REDWOOD CITY, Calif.–(BUSINESS WIRE)–Electronic Arts Inc. (NASDAQ: EA) today announced preliminary financial results for its fourth fiscal quarter and fiscal year ended March 31, 2019.
News and ongoing updates regarding EA and its games are available on EA’s blog at www.ea.com/news.
“FY20 will be a year of continued growth for our industry, and we’re excited to bring more great entertainment to the expanding audience around the world,” said CEO Andrew Wilson. “Players are engaging with games in more ways than ever before. We’re committed to meeting them where they are with a broad portfolio of amazing new games and live services, choice of engagement models including free-to-play and subscriptions, and new opportunities to play, compete and watch.”
“We ended our fiscal year with strong growth, driven by our live services business which continued to provide a very large, stable and profitable source of net bookings,” said COO and CFO Blake Jorgensen. “Looking ahead, we will bring games to an extraordinary variety of players in fiscal 2020 and deliver on our commitment to players with deep live services content for Ultimate Team, Apex Legends, The Sims 4, Anthem and Battlefield V.”
Selected Operating Highlights and Metrics
- Digital net bookings* for the trailing twelve months was $3.722 billion, up 5% year-over-year and represents 75% of total net bookings.
- During the quarter, launched two new original IP titles, Apex LegendsTM and AnthemTM.
- During the quarter, launched Firestorm battle royale in Battlefield TM V, the biggest BattlefieldTM live service event ever.
- In FY19, more than 45 million unique players engaged in FIFA 19 and FIFA 18 on console and PC.
- In FY19, active players in The Sims TM 4 increased by 35% year-over-year.
* 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 from operating activities was $599 million for the quarter and $1.547 billion for the trailing twelve months.
- EA repurchased 3.2 million shares for $301 million during the quarter and 11.0 million shares for $1.192 billion 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. For more information about the adoption of Topic 606, please refer to the Investor Accounting FAQ on our IR website. Financial data for periods prior to April 1, 2018 has not been restated.
Quarterly Financial Highlights
|
Three Months Ended |
||||
| March 31, | ||||
| 2019 | 2018 | |||
| (in $ millions, except per share amounts) | ||||
| Digital net revenue | 1,065 | 1,102 | ||
| Packaged goods and other net revenue | 173 | 480 | ||
|
Total net revenue |
1,238 | 1,582 | ||
| Net income | 209 | 607 | ||
| Diluted earnings per share | 0.69 | 1.95 | ||
| Operating cash flow | 599 | 615 | ||
| Value of shares repurchased | 301 | 148 | ||
| Number of shares repurchased | 3.2 | 1.2 | ||
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 March 31, 2019 | |||||||||||||
| GAAP-Based Financial Data | |||||||||||||
| (in $ millions) |
Statement |
Acquisition- |
Change in |
Mobile |
Stock-based |
||||||||
| Total net revenue | 1,238 | – | 173 | (47 | ) | – | |||||||
| Cost of revenue | 276 | (1 | ) | – | (47 | ) | (1 | ) | |||||
| Gross profit | 962 | 1 | 173 | – | 1 | ||||||||
| Total operating expenses | 766 | (16 | ) | – | – | (72 | ) | ||||||
| Operating income | 196 | 17 | 173 | – | 73 | ||||||||
| Interest and other income, net | 23 | – | – | – | – | ||||||||
| Income before provision for income taxes | 219 | 17 | 173 | – | 73 | ||||||||
| Number of shares used in computation: | |||||||||||||
| Diluted | 301 | ||||||||||||
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 December 31, 2018.
