 |
|
66 |
|
||
| Diluted earnings per share |
0.73 |
|
0.23 |
|
||
| Operating cash flow |
1,123 |
|
1,534 |
|
||
| Value of shares repurchased |
325 |
|
325 |
|
||
| Number of shares repurchased |
2.6 |
|
2.4 |
|
||
The following GAAP-based financial data2 and tax rate of 19{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} was used internally by company management to adjust its GAAP results in order to assess EA’s operating results:
| Three Months Ended December 31, 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 |
1,881 |
|
– |
|
461 |
– |
|
||||
| Cost of revenue |
568 |
|
(26 |
) |
– |
|
(2 |
) |
|||
| Gross profit |
1,313 |
|
26 |
|
461 |
|
2 |
|
|||
| Total operating expenses |
1,024 |
|
(50 |
) |
– |
|
(139 |
) |
|||
| Operating income |
289 |
|
76 |
|
461 |
|
141 |
|
|||
| Interest and other income (expense), net |
(7 |
) |
– |
|
– |
|
– |
|
|||
| Income before provision for income taxes |
282 |
|
76 |
|
461 |
|
141 |
|
|||
| Number of shares used in computation: | |||||||||||
| Diluted |
278 |
|
|||||||||
Trailing Twelve Months Financial Highlights
| Twelve Months Ended | ||||||
| December 31, | ||||||
|
2022 |
2021 |
|||||
| (in $ millions) | ||||||
| Full game |
2,003 |
1,805 |
||||
| Live services and other |
5,374 |
|
4,707 |
|
||
| Total net revenue |
7,377 |
|
6,512 |
|
||
| Net income |
1,039 |
|
640 |
|
||
| Operating cash flow |
1,377 |
|
1,826 |
|
||
| Value of shares repurchased |
1,295 |
|
1,300 |
|
||
| Number of shares repurchased |
10.2 |
|
9.4 |
|
||
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{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} and in fiscal 2023 a tax rate of 19{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b}.
| Twelve Months Ended December 31, 2022 | |||||||||||
| GAAP-Based Financial Data | |||||||||||
| (in $ millions) |
Statement of Operations |
Acquisition- related expenses |
Change in deferred net revenue (online- enabledgames) |
Stock-based compensation |
|||||||
| Total net revenue |
7,377 |
|
– |
|
(231 |
) |
– |
|
|||
| Cost of revenue |
1,763 |
|
(140 |
) |
– |
|
(7 |
) |
|||
| Gross profit |
5,614 |
|
140 |
|
(231 |
) |
7 |
|
|||
| Total operating expenses |
4,092 |
|
(184 |
) |
– |
|
(524 |
) |
|||
| Operating income |
1,522 |
|
324 |
|
(231 |
) |
531 |
|
|||
| Interest and other income (expense), net |
(21 |
) |
– |
|
– |
|
– |
|
|||
| Income before provision for income taxes |
1,501 |
|
324 |
|
(231 |
) |
531 |
|
|||
Operating Metric
The following is a calculation of our total net bookings1 for the periods presented:
| Three Months Ended | Twelve Months Ended | |||||||||||
| December 31, | December 31, | |||||||||||
|
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||
| (in $ millions) | ||||||||||||
| Total net revenue |
1,881 |
1,789 |
7,377 |
6,512 |
||||||||
| Change in deferred net revenue (online-enabled games) |
461 |
|
788 |
|
(231 |
) |
742 |
|
||||
| Total net bookings |
2,342 |
|
2,577 |
|
7,146 |
|
7,254 |
|
||||
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{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} are used internally by EA to adjust GAAP expectations to assess EA’s operating results and plan for future periods:
| Three 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 | 1,700 to 1,800 |
– |
|
(25 |
) |
– |
|
|||
| Cost of revenue | 395 to 415 |
(25 |
) |
– |
|
– |
|
|||
| Operating expense | 1,075 to 1,085 |
(35 |
) |
– |
|
(140 |
) |
|||
| Income before provision for income taxes | 235 to 304 |
60 |
|
(25 |
) |
140 |
|
|||
| Net income | 14 to 55 | |||||||||
| Number of shares used in computation: | ||||||||||
| Diluted shares |
277 |
|||||||||
| * The mid-point of the range has been used for purposes of presenting the reconciling items. |
