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Electronic Arts Reports Q3 FY20 Financial Results

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Electronic Arts Inc. (NASDAQ:EA) today announced preliminary financial results for its third fiscal quarter ended December 31, 2019.

News and ongoing updates regarding EA and its games are available on EA's blog at www.ea.com/news.

"It was an excellent third quarter, with our new games and live services delighting more players around the world," said CEO Andrew Wilson. "Our amazing creative teams at Electronic Arts continue to deliver some of the most high-quality, innovative and engaging experiences and content to a growing global audience."

"Over the last twelve months, we have delivered record live services revenue, live services net bookings and operating cash flow," said COO and CFO Blake Jorgensen. "Our broad-based business model reduces our dependence on individual titles and enables us to deliver financial results for our shareholders by providing a constant stream of high-quality entertainment for our players. We expect live services to continue to drive growth in fiscal 2021 and for growth to accelerate in fiscal 2022, led by a new Battlefield."

Selected Operating Highlights and Metrics

  • Digital net bookings* for the trailing twelve months was $4.128 billion, up 15% year-over-year and now represents 77% of total net bookings.
  • During the quarter, EA launched Plants vs. Zombies: Battle for NeighborvilleTM, Need for SpeedTM Heat and Star Wars Jedi: Fallen OrderTM.
  • FIFA Ultimate TeamTM matches were up nearly 40% year-over-year from launch through Q3.
  • During the quarter, The SimsTM 4 surpassed 20 million unique players worldwide life-to-date.

* Net bookings is defined as the net amount of products and services sold digitally or sold-in physically in the period. Net bookings is calculated by adding total net revenue to the change in deferred net revenue for online-enabled games and mobile platform fees.

Selected Financial Highlights and Metrics

All financial measures are presented on a GAAP basis.

  • Net cash from operating activities was $1.104 billion for the quarter and a record $1.898 billion for the trailing twelve months.
  • EA repurchased 3.1 million shares for $305 million during the quarter, bringing the total for the last twelve months to 12.8 million shares for $1.217 billion.

Quarterly Financial Highlights

Three Months Ended
December 31,

2019

 

2018

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

1,124

908

Packaged goods and other net revenue

469

381

Total net revenue

1,593

1,289

 
Net income

346

262

Earnings per share

1.18

0.86

 
Operating cash flow

1,104

954

 
Value of shares repurchased

305

292

Number of shares repurchased

3.1

3.2

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 December 31, 2019
GAAP-Based Financial Data
(in $ millions) Statement of
Operations
Acquisition-
related
expenses
Change in
deferred net
revenue
(online-
enabled
games)
Mobile
platform fees
Stock-based
compensation
Total net revenue

1,593

-

 

428

(43

)

-

 

Cost of revenue

508

(5

)

-

(43

)

(1

)

Gross profit

1,085

5

 

428

-

 

1

 

Total operating expenses

724

(7

)

-

-

 

(90

)

Operating income

361

12

 

428

-

 

91

 

Interest and other income, net

13

-

 

-

-

 

-

 

Income before provision for income taxes

374

12

 

428

-

 

91

 

Number of shares used in computation:
Diluted

294

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

TTM Financial Highlights

Twelve Months Ended
December 31,

2019

 

2018

(in $ millions)
Digital net revenue

4,160

3,747

Packaged goods and other net revenue

1,228

1,547

Total net revenue

5,388

5,294

 
Net income 2,830*

1,417

 
Operating cash flow

1,898

1,563

 
Value of shares repurchased

1,217

1,039

Number of shares repurchased

12.8

9.0

 
*Includes the impact of one-time tax benefits recognized in the fiscal quarters ended June 30 and September 30, 2019.