TTM Financial Highlights
| Twelve Months Ended | ||||
| March 31, | ||||
| 2019 | 2018 | |||
| (in $ millions, except per share amounts) | ||||
| Digital net revenue | 3,710 | 3,450 | ||
| Packaged goods and other net revenue | 1,240 | 1,700 | ||
| Total net revenue | 4,950 | 5,150 | ||
| Net income | 1,019 | 1,043* | ||
| Diluted earnings per share | 3.33 | 3.34* | ||
| Operating cash flow | 1,547 | 1,692 | ||
| Value of shares repurchased | 1,192 | 601 | ||
| Number of shares repurchased | 11.0 | 5.3 | ||
|
|
||||
*During the twelve months ended March 31, 2018, EA recognized $235 million of incremental income tax expense, or approximately $0.75 per share, due to the application of the Tax Cuts and Jobs Act.
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:
| Twelve Months Ended March 31, 2019 | |||||||||||||
| GAAP-Based Financial Data | |||||||||||||
| (in $ millions) |
Statement |
Acquisition- |
Change in |
Mobile |
Stock-based |
||||||||
| Total net revenue | 4,950 | – | 182 | (188 | ) | – | |||||||
| Cost of revenue | 1,322 | (4 | ) | – | (188 | ) | (4 | ) | |||||
| Gross profit | 3,628 | 4 | 182 | – | 4 | ||||||||
| Total operating expenses | 2,632 | (37 | ) | – | – | (280 | ) | ||||||
| Operating income | 996 | 41 | 182 | – | 284 | ||||||||
| Interest and other income, net | 83 | – | – | – | – | ||||||||
| Income before provision for income taxes | 1,079 | 41 | 182 | – | 284 | ||||||||
| Number of shares used in computation: | |||||||||||||
| Diluted | 306 | ||||||||||||
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 December 31, 2018.
Operating Metric
The following is a calculation of our total net bookings for the periods presented:
| Three Months Ended | TTM Ended | |||||||
| March 31, | March 31, | |||||||
| 2019 | 2018 | 2019 | 2018 | |||||
| (in $ millions) | ||||||||
| Total net revenue | 1,238 | 1,582 | 4,950 | 5,150 | ||||
| Change in deferred net revenue (online-enabled games) | 173 | (327) | 182 | 30 | ||||
| Mobile platform fees | (47) | – | (188) | – | ||||
| Net bookings | 1,364 | 1,255 | 4,944 | 5,180 | ||||
Business Outlook as of May 7, 2019
The following forward-looking statements reflect expectations as of May 7, 2019. Electronic Arts assumes no obligation to update these statements, except as required by law. 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 $5.375 billion.
- Change in deferred net revenue (online-enabled games) is expected to be approximately $(125) million.
- Mobile platform fees are expected to be approximately $(150) million.
- Net income is expected to be approximately $2.595 billion. This includes a one-time tax benefit of approximately $1.5 billion (see below).
- Diluted earnings per share is expected to be approximately $8.56. This includes a one-time tax benefit of approximately $5 per share (see below).
- Operating cash flow is expected to be approximately $1.575 billion.
- The Company estimates a share count of 303 million for purposes of calculating fiscal year 2020 diluted earnings per share.
Subsequent to the fiscal year ended March 31, 2019, EA completed an internal transfer of some of its intellectual property rights to its Swiss subsidiary, where EA’s international business is headquartered. This transfer will result in a one-time tax benefit of between $1.5 billion and $3.9 billion, which will be recognized as a deferred tax asset in EA’s consolidated financial statements for the three months ending June 30, 2019. The recognition of the deferred tax asset will add between $5 to $13 per share to GAAP EPS and the low end of this range has been reflected above in EA’s forecast. The forecast of this one-time tax benefit is preliminary and is dependent on the results of Swiss referendums to be voted on later this month.