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{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} are used internally by EA to adjust 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 | 7,252 to 7,352 |
– |
|
(182 |
) |
– |
|
|||
| Cost of revenue | 1,739 to 1,759 |
(120 |
) |
– |
|
(5 |
) |
|||
| Operating expense | 4,126 to 4,136 |
(167 |
) |
– |
|
(541 |
) |
|||
| Income before provision for income taxes | 1,380 to 1,449 |
287 |
|
(182 |
) |
546 |
|
|||
| Net income | 828 to 869 | |||||||||
| 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 January 31, 2023 at 2:00 pm PT (5:00 pm ET) to review its results for the third quarter ended December 31, 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 February 15, 2023 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 January 31, 2023” and other information regarding EA’s 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 January 31, 2023. 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 December 31, 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 December 31, 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 December 31, |
|
Nine Months Ended December 31, |
||||||||
|
|
|
||||||||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||
|
Net revenue |
1,881 |
|
|
1,789 |
|
|
5,552 |
|
|
5,166 |
|
|
Cost of revenue |
568 |
|
|
631 |
|
|
1,344 |
|
|
1,440 |
|
|
Gross profit |
1,313 |
|
|
1,158 |
|
|
4,208 |
|
|
3,726 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
||||
|
Research and development |
556 |
|
|
539 |
|
|
1,693 |
|
|
1,607 |
|
|
Marketing and sales |
256 |
|
|
293 |
|
|
723 |
|
|
716 |
|
|
General and administrative |
162 |
|
|
163 |
|
|
503 |
|
|
508 |
|
|
Amortization and impairment of intangibles |
50 |
|
|
61 |
|
|
132 |
|
|
131 |
|
|
Total operating expenses |
1,024 |
|
|
1,056 |
|
|
3,051 |
|
|
2,962 |
|
|
Operating income |
289 |
|
|
102 |
|
|
1,157 |
|
|
764 |
|
|
Interest and other income (expense), net |
(7 |
) |
|
(11 |
) |
|
(12 |
) |
|
(39 |
) |
|
Income before provision for income taxes |
282 |
|
|
91 |
|
|
1,145 |
|
|
725 |
|
|
Provision for income taxes |
78 |
|
|
25 |
|
|
331 |
|
|
161 |
|
|
Net income |
204 |
|
|
66 |
|
|
814 |
|
|
564 |
|
|
Earnings per share |
|
|
|
|
|
|
|
||||
|
Basic |
0.74 |
|
|
0.23 |
|
|
2.93 |
|
|
1.99 |
|
|
Diluted |
0.73 |
|
|
0.23 |
|
|
2.92 |
|
|
1.97 |
|
|
Number of shares used in computation |
|
|
|
|
|
|
|
||||
|
Basic |
276 |
|
|
283 |
|
|
278 |
|
|
284 |
|
|
Diluted |
278 |
|
|
285 |
|
|
279 |
|
|
287 |
|
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.
|
|
Three Months Ended December 31, |
||||||||||
|
|
2022 Guidance (Mid-Point) |
|
|
|
2022 Actuals |
|
2021 Actuals |
||||
|
|
|
Variance |
|
|
|||||||
|
Net revenue |
|
|
|
|
|
|
|
||||
|
Net revenue |
1,875 |
|
|
6 |
|
|
1,881 |
|
|
1,789 |
|
|
GAAP-based financial data |
|
|
|
|
|
|
|
||||
|
Change in deferred net revenue (online-enabled games)1 |
600 |
|
|
(139 |
) |
|
461 |
|
|
788 |
|
|
Cost of revenue |
|
|
|
|
|
|
|
||||
|
Cost of revenue |
570 |
|
|
(2 |
) |
|
568 |
|
|
631 |
|
|
GAAP-based financial data |
|
|
|
|
|
|
|
||||
|
Acquisition-related expenses |
(30 |
) |
|
4 |
|
|
(26 |
) |
|
(44 |
) |
|
Stock-based compensation |
— |
|
|
(2 |
) |
|
(2 |
) |
|
(1 |
) |
|
Operating expenses |
|
|
|
|
|
|
|
||||
|
Operating expenses |
1,085 |
|
|
(61 |
) |
|
1,024 |
|
|
1,056 |
|
|
GAAP-based financial data |
|
|
|
|
|
|
|
||||
|
Acquisition-related expenses |
(35 |
) |
|
(15 |
) |
|
(50 |
) |
|
(61 |
) |
|
Stock-based compensation |
(150 |
) |
|
11 |
|
|
(139 |
) |
|
(128 |
) |
|
Income before tax |
|
|
|
|
|
|
|
||||
|
Income before tax |
219 |
|
|
63 |
|
|
282 |
|
|
91 |
|
|
GAAP-based financial data |
|
|
|
|
|
|
|
||||
|
Acquisition-related expenses |
65 |
|
|
11 |
|
|
76 |
|
|
105 |
|
|
Change in deferred net revenue (online-enabled games)1 |
600 |
|
|
