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| 8-K - FORM 8-K - ELECTRONIC ARTS INC. | ea-20200730.htm |
Exhibit 99.1
| Electronic Arts Reports Strong Q1 FY21 Financial Results |  | ||||||||||||||||||||||
REDWOOD CITY, CA – July 30, 2020 – Electronic Arts Inc. (NASDAQ: EA) today announced preliminary financial results for its first fiscal quarter ended June 30, 2020.
“This was an extraordinary quarter, and we’re deeply proud of everything our teams at Electronic Arts are doing for our players and communities,” said CEO Andrew Wilson. “We launched new games, deeply engaged players in our live services, and welcomed tens of millions of new players to our network. It was an unprecedented first quarter of growth in our business, and we will continue building on that strength with more innovative experiences, more groundbreaking content, and more ways to connect with friends and play great games throughout the year.”
“Player engagement through the first quarter was exceptionally high, and well above our forecast,” said COO and CFO Blake Jorgensen. “Our Stay Home, Play Together initiatives have been a strong tailwind for the business, as players look for safe and social entertainment in these difficult times. We are focused on delivering high quality titles for our players, combined with our incredible ongoing live services and increasing reach across platforms and geographies which should continue to expand our business over time.”
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
•Net bookings* for the trailing twelve months was $5.980 billion, up 17% year-over-year.
•Launched Command & Conquer™ Remastered and Burnout Paradise™ Remastered during the quarter.
•During the quarter, EA delivered over 30 new content updates, including two major game expansions, and more than 50 mobile updates.
•Launched nearly 30 titles on the Steam platform during the quarter.
•During the quarter, Apex LegendsTM launched Season 5 with engagement reaching its highest levels since Season 1.
•During the quarter, player acquisition for FIFA was up more than 100% year-over-year and up nearly 140% year-over-year in Madden NFL.
•Life to date, The Sims 4TM has more than 30 million players across all platforms; daily, weekly, and monthly active player totals reached record highs for a first quarter.
* 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.
Selected Financial Highlights and Metrics
•Net cash provided by operating activities was $378 million for the quarter and a record $2.017 billion for the trailing twelve months.
•EA repurchased approximately 747,000 shares for $78 million during the quarter, completing its $2.4 billion, two-year repurchase program.
Quarterly Financial Highlights
| Three Months Ended | |||||||||||
| June 30, | |||||||||||
| 2020 | 2019 | ||||||||||
| (in $ millions, except per share amounts) | |||||||||||
| Full game | 359 | 262 | |||||||||
| Live services and other | 1,100 | 947 | |||||||||
| Total net revenue | 1,459 | 1,209 | |||||||||
| Net income | 365 | 1,421* | |||||||||
| Diluted earnings per share | 1.25 | 4.75* | |||||||||
| Operating cash flow | 378 | 158 | |||||||||
| Value of shares repurchased | 78 | 305 | |||||||||
| Number of shares repurchased | 0.7 | 3.2 | |||||||||
____________________________
*Includes the impact of one-time tax benefits recognized during the fiscal quarter.
The following GAAP-based financial data and tax rate of 18% was used internally by company management to adjust its GAAP results in order to assess EA’s operating results:
| Three Months Ended June 30, 2020 | ||||||||||||||||||||
| 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 | 1,459 | — | (69) | — | ||||||||||||||||
| Cost of revenue | 288 | — | — | (1) | ||||||||||||||||
| Gross profit | 1,171 | — | (69) | 1 | ||||||||||||||||
| Total operating expenses | 700 | (5) | — | (101) | ||||||||||||||||
| Operating income | 471 | 5 | (69) | 102 | ||||||||||||||||
| Interest and other income, net | (3) | — | — | — | ||||||||||||||||
| Income before provision for (benefit from) income taxes | 468 | 5 | (69) | 102 | ||||||||||||||||
| Number of shares used in computation: | ||||||||||||||||||||
| Diluted | 292 | |||||||||||||||||||
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, 2020.