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 December 31, 2019
GAAP-Based Financial Data
(in $ millions) Statement of
Operations
Acquisition-
related
expenses
Change in
deferred net
revenue
(online-
enabled
games)
Mobile
platform fees
Stock-based
compensation
Total net revenue

5,388

-

 

139

(165

)

-

 

Cost of revenue

1,376

(10

)

-

(165

)

(4

)

Gross profit

4,012

10

 

139

-

 

4

 

Total operating expenses

2,772

(37

)

-

-

 

(325

)

Operating income

1,240

47

 

139

-

 

329

 

Interest and other income, net

73

-

 

-

-

 

-

 

Income before provision for income taxes

1,313

47

 

139

-

 

329

 

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

Operating Metric

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

Three Months Ended TTM Ended
December 31, December 31,

2019

 

2018

 

2019

 

2018

(in $ millions)
Total net revenue

1,593

1,289

5,388

5,294

Change in deferred net revenue (online-enabled games)

428

368

139

(318)

Mobile platform fees

(43)

(48)

(165)

(141)

Net bookings

1,978

1,609

5,362

4,835

Business Outlook as of January 30, 2020

The following forward-looking statements reflect expectations as of January 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 2020 Expectations – Ending March 31, 2020

Financial metrics:

  • Net revenue is expected to be approximately $5.475 billion.
    • Change in deferred net revenue (online-enabled games) is expected to be approximately $(165) million.
    • Mobile platform fees are expected to be approximately $(160) million.
  • Net income is expected to be approximately $2.929 billion.
  • Diluted earnings per share is expected to be approximately $9.90.
  • Operating cash flow is expected to be approximately $1.725 billion.
  • The Company estimates a share count of 296 million for purposes of calculating fiscal year 2020 diluted earnings per share.

Operational metric:

  • Net bookings is expected to be approximately $5.150 billion.

In addition, the following outlook for GAAP-based financial data and a long-term tax rate of 18% are used internally by EA to adjust our GAAP expectations to assess EA's operating results and plan for future periods:

Twelve Months Ending March 31, 2020
GAAP-Based Financial Data
GAAP
Guidance
Acquisition-
related
expenses
Change in
deferred net
revenue
(online-
enabled
games)
Mobile
platform fees
Stock-based
compensation
(in $ millions)
Digital net revenue

4,255

-

 

(95

)

(160

)

-

 

Packaged goods & other net revenue

1,220

-

 

(70

)

-

 

-

 

Total net revenue

5,475

-

 

(165

)

(160

)

-

 

Cost of revenue

1,357

(12

)

-

 

(160

)

(3

)

Operating expense

2,730

(28

)

-

 

-

 

(347

)

Income before provision for income taxes

1,453

40

 

(165

)

-

 

350

 

Net income

2,929

Number of shares used in computation:
Diluted shares

296

Fourth Quarter Fiscal Year 2020 Expectations – Ending March 31, 2020

Financial metrics:

  • Net revenue is expected to be approximately $1.325 billion.
    • Change in deferred net revenue (online-enabled games) is expected to be approximately $(131) million.
    • Mobile platform fees are expected to be approximately $(42) million.
  • Net income is expected to be approximately $308 million.
  • Diluted earnings per share is expected to be approximately $1.05.
  • The Company estimates a share count of 293 million for purposes of calculating fourth quarter fiscal year 2020 diluted earnings per share.

Operational metric:

  • Net bookings is expected to be approximately $1.152 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 March 31, 2020
GAAP-Based Financial Data
GAAP
Guidance
Acquisition-
related
expenses
Change in
deferred net
revenue (online-
enabled games)
Mobile
platform
fees
Stock-based
compensation
(in $ millions)
Total net revenue

1,325

-

 

(131

)

(42

)

-

 

Cost of revenue

257

(3

)

-

 

(42

)

-

Operating expense

724

(7

)

-

 

-

(94

)

Income before provision for income taxes

359

10

 

(131

)

-

94

 

Net income

308

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-Q for the fiscal quarter ended September 30, 2019.

Conference Call and Supporting Documents

Electronic Arts will host a conference call on Thursday, January 30, 2020 at 2:00 pm PT (5:00 pm ET) to review its results for the fiscal third quarter ended December 31, 2019 and its outlook for the future. During the course of the call, Electronic Arts may disclose material developments affecting its business and/or financial performance. Listeners may access the conference call live through the following dial-in number (866) 393-4306 (domestic) or (734) 385-2616 (international), using the Conference ID 4098898 or via webcast at EA's IR Website at http://ir.ea.com.

EA has posted a slide presentation, a financial model of EA's historical results and guidance, and an Investor Accounting FAQ on EA's IR Website. After the conference call, 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 13, 2020 at (855) 859-2056 (domestic) or (404) 537-3406 (international) using pin code 4098898. An audio webcast replay of the conference call will be available for one year on EA's IR Website.

