Summary
Electronic Arts Inc. (EA) reported strong financial performance for the third quarter of fiscal year 2020, ending December 31, 2019. Total net revenue increased by 24% year-over-year to $1.59 billion, driven by robust sales in both product and service categories. The company saw significant growth in its digital segment, with digital net revenue rising 24% to $1.12 billion, primarily fueled by live services, including extra content sales for popular franchises like FIFA Ultimate Team and Apex Legends, and strong full-game downloads from new releases such as Star Wars Jedi: Fallen Order. Profitability also saw a considerable boost, with operating income up 49% year-over-year to $361 million, leading to a net income of $346 million, or $1.18 per diluted share. The company's operational efficiency is highlighted by a stable gross margin and effective management of operating expenses, despite an increase in R&D spending. EA also generated strong operating cash flow of $1.104 billion for the nine-month period, underscoring its healthy financial position and ability to fund its operations and strategic initiatives, including ongoing share repurchases.
Financial Highlights
49 data points| Revenue | $1.59B |
| Cost of Revenue | $508.00M |
| Gross Profit | $1.08B |
| Operating Expenses | $724.00M |
| Operating Income | $361.00M |
| Interest Expense | $10.00M |
| Net Income | $346.00M |
| EPS (Basic) | $1.18 |
| EPS (Diluted) | $1.18 |
| Shares Outstanding (Basic) | 292.00M |
| Shares Outstanding (Diluted) | 294.00M |
Key Highlights
- 1Total net revenue for the quarter grew 24% year-over-year to $1.59 billion, exceeding market expectations.
- 2Digital net revenue increased by 24% to $1.12 billion, demonstrating continued strength in the company's digital transformation.
- 3Live services revenue, a key growth driver, saw a significant increase of 41% year-over-year, driven by extra content sales.
- 4Operating income surged by 49% to $361 million, indicating improved profitability and operational leverage.
- 5Diluted Earnings Per Share (EPS) was $1.18, a substantial increase from the prior year's quarter, reflecting strong bottom-line performance.
- 6The company generated $1.104 billion in operating cash flow for the nine-month period, showcasing strong cash generation capabilities.
- 7EA actively repurchased shares, spending $305 million in the quarter, reflecting confidence in its valuation and commitment to shareholder returns.