Market Overview

Electronic Arts Reports Q1 FY19 Financial Results

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Electronic
Arts Inc
. (NASDAQ:EA) today announced preliminary financial results
for its first fiscal quarter ended June 30, 2018.

"Across new games, new platforms and new geographies, we connected more
players around the world to more great entertainment in our first
quarter of FY19," said CEO Andrew Wilson. "We are striving to pioneer
and lead for our players, with new EA SPORTS games and content on every
platform, a first-of-its-kind subscription in Origin Access Premier and
growing competitive gaming tournaments for FIFA and Madden NFL coming in
the months ahead. With every game, every service, and every experience,
we are taking steps toward our vision to connect a billion people in
play."

"We started the year strongly as we continued to deliver on our growth
strategies with a focus on new genres, new geographies and building
engaging live services across our portfolio to drive recurring revenue,"
said COO and CFO Blake Jorgensen. "We have a strong slate of products to
launch through the rest of the fiscal year, great content coming in our
live services, and are continuing to grow our esports competitions."

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 $3.550
    billion, up 13% year-over-year and represents 69% of total net
    bookings.
  • The FIFA World Cup content update had more than 15 million unique
    players during the quarter.
  • Launched FIFA Mobile in China this quarter, reaching #1 on the top
    downloads chart for iOS in China and showing best-in-class engagement
    on the WeChat platform.
  • Launched FIFA Online 4 in Asia during the quarter.
  • More than 20 million players participated in the current season of
    FIFA competitive gaming and had 80% more average viewers over last
    season.
  • The Sims™ 4 player base grew 35% year-over-year.
  • EA received more than 60 awards at E3 this year, including "Best of"
    awards from the E3 Game Critics for Anthem™, Battlefield™ V, and FIFA
    19.

* 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, for periods after the fourth
quarter of fiscal 2018, mobile platform fees.

Selected Financial Highlights and Metrics

All financial measures are presented on a GAAP basis.

  • Net cash provided by operating activities was $120 million for the
    quarter and $1.636 billion for the trailing twelve months.
  • EA repurchased 2.3 million shares for $300 million during the quarter
    and 6.2 million shares for $751 million during the trailing twelve
    months.

Impact of Recently Adopted Accounting Standard

At the beginning of fiscal year 2019, April 1, 2018, EA adopted FASB ASU
2014-09 (Topic 606), Revenue from Contracts with Customers. Topic 606
significantly changes how EA recognizes and reports revenue and diluted
earnings per share; however, it does not materially impact net bookings,
EA's operational metric. For more information about the adoption of
Topic 606, including information with respect to mobile platform fees,
please refer to the Investor Accounting FAQ document posted on our IR
website. Financial data for periods prior to April 1, 2018 has not been
restated.

Quarterly Financial Highlights

   
Three Months Ended
June 30,
2018 2017
(in $ millions, except per share amounts)
Digital net revenue 957 879
Packaged goods and other net revenue 180 570
Total net revenue 1,137 1,449
 
Net income 293 644
Diluted earnings per share 0.95 2.06
 
Operating cash flow 120 176
 
Value of shares repurchased 300 150
Number of shares repurchased 2.3 1.4

While EA no longer reports certain non-GAAP financial measures, the
following GAAP-based financial data and tax rate of 18% was used
internally by company management to adjust its fiscal 2019 GAAP results
in order to assess EA's operating results:

Three Months Ended June 30, 2018
  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 1,137 - (339 ) (49 ) -
Cost of revenue 215 (1 ) -   (49 ) (1 )
Gross profit 922 1 (339 ) - 1
Total operating expenses 622 (6 ) -   -   (69 )
Operating income 300 7 (339 ) - 70
Interest and other income, net 19 -   -   -   -  
Income before provision for income taxes 319 7 (339 ) - 70
Number of shares used in computation:
Diluted 310

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, 2018.

TTM Financial Highlights

    TTM Ended
June 30,
2018     2017
(in $ millions)
Digital net revenue 3,528 3,064
Packaged goods and other net revenue 1,310 1,959
Total net revenue 4,838 5,023
 
Net income 692 * 1,171
 
Operating cash flow 1,636 1,872
 
Value of shares repurchased 751 529
Number of shares repurchased 6.2 6.0
 
*During the twelve months ended June 30, 2018, EA recognized $235
million of incremental income tax expense due to the application of
the Tax Cuts and Jobs Act.

