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Electronic Arts Reports Q3 FY14 Financial Results

Electronic Arts Inc. (NASDAQ: EA) today announced preliminary financial results for its third fiscal quarter ended December 31, 2013.

“EA’s third quarter marked an exciting start to a new generation of games, and we are proud to have been the #1 publisher on next-generation consoles in December, with millions of gamers across the globe playing EA titles on the PlayStation 4 and Xbox One,” said Chief Executive Officer Andrew Wilson. “In addition to consoles, our mobile games, digital downloads and live services are growing year-over-year as we continue to deliver exciting new experiences to gamers around the world.”

“In a transitional quarter, EA delivered EPS results above our guidance driven by strong sales of our next-generation console titles, continued growth in our digital games and services, and financial discipline across the business,” said Chief Financial Officer Blake Jorgensen. “For our full year outlook, we are lowering our non-GAAP net revenue guidance to $3.91 billion due to the weakness in current generation software, but we are increasing our non-GAAP EPS guidance to $1.30 due to the improvement in our operating profits.”

This release, along with ongoing updates regarding EA’s business, is available on EA’s blog at http://ea.com/news.

Selected Operating Highlights and Metrics:

*On a non-GAAP basis

  • EA was the #1 publisher on the PlayStation 4 computer entertainment systems and Xbox One, the all-in-one games and entertainment system from Microsoft, in the Western World in December, led by Battlefield 4™, Madden NFL 25, FIFA 14 and Need for Speed™ Rivals.
  • For the month of December, FIFA 14 and Battlefield 4 were two of the top three best-selling titles across all platforms in the Western World, and FIFA 14 was the #1 title in Europe.
  • EA titles represented 35% of the Western World PlayStation 4 and Xbox One software sales in the third quarter.
  • Third quarter digital net revenue increased by 27% year-over-year to $517 million*, and trailing twelve month digital net revenue was a record $1.86 billion*.
  • On a year-to-date basis, FIFA Ultimate Team, Madden NFL Ultimate Team, and NHL® Hockey Ultimate Team collectively grew 60% year-over-year and drove digital net revenue* growth.
  • EA’s mobile and handheld digital net revenue generated $125 million* in Q3 fiscal 14, a 26% year-over-year increase over Q3 fiscal 13.
  • The Simpsons™ Tapped Out generated over $130 million* in digital net revenue through Q3 fiscal 14.
  • Trailing twelve months operating cash flow was $664 million, the highest trailing twelve month operating cash flow for EA since 2005.

Q3 Financial Highlights:

For the quarter, non-GAAP net revenue of $1.57 billion was below our guidance of $1.65 billion. Non-GAAP diluted earnings per share of $1.26 was above our guidance of $1.22.

 

 

(in millions of $, except per share amounts)

 

QuarterEnded12/31/13

 

QuarterEnded12/31/12

 
GAAP Digital Net Revenue $410 $321
GAAP Publishing Packaged Goods and Other Net Revenue 370 568
GAAP Distribution Packaged Goods Net Revenue 28 33
GAAP Total Net Revenue $808 $922
 
Non-GAAP Digital Net Revenue $517 $407
Non-GAAP Publishing Packaged Goods and Other Net Revenue 1,027 742
Non-GAAP Distribution Packaged Goods Net Revenue 28 33
Non-GAAP Total Net Revenue $1,572 $1,182
 
GAAP Net Loss $(308) $(45)
Non-GAAP Net Income 398 176
GAAP Loss Per Share (1.00) (0.15)
Non-GAAP Diluted Earnings Per Share 1.26 0.57
 
Cash Provided by Operations $685 $363

 

Trailing Twelve Month (TTM) Financial Highlights:

 

(in millions of $)

TTMEnded12/31/13

TTMEnded12/31/12

 

GAAP Net Revenue

$3,661

$3,956

GAAP Net Income (Loss)

(36)

175

Non-GAAP Net Revenue

4,147

3,730

Non-GAAP Net Income

551

151

 

Cash Provided by Operations

$664

$378

Business Outlook as of January 28, 2014

The following forward-looking statements, as well as those made above, reflect expectations as of January 28, 2014. Electronic Arts assumes no obligation to update these statements. Results may be materially different and are affected by many factors detailed in this release and in EA’s annual and quarterly SEC filings.

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