Financial Highlights for the Trailing Twelve Months
| Twelve Months Ended | |||||||||||
| June 30, | |||||||||||
| 2020 | 2019 | ||||||||||
| (in $ millions) | |||||||||||
| Full game | 1,984 | 1,784 | |||||||||
| Live services and other | 3,803 | 3,238 | |||||||||
| Total net revenue | 5,787 | 5,022 | |||||||||
| Net income | 1,983* | 2,147* | |||||||||
| Operating cash flow | 2,017 | 1,585 | |||||||||
| Value of shares repurchased | 980 | 1,197 | |||||||||
| Number of shares repurchased | 9.8 | 11.9 | |||||||||
*Includes the impact of one-time tax benefits recognized during the trailing twelve months.
The following GAAP-based financial data and tax rate of 18% was used internally by company management to adjust its GAAP results in order to assess EA’s operating results:
| Twelve Months Ended June 30, 2020 | ||||||||||||||||||||||||||
| 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 | 5,787 | — | 193 | — | ||||||||||||||||||||||
| Cost of revenue | 1,470 | (10) | — | (4) | ||||||||||||||||||||||
| Gross profit | 4,317 | 10 | 193 | 4 | ||||||||||||||||||||||
| Total operating expenses | 2,816 | (26) | — | (372) | ||||||||||||||||||||||
| Operating income | 1,501 | 36 | 193 | 376 | ||||||||||||||||||||||
| Interest and other income, net | 39 | — | — | — | ||||||||||||||||||||||
| Income before provision for income taxes | 1,540 | 36 | 193 | 376 | ||||||||||||||||||||||
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, 2020.
Operating Metric
The following is a calculation of our total net bookings for the periods presented:
| Three Months Ended June 30, | Twelve Months Ended June 30, | ||||||||||||||||||||||
| 2020 | 2019* | 2020* | 2019* | ||||||||||||||||||||
| (in $ millions) | |||||||||||||||||||||||
| Total net revenue | 1,459 | 1,209 | 5,787 | 5,022 | |||||||||||||||||||
| Change in deferred net revenue (online-enabled games) | (69) | (427) | 193 | 94 | |||||||||||||||||||
| Net bookings | 1,390 | 782 | 5,980 | 5,116 | |||||||||||||||||||
*At the beginning of FY21, EA changed the way in which it reports net bookings. Periods prior to the first quarter of FY21 have been recast for comparability to align with these changes. For more information, please see the Financial Reporting FAQ on our IR website.
Business Outlook as of July 30, 2020
The following forward-looking statements reflect expectations as of July 30, 2020. 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 2021 Expectations – Ending March 31, 2021
Financial metrics:
•Net revenue is expected to be approximately $5.625 billion.
◦Change in deferred net revenue (online-enabled games) is expected to be approximately $325 million.
•Net income is expected to be approximately $869 million.
•Diluted earnings per share is expected to be approximately $2.97.
•Operating cash flow is expected to be approximately $1.850 billion.
•The Company estimates a share count of 293 million for purposes of calculating fiscal year 2021 diluted earnings per share.
Operational metric:
•Net bookings is expected to be approximately $5.950 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, 2021 | |||||||||||||||||||||||
| GAAP-Based Financial Data | |||||||||||||||||||||||
| GAAP Guidance | Acquisition-related expenses | Change in deferred net revenue (online-enabled games) | Stock-based compensation | ||||||||||||||||||||
| (in $ millions) | |||||||||||||||||||||||
| Total net revenue | 5,625 | — | 325 | — | |||||||||||||||||||
| Cost of revenue | 1,483 | — | — | (1) | |||||||||||||||||||
| Operating expense | 3,024 | (20) | — | (444) | |||||||||||||||||||
| Income before provision for (benefit from) income taxes | 1,086 | 20 | 325 | 445 | |||||||||||||||||||
| Net income | 869 | ||||||||||||||||||||||
| Number of shares used in computation: | |||||||||||||||||||||||
| Diluted shares | 293 | ||||||||||||||||||||||
Second Quarter Fiscal Year 2021 Expectations – Ending September 30, 2020
Financial metrics:
•Net revenue is expected to be approximately $1.125 billion.