While EA no longer reports certain non-GAAP financial measures, the
following GAAP-based financial data and tax rate of 18% in fiscal year
2019 and 21% in fiscal year 2018 was used internally by company
management to adjust its GAAP results in order to assess EA's operating
results:

TTM Ended June 30, 2018
  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 4,838 - 365 (49) -
Cost of revenue 1,338 (3) - (49) (3)
Gross profit 3,500 3 365 - 3
Total operating expenses 2,509 (14) - - (261)
Operating income 991 17 365 - 264
Interest and other income, net 28 - - - -
Income before provision for income taxes 1,019 17 365 - 264

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, 2018.

Operating Metric

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

  Three Months Ended   TTM Ended
June 30, June 30,
2018     2017   2018     2017
(in $ millions)
Total net revenue 1,137 1,449 4,838 5,023
Change in deferred net revenue (online-enabled games) (339 ) (674 ) 365 12
Mobile platform fees (49 ) -   (49 ) -
Net bookings 749   775   5,154   5,035

Business Outlook as of July 26, 2018

The following forward-looking statements reflect expectations as of July
26, 2018. 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 2019 Expectations – Ending March 31, 2019

Financial metrics:

  • Net revenue is expected to be approximately $5.600 billion.
    • Change in deferred net revenue (online-enabled games) is expected
      to be approximately $235 million.
    • Mobile platform fees are expected to be approximately $(285)
      million.
  • Net income is expected to be approximately $1.108 billion.
  • Diluted earnings per share is expected to be approximately $3.55.
  • Operating cash flow is expected to be approximately $1.825 billion.
  • The Company estimates a share count of 312 million for purposes of
    calculating fiscal year 2019 diluted earnings per share.

Operational metric:

  • Net bookings is expected to be approximately $5.550 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, 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)
Digital net revenue 4,150 - 185 (285) -
Packaged goods & other net revenue   1,450   -   50   -   -
Total net revenue     5,600   -   235   (285)   -
Cost of revenue 1,566 (5) - (285) (1)
Operating expense 2,784 (25) - - (329)
Income before provision for income taxes 1,250 30 235 - 330
Net income 1,108
Number of shares used in computation:
Diluted shares 312

Second Quarter Fiscal Year 2019 Expectations – Ending September 30,
2018

Financial metrics:

  • Net revenue is expected to be approximately $1.270 billion.
    • Change in deferred net revenue (online-enabled games) is expected
      to be approximately $(55) million.
    • Mobile platform fees are expected to be approximately $(55)
      million.
  • Net income is expected to be approximately $150 million.
  • Diluted earnings per share is expected to be approximately $0.48.
  • The Company estimates a share count of 312 million for purposes of
    calculating second quarter fiscal year 2019 diluted earnings per share.

Operational metric:

  • Net bookings is expected to be approximately $1.160 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 September 30, 2018
  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     1,270     -       (55 )       (55 )     -  
Cost of revenue 436 (1 ) - (55 ) -
Operating expense 674 (9 ) - - (85 )
Income before provision for income taxes 168 10 (55 ) - 85
Net income 150
Number of shares used in computation:
Diluted shares 312

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, 2018.

Conference Call and Supporting Documents

Electronic Arts will host a conference call on July 26, 2018 at 2:00 pm
PT (5:00 pm ET) to review its results for the first fiscal quarter ended
June 30, 2018 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 844-215-4106
(domestic) or 918-534-8313 (international), using the password "EA" 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 an Investor Accounting FAQ document
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
9, 2018 at 855-859-2056 (domestic) or 404-537-3406 (international) using
pin code 8686629. 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 2019 expectations under the heading "Business
Outlook as of July 26, 2018," and other information regarding EA's
fiscal 2019 expectations contain forward-looking statements that are
subject to change. Statements including words such as "anticipate,"
"believe," "estimate" or "expect" and statements in the future tense are
forward-looking statements. These forward-looking statements are
preliminary estimates and expectations based on current information and
are subject to business and economic risks and uncertainties that could
cause actual events or actual future results to differ materially from
the expectations set forth 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 titles; the Company's ability to develop and support digital
products and services, including managing online security and privacy;
the Company's ability to manage expenses; the competition in the
interactive entertainment industry; the effectiveness of the Company's
sales and marketing programs; timely development and release of
Electronic Arts' products; 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; and other factors described in the Company's Annual
Report on Form 10-K for the fiscal year ended March 31, 2018.

These forward-looking statements are current as of July 26, 2018.
Electronic Arts assumes no obligation and does not intend to update
these forward-looking statements. 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, 2018. 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, 2018.

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. EA has more than 300 million registered players
around the world.