Operational metric:
- Net bookings is expected to be approximately $5.100 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 |
Acquisition- |
Change in |
Mobile |
Stock-based |
||||||||||
| (in $ millions) | ||||||||||||||
| Digital net revenue | 4,175 | – | (75 | ) | (150 | ) | – | |||||||
| Packaged goods & other net revenue | 1,200 | – | (50 | ) | – | – | ||||||||
| Total net revenue | 5,375 | – | (125 | ) | (150 | ) | – | |||||||
| Cost of revenue | 1,327 | (12 | ) | – | (150 | ) | (2 | ) | ||||||
| Operating expense | 2,746 | (23 | ) | – | – | (353 | ) | |||||||
| Income before provision for income taxes | 1,361 | 35 | (125 | ) | – | 355 | ||||||||
| Net income | 2,595 | |||||||||||||
| Number of shares used in computation: | ||||||||||||||
| Diluted shares | 303 | |||||||||||||
First Quarter Fiscal Year 2020 Expectations – Ending June 30, 2019
Financial metrics:
- Net revenue is expected to be approximately $1.130 billion.
- Change in deferred net revenue (online-enabled games) is expected to be approximately $(405) million.
- Mobile platform fees are expected to be approximately $(35) million.
- Net income is expected to be approximately $1.765 billion. This includes a one-time tax benefit of approximately $1.5 billion (see above).
- Diluted earnings per share is expected to be approximately $5.84. This includes a one-time tax benefit of approximately $5 per share (see above).
- The Company estimates a share count of 302 million for purposes of calculating first quarter fiscal year 2020 diluted earnings per share. Should the first quarter be a loss, the Company will use the basic share count of 299 million for purposes of calculating first quarter fiscal year 2020 earnings per share.
Operational metric:
- Net bookings is expected to be approximately $690 million.
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 June 30, 2019 | ||||||||||||||
| GAAP-Based Financial Data | ||||||||||||||
|
GAAP |
Acquisition- |
Change in |
Mobile |
Stock-based |
||||||||||
| (in $ millions) | ||||||||||||||
| Total net revenue | 1,130 | – | (405 | ) | (35 | ) | – | |||||||
| Cost of revenue | 188 | (2 | ) | – | (35 | ) | – | |||||||
| Operating expense | 650 | (5 | ) | – | – | (70 | ) | |||||||
| Income before provision for income taxes | 310 | 7 | (405 | ) | – | 70 | ||||||||
|
Net income |
1,765 | |||||||||||||
| Number of shares used in computation: | ||||||||||||||
| Diluted shares | 302 | |||||||||||||
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 December 31, 2018.
Conference Call and Supporting Documents
Electronic Arts will host a conference call on Tuesday, May 7, 2019 at 2:00 pm PT (5:00 pm ET) to review its results for the fiscal fourth quarter and fiscal year ended March 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 2997759 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 May 21, 2019 at (855) 859-2056 (domestic) or (404) 537-3406 (international) using pin code 2997759. 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 May 7, 2019,” and other information regarding EA’s fiscal 2020 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 or 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, 2018.
These forward-looking statements are valid as of May 7, 2019. 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 Annual Report on Form 10-K for the fiscal year ended March 31, 2019. Electronic Arts assumes no obligation and does not intend to update these estimates prior to filing its Form 10-K for the fiscal year ended March 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 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.
