01—Abstract
Summary
Summary of the 10-Q filed November 7, 2023. Cited figures are marked; the original filing is the authoritative source.
Electronic Arts Inc. (EA) reported its financial results for the fiscal second quarter ended September 30, 2023.
The company saw a modest increase in net revenue, reaching $1.914 billiona, a 1% year-over-year rise. This growth was driven by strong performance in full game downloads and new releases like EA SPORTS FC 24, which offset a slight decline in live services and other revenue. Net income for the quarter was $399 million, or $1.47 per diluted share, showing an improvement from the prior year.
The company also reported a significant increase in net cash provided by operating activities, up 200%b year-over-year, indicating improved cash generation. EA continues its commitment to returning capital to shareholders through share repurchases and dividends, demonstrating financial discipline and confidence in its ongoing business strategy.
02—Key points
Key Highlights
- Net revenue increased by 1% year-over-year to $1.914 billion.
- Net income grew to $399 million, or $1.47 per diluted share, up from $299 million in the prior year period.
- Net cash provided by operating activities significantly increased by 200% year-over-year to $112 million for the quarter.
- Full game net revenue increased by 3% to $621 million, primarily driven by new releases.
- Live services and other net revenue saw a slight decrease of 1% to $1,293 million.
- The company repurchased 2.6 million shares for $325 million under its ongoing stock repurchase program.
- EA SPORTS FC 24's launch contributed positively to the financial results, alongside sustained performance from key franchises like Apex Legends and The Sims 4.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2024, Electronic Arts kept $0.21.
- Revenue$1.91B100.0%
- Cost of revenue−$456.0M23.8%
- Gross profit$1.46B76.2%
- Operating costs−$1.08B56.5%
- Operating income$377.0M19.7%
- Interest, other & tax$22.0M1.1%
- Net income$399.0M20.8%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2024filed November 7, 2023Financial Statements
Q2 FY2024 against Q2 FY2023
| Line item | Q2 FY2024Q2 FY2023 | Change |
|---|---|---|
| Revenue | $1.91B$1.90B | +0.5% |
| Cost of Revenue | $456.00M$462.00M | −1.3% |
| Gross Profit | $1.46B$1.44B | +1.1% |
| Operating Expenses | $1.08B$1.01B | +6.5% |
| Operating Income | $377.00M$427.00M | −11.7% |
| Interest Expense | $14.00M$15.00M | −6.7% |
| Net Income | $399.00M$299.00M | +33.4% |
| EPS (Basic) | $1.47$1.08 | +36.1% |
| EPS (Diluted) | $1.47$1.07 | +37.4% |
| Shares Outstanding (Basic) | 271.00M278.00M | −2.5% |
| Shares Outstanding (Diluted) | 272.00M279.00M | −2.5% |
05—Questions
Frequently Asked Questions
What was the primary driver of revenue growth in the second quarter?
Revenue growth was primarily driven by strong performance in full game downloads, boosted by the release of new titles such as EA SPORTS FC 24 and Star Wars Jedi: Survivor. These gains helped offset a slight decrease in live services and other revenue.
How did EA's profitability change compared to the previous year?
EA's profitability improved significantly. Net income rose to $399 million for the quarter ended September 30, 2023, from $299 million in the same period last year. Diluted earnings per share also increased to $1.47 from $1.07.
What is the company's cash flow situation?
The company's cash flow from operations improved dramatically, with net cash provided by operating activities increasing by 200% year-over-year to $112 million for the quarter. Total cash, cash equivalents, and short-term investments stood at $2.305 billion as of September 30, 2023, indicating a healthy liquidity position.
What is EA doing with its cash?
EA continues to return capital to shareholders through share repurchases and dividends. In the quarter, the company repurchased 2.6 million shares for $325 million and paid cash dividends of $51 million.
06—Continue