How did Electronic Arts' revenue performance change in this quarter compared to the prior year?

Total net revenue for the quarter ending June 29, 2013, was $949 million, a slight decrease of 1% compared to $955 million in the same quarter last year. This was primarily driven by a significant decline in product revenue, partially offset by strong growth in service and other revenue.

What were the key drivers behind the increase in net income?

The increase in net income to $222 million from $201 million was primarily due to a $5 million increase in gross profit, a $40 million decrease in operating expenses (excluding acquisition-related contingent consideration), and a $3 million decrease in the provision for income taxes. These positive factors were partially offset by an increase in acquisition-related contingent consideration charges.

How is the company's revenue mix shifting?

Electronic Arts is seeing a significant shift towards digital revenue. 'Service and other' revenue, which includes subscriptions, micro-transactions, and online services, increased by 60% year-over-year. Conversely, 'product revenue,' largely from physical game sales, decreased by 23%.

What is the company's liquidity position?

As of June 30, 2013, Electronic Arts had $1,056 million in cash and cash equivalents and $355 million in short-term investments, totaling $1,411 million. Management believes this, along with cash generated from operations and available financing facilities, is sufficient to meet operating requirements for at least the next 12 months.

EA 10-Q Quarterly Report Q1 FY2014 — Revenue, Net Income, EPS

Summary

Electronic Arts Inc. (EA) reported its financial results for the first quarter of fiscal year 2014, ending June 29, 2013. The company generated total net revenue of $949 million, a slight decrease of 1% compared to the same period last year. Despite the minor revenue dip, net income saw a notable increase to $222 million, up from $201 million in the prior year's quarter, driven by improved gross profit and reduced operating expenses. Diluted earnings per share also rose to $0.71 from $0.63. The company highlighted a significant increase in "service and other" revenue, which grew by 60% year-over-year, indicating a successful shift towards digital content and services. Conversely, "product revenue" experienced a decline of 23%. Geographically, international revenue showed a strong increase of 10%, now representing 58% of total net revenue, while North American revenue declined by 12%. EA's balance sheet shows a decrease in cash and cash equivalents to $1,056 million from $1,292 million at the end of the previous fiscal year, while short-term investments also saw a slight reduction. The company's financial health appears stable, with sufficient liquidity to meet operational needs for the next 12 months.

Financial Highlights

49 data points

Beta

Revenue

$949.00M

0.8% Gross Margin

Net Income

$222.00M

0.2% Net Margin

EPS (Diluted)

$0.71

Total Assets

$4.61B

Cash & Equivalents

$1.06B

Free Cash Flow

-$248.00M

Financial Statements

Beta

Revenue	$949.00M
Cost of Revenue	$194.00M
Gross Profit	$755.00M
Operating Expenses	$522.00M
Operating Income	$233.00M
Interest Expense	-$7.00M
Net Income	$222.00M
EPS (Basic)	$0.73
EPS (Diluted)	$0.71
Shares Outstanding (Basic)	304.00M
Shares Outstanding (Diluted)	312.00M

Key Highlights

1Total net revenue for the quarter was $949 million, a 1% decrease year-over-year.
2Net income increased to $222 million from $201 million in the prior year's quarter.
3Diluted earnings per share improved to $0.71 from $0.63.
4Service and other revenue grew by 60% to $406 million, signaling a strong shift to digital services.
5Product revenue decreased by 23% to $543 million.
6International revenue increased by 10% to $554 million, now comprising 58% of total net revenue.
7Cash and cash equivalents decreased to $1,056 million from $1,292 million.

ELECTRONIC ARTS INC. Quarterly Report for Q1 Ended Jun 30, 2013

Summary

Financial Highlights

Key Highlights

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