Apex Legends, Anthem, Battlefield, The Sims, EA SPORTS, 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 |
Twelve Months Ended |
|||||||||||
|
2019 1 |
2018 |
2019 1 |
2018 | |||||||||
| Net revenue | ||||||||||||
| Product | 216 | 757 | 1,593 | 2,586 | ||||||||
| Service and other | 1,022 | 825 | 3,357 | 2,564 | ||||||||
| Total net revenue | 1,238 | 1,582 | 4,950 | 5,150 | ||||||||
| Cost of revenue | ||||||||||||
| Product | 52 | 106 | 517 | 822 | ||||||||
| Service and other | 224 | 127 | 805 | 455 | ||||||||
| Total cost of revenue | 276 | 233 | 1,322 | 1,277 | ||||||||
| Gross profit | 962 | 1,349 | 3,628 | 3,873 | ||||||||
| Operating expenses: | ||||||||||||
| Research and development | 398 | 335 | 1,433 | 1,320 | ||||||||
| Marketing and sales | 229 | 130 | 702 | 641 | ||||||||
| General and administrative | 123 | 126 | 460 | 469 | ||||||||
| Acquisition-related contingent consideration | 11 | — | 14 | — | ||||||||
| Amortization of intangibles | 5 | 5 | 23 | 9 | ||||||||
| Total operating expenses | 766 | 596 | 2,632 | 2,439 | ||||||||
| Operating income | 196 | 753 | 996 | 1,434 | ||||||||
| Interest and other income (expense), net | 23 | 1 | 83 | 15 | ||||||||
| Income before provision for income taxes | 219 | 754 | 1,079 | 1,449 | ||||||||
| Provision for income taxes | 10 | 147 | 60 | 406 | ||||||||
| Net income | 209 | 607 | 1,019 | 1,043 | ||||||||
| Earnings per share | ||||||||||||
| Basic | 0.70 | 1.98 | 3.36 | 3.39 | ||||||||
| Diluted | 0.69 | 1.95 | 3.33 | 3.34 | ||||||||
| Number of shares used in computation | ||||||||||||
| Basic | 299 | 307 | 303 | 308 | ||||||||
| Diluted | 301 | 311 | 306 | 312 | ||||||||
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 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 provided on February 5, 2019 for the three months ended March 31, 2019 plus a comparison to the actuals for the three months ended March 31, 2018.
| Three Months Ended March 31, | ||||||||||||||
|
2019 1 |
2019 1 |
2018 | ||||||||||||
| Guidance | Variance | Actuals | Actuals | |||||||||||
| Net revenue | ||||||||||||||
| Net revenue | 1,163 | 75 | 1,238 | 1,582 | ||||||||||
| GAAP-based financial data | ||||||||||||||
| Change in deferred net revenue (online-enabled games) | 56 | 117 | 173 | (327 | ) | |||||||||
| Mobile platform fees | (49 | ) | 2 | (47 | ) | — | ||||||||
| Cost of revenue | ||||||||||||||
| Cost of revenue | 265 | 11 | 276 | 233 | ||||||||||
| GAAP-based financial data | ||||||||||||||
| Acquisition-related expenses | — | (1 | ) | (1 | ) | (1 | ) | |||||||
| Stock-based compensation | — | (1 | ) | (1 | ) | (1 | ) | |||||||
| Mobile platform fees | (49 | ) | 2 | (47 | ) | — | ||||||||
| Operating expenses | ||||||||||||||
| Operating expenses | 715 | 51 | 766 | 596 | ||||||||||
| GAAP-based financial data | ||||||||||||||
| Acquisition-related expenses | (6 | ) | (10 | ) | (16 | ) | (5 | ) | ||||||
| Stock-based compensation | (76 | ) | 4 | (72 | ) | (68 | ) | |||||||
| Income before tax | ||||||||||||||
| Income before tax | 195 | 24 | 219 | 754 | ||||||||||
| GAAP-based financial data | ||||||||||||||
| Acquisition-related expenses | 6 | 11 | 17 | 6 | ||||||||||
| Change in deferred net revenue (online-enabled games) | 56 | 117 | 173 | (327 | ) | |||||||||
| Mobile platform fees | — | — | — | — | ||||||||||
| Stock-based compensation | 76 | (3 | ) | 73 | 69 | |||||||||
| Tax rate used for management reporting | 18 | % | 18 | % | 21 | % | ||||||||