(139 |
) |
|
461 |
|
|
788 |
|
|
Stock-based compensation |
150 |
|
|
(9 |
) |
|
141 |
|
|
129 |
|
|
Tax rate used for management reporting |
19 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
|
|
19 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
18 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
|
Earnings per share |
|
|
|
|
|
|
|
||||
|
Basic |
0.51 |
|
|
0.23 |
|
|
0.74 |
|
|
0.23 |
|
|
Diluted |
0.51 |
|
|
0.22 |
|
|
0.73 |
|
|
0.23 |
|
|
Number of shares used in computation |
|
|
|
|
|
|
|
||||
|
Basic |
277 |
|
|
(1 |
) |
|
276 |
|
|
283 |
|
|
Diluted |
279 |
|
|
(1 |
) |
|
278 |
|
|
285 |
|
|
1 |
|
The 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) |
|||||
|
|
|
|
|
||
|
|
December 31, 2022 |
|
March 31, 20222 |
||
|
ASSETS |
|
|
|
||
|
Current assets: |
|
|
|
||
|
Cash and cash equivalents |
2,202 |
|
|
2,732 |
|
|
Short-term investments |
351 |
|
|
330 |
|
|
Receivables, net |
836 |
|
|
650 |
|
|
Other current assets |
453 |
|
|
439 |
|
|
Total current assets |
3,842 |
|
|
4,151 |
|
|
Property and equipment, net |
553 |
|
|
550 |
|
|
Goodwill |
5,380 |
|
|
5,387 |
|
|
Acquisition-related intangibles, net |
735 |
|
|
962 |
|
|
Deferred income taxes, net |
2,443 |
|
|
2,243 |
|
|
Other assets |
517 |
|
|
507 |
|
|
TOTAL ASSETS |
13,470 |
|
|
13,800 |
|
|
|
|
|
|
||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
||
|
Current liabilities: |
|
|
|
||
|
Accounts payable |
62 |
|
|
101 |
|
|
Accrued and other current liabilities |
1,243 |
|
|
1,388 |
|
|
Deferred net revenue (online-enabled games) |
1,808 |
|
|
2,024 |
|
|
Total current liabilities |
3,113 |
|
|
3,513 |
|
|
Senior notes, net |
1,879 |
|
|
1,878 |
|
|
Income tax obligations |
525 |
|
|
386 |
|
|
Deferred income taxes, net |
1 |
|
|
1 |
|
|
Other liabilities |
401 |
|
|
397 |
|
|
Total liabilities |
5,919 |
|
|
6,175 |
|
|
|
|
|
|
||
|
Stockholders’ equity: |
|
|
|
||
|
Common stock |
3 |
|
|
3 |
|
|
Retained earnings |
7,585 |
|
|
7,607 |
|
|
Accumulated other comprehensive income (loss) |
(37 |
) |
|
15 |
|
|
Total stockholders’ equity |
7,551 |
|
|
7,625 |
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
13,470 |
|
|
13,800 |
|
|
2 |
|
Derived from audited consolidated financial statements. |
|
ELECTRONIC ARTS INC. AND SUBSIDIARIES |
|||||||||||
|
Unaudited Condensed Consolidated Statements of Cash Flows |
|||||||||||
|
(in $ millions) |
|||||||||||
|
|
|
|
|
|
|
|
|
||||
|
|
Three Months Ended December 31, |
|
Nine Months Ended December 31, |
||||||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||
|
OPERATING ACTIVITIES |
|
|
|
|
|
|
|
||||
|
Net income |
204 |
|
|
66 |
|
|
814 |
|
|
564 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
||||
|
Depreciation, amortization, accretion and impairment |
122 |
|
|
146 |
|
|
363 |
|
|
345 |
|
|
Stock-based compensation |
141 |
|
|
129 |
|
|
406 |
|
|
403 |
|
|
Change in assets and liabilities |
|
|
|
|
|
|
|
||||
|
Receivables, net |
90 |
|
|
56 |
|
|
(186 |
) |
|
(390 |
) |
|
Other assets |
(28 |
) |
|
(24 |
) |
|
(53 |
) |
|
(75 |
) |
|
Accounts payable |
(74 |
) |
|
(51 |
) |
|
(21 |
) |
|
(9 |
) |
|
Accrued and other liabilities |
297 |
|
|
433 |
|
|
28 |
|
|
183 |
|
|
Deferred income taxes, net |
(47 |
) |
|
— |
|
|
(203 |
) |
|
(140 |
) |
|
Deferred net revenue (online-enabled games) |
418 |
|
|
779 |
|
|
(215 |
) |
|
574 |
|
|
Net cash provided by operating activities |
1,123 |
|
|
1,534 |
|
|
933 |
|
|
1,455 |
|
|
|
|
|
|
|
|
|
|
||||
|
INVESTING ACTIVITIES |
|
|
|
|
|
|
|
||||
|
Capital expenditures |
(48 |
) |
|
(48 |
) |
|
(160 |
) |
|
(135 |
) |
|
Proceeds from maturities and sales of short-term investments |
77 |
|
|
65 |
|
|
243 |
|
|
1,193 |
|
|
Purchase of short-term investments |
(90 |
) |
|
(69 |
) |
|
(263 |
) |
|
(438 |
) |
|