In fiscal year 2018, EA posted GAAP net revenue of $5.15 billion.
Headquartered in Redwood City, California, EA is recognized for a
portfolio of critically acclaimed, high-quality brands such as The
Sims™, Madden NFL, EA SPORTS™ FIFA, Battlefield™, Need for Speed™,
Dragon Age™ and Plants vs. Zombies™. More information about EA is
available at www.ea.com/news.

EA SPORTS, Battlefield, The Sims, Need for Speed, Dragon Age, 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
June 30,

2018 1 2017
Net revenue
Product 202 828
Service and other 935 621
Total net revenue 1,137 1,449
Cost of revenue
Product 68 64
Service and other 147 90
Total cost of revenue 215 154
Gross profit 922 1,295
Operating expenses:
Research and development 362 325
Marketing and sales 140 121
General and administrative 114 105
Amortization of intangibles 6 1
Total operating expenses 622 552
Operating income 300 743
Interest and other income (expense), net 19 6
Income before provision for income taxes 319 749
Provision for income taxes 26 105
Net income 293 644
Earnings per share
Basic 0.96 2.08
Diluted 0.95 2.06
Number of shares used in computation
Basic 306 309
Diluted 310 313
 
1At the beginning of fiscal year 2019, April 1, 2018, EA
adopted FASB ASU 2014-09 (Topic 606), Revenue from Contracts with
Customers. Topic 606 significantly changes how EA recognizes and
reports revenue and diluted earnings per share. For more information
about the adoption of Topic 606, including information with respect
to mobile platform fees, please refer to the Investor Accounting FAQ
document posted on our IR website. Financial data for periods prior
to April 1, 2018 has not been restated.
 

Results (in $ millions, except per share data)

The following table reports the variance of the actuals versus our
guidance for the three months ended June 30, 2018 plus a comparison to
the actuals for the three months ended June 30, 2017.

 
  Three Months Ended June 30,  
2018 1     2018 1   2017
Guidance Variance Actuals Actuals
Net revenue
Net revenue 1,080 57 1,137 1,449
GAAP-based financial data
Change in deferred net revenue (online-enabled games) (300 ) (39 ) (339 ) (674 )
Mobile platform fees (60 ) 11 (49 )
Cost of revenue
Cost of revenue 226 (11 ) 215 154
GAAP-based financial data
Acquisition-related expenses (1 ) (1 )
Stock-based compensation (1 ) (1 ) (1 )
Mobile platform fees (60 ) 11 (49 )
Operating expenses
Operating expenses 634 (12 ) 622 552
GAAP-based financial data
Acquisition-related expenses (4 ) (2 ) (6 ) (1 )
Stock-based compensation (75 ) 6 (69 ) (47 )
Income before tax
Income before tax 220 99 319 749
GAAP-based financial data
Acquisition-related expenses 5 2 7 1
Change in deferred net revenue (online-enabled games) (300 ) (39 ) (339 ) (674 )
Mobile platform fees
Stock-based compensation 75 (5 ) 70 48
Tax rate used for management reporting 18 % 18 % 21 %
Earnings per share
Basic 0.65 0.31 0.96 2.08
Diluted 0.64 0.31 0.95 2.06
Number of shares
Basic 307 (1 ) 306 309
Diluted 311 (1 ) 310 313
 
1At the beginning of fiscal year 2019, April 1, 2018, EA
adopted FASB ASU 2014-09 (Topic 606), Revenue from Contracts with
Customers. Topic 606 significantly changes how EA recognizes and
reports revenue and diluted earnings per share. For more information
about the adoption of Topic 606, including information with respect
to mobile platform fees, please refer to the Investor Accounting FAQ
document posted on our IR website. Financial data for periods prior
to April 1, 2018 has not been restated.
 
 
ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Balance Sheets
(in $ millions)
   
June 30, 20181 March 31, 20182
ASSETS
Current assets:
Cash and cash equivalents 3,876 4,258
Short-term investments 1,095 1,073
Receivables, net of allowances of $4 and $165, respectively 371 385
Other current assets 282   288  
Total current assets 5,624 6,004
Property and equipment, net 440 453
Goodwill 1,886 1,883
Acquisition-related intangibles, net 107 71
Deferred income taxes, net 92 84
Other assets 98   89  
TOTAL ASSETS 8,247   8,584  
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable 47 48
Accrued and other current liabilities 765 821
Deferred net revenue (online-enabled games) 652   1,622  
Total current liabilities 1,464 2,491
Senior notes, net 993 992
Income tax obligations 276 250
Deferred income taxes, net 1 1
Other liabilities 253   255  
Total liabilities 2,987 3,989
 