| Earnings per share | ||||||||||||||
| Basic | 0.56 | 0.14 | 0.70 | 1.98 | ||||||||||
| Diluted | 0.56 | 0.13 | 0.69 | 1.95 | ||||||||||
| Number of shares | ||||||||||||||
| Basic | 301 | (2 | ) | 299 | 307 | |||||||||
| Diluted | 303 | (2 | ) | 301 | 311 | |||||||||
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 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) | ||||||
| March 31, 20191 | March 31, 20182 | |||||
| ASSETS | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | 4,708 | 4,258 | ||||
| Short-term investments | 737 | 1,073 | ||||
| Receivables, net of allowances of $7 and $165, respectively | 623 | 385 | ||||
| Other current assets | 313 | 288 | ||||
| Total current assets | 6,381 | 6,004 | ||||
| Property and equipment, net | 448 | 453 | ||||
| Goodwill | 1,892 | 1,883 | ||||
| Acquisition-related intangibles, net | 87 | 71 | ||||
| Deferred income taxes, net | 35 | 84 | ||||
| Other assets | 114 | 89 | ||||
| TOTAL ASSETS | 8,957 | 8,584 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
| Current liabilities: | ||||||
| Accounts payable | 113 | 48 | ||||
| Accrued and other current liabilities | 1,052 | 821 | ||||
| Deferred net revenue (online-enabled games) | 1,100 | 1,622 | ||||
| Total current liabilities | 2,265 | 2,491 | ||||
| Senior notes, net | 994 | 992 | ||||
| Income tax obligations | 233 | 250 | ||||
| Deferred income taxes, net | 2 | 1 | ||||
| Other liabilities | 132 | 255 | ||||
| Total liabilities | 3,626 | 3,989 | ||||
| Stockholders’ equity: | ||||||
| Common stock | 3 | 3 | ||||
| Additional paid-in capital | — | 657 | ||||
| Retained earnings | 5,358 | 4,062 | ||||
| Accumulated other comprehensive loss | (30 | ) | (127 | ) | ||
| Total stockholders’ equity | 5,331 | 4,595 | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 8,957 | 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 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 |
Twelve Months Ended |
|||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||
| OPERATING ACTIVITIES | ||||||||||||
| Net income | 209 | 607 | 1,019 | 1,043 | ||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
| Depreciation, amortization and accretion | 37 | 39 | 145 | 136 | ||||||||
| Acquisition-related contingent consideration | 14 | — | 14 | — | ||||||||
| Stock-based compensation | 73 | 69 | 284 | 242 | ||||||||
| Change in assets and liabilities | ||||||||||||
| Receivables, net | 183 | 502 | (88 | ) | (25 | ) | ||||||
| Other assets | (65 | ) | (69 | ) | (24 | ) | 10 | |||||
| Accounts payable | 24 | (60 | ) | 59 | (44 | ) | ||||||
| Accrued and other liabilities | (120 | ) | (222 | ) | 3 | 43 | ||||||
| Deferred income taxes, net | 73 | 74 | (16 | ) | 204 | |||||||
| Deferred net revenue (online-enabled games) | 171 | (325 | ) | 151 | 83 | |||||||
| Net cash provided by operating activities | 599 | 615 | 1,547 | 1,692 | ||||||||
| INVESTING ACTIVITIES | ||||||||||||
| Capital expenditures | (35 | ) | (20 | ) | (119 | ) | (107 | ) | ||||
| Proceeds from maturities and sales of short-term investments | 733 | 1,510 | 1,688 | 3,166 | ||||||||
| Purchase of short-term investments | (198 | ) | (275 | ) | (1,342 | ) | (2,287 | ) | ||||
| Acquisitions, net of cash acquired | — | — | (58 | ) | (150 | ) | ||||||
| Net cash provided by investing activities | 500 | 1,215 | 169 | 622 | ||||||||
| FINANCING ACTIVITIES | ||||||||||||
| Proceeds from issuance of common stock | 25 | 21 | 61 | 78 | ||||||||
