10-KPeriod: FY2021

ELECTRONIC ARTS INC. Annual Report, Year Ended Mar 31, 2021

Filed May 26, 2021For Securities:EA

Summary

Electronic Arts Inc. (EA) reported solid performance for the fiscal year ended March 31, 2021, with total net revenue reaching $5.63 billion, a slight increase of 2% year-over-year. This growth was primarily driven by a 10% increase in live services and other net revenue, which now accounts for 71% of total net revenue. The company benefited from increased player engagement, partly due to pandemic-related social restrictions, which accelerated longer-term trends like digital game purchases and live service monetization. EA also made significant strategic acquisitions during the year, including Codemasters for $1.2 billion to bolster its racing game portfolio and Glu Mobile for $2.3 billion to enhance its mobile gaming capabilities. Despite revenue growth, operating income and net income saw a decline compared to the prior year. This was largely due to a one-time net tax benefit recognized in fiscal year 2020, which artificially inflated that year's net income. EA continued its commitment to returning capital to shareholders through share repurchases and initiated a quarterly cash dividend. The company's strategy remains focused on delivering engaging games and content, expanding its live services, and connecting more players across more platforms.

Financial Highlights

51 data points
Beta

Revenue

$5.63B

73.5% Gross Margin

Net Income

$837.00M

14.9% Net Margin

EPS (Diluted)

$2.87

Total Assets

$13.29B

Cash & Equivalents

$5.26B

Free Cash Flow

$1.93B

Financial Statements
Beta
Revenue$5.63B
Cost of Revenue$1.49B
Gross Profit$4.13B
Operating Expenses$3.09B
Operating Income$1.05B
Interest Expense$45.00M
Net Income$837.00M
EPS (Basic)$2.90
EPS (Diluted)$2.87
Shares Outstanding (Basic)289.00M
Shares Outstanding (Diluted)292.00M

Key Highlights

  • 1Total net revenue increased by 2% year-over-year to $5.63 billion, driven by strong live services performance.
  • 2Live services and other net revenue grew by 10% to $4.02 billion, representing 71% of total net revenue.
  • 3Significant strategic acquisitions were completed: Codemasters for $1.2 billion and Glu Mobile for $2.3 billion, strengthening the company's portfolio and market position.
  • 4Digital sales continue to grow, with digital full game downloads increasing by 13% and representing a significant portion of full game revenue.
  • 5The company returned $827 million to stockholders through share repurchases and dividends in fiscal year 2021.
  • 6Net bookings, a key performance metric, increased by 15% to $6.19 billion, indicating strong underlying demand.
  • 7Despite revenue growth, operating income decreased by 28% and net income by 72% due to a large one-time tax benefit in the prior year.

Frequently Asked Questions

Electronic Arts reported total net revenue of $5.63 billion, a 2% increase year-over-year. Live services and other net revenue grew by 10% to $4.02 billion. Operating income was $1.05 billion (down 28% year-over-year), and net income was $837 million (down 72% year-over-year). Diluted EPS was $2.87.

EA completed two significant acquisitions: Codemasters Group Holdings plc for $1.2 billion to expand its racing game portfolio and Glu Mobile Inc. for $2.3 billion to bolster its mobile gaming business. These acquisitions are expected to accelerate growth and enhance the company's market position.

The pandemic positively impacted EA by increasing player engagement as consumers spent more time at home. This boosted sales and accelerated existing trends like digital game purchases and live services, contributing to revenue growth. However, the company also noted the uncertainty of the pandemic's long-term effects and its potential to impact development schedules and consumer behavior.

Live services and other net revenue, which includes extra content, subscriptions, and other non-base game revenue, is a critical and growing part of EA's business. It increased by 10% to $4.02 billion, making up 71% of total net revenue. This segment, particularly extra content sales within modes like Ultimate Team, provides a more predictable and recurring revenue stream.