It has been about a month since the last earnings report for Electronic Arts (EA) . Shares have added about 9.4% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Electronic Arts due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts. Electronic Arts Q2 Earnings and Revenue ...

Core Viewpoint - Electronic Arts (EA) has shown strong performance in the stock market, with a year-to-date gain of 21.7%, outperforming both the broader Zacks Consumer Discretionary sector and the Zacks Gaming industry [1] Financial Performance - EA's revenue from live services and other sources increased by 1.2% year-over-year to $1.3 billion, while full-game download revenues surged by 37% year-over-year to $475 million during Q2 of fiscal 2025 [2] - For Q3 fiscal 2025, EA anticipates GAAP revenues between $1.875 billion and $2.025 billion, with earnings per share expected to range from 85 cents to $1.02 [6] - The company projects fiscal 2025 revenues between $7.4 billion and $7.7 billion, with earnings per share expected between $3.34 and $4 [6][10] - The consensus estimate for Q3 fiscal 2025 earnings is $3.43 per share, reflecting a 15.88% year-over-year growth [9] - The consensus for fiscal 2025 earnings is $7.82 per share, indicating a 12.52% year-over-year growth [10] Product Development and Innovations - EA has introduced Strand Hair Technology in Dragon Age: The Veilguard, enhancing character realism with 50,000 individual strands for over 100 hairstyles [3] - The company launched Cranium Technology in EA SPORTS FC 25, improving character customization and animation [4] - EA's ongoing research and development in titles like Battlefield and skate aims to boost customer engagement and satisfaction [5] Market Position and Valuation - EA shares are currently considered overvalued, with a forward 12-month Price/Earnings (P/E) ratio of 20.18, higher than the Zacks Consumer Discretionary sector's 19.14 [12] - The company has a Zacks Rank 3 (Hold), suggesting that investors should wait for a more favorable entry point [13]

Core Viewpoint - Electronic Arts (EA) has experienced a significant stock price increase of over 25% since early 2022, attributed to revenue growth and share repurchases, despite a general decline in gaming demand [1][2][3]. Financial Performance - EA's revenue rose by 30% from $5.6 billion in fiscal 2021 to $7.3 billion currently, although revenue growth was only 2% in fiscal 2024 due to declining gaming demand [1][3]. - The company's operating margin improved to 20.9% in fiscal 2024 from 18.6% in 2021, indicating enhanced profitability [2]. - EA reported total bookings of $2.1 billion in Q2'25, reflecting a 14% year-over-year increase, with earnings per share rising to $2.15 from $1.46 in the prior-year quarter [3]. Market Position and Valuation - EA's stock is currently priced fairly at an estimated valuation of $165 per share, based on a forward P/E ratio of 21x expected earnings of $7.79 for 2025 [5]. - The company has a solid financial position, with a debt to equity ratio of 4.5% and cash constituting 24.3% of its assets, indicating low financial risk [2]. Industry Trends - The U.S. total video game sales in 2023 reached $57.2 billion, showing only a modest 1% year-over-year growth, reflecting broader industry challenges [1]. - The average quarterly playtime for gamers has decreased by 26% from 2021 to 2023, contributing to the overall decline in gaming demand [3]. Stock Performance - EA stock has risen 20% this year, slightly underperforming the S&P 500 index, which rose by 25% [4]. - Historical returns for EA stock have been less volatile compared to the S&P 500, with annual returns of -8% in 2021, -7% in 2022, and 13% in 2023 [4].

Core Viewpoint - Electronic Arts (EA) is a prominent company in the gaming industry, known for its development and distribution of games across various platforms including consoles, PCs, and mobile devices [1]. Group 1: Company Overview - EA's portfolio includes well-known franchises such as Battlefield, Mass Effect, Dragon Age, The Sims, Need for Speed, EA Sports FC (formerly FIFA), and Madden NFL Series [1]. Group 2: Investment Philosophy - The investment philosophy is based on fundamental bottom-up analysis and quantitative modeling, focusing on identifying perception gaps to exploit over-pessimism and excessive exuberance in the market [1].

Table of Contents Non-accelerated filer ☐ Smaller reporting company ☐ FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended September 30, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 000-17948 (650) 628-1500 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title ...

