EA SPORTS FCTM Momentum Continues, Driving Record Live Services Net Bookings

REDWOOD CITY, CA – January 30, 2024 – Electronic Arts Inc. (NASDAQ: EA) today announced preliminary financial results for its third quarter ended December 31, 2023.

“Our incredible teams delivered a strong Q3, entertaining hundreds of millions of people across our portfolio, driving deep engagement and record live services,” said Andrew Wilson, CEO of EA. “We remain focused on growing our biggest franchises and delivering new, innovative games and experiences for our global communities.”

“EA SPORTS FC outperformed expectations again this quarter, delivering 7% year-over-year net bookings growth, as momentum continued through the FC brand transition,” said Stuart Canfield, CFO of EA. “We will continue to build upon the strength within our portfolio, while prioritizing investments in our largest opportunities for multi-year growth.”

Selected Operating Highlights and Metrics1

•Net bookings2 for Q3 was $2.366 billion, up 1% year-over-year (up 2% in constant currency).

•Live services and other net bookings for Q3 achieved a record $1.712 billion, up 3% year-over-year (up 5% in constant currency). On a trailing twelve-month basis, live services were 73% of our business.

•The EA SPORTS FCTM franchise outperformed Q3 expectations, delivering 7% net bookings growth against a prior year that included the World Cup.

•EA SPORTSTM Madden NFL delivered net bookings growth of 5% year-over-year.

•Net revenue was $1.945 billion for the quarter.

•Net cash provided by operating activities for the quarter was $1.264 billion, up 13% year-over-year. For the trailing twelve months, net cash provided by operating activities was a record $2.352 billion.

•EA repurchased 2.5 million shares for $325 million during the quarter, bringing the total for the trailing twelve months to 10.4 million shares for $1.300 billion.

EA has declared a quarterly cash dividend of $0.19 per share of the Company’s common stock. The dividend is payable on March 20, 2024 to shareholders of record as of the close of business on February 28, 2024.

The following GAAP-based financial data3 and tax rate of 19% was used internally by company management to adjust its GAAP results in order to assess EA’s operating results:

The following GAAP-based financial data3 and a tax rate of 19% was used internally by company management to adjust its GAAP results in order to assess EA’s operating results.

The following is a calculation of our total net bookings2 for the periods presented:

•Net revenue is expected to be approximately $1.625 billion to $1.925 billion.

◦No change in deferred net revenue (online-enabled games) is expected.

•Net income is expected to be approximately $54 million to $183 million.

•Diluted earnings per share is expected to be approximately $0.20 to $0.68.

•The Company estimates a share count of 271 million for purposes of calculating diluted earnings per share.

•Net bookings2 is expected to be approximately $1.625 billion to $1.925 billion.

** Subsequent to December 31, 2023, we impaired certain acquisition-related intangible assets totaling approximately $70 million that will be recorded in the fourth quarter of fiscal year 2024.

•Net revenue is expected to be approximately $7.408 billion to $7.708 billion.

◦Change in deferred net revenue (online-enabled games) is expected to be approximately ($19) million.

•Net income is expected to be approximately $1.145 billion to $1.274 billion.

•Diluted earnings per share is expected to be approximately $4.21 to $4.68.

•Operating cash flow is expected to be approximately $1.950 billion to $2.100 billion.

•The Company estimates a share count of 272 million for purposes of calculating diluted earnings per share.

•Net bookings2 is expected to be approximately $7.389 billion to $7.689 billion.

** Includes Q4 impairment of acquisition-related intangible assets as per previous table.

Electronic Arts will host a conference call on January 30, 2024 at 2:00 pm PT (5:00 pm ET) to review its results for the third quarter ended December 31, 2023 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 14, 2024 at (800) 770-2030 (domestic) or (647) 362-9199 (international) using conference code 5939891. An audio webcast replay of the conference call will be available for one year on EA’s IR Website.

Some statements set forth in this release, including the information relating to EA’s expectations under the heading “Business Outlook as of January 30, 2024” 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, 2023.

These forward-looking statements are current as of January 30, 2024. 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, 2023. 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, 2023.

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 2023, EA posted GAAP net revenue of approximately $7.4 billion. Headquartered in Redwood City, California, EA is recognized for a portfolio of critically acclaimed, high-quality brands such as EA SPORTS FC™, Battlefield™, Apex Legends™, The Sims™, EA SPORTS Madden NFL, Need for Speed™, Titanfall™, Plants vs. Zombies™ and EA SPORTS F1®. More information about EA is available at www.ea.com/news.

EA, EA SPORTS, EA SPORTS FC, Battlefield, Need for Speed, Apex Legends, The Sims, Titanfall, and Plants vs. Zombies are trademarks of Electronic Arts Inc. John Madden, NFL, FIFA and F1 are the property of their respective owners and used with permission.

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1 For more information on constant currency, please refer to the earnings slides available on EA’s IR Website.

2 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.

3 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, 2023.

    

The following table reports the variance of the actuals versus our guidance provided on November 1, 2023 for the three months ended December 31, 2023 plus a comparison to the actuals for the three months ended December 31, 2022.

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.

2Derived from audited consolidated financial statements.

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.

3 Diluted earnings per share reflects the potential dilution from common shares (calculated using the treasury stock method), issuable through stock-based compensation plans. When the company incurs a loss, shares issuable though stock-based compensation plans are excluded from the diluted loss per share calculation as inclusion would be anti-dilutive.

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.