Forward-Looking Statements

Some statements set forth in this release, including the information relating to EA's fiscal 2020 expectations under the heading "Business Outlook as of January 30, 2020," and other information regarding EA's fiscal 2020, fiscal 2021 and fiscal 2022 expectations contain forward-looking statements that are subject to change. Statements including words such as "anticipate," "believe," "expect," "intend," "estimate," "plan," "predict," "seek," "goal," "will," "may," "likely," "should," "could" (and the negative of any of these terms), "future" and similar expressions also identify forward-looking statements. These forward-looking statements are not guarantees of future performance and reflect management's current expectations. Our actual results could differ materially from those discussed in the forward-looking statements.

Some of the factors which could cause the Company's results to differ materially from its expectations include the following: sales of the Company's products and services; the Company's ability to develop and support digital products and services, including managing online security and privacy; outages of our products, services and technological infrastructure; the Company's ability to manage expenses; the competition in the interactive entertainment industry; governmental regulations; the effectiveness of the Company's sales and marketing programs; timely development and release of the Company's products and services; the Company's ability to realize the anticipated benefits of acquisitions; the consumer demand for, and the availability of an adequate supply of console hardware units; the Company's ability to predict consumer preferences among competing platforms; the Company's ability to develop and implement new technology; foreign currency exchange rate fluctuations; general economic conditions; changes in our tax rates or tax laws; and other factors described in Part II, Item 1A of Electronic Arts' latest Quarterly Report on Form 10-Q under the heading "Risk Factors", as well as in other documents we have filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the fiscal year ended March 31, 2019.

These forward-looking statements are current as of January 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 December 31, 2019. Electronic Arts assumes no obligation and does not intend to update these estimates prior to filing its Form 10-Q for the fiscal quarter ended December 31, 2019.

About Electronic Arts

Electronic Arts (NASDAQ:EA) is a global leader in digital interactive entertainment. The Company develops and delivers games, content and online services for Internet-connected consoles, mobile devices and personal computers.

In fiscal year 2019, EA posted GAAP net revenue of $4.95 billion. Headquartered in Redwood City, California, EA is recognized for a portfolio of critically acclaimed, high-quality brands such as EA SPORTS™ FIFA, Battlefield™, Apex Legends™, The Sims™, Madden NFL, Need for Speed™, Titanfall™ and Plants vs. Zombies™. More information about EA is available at www.ea.com/news.

EA SPORTS, Battlefield, The Sims, Need for Speed, Apex Legends, Ultimate Team, Plants vs. Zombies and Plants vs. Zombies: Battle for Neighborville are trademarks of Electronic Arts Inc. STAR WARS © & TM 2019 Lucasfilm Ltd. All rights reserved. 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

December 31,

 

Nine Months Ended

December 31,

 

2019

 

2018

 

2019

2018

Net revenue

 

 

 

 

 

 

Product

701

 

552

 

1,435

 

1,377

Service and other

892

 

737

 

2,715

 

2,335

Total net revenue

1,593

 

1,289

 

4,150

 

3,712

Cost of revenue

 

 

 

 

 

 

Product

216

 

175

 

444

 

465

Service and other

292

 

238

 

656

 

581

Total cost of revenue

508

 

413

 

1,100

 

1,046

Gross profit

1,085

 

876

 

3,050

 

2,666

Operating expenses:

 

 

 

 

 

 

Research and development

389

 

334

 

1,157

 

1,035

Marketing and sales

202

 

187

 

464

 

473

General and administrative

126

 

106

 

364

 

337

Acquisition-related contingent consideration

2

 

1

 

5

 

3

Amortization of intangibles

5

 

6

 

16

 

18

Total operating expenses

724

 

634

 

2,006

 

1,866

Operating income

361

 

242

 

1,044

 

800

Interest and other income (expense), net

13

 

23

 

50

 

60

Income before provision for (benefit from) income taxes

374

 

265

 

1,094

 

860

Provision for (benefit from) income taxes

28

 

3

 

(1,527)

50

Net income

346

 

262

 

2,621

 

810

Earnings per share

 

 

 

 

 

 

Basic

1.18

 

0.87

 

8.91

 

2.66

Diluted

1.18

 

0.86

 

8.85

 

2.64

Number of shares used in computation

 

 

 

 

 

 

Basic

292

 

302

 

294

 

304

Diluted

294

 

304

 

296

 

307

Results (in $ millions, except per share data)

The following table reports the variance of the actuals versus our guidance provided on October 29, 2019 for the three months ended December 31, 2019 plus a comparison to the actuals for the three months ended December 31, 2018.

