Summary
Electronic Arts Inc. (EA) reported total net revenue of $1,061 million for the third quarter of fiscal year 2012 (ended December 30, 2011), a slight increase of $8 million compared to the prior year's quarter. This growth was primarily driven by digital products, including wireless, internet-derived, and advertising revenues, boosted by strong performance from titles like "Battlefield 3," "FIFA 12," and "Madden 12." However, the company reported a net loss of $205 million for the quarter, an improvement from a loss of $322 million in the same period last year. This reduction in loss was attributed to decreased restructuring activities and lower cost of goods sold, partially offset by an increase in operating expenses, particularly personnel costs associated with recent acquisitions. For the nine-month period ended December 31, 2011, EA generated net revenue of $2,775 million, an 11% increase year-over-year. The company highlighted significant growth in its digital distribution and services segment, reflecting a strategic shift towards online and mobile platforms. Key strategic developments during the period included the acquisition of PopCap Games, Inc. to bolster its casual gaming portfolio and digital offerings, and the issuance of convertible senior notes to strengthen its balance sheet. Despite revenue growth, cash flow from operations saw a decrease due to higher accounts payable settlements, and investing activities were significantly impacted by the PopCap acquisition.
Financial Highlights
48 data points| Revenue | $1.06B |
| Cost of Revenue | $552.00M |
| Gross Profit | $509.00M |
| Operating Expenses | $692.00M |
| Operating Income | -$183.00M |
| Interest Expense | $7.00M |
| Net Income | -$205.00M |
| EPS (Basic) | $-0.62 |
| EPS (Diluted) | $-0.62 |
| Shares Outstanding (Basic) | 332.00M |
Key Highlights
- 1Total net revenue for the three months ended December 31, 2011, was $1,061 million, a slight increase of $8 million compared to the prior year, driven by digital products and strong title performance (Battlefield 3, FIFA 12, Madden 12).
- 2Net loss improved to $205 million for the quarter, from $322 million in the prior year, primarily due to reduced restructuring charges and lower cost of goods sold.
- 3Digital content distribution and services revenue significantly increased, indicating a strategic focus on online and mobile platforms.
- 4Acquisition of PopCap Games Inc. in August 2011 for approximately $732 million (cash and stock) to enhance casual gaming and digital business.
- 5Issued $632.5 million in 0.75% Convertible Senior Notes due 2016 to strengthen financial position.
- 6Stock repurchase program continued, with $288 million repurchased by December 31, 2011, out of an authorized $600 million.
- 7International sales accounted for 52% of total net revenue for the nine months ended December 31, 2011, showing the company's global reach.