◦Change in deferred net revenue (online-enabled games) is expected to be approximately $(250) million.
•Net income is expected to be approximately $61 million.
•Diluted earnings per share is expected to be approximately $0.21.
•The Company estimates a share count of 293 million for purposes of calculating second quarter fiscal year 2021 diluted earnings per share. If the Company reports a net loss instead of net income, a basic share count for calculating earnings per share would be 289 million shares.
Operational metric:
•Net bookings is expected to be approximately $875 million.
As previously announced, Madden NFL 21 will launch on August 28, 2020 and FIFA 21 will launch on October 9, 2020, moving FIFA 21 out of the second fiscal quarter and into the beginning of the third fiscal quarter. These launch dates affect the original estimated phasing of net revenue and net bookings as well as the year-over-year quarterly comparison. Refer to the slide presentation on EA’s IR website for additional details.
In addition, the following outlook for GAAP-based financial data and a long-term tax rate of 18% are used internally by EA to adjust our GAAP expectations to assess EA’s operating results and plan for future periods:
| Three Months Ending September 30, 2020 | |||||||||||||||||||||||
| GAAP-Based Financial Data | |||||||||||||||||||||||
| GAAP Guidance | Acquisition-related expenses | Change in deferred net revenue (online-enabled games) | Stock-based compensation | ||||||||||||||||||||
| (in $ millions) | |||||||||||||||||||||||
| Total net revenue | 1,125 | — | (250) | — | |||||||||||||||||||
| Cost of revenue | 280 | — | — | — | |||||||||||||||||||
| Operating expense | 755 | (5) | — | (110) | |||||||||||||||||||
| Income (loss) before provision for (benefit from) income taxes | 83 | 5 | (250) | 110 | |||||||||||||||||||
| Net income (loss) | 61 | ||||||||||||||||||||||
| Number of shares used in computation: | |||||||||||||||||||||||
| Diluted shares | 293 | ||||||||||||||||||||||
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, 2020.
Conference Call and Supporting Documents
Electronic Arts will host a conference call on July 30, 2020 at 2:00 pm PT (5:00 pm ET) to review its results for the first fiscal quarter ended June 30, 2020 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) 324-3683 (domestic) or (509) 844-0959 (international), using the conference code 5955287 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 August 13, 2020 at 855-859-2056 (domestic) or 404-537-3406 (international) using pin code 5955287. 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 2021 expectations under the heading “Business Outlook as of July 30, 2020,” and other information regarding EA's fiscal 2021 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: the impact of the COVID-19 pandemic, sales of the Company’s products and services; the Company’s ability to develop and support digital products and services, including managing online security and privacy; outages of our products, services and technological infrastructure; the Company’s ability to manage expenses; the competition in the interactive entertainment industry; governmental regulations; the effectiveness of the Company’s sales and marketing programs; timely development and release of the Company’s products and services; the Company’s ability to realize the anticipated benefits of acquisitions; the consumer demand for, and the availability of an adequate supply of console hardware units; the Company’s ability to predict consumer preferences among competing platforms; the Company’s ability to develop and implement new technology; foreign currency exchange rate fluctuations; general economic conditions; changes in our tax rates or tax laws; and other factors described in Part I, Item 1A of Electronic Arts’ latest Annual Report on Form 10-K under the heading “Risk Factors”, as well as in other documents we have filed with the Securities and Exchange Commission.
These forward-looking statements are current as of July 30, 2020. Electronic Arts assumes no obligation to revise or update any forward-looking statement for any reason, except as required by law. In addition, the preliminary financial results set forth in this release are estimates based on information currently available to Electronic Arts.
While Electronic Arts believes these estimates are meaningful, they could differ from the actual amounts that Electronic Arts ultimately reports in its Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2020. Electronic Arts assumes no obligation and does not intend to update these estimates prior to filing its Form 10-Q for the fiscal quarter ended June 30, 2020.
