01—Abstract
Summary
Summary of the 10-Q filed October 31, 2025. Cited figures are marked; the original filing is the authoritative source.
Electronic Arts Inc. (EA) reported its financial results for the fiscal quarter and six months ended September 30, 2025.
For the quarter, net revenue was $1.839 billiona, a decrease of 9% year-over-year, while net income was $137 million, down significantly from $294 million in the prior year period. Diluted earnings per share stood at $0.54. The company announced a definitive agreement to be acquired by an investor consortium for $210 per share in cash, expected to close in the first quarter of fiscal 2027.
This significant development overshadows the current operational performance. While the company experienced a decline in net revenue and net income compared to the prior year, management highlighted ongoing trends in live services and digital game delivery as crucial for future growth. Despite the year-over-year revenue decline, net bookings for the quarter were $1.818 billionb, reflecting underlying sales activity.
Investors should closely monitor the progress of the proposed merger, including regulatory approvals and stockholder adoption, as this transaction represents the most material event for the company. Operationally, the continued strength of live services, particularly within sports franchises like EA SPORTS FC, remains a key revenue driver, even amidst competitive pressures and shifts in consumer spending patterns.
02—Key points
Key Highlights
- Net revenue for the three months ended September 30, 2025, was $1.839 billion, a 9% decrease year-over-year.
- Net income for the quarter was $137 million, a significant decrease from $294 million in the prior year period.
- Diluted earnings per share for the quarter was $0.54.
- A definitive agreement to be acquired by an investor consortium for $210 per share in cash was announced, with an expected closing in the first quarter of fiscal 2027.
- Net bookings for the quarter were $1.818 billion, a 13% decrease year-over-year, primarily driven by declines in EA SPORTS College Football and EA SPORTS FC franchises.
- Cash, cash equivalents, and short-term investments totaled $1.260 billion as of September 30, 2025.
- The company returned $423 million to stockholders through share repurchases and dividends in the quarter.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2026, Electronic Arts kept $0.07.
- Revenue$1.84B100.0%
- Cost of revenue−$443.0M24.1%
- Gross profit$1.40B75.9%
- Operating costs−$1.20B65.0%
- Operating income$200.0M10.9%
- Interest, other & tax−$63.0M3.4%
- Net income$137.0M7.4%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed October 31, 2025Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Revenue | $1.84B$2.02B | −9.2% |
| Cost of Revenue | $443.00M$456.00M | −2.9% |
| Gross Profit | $1.40B$1.57B | −11.0% |
| Operating Expenses | $1.20B$1.19B | +0.9% |
| Operating Income | $200.00M$384.00M | −47.9% |
| Interest Expense | $14.00M$14.00M | 0.0% |
| Net Income | $137.00M$294.00M | −53.4% |
| EPS (Basic) | $0.55$1.11 | −50.5% |
| EPS (Diluted) | $0.54$1.11 | −51.4% |
| Shares Outstanding (Basic) | 250.00M264.00M | −5.3% |
| Shares Outstanding (Diluted) | 252.00M266.00M | −5.3% |
05—Questions
Frequently Asked Questions
What is the most significant development impacting Electronic Arts at this time?
The most significant development is the announcement of a definitive agreement to be acquired by an investor consortium for $210 per share in cash. This transaction is expected to close in the first quarter of fiscal year 2027 and is subject to various closing conditions, including regulatory and stockholder approvals.
How did Electronic Arts' financial performance compare to the prior year for the quarter?
For the three months ended September 30, 2025, net revenue decreased by 9% to $1.839 billion, and net income decreased significantly by 53% to $137 million, compared to the same period in the prior year. Diluted EPS also fell to $0.54 from $1.11.
What is the outlook for live services revenue?
Live services and other net revenue was $1.221 billion for the quarter, a 7% decrease year-over-year. However, management expects live services net revenue to continue to be material to the business, driven by extra content sales, particularly within sports franchises like EA SPORTS FC's Ultimate Team mode, despite the competitive landscape.
What is the company's cash position and how is it managing capital?
As of September 30, 2025, Electronic Arts held $1.260 billion in cash, cash equivalents, and short-term investments. In the current quarter, the company returned $423 million to stockholders through share repurchases ($375 million) and cash dividends ($48 million).
06—Continue