Group 1 - Proactive provides fast, accessible, informative, and actionable business and finance news content to a global investment audience [1][2] - The news team covers a wide range of sectors including biotech, pharma, mining, natural resources, battery metals, oil and gas, crypto, and emerging technologies [3] - Proactive has a presence in key finance and investing hubs with bureaus and studios located in major cities such as London, New York, and Sydney [2] Group 2 - The company utilizes technology to enhance workflows and has adopted automation and software tools, including generative AI, while ensuring all content is edited and authored by humans [4]

Core Viewpoint - Electronic Arts (EA) reported strong second-quarter fiscal 2025 earnings, with earnings per share of $2.15, a 47.3% increase year over year, and revenues of $2.02 billion, up 5.8% year over year, driven by recovery in Live services and full game revenues [1][2]. Financial Performance - Net bookings for the fiscal second quarter reached $2.07 billion, reflecting a 14.2% year-over-year increase, largely due to the positive reception of EA SPORTS College Football 25 [2]. - Full-game net bookings amounted to $832 million, a 20% increase year over year, supported by the expansion of the American Football ecosystem [3]. - Live services net bookings were $1.25 billion, up 10% year over year, with American Football Ultimate Team modes contributing significantly [3]. Revenue Breakdown - Full-game revenues, constituting 35.4% of total revenues, increased 15.3% year over year to $716 million, with full-game download revenues rising 37% to $475 million, while revenues from packaged goods fell 12% to $241 million [4]. - Live services and other revenues, making up 64.6% of total revenues, saw a modest increase of 1.2% year over year to $1.3 billion [4]. - Revenue from consoles grew 16% year over year to $1.37 billion, while revenues from PC & Other and mobile platforms declined by 14% and 5% respectively [5]. Operating Metrics - GAAP gross profit increased 7.6% year over year to $156 billion, with gross margin expanding by 130 basis points to 77.5% [6]. - Operating expenses rose 9.6% year over year to $1.18 billion, representing 58.5% of revenues, an increase of 200 basis points [6]. - Operating income on a GAAP basis increased 1.9% year over year to $384 million, with the operating margin contracting by 70 basis points to 19% [7]. Balance Sheet and Cash Flow - As of June 30, 2024, EA had $2.5 billion in cash and short-term investments, down from $2.76 billion a year earlier [8]. - Net cash provided by operating activities was $234 million for the quarter and $2.198 billion for the trailing 12 months [8]. - The company repurchased 2.6 million shares for $375 million during the quarter, totaling 10.2 million shares for $1.4 billion over the trailing 12 months [8]. Dividend and Guidance - EA declared a quarterly cash dividend of 19 cents per share, payable on December 18, 2024, to stockholders of record as of November 27, 2024 [9]. - For the third quarter of fiscal 2025, EA expects GAAP revenues between $1.875 billion and $2.025 billion, with earnings per share in the range of 85 cents to $1.02, and net bookings projected between $2.4 billion and $2.55 billion [11]. - For fiscal 2025, EA anticipates revenues between $7.4 billion and $7.7 billion, earnings per share between $3.34 and $4, and net bookings between $7.5 billion and $7.8 billion [11].

Core Insights - Electronic Arts (EA) reported revenue of $2.08 billion for the quarter ended September 2024, reflecting a year-over-year increase of 14.2% [1] - The earnings per share (EPS) for the quarter was $2.15, up from $1.46 in the same quarter last year, indicating a strong performance [1] - The reported revenue exceeded the Zacks Consensus Estimate of $2.03 billion by 2.40%, while the EPS also surpassed the consensus estimate of $2.03 by 5.91% [1] Financial Performance Metrics - Net Bookings for EA were $2.08 billion, slightly above the average estimate of $2.03 billion from seven analysts [3] - Live services and other Net Bookings reached $1.25 billion, exceeding the average estimate of $1.07 billion by 10.5% year-over-year [3] - Full game downloads Net Bookings were $832 million, significantly higher than the estimated $501.90 million, marking a 124.9% increase compared to the previous year [3] - Packaged goods Net Bookings totaled $545 million, surpassing the average estimate of $379.53 million, representing a 69.8% year-over-year growth [3] Stock Performance - Over the past month, EA's shares have returned +0.5%, while the Zacks S&P 500 composite has increased by +1.7% [4] - EA currently holds a Zacks Rank 3 (Hold), suggesting that its performance may align with the broader market in the near term [4]

