01—Abstract
Summary
Summary of the 10-K filed May 25, 2022. Cited figures are marked; the original filing is the authoritative source.
Electronic Arts (EA) reported strong revenue growth in the fiscal year ending March 31, 2022, with total net revenue increasing by 24% year-over-year to $6.991 billiona.
This growth was primarily driven by its Live Services segment, which includes extra content and subscriptions, accounting for a significant portion (71%b) of total net revenue. The company also saw substantial growth in its mobile division, boosted by acquisitions like Glu Mobile and Playdemic, indicating a strategic focus on this expanding market. EA continues to leverage its strong portfolio of owned and licensed intellectual properties, with franchises like FIFA and Apex Legends being key revenue drivers.
The company is actively investing in innovation and expanding its reach across various platforms and business models, including free-to-play and subscription services. While the company reported an increase in operating expenses, largely due to strategic investments and acquisitions, it also managed to grow operating income. However, net income and diluted earnings per share saw a slight decrease year-over-year, influenced by increased operating expenses and changes in tax rates.
Looking ahead, EA is focused on creating socially-connected ecosystems, investing in creation tools for its community, and expanding its content and distribution channels. The company's robust live services model, combined with strategic acquisitions and a focus on player engagement, positions it to capitalize on evolving trends in the digital interactive entertainment market.
02—Key points
Key Highlights
- Total net revenue grew 24% year-over-year to $6.991 billion, primarily driven by live services and mobile segment growth.
- Live Services and other net revenue increased 24% to $4.998 billion, representing 71% of total net revenue.
- Acquisitions of Glu Mobile and Playdemic significantly strengthened EA's mobile gaming portfolio.
- Net bookings, a key performance indicator, increased 21% to $7.515 billion, driven by strong performance in FIFA, Apex Legends, and Madden NFL 22.
- The company repurchased approximately $1.3 billion of its common stock during the fiscal year, reflecting a commitment to returning capital to shareholders.
- Digital full game downloads increased by 40% in net revenue, highlighting the shift towards digital distribution in the gaming industry.
- EA is strategically rebranding its global football franchise to 'EA SPORTS FC' starting in fiscal year 2024, aiming to create a larger global football club.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2022, Electronic Arts kept $0.11.
- Revenue$6.99B100.0%
- Cost of revenue−$1.86B26.6%
- Gross profit$5.13B73.4%
- Operating costs−$4.00B57.3%
- Operating income$1.13B16.1%
- Interest, other & tax−$340.0M4.9%
- Net income$789.0M11.3%
Where FY2022 revenue went
$6.99B- Operating costs: $4.00B, 57% of revenue
- Cost of revenue: $1.86B, 27% of revenue
- Net income: $789.0M, 11% of revenue
- Interest, other & tax: $340.0M, 4.9% of revenue
Kept 11% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2022filed May 25, 2022Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $6.99B$5.63B | +24.2% |
| Cost of Revenue | $1.86B$1.49B | +24.4% |
| Gross Profit | $5.13B$4.13B | +24.1% |
| Operating Expenses | $4.00B$3.09B | +29.6% |
| Operating Income | $1.13B$1.05B | +7.9% |
| Interest Expense | $58.00M$45.00M | +28.9% |
| Net Income | $789.00M$837.00M | −5.7% |
| EPS (Basic) | $2.78$2.90 | −4.1% |
| EPS (Diluted) | $2.76$2.87 | −3.8% |
| Shares Outstanding (Basic) | 284.00M289.00M | −1.7% |
| Shares Outstanding (Diluted) | 286.00M292.00M | −2.1% |
05—Questions
Frequently Asked Questions
What was the primary driver of Electronic Arts' revenue growth in the fiscal year ended March 31, 2022?
The primary driver of Electronic Arts' revenue growth was its Live Services segment, which saw a 24% increase year-over-year to $4.998 billion. This segment, comprising extra content, subscriptions, and other revenue generated beyond base game sales, accounted for 71% of the company's total net revenue, demonstrating the success of its ongoing engagement strategies with players.
How did the company's acquisitions impact its performance?
Electronic Arts completed two significant acquisitions in the fiscal year: Glu Mobile for $2.0 billion and Playdemic for $1.4 billion. These acquisitions were strategic moves to accelerate growth in the mobile gaming sector, adding popular mobile franchises and valuable expertise to EA's portfolio. The impact is evident in the substantial growth reported by the mobile business.
What is the significance of the 'EA SPORTS FC' rebrand?
Starting in fiscal year 2024, EA's global football franchise, which includes the highly successful FIFA series, will transition to the 'EA SPORTS FC' brand. This rebranding is a strategic move aimed at creating the 'largest football club in the world' and is expected to drive innovation and connect more fans globally, positioning EA for continued growth in the interactive football space.
How did the company manage its capital and return value to shareholders?
Electronic Arts returned $1.493 billion to stockholders during the fiscal year ended March 31, 2022. This included approximately $1.3 billion through its stock repurchase program and $193 million in cash dividends. The company also has an ongoing $2.6 billion stock repurchase program and declared a quarterly cash dividend, indicating a commitment to shareholder returns.
06—Continue