Electronic Arts(EA) - 2025 Q4 - Annual Report

Revenue and Financial Performance - Total net revenue for fiscal year 2025 was $7,463 million, down 1 percent year-over-year[126]. - Live services and other net revenue was$5,461 million, down 2 percent year-over-year[126]. - Net revenue from digital full game downloads was $1,478 million, an increase of 10 percent compared to$1,343 million in fiscal year 2024[126]. - Net bookings for fiscal year 2025 were $7,355 million, a decrease of$75 million or 1 percent compared to fiscal year 2024[132]. - Live services and other net bookings were $5,338 million for fiscal year 2025, down$87 million or 2 percent year-over-year[132]. - Gross margin improved to 79.3 percent, up 2 percentage points year-over-year[126]. - Operating expenses increased to $4,400 million, up 2 percent year-over-year[126]. - Net income for fiscal year 2025 was$1,121 million, with diluted earnings per share of $4.25[126]. - Digital sales accounted for 78 percent of total units sold in fiscal year 2025, up from 73 percent in fiscal year 2024[127]. - The company paid aggregate cash dividends of$199 million during the fiscal year ended March 31, 2025, with a quarterly cash dividend of $0.19 per share[112]. - A new stock repurchase program was authorized to repurchase up to$5.0 billion of common stock, expiring on May 9, 2027[113]. - The company repurchased a total of 9,752,621 shares in the fourth quarter of the fiscal year ended March 31, 2025, at an average price of $135.05[115]. Market and Competitive Landscape - Digital live services and other net revenue accounted for 73$2,569 million, an increase of $149 million or 6$764 million to $2,136 million compared to$2,900 million in 2024, representing a decline of 26.3%[180]. - Net cash provided by operating activities decreased by $236 million to$2,079 million in fiscal year 2025, primarily due to lower cash collections from sales and higher cash payments for income taxes[181]. - Net cash provided by investing activities increased by $244 million to$37 million in fiscal year 2025, driven by a $203 million decrease in the purchase of short-term investments[182]. - Net cash used in financing activities increased by$1,239 million to $2,863 million in fiscal year 2025, primarily due to a$1,208 million increase in common stock repurchases[183]. - The company has senior unsecured notes and an unsecured revolving credit facility, which could impact financial condition and results[92]. - The revolving credit facility requires compliance with a debt to EBITDA ratio, and breaches could lead to immediate repayment of indebtedness[93]. Taxation and Compliance - The effective tax rate for fiscal year 2025 was 30.2%, an increase from 19.9% in fiscal year 2024[175]. - A $51 million tax charge was recognized to increase the valuation allowance on Swiss deferred tax assets during fiscal year 2025[176]. - Changes in international tax laws, such as the global minimum taxes proposed by the OECD, could affect the company's effective tax rates and cash taxes[95]. - Compliance with evolving global data privacy laws is costly and could result in penalties or harm to the company's reputation[84]. International Operations - International net revenue accounted for 59$241 million in the fair value of foreign currency forward contracts used in cash flow hedging[200]. - A hypothetical 150 basis point increase in interest rates would result in a $1 million, or 1% decrease in the fair market value of the company's short-term investments[203].