| Cash paid to taxing authorities for shares withheld from employees | (6 | ) | (8 | ) | (122 | ) | (120 | ) | ||||
| Repurchase and retirement of common stock | (301 | ) | (148 | ) | (1,192 | ) | (601 | ) | ||||
| Net cash used in financing activities | (282 | ) | (135 | ) | (1,253 | ) | (643 | ) | ||||
| Effect of foreign exchange on cash and cash equivalents | 4 | (3 | ) | (13 | ) | 22 | ||||||
| Increase in cash and cash equivalents | 821 | 1,692 | 450 | 1,693 | ||||||||
| Beginning cash and cash equivalents | 3,887 | 2,566 | 4,258 | 2,565 | ||||||||
| Ending cash and cash equivalents | 4,708 | 4,258 | 4,708 | 4,258 | ||||||||
| ELECTRONIC ARTS INC. AND SUBSIDIARIES | ||||||||||||||||||
| Unaudited Supplemental Financial Information and Business Metrics | ||||||||||||||||||
| (in $ millions, except per share data) | ||||||||||||||||||
| Q4 | Q11 | Q21 | Q31 | Q41 | YOY % | |||||||||||||
| FY18 | FY19 | FY19 | FY19 | FY19 | Change | |||||||||||||
| Net revenue | ||||||||||||||||||
| Net revenue | 1,582 | 1,137 | 1,286 | 1,289 | 1,238 | (22 | %) | |||||||||||
| GAAP-based financial data | ||||||||||||||||||
| Change in deferred net revenue (online-enabled games)3 | (327 | ) | (339 | ) | (20 | ) | 368 | 173 | ||||||||||
| Mobile platform fees | — | (49 | ) | (44 | ) | (48 | ) | (47 | ) | |||||||||
| Gross profit | ||||||||||||||||||
| Gross profit | 1,349 | 922 | 868 | 876 | 962 | (29 | %) | |||||||||||
| GAAP-based financial data | ||||||||||||||||||
| Acquisition-related expenses | 1 | 1 | 1 | 1 | 1 | |||||||||||||
| Change in deferred net revenue (online-enabled games)3 | (327 | ) | (339 | ) | (20 | ) | 368 | 173 | ||||||||||
| Mobile platform fees | — | — | — | — | — | |||||||||||||
| Stock-based compensation | 1 | 1 | 1 | 1 | 1 | |||||||||||||
| Gross profit (as a % of net revenue) | 85 | % | 81 | % | 67 | % | 68 | % | 78 | % | ||||||||
| Operating income | ||||||||||||||||||
| Operating income | 753 | 300 | 258 | 242 | 196 | (74 | %) | |||||||||||
| GAAP-based financial data | ||||||||||||||||||
| Acquisition-related expenses | 6 | 7 | 9 | 8 | 17 | |||||||||||||
| Change in deferred net revenue (online-enabled games)3 | (327 | ) | (339 | ) | (20 | ) | 368 | 173 | ||||||||||
| Stock-based compensation | 69 | 70 | 66 | 75 | 73 | |||||||||||||
| Operating income (as a % of net revenue) | 48 | % | 26 | % | 20 | % | 19 | % | 16 | % | ||||||||
| Net income | ||||||||||||||||||
| Net income | 607 | 293 | 255 | 262 | 209 | (66 | %) | |||||||||||
| GAAP-based financial data | ||||||||||||||||||
| Acquisition-related expenses | 6 | 7 | 9 | 8 | 17 | |||||||||||||
| Change in deferred net revenue (online-enabled games)3 | (327 | ) | (339 | ) | (20 | ) | 368 | 173 | ||||||||||
| Stock-based compensation | 69 | 70 | 66 | 75 | 73 | |||||||||||||
| Tax rate used for management reporting | 21 | % | 18 | % | 18 | % | 18 | % | 18 | % | ||||||||
| Net income (as a % of net revenue) | 38 | % | 26 | % | 20 | % | 20 | % | 17 | % | ||||||||
| Diluted earnings per share | 1.95 | 0.95 | 0.83 | 0.86 | 0.69 | (65 | %) | |||||||||||
| Number of diluted shares used in computation | ||||||||||||||||||
| Basic | 307 | 306 | 305 | 302 | 299 | |||||||||||||
| Diluted | 311 | 310 | 307 | 304 | 301 | |||||||||||||
Contacts
For additional information, please contact:
Chris Evenden
Vice President, Investor Relations
650-628-0255
cevenden@ea.com
John Reseburg
Vice President, Corporate Communications
650-628-3601
jreseburg@ea.com