01—Abstract
Summary
Summary of the 10-K filed May 22, 2024. Cited figures are marked; the original filing is the authoritative source.
Electronic Arts Inc. (EA) reported solid financial results for the fiscal year ended March 30, 2024, with total net revenue reaching $7.56 billiona, a 2% increase year-over-year.
The company's live services segment continues to be a dominant revenue driver, accounting for 73% of total net revenue. This segment, particularly extra content purchases within modes like Ultimate Team and for franchises such as Apex Legends, demonstrates the success of EA's recurring revenue strategy. Operating income saw a significant 14% increase, reaching $1.52 billionb, reflecting improved operational efficiency and a higher gross margin of 77.4%.
EA demonstrated a strong commitment to returning value to shareholders through a substantial stock repurchase program, buying back approximately $1.3 billionc worth of shares in fiscal year 2024. The company also announced a new, significantly larger stock repurchase authorization of $5.0 billion, signaling confidence in its financial position and future outlook. While the company operates in a highly competitive and rapidly evolving industry, its focus on core franchises, digital delivery, and live services positions it for continued engagement and revenue growth.
02—Key points
Key Highlights
- Total net revenue increased by 2% to $7.56 billion in fiscal year 2024.
- Live services and other net revenue contributed $5.55 billion, representing 73% of total net revenue, highlighting the strength of recurring revenue streams.
- Operating income grew by 14% to $1.52 billion, supported by a higher gross margin of 77.4%.
- Net cash provided by operating activities increased by a significant 49% to $2.31 billion.
- The company repurchased $1.3 billion of its common stock in FY2024 and authorized a new $5.0 billion stock repurchase program.
- Digital full game downloads continue to grow, comprising $1.34 billion in net revenue, while packaged goods remained stable at $672 million.
- EA SPORTS FC franchise remains a key revenue driver, with the successful launch of EA SPORTS FC marking its continued importance.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2024, Electronic Arts kept $0.17.
- Revenue$7.56B100.0%
- Cost of revenue−$1.71B22.6%
- Gross profit$5.85B77.4%
- Operating costs−$4.33B57.3%
- Operating income$1.52B20.1%
- Interest, other & tax−$245.0M3.2%
- Net income$1.27B16.8%
Where FY2024 revenue went
$7.56B- Operating costs: $4.33B, 57% of revenue
- Cost of revenue: $1.71B, 23% of revenue
- Net income: $1.27B, 17% of revenue
- Interest, other & tax: $245.0M, 3.2% of revenue
Kept 17% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2024filed May 22, 2024Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $7.56B$7.43B | +1.8% |
| Cost of Revenue | $1.71B$1.79B | −4.6% |
| Gross Profit | $5.85B$5.63B | +3.9% |
| Operating Expenses | $4.33B$4.30B | +0.7% |
| Operating Income | $1.52B$1.33B | +14.0% |
| Interest Expense | $58.00M$58.00M | 0.0% |
| Net Income | $1.27B$802.00M | +58.7% |
| EPS (Basic) | $4.71$2.90 | +62.4% |
| EPS (Diluted) | $4.68$2.88 | +62.5% |
| Shares Outstanding (Basic) | 270.00M277.00M | −2.5% |
| Shares Outstanding (Diluted) | 272.00M278.00M | −2.2% |
05—Questions
Frequently Asked Questions
What is the primary driver of Electronic Arts' revenue growth?
The primary driver of Electronic Arts' revenue growth continues to be its live services, which includes extra content purchases, subscriptions, and other in-game monetization strategies. This segment accounted for 73% of total net revenue in fiscal year 2024, underscoring the success of EA's recurring revenue model.
How is Electronic Arts returning value to shareholders?
Electronic Arts is returning value to shareholders through a combination of dividends and share repurchases. In fiscal year 2024, the company paid $205 million in cash dividends and repurchased approximately $1.3 billion worth of its common stock. Furthermore, a new $5.0 billion stock repurchase program was authorized, indicating a strong commitment to shareholder returns.
What are the key risks facing Electronic Arts?
Key risks identified in the filing include intense competition from established and emerging players, the rapid evolution of technology and business models, potential development and release schedule delays, reliance on third-party platforms (Sony, Microsoft, Apple, Google), cybersecurity threats, and regulatory changes impacting the gaming industry. The success of major franchises like EA SPORTS FC is also critical, as underperformance could significantly impact financial results.
How is the company addressing its restructuring efforts?
Electronic Arts implemented a 2024 Restructuring Plan focused on aligning its portfolio and resources with strategic priorities. This plan involves actions such as portfolio rationalization, real estate reductions, and headcount adjustments, with a goal to substantially complete these actions by December 31, 2024.
06—Continue