Acquisitions, net of cash acquired |
— |
|
|
3 |
|
|
— |
|
|
(3,391 |
) |
|
Net cash used in investing activities |
(61 |
) |
|
(49 |
) |
|
(180 |
) |
|
(2,771 |
) |
|
|
|
|
|
|
|
|
|
||||
|
FINANCING ACTIVITIES |
|
|
|
|
|
|
|
||||
|
Proceeds from issuance of common stock |
3 |
|
|
3 |
|
|
47 |
|
|
44 |
|
|
Cash dividends paid |
(52 |
) |
|
(48 |
) |
|
(158 |
) |
|
(145 |
) |
|
Cash paid to taxing authorities for shares withheld from employees |
(44 |
) |
|
(72 |
) |
|
(161 |
) |
|
(193 |
) |
|
Repurchase and retirement of common stock |
(325 |
) |
|
(325 |
) |
|
(970 |
) |
|
(975 |
) |
|
Net cash used in financing activities |
(418 |
) |
|
(442 |
) |
|
(1,242 |
) |
|
(1,269 |
) |
|
|
|
|
|
|
|
|
|
||||
|
Effect of foreign exchange on cash and cash equivalents |
19 |
|
|
(3 |
) |
|
(41 |
) |
|
(5 |
) |
|
Change in cash and cash equivalents |
663 |
|
|
1,040 |
|
|
(530 |
) |
|
(2,590 |
) |
|
Beginning cash and cash equivalents |
1,539 |
|
|
1,630 |
|
|
2,732 |
|
|
5,260 |
|
|
Ending cash and cash equivalents |
2,202 |
|
|
2,670 |
|
|
2,202 |
|
|
2,670 |
|
|
ELECTRONIC ARTS INC. AND SUBSIDIARIES |
|||||||||||||||||
|
Unaudited Supplemental Financial Information and Business Metrics |
|||||||||||||||||
|
(in $ millions, except per share data) |
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Q3 |
|
Q4 |
|
Q1 |
|
Q2 |
|
Q3 |
|
YOY {797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
||||||
|
|
FY22 |
|
FY22 |
|
FY23 |
|
FY23 |
|
FY23 |
|
Change |
||||||
|
Net revenue |
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Net revenue |
1,789 |
|
|
1,825 |
|
|
1,767 |
|
|
1,904 |
|
|
1,881 |
|
|
5 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
GAAP-based financial data |
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Change in deferred net revenue (online-enabled games)1 |
788 |
|
|
(74 |
) |
|
(468 |
) |
|
(150 |
) |
|
461 |
|
|
|
|
|
Gross profit |
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Gross profit |
1,158 |
|
|
1,406 |
|
|
1,453 |
|
|
1,442 |
|
|
1,313 |
|
|
13 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
Gross profit (as a {797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} of net revenue) |
65 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
77 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
82 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
76 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
70 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
|
|
|
GAAP-based financial data |
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Acquisition-related expenses |
44 |
|
|
45 |
|
|
30 |
|
|
39 |
|
|
26 |
|
|
|
|
|
Change in deferred net revenue (online-enabled games)1 |
788 |
|
|
(74 |
) |
|
(468 |
) |
|
(150 |
) |
|
461 |
|
|
|
|
|
Stock-based compensation |
1 |
|
|
2 |
|
|
2 |
|
|
1 |
|
|
2 |
|
|
|
|
|
Operating income |
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Operating income |
102 |
|
|
365 |
|
|
441 |
|
|
427 |
|
|
289 |
|
|
183 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
Operating income (as a {797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} of net revenue) |
6 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
20 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
25 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
22 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
15 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
|
|
|
GAAP-based financial data |
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Acquisition-related expenses |
105 |
|
|
97 |
|
|
69 |
|
|
82 |
|
|
76 |
|
|
|
|
|
Change in deferred net revenue (online-enabled games)1 |
788 |
|
|
(74 |
) |
|
(468 |
) |
|
(150 |
) |
|
461 |
|
|
|
|
|
Stock-based compensation |
129 |
|
|
125 |
|
|
125 |
|
|
140 |
|
|
141 |
|
|
|
|
|
Net income |