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 2020, EA posted GAAP net revenue of $5.5 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, Command & Conquer, Burnout Paradise, Battlefield, Need for Speed, Apex Legends, The Sims and Plants vs. Zombies are trademarks of Electronic Arts Inc. John Madden, NFL and FIFA are the property of their respective owners and used with permission.
For additional information, please contact:
| Chris Evenden | John Reseburg | ||||
| Vice President, Investor Relations | Vice President, Corporate Communications | ||||
| 650-628-0255 | 650-628-3601 | ||||
| cevenden@ea.com | jreseburg@ea.com | ||||
| ELECTRONIC ARTS INC. AND SUBSIDIARIES | |||||||||||
| Unaudited Condensed Consolidated Statements of Operations | |||||||||||
| (in $ millions, except per share data) | |||||||||||
| Three Months Ended | |||||||||||
| June 30, | |||||||||||
| 2020 | 2019 | ||||||||||
| Net revenue | 1,459 | 1,209 | |||||||||
| Cost of revenue | 288 | 187 | |||||||||
| Gross profit | 1,171 | 1,022 | |||||||||
| Operating expenses: | |||||||||||
| Research and development | 438 | 381 | |||||||||
| Marketing and sales | 121 | 110 | |||||||||
| General and administrative | 136 | 110 | |||||||||
| Acquisition-related contingent consideration | — | 1 | |||||||||
| Amortization of intangibles | 5 | 5 | |||||||||
| Total operating expenses | 700 | 607 | |||||||||
| Operating income | 471 | 415 | |||||||||
| Interest and other income (expense), net | (3) | 21 | |||||||||
| Income before provision for (benefit from) income taxes | 468 | 436 | |||||||||
| Provision for (benefit from) income taxes | 103 | (985) | |||||||||
| Net income | 365 | 1,421 | |||||||||
| Earnings per share | |||||||||||
| Basic | 1.27 | 4.78 | |||||||||
| Diluted | 1.25 | 4.75 | |||||||||
| Number of shares used in computation | |||||||||||
| Basic | 288 | 297 | |||||||||
| Diluted | 292 | 299 | |||||||||
Results (in $ millions, except per share data)
The following table reports the variance of the actuals versus our guidance provided on May 5, 2020 for the three months ended June 30, 2020 plus a comparison to the actuals for the three months ended June 30, 2019.
| Three Months Ended June 30, | |||||||||||||||||||||||
| 2020 | 2020 | 2019 | |||||||||||||||||||||
| Guidance | Variance | Actuals | Actuals | ||||||||||||||||||||
| Net revenue | |||||||||||||||||||||||
| Net revenue | 1,220 | 239 | 1,459 | 1,209 | |||||||||||||||||||
| GAAP-based financial data | |||||||||||||||||||||||
Change in deferred net revenue (online-enabled games)1 | (220) | 151 | (69) | (427) | |||||||||||||||||||
| Cost of revenue | |||||||||||||||||||||||
| Cost of revenue | 210 | 78 | 288 | 187 | |||||||||||||||||||
| GAAP-based financial data | |||||||||||||||||||||||
| Acquisition-related expenses | — | — | — | (2) | |||||||||||||||||||
| Stock-based compensation | — | (1) | (1) | (1) | |||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| Operating expenses | 635 | 65 | 700 | 607 | |||||||||||||||||||
| GAAP-based financial data | |||||||||||||||||||||||
| Acquisition-related expenses | (5) | — | (5) | (6) | |||||||||||||||||||
| Stock-based compensation | (90) | (11) | (101) | (72) | |||||||||||||||||||
| Income before tax | |||||||||||||||||||||||
| Income before tax | 374 | 94 | 468 | 436 | |||||||||||||||||||
| GAAP-based financial data | |||||||||||||||||||||||
| Acquisition-related expenses | 5 | — | 5 | 8 | |||||||||||||||||||
Change in deferred net revenue (online-enabled games)1 | (220) | 151 | (69) | (427) | |||||||||||||||||||
| Stock-based compensation | 90 | 12 | 102 | 73 | |||||||||||||||||||
| Tax rate used for management reporting | 18 | % | 18 | % | 18 | % | |||||||||||||||||
| Earnings per share | |||||||||||||||||||||||
| Basic | 0.93 | 0.34 | 1.27 | 4.78 | |||||||||||||||||||
| Diluted | 0.93 | 0.32 | 1.25 | 4.75 | |||||||||||||||||||
| Number of shares | |||||||||||||||||||||||
| Basic | 289 | (1) | 288 | 297 | |||||||||||||||||||
| Diluted | 291 | 1 | 292 | 299 | |||||||||||||||||||
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.