Financial Data and Key Metrics Changes - Q2 net bookings reached $2.08 billion, up 14% year-over-year, exceeding expectations [29] - Full game net bookings were $832 million, up 20% year-over-year [29] - Live services net bookings were $1.25 billion, up 10% year-over-year, comprising 74% of the business on a trailing twelve-month basis [30][29] - Q2 net revenue was $2.03 billion, up 6% year-over-year, with gross margins increasing by 130 basis points [36] - Earnings per share was $1.11, with a record Q2 operating cash flow of $234 million, more than double the prior year [37] Business Line Data and Key Metrics Changes - The American Football segment saw significant growth, with new players more than doubling year-over-year, representing around 25% of the player base [11] - College Football 25 became the best-selling HD title in North America, driving engagement and community connection [12] - EA SPORTS FC reached over 130% more players worldwide, with significant engagement in both HD and mobile platforms [14][32] - Apex Legends experienced a decline in net bookings, attributed to changes in the Battle Pass structure, but is expected to recover with future innovations [20][33] Market Data and Key Metrics Changes - The EA SPORTS franchises demonstrated strong performance, particularly in American Football and Global Football, contributing to overall growth [27][32] - The company is well-positioned to capture more share of sports fandom as the industry shifts towards more social and interactive experiences [9] Company Strategy and Development Direction - The company aims to create a comprehensive football fan platform that engages fans year-round, integrating both NFL and College Football [51][53] - Plans to leverage generative AI to expand and transform entertainment experiences, focusing on social connection and self-expression [9] - The EA SPORTS APP is set to enhance fan engagement by combining real-world sports content with interactive gaming experiences [55][57] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term financial framework and the ability to significantly outperform the market through FY27 for net bookings growth [44] - The company raised its FY25 net bookings guidance to $7.5 billion to $7.8 billion, reflecting strong performance in the first half of the fiscal year [38] - Management highlighted the importance of community-driven events and engagement strategies to sustain growth in the American Football segment [54] Other Important Information - The Sims franchise is evolving to offer more options for player engagement, with new content and community-driven initiatives [22][23] - The upcoming launch of Dragon Age: The Veilguard is anticipated to be a significant success, building on the legacy of its predecessor [24][74] Q&A Session All Questions and Answers Question: How to capture momentum in American football on a long-term basis? - Management emphasized a thoughtful rollout plan, focusing on community engagement and building a symbiotic relationship between Madden and College Football [50][51] Question: What are the plans for the EA SPORTS app and its rollout? - The company plans a phased rollout, starting with Spain, leveraging partnerships to enhance the sports fan experience [55][57] Question: What is the expected growth for live services in sports? - Live services are expected to see mid-single-digit growth, driven primarily by the American Football segment [60][61] Question: How will Apex Legends evolve after recent challenges? - Management indicated a focus on meaningful innovation and systematic changes to enhance player engagement and retention [64][66] Question: What has been done to position BioWare for success with Veilguard? - The studio has returned to its strengths in storytelling and character development, focusing on delivering high-quality experiences [82][84]

Group 1 - Electronic Arts (EA) reported quarterly earnings of $2.15 per share, exceeding the Zacks Consensus Estimate of $2.03 per share, and up from $1.46 per share a year ago, representing an earnings surprise of 5.91% [1] - The company posted revenues of $2.08 billion for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 2.40%, and an increase from $1.82 billion year-over-year [2] - EA has surpassed consensus EPS estimates three times over the last four quarters and topped consensus revenue estimates two times in the same period [2] Group 2 - The stock's immediate price movement will depend on management's commentary during the earnings call, with EA shares having gained about 5.4% since the beginning of the year, compared to the S&P 500's gain of 22.1% [3] - The current consensus EPS estimate for the upcoming quarter is $3.48 on revenues of $2.54 billion, and for the current fiscal year, it is $7.80 on revenues of $7.65 billion [7] - The Zacks Industry Rank indicates that the Gaming industry is currently in the bottom 42% of over 250 Zacks industries, suggesting that the industry's outlook can significantly impact EA's stock performance [8]