 

 

Three Months Ended December 31,

 

2019

 

 

 

2019

 

2018

 

Guidance

 

Variance

 

Actuals

 

Actuals

Net revenue

 

 

 

 

 

 

 

Net revenue

1,510

 

 

83

 

 

1,593

 

 

1,289

 

GAAP-based financial data

 

 

 

 

 

 

 

Change in deferred net revenue (online-enabled games)

470

 

 

(42

)

 

428

 

 

368

 

Mobile platform fees

(40

)

 

(3

)

 

(43

)

 

(48

)

Cost of revenue

 

 

 

 

 

 

 

Cost of revenue

482

 

 

26

 

 

508

 

 

413

 

GAAP-based financial data

 

 

 

 

 

 

 

Acquisition-related expenses

(6

)

 

1

 

 

(5

)

 

(1

)

Stock-based compensation

 

 

(1

)

 

(1

)

 

(1

)

Mobile platform fees

(40

)

 

(3

)

 

(43

)

 

(48

)

Operating expenses

 

 

 

 

 

 

 

Operating expenses

733

 

 

(9

)

 

724

 

 

634

 

GAAP-based financial data

 

 

 

 

 

 

 

Acquisition-related expenses

(5

)

 

(2

)

 

(7

)

 

(7

)

Stock-based compensation

(95

)

 

5

 

 

(90

)

 

(74

)

Income before tax

 

 

 

 

 

 

 

Income before tax

306

 

 

68

 

 

374

 

 

265

 

GAAP-based financial data

 

 

 

 

 

 

 

Acquisition-related expenses

11

 

 

1

 

 

12

 

 

8

 

Change in deferred net revenue (online-enabled games)

470

 

 

(42

)

 

428

 

 

368

 

Mobile platform fees

 

 

 

 

 

 

 

Stock-based compensation

95

 

 

(4

)

 

91

 

 

75

 

Tax rate used for management reporting

18

%

 

 

 

18

%

 

18

%

Earnings per share

 

 

 

 

 

 

 

Basic

0.93

 

 

0.25

 

 

1.18

 

 

0.87

 

Diluted

0.92

 

 

0.26

 

 

1.18

 

 

0.86

 

Number of shares

 

 

 

 

 

 

 

Basic

294

 

 

(2

)

 

292

 

 

302

 

Diluted

295

 

 

(1

)

 

294

 

 

304

 

ELECTRONIC ARTS INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated Balance Sheets

(in $ millions)

 

 

 

 

 

December 31, 2019

 

March 31, 20191

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

3,603

 

 

4,708

 

Short-term investments

1,999

 

 

737

 

Receivables, net

798

 

 

623

 

Other current assets

229

 

 

313

 

Total current assets

6,629

 

 

6,381

 

Property and equipment, net

439

 

 

448

 

Goodwill

1,892

 

 

1,892

 

Acquisition-related intangibles, net

62

 

 

87

 

Deferred income taxes, net

1,828

 

 

35

 

Other assets

311

 

 

114

 

TOTAL ASSETS

11,161

 

 

8,957

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

61

 

 

113

 

Accrued and other current liabilities

1,204

 

 

1,052

 

Deferred net revenue (online-enabled games)

1,073

 

 

1,100

 

Total current liabilities

2,338

 

 

2,265

 

Senior notes, net

995

 

 

994

 

Income tax obligations

352

 

 

233

 

Deferred income taxes, net

2

 

 

2

 

Other liabilities

237

 

 

132

 

Total liabilities

3,924

 

 

3,626

 

 

 

 

 

Stockholders' equity:

 

 

 

Common stock

3

 

 

3

 

Retained earnings

7,267

 

 

5,358

 

Accumulated other comprehensive loss

(33

)

 

(30

)

Total stockholders' equity

7,237

 

 

5,331

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

11,161

 

 

8,957

 

 

1Derived from audited consolidated financial statements.

