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Electronic Arts Reports Q3 FY13 Financial Results

Stocks in this article: EA

Electronic Arts Inc. (NASDAQ: EA) today announced preliminary financial results for its third fiscal quarter ended December 31, 2012.

“Despite a challenging quarter, we were able to deliver non-GAAP EPS at the high end of our guidance range,” said Chief Executive Officer John Riccitiello. “We are investing for the future wave of growth that we foresee in digital and console.”

“We delivered on non-GAAP EPS by driving high-margin digital revenue and through disciplined expense management,” said Chief Financial Officer Blake Jorgensen.

“EA had six of the top twenty titles in Western markets in 2012, compared to four in 2011,” said Chief Operating Officer Peter Moore. “EA was also the #1 publisher on iOS worldwide for the year.”

Selected Operating Highlights and Metrics: *On a non-GAAP basis

  • FIFA 13 sold through over 12 million units through the third quarter, a 23% increase versus FIFA 12 in the prior year.
  • FIFA 13 digital net revenue topped $100 million* in the quarter, a 98% increase versus FIFA 12 in the prior year.
  • Total FIFA digital net revenue generated over $230 million* in the first three quarters of fiscal 13, including EA SPORTS FIFA Online 2 and FIFA World Class Soccer that together contributed over $60 million*.
  • Battlefield 3™ Premium generated over $108 million in sales through the third quarter, and has 2.9 million subscriptions to date.
  • EA had six of the top twenty titles in Western World retail markets in 2012, compared to four in 2011, and was the #1 global publisher in the iOS game market for 2012.
  • The Simpsons™: Tapped Out was a top grossing iOS game for the quarter, generating over $23 million* in digital net revenue.
  • EA’s games and services for mobile, including handhelds, have generated approximately $100 million* in the quarter, an 18%* year-over-year increase in digital net revenue.
  • EA’s Origin™ platform for downloading digital games and services has registered over 39 million users, including 17 million mobile users. EA has signed agreements with 86 independent developers for Origin.
  • Trailing twelve-month non-GAAP digital net revenue was up 37% to a record $1.5 billion*.
  • Trailing twelve-month operating cash flow was $378 million, a $135 million improvement versus the prior year.
  • EA repurchased 12.2 million shares at a cost of $157 million in the third fiscal quarter, pursuant to a $500 million Share Repurchase Program announced on July 31, 2012, bringing the total shares repurchased under the current program to 20.6 million shares at a total cost of $265 million.
  • Dead Space™ 3 pre-sells are outpacing Dead Space 2, and Crysis® 3 pre-orders are tracking 40% ahead of Crysis 2.

Q3 Financial Highlights:

For the quarter, non-GAAP net revenue of $1,182 million was below our guidance of $1,250 million to $1,350 million. Non-GAAP diluted earnings per share of $0.57 was above the midpoint of our guidance of $0.50 to $0.60.

 

 

(in millions of $, except per share amounts)

 

QuarterEnded12/31/12

 

QuarterEnded12/31/11

 
Digital Net Revenue $ 321 $ 274
Publishing Packaged Goods and Other Net Revenue 568 738
Distribution Packaged Goods Net Revenue   33       49  
GAAP Total Net Revenue $ 922     $ 1,061  
 
Non-GAAP Digital Net Revenue $ 407 $ 377
Non-GAAP Publishing Packaged Goods and Other Net Revenue 742 1,225
Non-GAAP Distribution Packaged Goods Net Revenue   33       49  
Non-GAAP Total Net Revenue $ 1,182     $ 1,651  
 
GAAP Net Loss $ (45 ) $ (205 )
Non-GAAP Net Income 176 334
GAAP Diluted Loss Per Share (0.15 ) (0.62 )
Non-GAAP Diluted Earnings Per Share 0.57 0.99
 
Cash Provided by Operations $ 363 $ 475
   

Trailing Twelve Month (TTM) Financial Highlights:

 

(in millions of $)

TTMEnded12/31/12

TTMEnded12/31/11

 
GAAP Net Revenue $ 3,956 $ 3,865
GAAP Net Income (Loss) 175 (173 )
 
Non-GAAP Net Revenue $ 3,730 $ 4,204
Non-GAAP Net Income 151 311
 
Cash Provided by Operations $ 378 $ 243
 
 

Q3 FY13 Digital Metrics:

 

(in millions)

QuarterEnded12/31/12

QuarterEnded12/31/11

 

GAAP Mobile Net Revenue

$

86

$

70

Non-GAAP Mobile Net Revenue

$

99

$

83

 

Business Outlook as of January 30, 2013

The following forward-looking statements, as well as those made above, reflect expectations as of January 30, 2013. Electronic Arts assumes no obligation to update these statements. Results may be materially different and are affected by many factors, including: product development delays; competition in the industry; the health of the economy in the U.S. and abroad and the related impact on discretionary consumer spending; changes in anticipated costs; the financial impact of acquisitions by EA; the popular appeal of EA’s products; EA’s effective tax rate; and other factors detailed in this release and in EA’s annual and quarterly SEC filings.

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