Summary
Electronic Arts Inc. (EA) reported a net loss of $140 million, or $0.45 per diluted share, for the three months ended September 30, 2015, a significant shift from the $3 million net income, or $0.01 per diluted share, reported in the same period last year. This decline was primarily driven by a $157 million decrease in gross profit, despite a $14 million reduction in operating expenses. Total net revenue for the quarter fell by 18% to $815 million compared to the prior year's $990 million, largely attributed to declines in product revenue from franchises like Battlefield, Need for Speed, and FIFA, partially offset by gains in Dragon Age: Inquisition and The Sims. For the first six months of fiscal year 2016, EA reported a net income of $302 million, a decrease from $338 million in the comparable period of the prior year. Net revenue for the six-month period also declined by 8% to $2,018 million. The company continues to emphasize its digital transformation, with digital revenue showing growth, but this was not enough to offset the overall revenue decline. Significant upcoming maturities on convertible notes and ongoing stock repurchase programs are key financial activities to monitor.
Financial Highlights
48 data points| Revenue | $815.00M |
| Cost of Revenue | $409.00M |
| Gross Profit | $406.00M |
| Operating Expenses | $525.00M |
| Operating Income | -$119.00M |
| Interest Expense | -$6.00M |
| Net Income | -$140.00M |
| EPS (Basic) | $-0.45 |
| EPS (Diluted) | $-0.45 |
| Shares Outstanding (Basic) | 312.00M |
| Shares Outstanding (Diluted) | 312.00M |
Key Highlights
- 1Net loss of $140 million for the quarter ended September 30, 2015, compared to a net income of $3 million in the prior year.
- 2Total net revenue decreased by 18% to $815 million for the quarter compared to the prior year.
- 3Product revenue declined by 19% to $434 million, while service and other revenue decreased by 16% to $381 million for the quarter.
- 4The company continued its share repurchase program, buying back approximately $126 million worth of stock in the quarter.
- 5Cash and cash equivalents decreased by $470 million to $1,598 million as of September 30, 2015.
- 6The $0.75% Convertible Senior Notes due 2016 became convertible during the quarter, leading to conversions and a $6 million loss on conversion.
- 7Foreign currency exchange rates had a negative impact on reported international net revenue.