ELECTRONIC ARTS INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Cash Flows

(in $ millions)

 

 

 

 

 

 

 

 

 

Three Months Ended

December 31,

 

Nine Months Ended

December 31,

 

2019

 

2018

 

2019

 

2018

OPERATING ACTIVITIES

 

 

 

 

 

 

 

Net income

346

 

 

262

 

 

2,621

 

 

810

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

Depreciation, amortization and accretion

39

 

 

34

 

 

111

 

 

108

 

Stock-based compensation

91

 

 

75

 

 

256

 

 

211

 

Change in assets and liabilities

 

 

 

 

 

 

 

Receivables, net

59

 

 

151

 

 

(176

)

 

(271

)

Other assets

43

 

 

21

 

 

76

 

 

41

 

Accounts payable

(84

)

 

(97

)

 

(33

)

 

35

 

Accrued and other liabilities

176

 

 

148

 

 

264

 

 

123

 

Deferred income taxes, net

7

 

 

5

 

 

(1,793

)

 

(89

)

Deferred net revenue (online-enabled games)

427

 

 

355

 

 

(27

)

 

(20

)

Net cash provided by operating activities

1,104

 

 

954

 

 

1,299

 

 

948

 

INVESTING ACTIVITIES

 

 

 

 

 

 

 

Capital expenditures

(28

)

 

(21

)

 

(100

)

 

(84

)

Proceeds from maturities and sales of short-term investments

582

 

 

509

 

 

1,375

 

 

955

 

Purchase of short-term investments

(637

)

 

(115

)

 

(2,621

)

 

(1,144

)

Acquisitions, net of cash acquired

 

 

 

 

 

 

(58

)

Net cash provided by (used in) investing activities

(83

)

 

373

 

 

(1,346

)

 

(331

)

FINANCING ACTIVITIES

 

 

 

 

 

 

 

Proceeds from issuance of common stock

1

 

 

 

 

34

 

 

36

 

Cash paid to taxing authorities for shares withheld from employees

(31

)

 

(20

)

 

(86

)

 

(116

)

Repurchase and retirement of common stock

(305

)

 

(292

)

 

(916

)

 

(891

)

Payment of contingent consideration

(26

)

 

 

 

(90

)

 

 

Net cash used in financing activities

(361

)

 

(312

)

 

(1,058

)

 

(971

)

Effect of foreign exchange on cash and cash equivalents

3

 

 

(9

)

 

 

 

(17

)

Change in cash and cash equivalents

663

 

 

1,006

 

 

(1,105

)

 

(371

)

Beginning cash and cash equivalents

2,940

 

 

2,881

 

 

4,708

 

 

4,258

 

Ending cash and cash equivalents

3,603

 

 

3,887

 

 

3,603

 

 

3,887

 

ELECTRONIC ARTS INC. AND SUBSIDIARIES

Unaudited Supplemental Financial Information and Business Metrics

(in $ millions, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

Q3

 

Q4

 

Q1

 

Q2

 

Q3

 

YOY %

 

FY19

 

FY19

 

FY20

 

FY20

 

FY20

 

Change

Net revenue

 

 

 

 

 

 

 

 

 

 

 

Net revenue

1,289

 

 

1,238

 

 

1,209

 

 

1,348

 

 

1,593

 

 

24

%

GAAP-based financial data

 

 

 

 

 

 

 

 

 

 

 

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

368

 

 

173

 

 

(427

)

 

(35

)

 

428

 

 

 

Mobile platform fees

(48

)

 

(47

)

 

(39

)

 

(36

)

 

(43

)

 

 

Gross profit

 

 

 

 

 

 

 

 

 

 

 

Gross profit

876

 

 

962

 

 

1,022

 

 

943

 

 

1,085

 

 

24

%

Gross profit (as a % of net revenue)

68

%

 

78

%

 

85

%

 

70

%

 

68

%

 

 

GAAP-based financial data

 

 

 

 

 

 

 

 

 

 

 

Acquisition-related expenses

1

 