In fiscal 2021, EA changed the way in which it reports net revenue. Periods prior to the first quarter of fiscal 2021 have been recast for comparability to align with these changes. For more information please see the Financial Reporting FAQ on our Investor Relations Website.
| ELECTRONIC ARTS INC. AND SUBSIDIARIES | |||||||||||
| Unaudited Condensed Consolidated Balance Sheets | |||||||||||
| (in $ millions) | |||||||||||
| June 30, 2020 | March 31, 20202 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | 4,013 | 3,768 | |||||||||
| Short-term investments | 1,947 | 1,967 | |||||||||
| Receivables, net | 507 | 461 | |||||||||
| Other current assets | 223 | 321 | |||||||||
| Total current assets | 6,690 | 6,517 | |||||||||
| Property and equipment, net | 450 | 449 | |||||||||
| Goodwill | 1,889 | 1,885 | |||||||||
| Acquisition-related intangibles, net | 48 | 53 | |||||||||
| Deferred income taxes, net | 1,894 | 1,903 | |||||||||
| Other assets | 313 | 305 | |||||||||
| TOTAL ASSETS | 11,284 | 11,112 | |||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | 51 | 68 | |||||||||
| Accrued and other current liabilities | 1,040 | 1,052 | |||||||||
| Deferred net revenue (online-enabled games) | 878 | 945 | |||||||||
| Senior notes, current, net | 599 | 599 | |||||||||
| Total current liabilities | 2,568 | 2,664 | |||||||||
| Senior notes, net | 397 | 397 | |||||||||
| Income tax obligations | 312 | 373 | |||||||||
| Deferred income taxes, net | 1 | 1 | |||||||||
| Other liabilities | 224 | 216 | |||||||||
| Total liabilities | 3,502 | 3,651 | |||||||||
| Stockholders’ equity: | |||||||||||
| Common stock | 3 | 3 | |||||||||
| Retained earnings | 7,831 | 7,508 | |||||||||
| Accumulated other comprehensive loss | (52) | (50) | |||||||||
| Total stockholders’ equity | 7,782 | 7,461 | |||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 11,284 | 11,112 | |||||||||
2Derived from audited consolidated financial statements.