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Net income |
66 |
|
|
225 |
|
|
311 |
|
|
299 |
|
|
204 |
|
|
209 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
Net income (as a {797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} of net revenue) |
4 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
12 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
18 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
16 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
11 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
|
|
|
GAAP-based financial data |
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Acquisition-related expenses |
105 |
|
|
97 |
|
|
69 |
|
|
82 |
|
|
76 |
|
|
|
|
|
Change in deferred net revenue (online-enabled games)1 |
788 |
|
|
(74 |
) |
|
(468 |
) |
|
(150 |
) |
|
461 |
|
|
|
|
|
Stock-based compensation |
129 |
|
|
125 |
|
|
125 |
|
|
140 |
|
|
141 |
|
|
|
|
|
Tax rate used for management reporting |
18 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
18 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
19 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
19 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
19 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
|
|
|
Diluted earnings per share |
0.23 |
|
|
0.80 |
|
|
1.11 |
|
|
1.07 |
|
|
0.73 |
|
|
217 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
Number of shares used in computation |
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Basic |
283 |
|
|
281 |
|
|
279 |
|
|
278 |
|
|
276 |
|
|
|
|
|
Diluted |
285 |
|
|
283 |
|
|
281 |
|
|
279 |
|
|
278 |
|
|
|
|
|
1 |
|
The 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) |
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Q3 |
|
Q4 |
|
Q1 |
|
Q2 |
|
Q3 |
|
YOY {797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
||||||
|
|
FY22 |
|
FY22 |
|
FY23 |
|
FY23 |
|
FY23 |
|
Change |
||||||
|
QUARTERLY NET REVENUE PRESENTATIONS |
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Net revenue by composition |
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Full game downloads |
400 |
|
|
312 |
|
|
237 |
|
|
328 |
|
|
423 |
|
|
6 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
Packaged goods |
216 |
|
|
126 |
|
|
104 |
|
|
274 |
|
|
199 |
|
|
(8 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b}) |
|
Full game |
616 |
|
|
438 |
|
|
341 |
|
|
602 |
|
|
622 |
|
|
1 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
Live services and other |
1,173 |
|
|
1,387 |
|
|
1,426 |
|
|
1,302 |
|
|
1,259 |
|
|
7 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
Total net revenue |
1,789 |
|
|
1,825 |
|
|
1,767 |
|
|
1,904 |
|
|
1,881 |
|
|
5 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
Full game |
34 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
24 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
19 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
32 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
33 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
|
|
|
Live services and other |
66 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
76 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
81 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
68 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
67 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
|
|
|
Total net revenue {797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
100 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
100 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
100 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
100 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
100 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
|
|
|
GAAP-based financial data |
|
|
|
|
|
|
|||||||||||
|
Full game downloads |
