01—Abstract
Summary
Summary of the 10-K filed May 26, 2021. Cited figures are marked; the original filing is the authoritative source.
Electronic Arts Inc. (EA) reported solid performance for the fiscal year ended March 31, 2021, with total net revenue reaching $5.63 billiona, 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 billionb 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.
02—Key points
Key Highlights
- Total net revenue increased by 2% year-over-year to $5.63 billion, driven by strong live services performance.
- Live services and other net revenue grew by 10% to $4.02 billion, representing 71% of total net revenue.
- Significant strategic acquisitions were completed: Codemasters for $1.2 billion and Glu Mobile for $2.3 billion, strengthening the company's portfolio and market position.
- Digital sales continue to grow, with digital full game downloads increasing by 13% and representing a significant portion of full game revenue.
- The company returned $827 million to stockholders through share repurchases and dividends in fiscal year 2021.
- Net bookings, a key performance metric, increased by 15% to $6.19 billion, indicating strong underlying demand.
- Despite revenue growth, operating income decreased by 28% and net income by 72% due to a large one-time tax benefit in the prior year.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, Electronic Arts kept $0.15.
- Revenue$5.63B100.0%
- Cost of revenue−$1.49B26.5%
- Gross profit$4.13B73.5%
- Operating costs−$3.09B54.9%
- Operating income$1.05B18.6%
- Interest, other & tax−$209.0M3.7%
- Net income$837.0M14.9%
Where FY2021 revenue went
$5.63B- Operating costs: $3.09B, 55% of revenue
- Cost of revenue: $1.49B, 27% of revenue
- Net income: $837.0M, 15% of revenue
- Interest, other & tax: $209.0M, 3.7% of revenue
Kept 15% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2021filed May 26, 2021Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $5.63B$5.54B | +1.7% |
| Cost of Revenue | $1.49B$1.37B | +9.1% |
| Gross Profit | $4.13B$4.17B | −0.8% |
| Operating Expenses | $3.09B$2.72B | +13.4% |
| Operating Income | $1.05B$1.45B | −27.6% |
| Interest Expense | $45.00M$44.00M | +2.3% |
| Net Income | $837.00M$3.04B | −72.5% |
| EPS (Basic) | $2.90$10.37 | −72.0% |
| EPS (Diluted) | $2.87$10.30 | −72.1% |
| Shares Outstanding (Basic) | 289.00M293.00M | −1.4% |
| Shares Outstanding (Diluted) | 292.00M295.00M | −1.0% |
05—Questions
Frequently Asked Questions
What were Electronic Arts' key financial results for the fiscal year ended March 31, 2021?
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.
What were the major strategic moves made by EA during this fiscal year?
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.
How did the COVID-19 pandemic impact EA's business?
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.
What is the significance of 'Live Services and Other Net Revenue' for EA?
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.
06—Continue