 

1

 

 

2

 

 

2

 

 

5

 

 

 

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

368

 

 

173

 

 

(427

)

 

(35

)

 

428

 

 

 

Mobile platform fees

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

1

 

 

1

 

 

1

 

 

1

 

 

1

 

 

 

Operating income

 

 

 

 

 

 

 

 

 

 

 

Operating income

242

 

 

196

 

 

415

 

 

268

 

 

361

 

 

49

%

Operating income (as a % of net revenue)

19

%

 

16

%

 

34

%

 

20

%

 

23

%

 

 

GAAP-based financial data

 

 

 

 

 

 

 

 

 

 

 

Acquisition-related expenses

8

 

 

17

 

 

8

 

 

10

 

 

12

 

 

 

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

368

 

 

173

 

 

(427

)

 

(35

)

 

428

 

 

 

Stock-based compensation

75

 

 

73

 

 

73

 

 

92

 

 

91

 

 

 

Net income

 

 

 

 

 

 

 

 

 

 

 

Net income

262

 

 

209

 

 

1,421

 

 

854

 

 

346

 

 

32

%

Net income (as a % of net revenue)

20

%

 

17

%

 

118

%

 

63

%

 

22

%

 

 

GAAP-based financial data

 

 

 

 

 

 

 

 

 

 

 

Acquisition-related expenses

8

 

 

17

 

 

8

 

 

10

 

 

12

 

 

 

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

368

 

 

173

 

 

(427

)

 

(35

)

 

428

 

 

 

Stock-based compensation

75

 

 

73

 

 

73

 

 

92

 

 

91

 

 

 

Tax rate used for management reporting

18

%

 

18

%

 

18

%

 

18

%

 

18

%

 

 

Diluted earnings per share

0.86

 

 

0.69

 

 

4.75

 

 

2.89

 

 

1.18

 

 

37

%

Number of diluted shares used in computation

 

 

 

 

 

 

 

 

 

 

 

Basic

302

 

 

299

 

 

297

 

 

295

 

 

292

 

 

 

Diluted

304

 

 

301

 

 

299

 

 

296

 

 

294

 

 

 

2The change in deferred net revenue (online-enabled games) in the unaudited condensed consolidated statements of cash flows does not necessarily equal the change in deferred net revenue (online-enabled games) in the unaudited condensed consolidated statements of operations primarily due to the impact of unrecognized gains/losses on cash flow hedges.

ELECTRONIC ARTS INC. AND SUBSIDIARIES

Unaudited Supplemental Financial Information and Business Metrics

(in $ millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q3

 

Q4

 

Q1

 

Q2

 

Q3

 

YOY %

 

 

FY19

 

FY19

 

FY20

 

FY20

 

FY20

 

Change

QUARTERLY NET REVENUE PRESENTATIONS

 

 

 

 

 

 

 

 

 

 

 

 

Net revenue by composition

 

 

 

 

 

 

 

 

 

 

 

 

Full game downloads

 

247

 

 

169

 

 

132

 

 

180

 

 

286

 

 

16

%

Live services

 

480

 

 

714

 

 

731

 

 

573

 

 

677

 

 

41

%

Mobile3

 

181

 

 

182

 

 

186

 

 

169

 

 

161

 

 

(11

%)

Total digital

 

908

 

 

1,065

 

 

1,049

 

 

922

 

 

1,124

 

 

24

%

Packaged goods and other

 

381

 

 

173

 

 

160

 

 

426

 

 

469

 

 

23

%

Total net revenue

 

1,289

 

 

1,238

 

 

1,209

 

 

1,348

 

 

1,593

 

 

24

%

Total digital

 

70

%

 

86

%

 

87

%

 

68

%

 

71

%

 

 

Packaged goods and other

 

30

%

 

14

%

 

13

%

 

32

%

 

29

%

 

 

Total net revenue %

 

100

%

 

100

%

 

100

%

 

100

%

 

100

%

 

 

GAAP-based financial data

 

 

 

 

 

 

Full game downloads

 

26

 

 

44

 

 

(57

)

 

(5

)

 

31

 

 

 

Live services

 

304

 

 

131

 

 

(227

)

 

(80

)

 

316

 

 

 

Mobile

 

