01—Abstract
Summary
Summary of the 10-Q filed August 1, 2025. Cited figures are marked; the original filing is the authoritative source.
Electronic Arts Inc. (EA) reported its first quarter results for fiscal year 2026, ending June 30, 2025.
Total net revenue saw a slight increase of 1% year-over-year to $1,671 milliona. However, operating income declined by 26% to $271 million, and net income decreased by 28% to $201 million ($0.79 diluted EPS), primarily due to a significant 12% increase in operating expenses, driven by higher research and development investments and marketing spend. The company's cash position saw a notable decrease, with cash and cash equivalents falling to $1,518 million from $2,136 million at the prior quarter's end.
This was largely driven by increased financing outflows, including substantial share repurchases totaling $375 millionb and excise taxes paid, as well as a significant drop in net cash provided by operating activities to $17 million from $120 million in the prior year period. Despite the cash outflow, EA returned $423 million to stockholders through share repurchases and dividends.
02—Key points
Key Highlights
- Net revenue increased 1% year-over-year to $1.67 billion, slightly above the prior year's $1.66 billion.
- Operating income decreased significantly by 26% year-over-year to $271 million, impacted by higher operating expenses.
- Net income for the quarter was $201 million, a decrease from $280 million in the same period last year, resulting in diluted EPS of $0.79 compared to $1.04.
- Cash and cash equivalents decreased by $618 million sequentially, ending at $1.52 billion.
- Net cash provided by operating activities saw a substantial decrease, down to $17 million from $120 million in the prior year period.
- The company repurchased 3.0 million shares for approximately $375 million and paid $48 million in dividends, returning a total of $423 million to stockholders.
- Research and Development expenses increased by 12% year-over-year, reflecting continued investment in studio operations and contracted services.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2026, Electronic Arts kept $0.12.
- Revenue$1.67B100.0%
- Cost of revenue−$279.0M16.7%
- Gross profit$1.39B83.3%
- Operating costs−$1.12B67.1%
- Operating income$271.0M16.2%
- Interest, other & tax−$70.0M4.2%
- Net income$201.0M12.0%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed August 1, 2025Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $1.67B$1.66B | +0.7% |
| Cost of Revenue | $279.00M$263.00M | +6.1% |
| Gross Profit | $1.39B$1.40B | −0.4% |
| Operating Expenses | $1.12B$1.03B | +8.5% |
| Operating Income | $271.00M$364.00M | −25.5% |
| Interest Expense | $14.00M$14.00M | 0.0% |
| Net Income | $201.00M$280.00M | −28.2% |
| EPS (Basic) | $0.80$1.05 | −23.8% |
| EPS (Diluted) | $0.79$1.04 | −24.0% |
| Shares Outstanding (Basic) | 251.00M266.00M | −5.6% |
| Shares Outstanding (Diluted) | 254.00M268.00M | −5.2% |
05—Questions
Frequently Asked Questions
How did EA's revenue perform in the first quarter of FY26 compared to the previous year?
EA reported a total net revenue of $1,671 million for the three months ended June 30, 2025, a slight increase of 1% compared to $1,660 million in the same period of the prior year. Full game revenue saw a notable increase of 16% to $289 million, while live services and other revenue decreased by 2% to $1,382 million.
What is the primary driver behind the decrease in operating income and net income?
The decrease in operating income and net income was primarily driven by a significant increase in operating expenses. Specifically, Research and Development expenses rose by 12% due to increased personnel and contracted services costs, and Marketing and Sales expenses increased by 4% due to higher advertising spend for key franchises. Overall operating expenses increased by 9% year-over-year.
What is the company's current cash position, and what impacted it during the quarter?
As of June 30, 2025, EA's cash and cash equivalents stood at $1,518 million, a decrease of $618 million from the prior quarter. This reduction was largely due to a significant decrease in net cash provided by operating activities to $17 million and increased financing activities, including substantial share repurchases ($375 million) and payments related to stock-based compensation taxes.
How is EA returning capital to shareholders?
During the quarter, EA returned a total of $423 million to stockholders. This includes $375 million for share repurchases (approximately 3.0 million shares) and $48 million through its quarterly cash dividend program.
06—Continue