EX-99.1 2 earningsrelease5719.htm PRESS RELEASE Exhibit


Exhibit 99.1
 
Electronic Arts Reports Q4 and Full Year FY19 Financial Results
graphic050614a08.jpg
 
 
 
 
 
REDWOOD CITY, CA - May 7, 2019 — 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 of Operations
 
Acquisition-related expenses
 
Change in deferred net revenue (online-enabled games)
 
Mobile platform fees
 
Stock-based compensation
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 of Operations
 
Acquisition-related expenses
 
Change in deferred net revenue (online-enabled games)
 
Mobile platform fees
 
Stock-based compensation
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
March 31,
 
TTM Ended
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 Guidance
 
Acquisition-related expenses
 
Change in deferred net revenue (online-enabled games)
 
Mobile platform fees
 
Stock-based compensation
(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 Guidance
 
Acquisition-related expenses
 
Change in deferred net revenue (online-enabled games)
 
Mobile platform fees
 
Stock-based compensation
(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.

For additional information, please contact:
Chris Evenden
John Reseburg
Vice President, Investor Relations
Vice President, Corporate Communications
650-628-0255
650-628-3601
cevenden@ea.com
jreseburg@ea.com






    
ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Operations
(in $ millions, except per share data)
 
 
 
 
 
 
 
 
 
Three Months Ended March 31,
 
Twelve Months Ended March 31,
 
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 March 31,
 
Twelve Months Ended March 31,
 
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

 
 

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.

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 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)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Q4
 
Q11
 
Q21
 
Q31
 
Q41
 
YOY %
 
 
FY18
 
FY19
 
FY19
 
FY19
 
FY19
 
Change
QUARTERLY NET REVENUE PRESENTATIONS
 
 
 
 
 
 
 
 
 
 
 
 
Net revenue by composition
 
 
 
 
 
 
 
 
 
 
 
 
Full game downloads
 
232

 
116

 
148

 
247

 
169

 
(27
%)
Live services
 
698

 
610

 
412

 
480

 
714

 
2
%
Mobile
 
172

 
231

 
220

 
181

 
182

 
6
%
Total digital
 
1,102

 
957

 
780

 
908

 
1,065

 
(3
%)
Packaged goods and other
 
480

 
180

 
506

 
381

 
173

 
(64
%)
Total net revenue
 
1,582

 
1,137

 
1,286

 
1,289

 
1,238

 
(22
%)
Total digital
 
70
%
 
84
%
 
61
%
 
70
%
 
86
%
 
 
Packaged goods and other
 
30
%
 
16
%
 
39
%
 
30
%
 
14
%
 
 
Total net revenue %
 
100
%
 
100
%
 
100
%
 
100
%
 
100
%
 
 
GAAP-based financial data
 
 
 
 
 
 
Full game downloads
 
(39
)
 
(20
)
 
9

 
26

 
44

 
 
Live services
 
(19
)
 
(160
)
 
(84
)
 
304

 
131

 
 
Mobile
 
4

 
(35
)
 
(24
)
 
9

 

 
 
Total digital
 
(54
)
 
(215
)
 
(99
)
 
339

 
175

 
 
Packaged goods and other
 
(273
)
 
(124
)
 
79

 
29

 
(2
)
 
 
Total change in deferred net revenue (online-enabled games) by composition3
 
(327
)
 
(339
)
 
(20
)
 
368

 
173

 
 
Mobile platform fees
 

 
(49
)
 
(44
)
 
(48
)
 
(47
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net revenue by platform
 
 
 
 
 
 
 
 
 
 
 
 
Console
 
1,196

 
705

 
917

 
885

 
826

 
(31
%)
PC/Browser
 
210

 
197

 
149

 
217

 
217

 
3
%
Mobile
 
173

 
233

 
220

 
181

 
190

 
10
%
Other
 
3

 
2

 

 
6

 
5

 
67
%
Total net revenue
 
1,582

 
1,137

 
1,286

 
1,289

 
1,238

 
(22
%)
GAAP-based financial data
 
 
 
 
 


Console
 
(313
)
 
(288
)
 
8

 
323

 
87

 
 
PC/Browser
 
(20
)
 
(9
)
 
(4
)
 
33

 
88

 
 
Mobile
 
5

 
(42
)
 
(24
)
 
11

 
(2
)
 
 
Other
 
1

 

 

 
1

 

 
 
Total change in deferred net revenue (online-enabled games) by platform3
 
(327
)
 
(339
)
 
(20
)
 
368

 
173

 
 
Mobile platform fees
 

 
(49
)
 
(44
)
 
(48
)
 
(47
)
 
 





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.

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 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)
 
 
 
 
 
 
 
 
 
 
 
 
 
Q4
 
Q11
 
Q21
 
Q31
 
Q41
 
YOY %
 
FY18
 
FY19
 
FY19
 
FY19
 
FY19
 
Change
CASH FLOW DATA
 
 
 
 
 
 
 
 
 
 
 
Operating cash flow
615

 
120

 
(126
)
 
954

 
599

 
(3
%)
Operating cash flow - TTM
1,692

 
1,636

 
1,458

 
1,563

 
1,547

 
(9
%)
Capital expenditures
20

 
32

 
31

 
21

 
35

 
75
%
Capital expenditures - TTM
107

 
106

 
107

 
104

 
119

 
11
%
Repurchase and retirement of common stock
148

 
300

 
299

 
292

 
301

 
103
%
DEPRECIATION
 
 
 
 
 
 
 
 
 
 
 
Depreciation expense
31

 
30

 
30

 
30

 
31

 

BALANCE SHEET DATA
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
4,258

 
3,876

 
2,881

 
3,887

 
4,708

 


Short-term investments
1,073

 
1,095

 
1,664

 
1,274

 
737

 


Cash and cash equivalents, and short-term investments
5,331

 
4,971

 
4,545

 
5,161

 
5,445

 
2
%
Receivables, net
385

 
371

 
966

 
806

 
623

 
62
%
STOCK-BASED COMPENSATION
 
 
 
 
 
 
 
 
 
 
 
Cost of revenue
1

 
1

 
1

 
1

 
1

 
 
Research and development
44

 
47

 
39

 
49

 
49

 
 
Marketing and sales
8

 
7

 
9

 
8

 
9

 
 
General and administrative
16

 
15

 
17

 
17

 
14

 
 
Total stock-based compensation
69

 
70

 
66

 
75

 
73

 
 







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 Sheets reflect 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.