9

 

 

 

 

(25

)

 

(11

)

 

16

 

 

 

Total digital

 

339

 

 

175

 

 

(309

)

 

(96

)

 

363

 

 

 

Packaged goods and other

 

29

 

 

(2

)

 

(118

)

 

61

 

 

65

 

 

 

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

 

368

 

 

173

 

 

(427

)

 

(35

)

 

428

 

 

 

Mobile platform fees

 

(48

)

 

(47

)

 

(39

)

 

(36

)

 

(43

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenue by platform

 

 

 

 

 

 

 

 

 

 

 

 

Console

 

885

 

 

826

 

 

760

 

 

923

 

 

1,163

 

 

31

%

PC/Browser

 

217

 

 

217

 

 

249

 

 

242

 

 

257

 

 

18

%

Mobile

 

181

 

 

190

 

 

196

 

 

177

 

 

169

 

 

(7

%)

Other

 

6

 

 

5

 

 

4

 

 

6

 

 

4

 

 

(33

%)

Total net revenue

 

1,289

 

 

1,238

 

 

1,209

 

 

1,348

 

 

1,593

 

 

24

%

GAAP-based financial data

 

 

 

 

 

 

Console

 

323

 

 

87

 

 

(344

)

 

8

 

 

388

 

 

 

PC/Browser

 

33

 

 

88

 

 

(59

)

 

(31

)

 

24

 

 

 

Mobile

 

11

 

 

(2

)

 

(25

)

 

(11

)

 

16

 

 

 

Other

 

1

 

 

 

 

1

 

 

(1

)

 

 

 

 

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

 

368

 

 

173

 

 

(427

)

 

(35

)

 

428

 

 

 

Mobile platform fees

 

(48

)

 

(47

)

 

(39

)

 

(36

)

 

(43

)

 

 

2The change in deferred net revenue (online-enabled games) in the unaudited condensed consolidated statements of cash flows does not necessarily equal the change in deferred net revenue (online-enabled games) in the unaudited condensed consolidated statements of operations primarily due to the impact of unrecognized gains/losses on cash flow hedges.

 

3Mobile Digital only: excludes non-Digital mobile items such as licensing

ELECTRONIC ARTS INC. AND SUBSIDIARIES

Unaudited Supplemental Financial Information and Business Metrics

(in $ millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

Q3

 

Q4

 

Q1

 

Q2

 

Q3

 

YOY %

 

FY19

 

FY19

 

FY20

 

FY20

 

FY20

 

Change

CASH FLOW DATA

 

 

 

 

 

 

 

 

 

 

 

Operating cash flow

954

 

 

599

 

 

158

 

 

37

 

 

1,104

 

 

16

%

Operating cash flow - TTM

1,563

 

 

1,547

 

 

1,585

 

 

1,748

 

 

1,898

 

 

21

%

Capital expenditures

21

 

 

35

 

 

45

 

 

27

 

 

28

 

 

33

%

Capital expenditures - TTM

104

 

119

 

132

 

128

 

135

 

30

%

Repurchase and retirement of common stock

292

 

 

301

 

 

305

 

 

306

 

 

305

 

 

4

%

DEPRECIATION

 

 

 

 

 

 

 

 

 

 

 

Depreciation expense

30

 

31

 

30

 

30

 

29

 

(3

%)

BALANCE SHEET DATA

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

3,887

 

4,708

 

3,533

 

2,940

 

3,603

 

 

Short-term investments

1,274

 

737

 

1,654

 

1,943

 

1,999

 

 

Cash and cash equivalents, and short-term investments

5,161

 

 

5,445

 

 

5,187

 

 

4,883

 

 

5,602

 

 

9

%

Receivables, net

806

 

623

 

329

 

856

 

798

 

(1

%)

STOCK-BASED COMPENSATION

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

1

 

 

1

 

 

1

 

 

1

 

 

1

 

 

 

Research and development

49

 

49

 

49

 

61

 

60

 

 

Marketing and sales

8

 

9

 

7

 

10

 

10

 

 

General and administrative

17

 

14

 

16

 

20

 

20

 

 

Total stock-based compensation

75

 

 

73

 

 

73

 

 

92

 

 

91

 

 

 

 

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