179 |
|
|
(103 |
) |
|
(111 |
) |
|
17 |
|
|
45 |
|
|
|
|
|
Packaged goods |
105 |
|
|
(68 |
) |
|
(65 |
) |
|
16 |
|
|
20 |
|
|
|
|
|
Full game |
284 |
|
|
(171 |
) |
|
(176 |
) |
|
33 |
|
|
65 |
|
|
|
|
|
Live services and other |
504 |
|
|
97 |
|
|
(292 |
) |
|
(183 |
) |
|
396 |
|
|
|
|
|
Total change in deferred net revenue (online-enabled games) by composition1 |
788 |
|
|
(74 |
) |
|
(468 |
) |
|
(150 |
) |
|
461 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Net revenue by platform |
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Console |
1,138 |
|
|
1,092 |
|
|
1,042 |
|
|
1,161 |
|
|
1,152 |
|
|
1 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
PC & Other |
374 |
|
|
420 |
|
|
402 |
|
|
423 |
|
|
435 |
|
|
16 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
Mobile |
277 |
|
|
313 |
|
|
323 |
|
|
320 |
|
|
294 |
|
|
6 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
Total net revenue |
1,789 |
|
|
1,825 |
|
|
1,767 |
|
|
1,904 |
|
|
1,881 |
|
|
5 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
GAAP-based financial data |
|
|
|
|
|
|
|||||||||||
|
Console |
608 |
|
|
(86 |
) |
|
(405 |
) |
|
(134 |
) |
|
423 |
|
|
|
|
|
PC & Other |
137 |
|
|
3 |
|
|
(54 |
) |
|
8 |
|
|
29 |
|
|
|
|
|
Mobile |
43 |
|
|
9 |
|
|
(9 |
) |
|
(24 |
) |
|
9 |
|
|
|
|
|
Total change in deferred net revenue (online-enabled games) by platform1 |
788 |
|
|
(74 |
) |
|
(468 |
) |
|
(150 |
) |
|
461 |
|
|
|
|
|
1 |
|
The 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) |
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Q3 |
|
Q4 |
|
Q1 |
|
Q2 |
|
Q3 |
|
YOY {797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
||||||
|
|
FY22 |
|
FY22 |
|
FY23 |
|
FY23 |
|
FY23 |
|
Change |
||||||
|
CASH FLOW DATA |
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Operating cash flow |
1,534 |
|
444 |
|
(78 |
) |
|
(112 |
) |
|
1,123 |
|
(27 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b}) |
|||
|
Operating cash flow – TTM |
1,826 |
|
|
1,899 |
|
|
1,964 |
|
|
1,788 |
|
|
1,377 |
|
|
(25 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b}) |
|
Capital expenditures |
48 |
|
|
53 |
|
|
59 |
|
|
53 |
|
|
48 |
|
|
— |
|
|
Capital expenditures – TTM |
166 |
|
|
188 |
|
|
203 |
|
|
213 |
|
|
213 |
|
|
28 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
Repurchase and retirement of common stock |
325 |
|
|
325 |
|
|
320 |
|
|
325 |
|
|
325 |
|
|
— |
|
|
Cash dividends paid |
48 |
|
|
48 |
|
|
53 |
|
|
53 |
|
|
52 |
|
|
8 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
DEPRECIATION |
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Depreciation expense |
41 |
|
|
42 |
|
|
44 |
|
|
45 |
|
|
46 |
|
|
12 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} |
|
BALANCE SHEET DATA |
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Cash and cash equivalents |
2,670 |
|
|
2,732 |
|
|
2,082 |
|
|
1,539 |
|
|
2,202 |
|
|
|
|
|
Short-term investments |
346 |
|
|
330 |
|
|
334 |
|
|
335 |
|
|
351 |
|
|
|
|
|
Cash and cash equivalents, and short-term investments |
3,016 |
|
|
3,062 |
|
|
2,416 |
|
|
1,874 |
|
|
2,553 |
|
|
(15 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b}) |
|
Receivables, net |
965 |
|
|
650 |
|
|
579 |
|
|
919 |
|
|
836 |
|
|
(13 |
{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b}) |
|
STOCK-BASED COMPENSATION |
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Cost of revenue |
1 |
|
|
2 |
|
|
2 |
|
|
1 |
|
|
2 |
|
|
|
|
|
Research and development |
86 |
|
|
84 |
|
|
81 |
|
|
95 |
|
|
95 |
|
|
|
|
|
Marketing and sales |
14 |
|
|
13 |
|
|
13 |
|
|
16 |
|
|
15 |
|
|
|
|
|
General and administrative |
28 |
|
|
26 |
|
|
29 |
|
|
28 |
|
|
29 |
|
|
|
|
|
Total stock-based compensation |
129 |
|
|
125 |
|
|
125 |
|
|
140 |
|
|
141 |
|
|
|
|
Category: Company News