| ELECTRONIC ARTS INC. AND SUBSIDIARIES | |||||||||||
| Unaudited Condensed Consolidated Statements of Cash Flows | |||||||||||
| (in $ millions) | |||||||||||
| Three Months Ended June 30, | |||||||||||
| 2020 | 2019 | ||||||||||
| OPERATING ACTIVITIES | |||||||||||
| Net income | 365 | 1,421 | |||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation, amortization and accretion | 37 | 37 | |||||||||
| Stock-based compensation | 102 | 73 | |||||||||
| Change in assets and liabilities | |||||||||||
| Receivables, net | (44) | 294 | |||||||||
| Other assets | 44 | 24 | |||||||||
| Accounts payable | (3) | (40) | |||||||||
| Accrued and other liabilities | (66) | (56) | |||||||||
| Deferred income taxes, net | 10 | (1,174) | |||||||||
| Deferred net revenue (online-enabled games) | (67) | (421) | |||||||||
| Net cash provided by operating activities | 378 | 158 | |||||||||
| INVESTING ACTIVITIES | |||||||||||
| Capital expenditures | (38) | (45) | |||||||||
| Proceeds from maturities and sales of short-term investments | 694 | 358 | |||||||||
| Purchase of short-term investments | (664) | (1,263) | |||||||||
| Net cash used in investing activities | (8) | (950) | |||||||||
| FINANCING ACTIVITIES | |||||||||||
| Proceeds from issuance of common stock | 3 | 3 | |||||||||
| Cash paid to taxing authorities for shares withheld from employees | (69) | (51) | |||||||||
| Repurchase and retirement of common stock | (78) | (305) | |||||||||
| Payment of contingent consideration | — | (32) | |||||||||
| Net cash used in financing activities | (144) | (385) | |||||||||
| Effect of foreign exchange on cash and cash equivalents | 19 | 2 | |||||||||
| Change in cash and cash equivalents | 245 | (1,175) | |||||||||
| Beginning cash and cash equivalents | 3,768 | 4,708 | |||||||||
| Ending cash and cash equivalents | 4,013 | 3,533 | |||||||||
| ELECTRONIC ARTS INC. AND SUBSIDIARIES | |||||||||||||||||||||||||||||||||||
| Unaudited Supplemental Financial Information and Business Metrics | |||||||||||||||||||||||||||||||||||
| (in $ millions, except per share data) | |||||||||||||||||||||||||||||||||||
| Q1 | Q2 | Q3 | Q4 | Q1 | YOY % | ||||||||||||||||||||||||||||||
| FY20 | FY20 | FY20 | FY20 | FY21 | Change | ||||||||||||||||||||||||||||||
| Net revenue | |||||||||||||||||||||||||||||||||||
| Net revenue | 1,209 | 1,348 | 1,593 | 1,387 | 1,459 | 21 | % | ||||||||||||||||||||||||||||
| GAAP-based financial data | |||||||||||||||||||||||||||||||||||
Change in deferred net revenue (online-enabled games)1 | (427) | (35) | 428 | (131) | (69) | ||||||||||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||||||||||||||
| Gross profit | 1,022 | 943 | 1,085 | 1,118 | 1,171 | 15 | % | ||||||||||||||||||||||||||||
| Gross profit (as a % of net revenue) | 85 | % | 70 | % | 68 | % | 81 | % | 80 | % | |||||||||||||||||||||||||
| GAAP-based financial data | |||||||||||||||||||||||||||||||||||
| Acquisition-related expenses | 2 | 2 | 5 | 3 | — | ||||||||||||||||||||||||||||||
Change in deferred net revenue (online-enabled games)1 | (427) | (35) | 428 | (131) | (69) | ||||||||||||||||||||||||||||||
| Stock-based compensation | 1 | 1 | 1 | 1 | 1 | ||||||||||||||||||||||||||||||
| Operating income | |||||||||||||||||||||||||||||||||||
| Operating income | 415 | 268 | 361 | 401 | 471 | 13 | % | ||||||||||||||||||||||||||||
| Operating income (as a % of net revenue) | 34 | % | 20 | % | 23 | % | 29 | % | 32 | % | |||||||||||||||||||||||||
| GAAP-based financial data | |||||||||||||||||||||||||||||||||||
| Acquisition-related expenses | 8 | 10 | 12 | 9 | 5 | ||||||||||||||||||||||||||||||
Change in deferred net revenue (online-enabled games)1 | (427) | (35) | 428 | (131) | (69) | ||||||||||||||||||||||||||||||
| Stock-based compensation | 73 | 92 | 91 | 91 | 102 | ||||||||||||||||||||||||||||||
| Net income | |||||||||||||||||||||||||||||||||||
| Net income | 1,421 | 854 | 346 | 418 | 365 | (74 | %) | ||||||||||||||||||||||||||||
| Net income (as a % of net revenue) | 118 | % | 63 | % | 22 | % | 30 | % | 25 | % | |||||||||||||||||||||||||
| GAAP-based financial data | |||||||||||||||||||||||||||||||||||
| Acquisition-related expenses | 8 | 10 | 12 | 9 | 5 | ||||||||||||||||||||||||||||||
Change in deferred net revenue (online-enabled games)1 | (427) | (35) | 428 | (131) | (69) | ||||||||||||||||||||||||||||||
| Stock-based compensation | 73 | 92 | 91 | 91 | 102 | ||||||||||||||||||||||||||||||
| Tax rate used for management reporting | 18 | % | 18 | % | 18 | % | 18 | % | 18 | % | |||||||||||||||||||||||||
| Diluted earnings per share | 4.75 | 2.89 | 1.18 | 1.43 | 1.25 | (74 | %) | ||||||||||||||||||||||||||||
| Number of diluted shares used in computation | |||||||||||||||||||||||||||||||||||
| Basic | 297 | 295 | 292 | 290 | 288 | ||||||||||||||||||||||||||||||
| Diluted | 299 | 296 | 294 | 292 | 292 | ||||||||||||||||||||||||||||||
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.