Stockholders' equity:
Common stock 3 3
Additional paid-in capital 339 657
Retained earnings 4,944 4,062
Accumulated other comprehensive loss (26 ) (127 )
Total stockholders' equity 5,260   4,595  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 8,247   8,584  
 
1At the beginning of fiscal year 2019, April 1, 2018, EA
adopted FASB ASU 2014-09 (Topic 606) Revenue from Contracts with
Customers. EA's Q1 FY19 Unaudited Condensed Consolidated Balance
Sheet reflects the effect of the adoption as of April 1, 2018, which
had an impact on the following: receivables, net of allowances,
accrued and other current liabilities, deferred net revenue
(online-enabled games), deferred income taxes, net, retained
earnings and accumulated other comprehensive loss. Financial data
for periods prior to April 1, 2018 has not been restated.
 
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,

2018 2017
OPERATING ACTIVITIES
Net income 293 644
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation, amortization and accretion 38 31
Stock-based compensation 70 48
Change in assets and liabilities
Receivables, net 169 135
Other assets 48 80
Accounts payable 8 (44 )
Accrued and other liabilities (59 ) (116 )
Deferred income taxes, net (74 ) 55
Deferred net revenue (online-enabled games) (373 ) (657 )
Net cash provided by operating activities 120   176  
INVESTING ACTIVITIES
Capital expenditures (32 ) (33 )
Proceeds from maturities and sales of short-term investments 207 438
Purchase of short-term investments (228 ) (693 )
Acquisition, net of cash acquired (50 )  
Net cash used in investing activities (103 ) (288 )
FINANCING ACTIVITIES
Proceeds from issuance of common stock 1 30
Cash paid to taxing authorities for shares withheld from employees (89 ) (95 )
Repurchase and retirement of common stock (300 ) (150 )
Net cash used in financing activities (388 ) (215 )
Effect of foreign exchange on cash and cash equivalents (11 ) 10  
Decrease in cash and cash equivalents (382 ) (317 )
Beginning cash and cash equivalents 4,258   2,565  
Ending cash and cash equivalents 3,876   2,248  
 
 
ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Supplemental Financial Information and Business Metrics
(in $ millions, except per share data)
           
Q1 Q2 Q3 Q4 Q11 YOY %
FY18 FY18 FY18 FY18 FY19 Change
Net revenue
Net revenue 1,449 959 1,160 1,582 1,137 (22 %)
GAAP-based financial data
Change in deferred net revenue (online-enabled games)3 (674 ) 220 811 (327 ) (339 )
Mobile platform fees (49 )
Gross profit
Gross profit 1,295 570 659 1,349 922 (29 %)
GAAP-based financial data
Acquisition-related expenses 1 1 1
Change in deferred net revenue (online-enabled games)3 (674 ) 220 811 (327 ) (339 )
Mobile platform fees
Stock-based compensation 1 1 1 1
Gross profit (as a % of net revenue) 89 % 59 % 57 % 85 % 81 %
Operating income (loss)
Operating income (loss) 743 (41 ) (21 ) 753 300 (60 %)
GAAP-based financial data
Acquisition-related expenses 1 2 2 6 7
Change in deferred net revenue (online-enabled games)3 (674 ) 220 811 (327 ) (339 )
Stock-based compensation 48 62 63 69 70
Operating income (loss) (as a % of net revenue) 51 % (4 %) (2 %) 48 % 26 %
Net income (loss)
Net income (loss) 644 (22 ) (186 ) 607 293 (55 %)
GAAP-based financial data
Acquisition-related expenses 1 2 2 6 7
Change in deferred net revenue (online-enabled games)3 (674 ) 220 811 (327 ) (339 )
Stock-based compensation 48 62 63 69 70
Tax rate used for management reporting 21 % 21 % 21 % 21 % 18 %
Net income (loss) (as a % of net revenue) 44 % (2 %) (16 %) 38 % 26 %
Diluted earnings (loss) per share 2.06 (0.07 ) (0.60 ) 1.95 0.95 (54 %)
Number of diluted shares used in computation
Basic 309 309 308 307 306
Diluted 313 309 308 311 310
Anti-dilutive shares excluded for loss position4 3 3
 
1At the beginning of fiscal year 2019, April 1, 2018, EA
adopted FASB ASU 2014-09 (Topic 606), Revenue from Contracts with
Customers. Topic 606 significantly changes how EA recognizes and
reports revenue and diluted earnings per share. For more information
about the adoption of Topic 606, including information with respect
to mobile platform fees, please refer to the Investor Accounting FAQ
document posted on our IR website. Financial data for periods prior
to April 1, 2018 has not been restated.
 