In fiscal 2021, EA changed the way in which it reports net revenue. Periods prior to the first quarter of fiscal 2021 have been recast for comparability to align with these changes. For more information please see the Financial Reporting FAQ on our Investor Relations Website.
| ELECTRONIC ARTS INC. AND SUBSIDIARIES | ||||||||||||||||||||||||||||||||||||||
| Unaudited Supplemental Financial Information and Business Metrics | ||||||||||||||||||||||||||||||||||||||
| (in $ millions) | ||||||||||||||||||||||||||||||||||||||
| Q1 | Q2 | Q3 | Q4 | Q1 | YOY % | |||||||||||||||||||||||||||||||||
| FY20 | FY20 | FY20 | FY20 | FY21 | Change | |||||||||||||||||||||||||||||||||
| QUARTERLY NET REVENUE PRESENTATIONS | ||||||||||||||||||||||||||||||||||||||
| Net revenue by composition | ||||||||||||||||||||||||||||||||||||||
| Full game downloads | 133 | 181 | 286 | 211 | 223 | 68 | % | |||||||||||||||||||||||||||||||
| Packaged goods | 129 | 399 | 403 | 145 | 136 | 5 | % | |||||||||||||||||||||||||||||||
| Full game | 262 | 580 | 689 | 356 | 359 | 37 | % | |||||||||||||||||||||||||||||||
| Live services and other | 947 | 768 | 904 | 1,031 | 1,100 | 16 | % | |||||||||||||||||||||||||||||||
| Total net revenue | 1,209 | 1,348 | 1,593 | 1,387 | 1,459 | 21 | % | |||||||||||||||||||||||||||||||
| Full game | 22 | % | 43 | % | 43 | % | 26 | % | 25 | % | ||||||||||||||||||||||||||||
| Live services and other | 78 | % | 57 | % | 57 | % | 74 | % | 75 | % | ||||||||||||||||||||||||||||
| Total net revenue % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||||||||||||||||||||
| GAAP-based financial data | ||||||||||||||||||||||||||||||||||||||
| Full game downloads | (57) | (5) | 31 | (21) | (5) | |||||||||||||||||||||||||||||||||
| Packaged goods | (110) | 62 | 60 | (67) | (67) | |||||||||||||||||||||||||||||||||
| Full game | (167) | 57 | 91 | (88) | (72) | |||||||||||||||||||||||||||||||||
| Live services and other | (260) | (92) | 337 | (43) | 3 | |||||||||||||||||||||||||||||||||
Total change in deferred net revenue (online-enabled games) by composition1 | (427) | (35) | 428 | (131) | (69) | |||||||||||||||||||||||||||||||||
| Net revenue by platform | ||||||||||||||||||||||||||||||||||||||
| Console | 760 | 923 | 1,163 | 928 | 932 | 23 | % | |||||||||||||||||||||||||||||||
| PC & Other | 253 | 248 | 261 | 274 | 325 | 28 | % | |||||||||||||||||||||||||||||||
| Mobile | 196 | 177 | 169 | 185 | 202 | 3 | % | |||||||||||||||||||||||||||||||
| Total net revenue | 1,209 | 1,348 | 1,593 | 1,387 | 1,459 | 21 | % | |||||||||||||||||||||||||||||||
| GAAP-based financial data | ||||||||||||||||||||||||||||||||||||||
| Console | (344) | 8 | 388 | (143) | (108) | |||||||||||||||||||||||||||||||||
| PC & Other | (58) | (32) | 24 | 7 | 15 | |||||||||||||||||||||||||||||||||
| Mobile | (25) | (11) | 16 | 5 | 24 | |||||||||||||||||||||||||||||||||
Total change in deferred net revenue (online-enabled games) by platform1 | (427) | (35) | 428 | (131) | (69) | |||||||||||||||||||||||||||||||||
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.