3The 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 due to the impact of unrecognized
gains/losses on cash flow hedges.
 
4Diluted 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 through stock-based
compensation plans are excluded from the diluted loss per share
calculation as inclusion would be anti-dilutive.
 
 
ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Supplemental Financial Information and Business Metrics
(in $ millions)
           
Q1 Q2 Q3 Q4 Q11 YOY %
FY18 FY18 FY18 FY18 FY19 Change
QUARTERLY NET REVENUE PRESENTATIONS
Net revenue by composition
Full game downloads 209 123 143 232 116 (44 %)
Live services 501 408 476 698 610 22 %
Mobile 169   158   161   172   231   37 %
Total digital 879   689   780   1,102   957   9 %
Packaged goods and other 570   270   380   480   180   (68 %)
Total net revenue 1,449   959   1,160   1,582   1,137   (22 %)
Total digital 61 % 72 % 67 % 70 % 84 %
Packaged goods and other 39 % 28 % 33 % 30 % 16 %
Total net revenue % 100 % 100 % 100 % 100 % 100 %
GAAP-based financial data
Full game downloads (98 ) (4 ) 117 (39 ) (20 )
Live services (81 ) (98 ) 311 (19 ) (160 )
Mobile (19 ) (8 ) 22   4   (35 )
Total digital (198 ) (110 ) 450   (54 ) (215 )
Packaged goods and other (476 ) 330   361   (273 ) (124 )
Total change in deferred net revenue (online-enabled games) by
composition3
(674 ) 220   811   (327 ) (339 )
Mobile platform fees (49 )
 
Net revenue by platform
Console 1,034 595 810 1,196 705 (32 %)
PC/Browser 240 196 181 210 197 (18 %)
Mobile 171 162 166 173 233 36 %
Other 4   6   3   3   2   (50 %)
Total net revenue 1,449   959   1,160   1,582   1,137   (22 %)
GAAP-based financial data
Console (590 ) 258 710 (313 ) (288 )
PC/Browser (61 ) (30 ) 83 (20 ) (9 )
Mobile (20 ) (7 ) 21 5 (42 )
Other (3 ) (1 ) (3 ) 1    
Total change in deferred net revenue (online-enabled games) by
platform3
(674 ) 220   811   (327 ) (339 )
Mobile platform fees (49 )
 
1At the beginning of fiscal year 2019, April 1, 2018, EA
adopted FASB ASU 2014-09 (Topic 606), Revenue from Contracts with
Customers. Topic 606 significantly changes how EA recognizes and
reports revenue and diluted earnings per share. For more information
about the adoption of Topic 606, including information with respect
to mobile platform fees, please refer to the Investor Accounting FAQ
document posted on our IR website. Financial data for periods prior
to April 1, 2018 has not been restated.
 
3The 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 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)
           
Q1 Q2 Q3 Q4 Q1 YOY %
FY18 FY18 FY18 FY18 FY19 Change
CASH FLOW DATA
Operating cash flow 176 52 849 615 120 (32 %)
Operating cash flow - TTM 1,872 1,802 1,514 1,692 1,636 (13 %)
Capital expenditures 33 30 24 20 32 (3 %)
Capital expenditures - TTM 116 117 116 107 106 (9 %)
Repurchase and retirement of common stock 150 153 150 148 300 100 %
DEPRECIATION
Depreciation expense 29 30 30 31 30 3 %
BALANCE SHEET DATA
Cash and cash equivalents 2,248 2,067 2,566 4,258 3,876
Short-term investments 2,222   2,288   2,318   1,073   1,095  
Cash and cash equivalents, and short-term investments 4,470 4,355 4,884 5,331 4,971 11 %
Receivables, net 1 222 812 886 385 371 67 %
STOCK-BASED COMPENSATION
Cost of revenue 1 1 1 1
Research and development 28 36 38 44 47
Marketing and sales 7 9 8 8 7
General and administrative 12   16   17   16   15  
Total stock-based compensation 48   62   63   69   70  
 
1At the beginning of fiscal year 2019, April 1, 2018, EA
adopted FASB ASU 2014-09 (Topic 606) Revenue from Contracts with
Customers. EA's Q1 FY19 Unaudited Condensed Consolidated Balance
Sheet reflects the effect of the adoption as of April 1, 2018, which
had an impact on receivables, net of allowances. Financial data for
periods prior to April 1, 2018 has not been restated.

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