In fiscal 2021, EA changed the way in which it reports net revenue. Periods prior to the first quarter of fiscal 2021 have been recast for comparability to align with these changes. For more information please see the Financial Reporting FAQ on our Investor Relations Website.
| ELECTRONIC ARTS INC. AND SUBSIDIARIES | |||||||||||||||||||||||||||||||||||
| Unaudited Supplemental Financial Information and Business Metrics | |||||||||||||||||||||||||||||||||||
| (in $ millions) | |||||||||||||||||||||||||||||||||||
| Q1 | Q2 | Q3 | Q4 | Q1 | YOY % | ||||||||||||||||||||||||||||||
| FY20 | FY20 | FY20 | FY20 | FY21 | Change | ||||||||||||||||||||||||||||||
| CASH FLOW DATA | |||||||||||||||||||||||||||||||||||
| Operating cash flow | 158 | 37 | 1,104 | 498 | 378 | 139 | % | ||||||||||||||||||||||||||||
| Operating cash flow - TTM | 1,585 | 1,748 | 1,898 | 1,797 | 2,017 | 27 | % | ||||||||||||||||||||||||||||
| Capital expenditures | 45 | 27 | 28 | 40 | 38 | (16 | %) | ||||||||||||||||||||||||||||
| Capital expenditures - TTM | 132 | 128 | 135 | 140 | 133 | 1 | % | ||||||||||||||||||||||||||||
| Repurchase and retirement of common stock | 305 | 306 | 305 | 291 | 78 | (74 | %) | ||||||||||||||||||||||||||||
| DEPRECIATION | |||||||||||||||||||||||||||||||||||
| Depreciation expense | 30 | 30 | 29 | 31 | 31 | 3 | % | ||||||||||||||||||||||||||||
| BALANCE SHEET DATA | |||||||||||||||||||||||||||||||||||
| Cash and cash equivalents | 3,533 | 2,940 | 3,603 | 3,768 | 4,013 | ||||||||||||||||||||||||||||||
| Short-term investments | 1,654 | 1,943 | 1,999 | 1,967 | 1,947 | ||||||||||||||||||||||||||||||
| Cash and cash equivalents, and short-term investments | 5,187 | 4,883 | 5,602 | 5,735 | 5,960 | 15 | % | ||||||||||||||||||||||||||||
| Receivables, net | 329 | 856 | 798 | 461 | 507 | 54 | % | ||||||||||||||||||||||||||||
| STOCK-BASED COMPENSATION | |||||||||||||||||||||||||||||||||||
| Cost of revenue | 1 | 1 | 1 | 1 | 1 | ||||||||||||||||||||||||||||||
| Research and development | 49 | 61 | 60 | 59 | 66 | ||||||||||||||||||||||||||||||
| Marketing and sales | 7 | 10 | 10 | 10 | 11 | ||||||||||||||||||||||||||||||
| General and administrative | 16 | 20 | 20 | 21 | 24 | ||||||||||||||||||||||||||||||
| Total stock-based compensation | 73 | 92 | 91 | 91 | 102 | ||||||||||||||||||||||||||||||