10-QPeriod: Q1 FY2027

ELECTRONIC ARTS INC. Quarterly Report for Q1 Ended Jun 30, 2026

Filed August 3, 2026For Securities:EA

Summary

Electronic Arts Inc. (EA) reported solid financial results for the quarter ended June 30, 2026, with net revenue increasing 19% year-over-year to $1.986 billion, largely driven by strong performance in its EA SPORTS franchises, Battlefield 6, and Apex Legends. The company's focus on live services continues to be a significant revenue driver, with this segment growing 7% year-over-year. Gross margin improved to 86.2%, reflecting the favorable shift towards digital sales and live services, which generally carry higher margins than physical goods. Operationally, EA's net income rose to $397 million, with diluted EPS of $1.56. However, cash flow from operations turned negative, showing a usage of $242 million, a significant decrease from the prior year's positive $17 million, primarily due to higher cash payments for income taxes and variable compensation. Notably, the company is nearing the completion of its acquisition by an investor consortium, expected to close around August 4, 2026, which will result in the delisting of EA's common stock from the NASDAQ.

Key Highlights

  • 1Net revenue grew 19% year-over-year to $1.986 billion, driven by strong sales from key franchises like EA SPORTS FC, Battlefield 6, and Apex Legends.
  • 2Live services and other revenue increased 7% year-over-year to $1.472 billion, demonstrating the continued success of EA's recurring revenue model.
  • 3Gross margin improved to 86.2%, up 3 percentage points year-over-year, reflecting the increasing contribution of high-margin digital and live services revenue.
  • 4Net income increased to $397 million, with diluted EPS of $1.56, a significant improvement from $201 million and $0.79 in the prior year's quarter.
  • 5Net cash used in operating activities was $242 million, a reversal from positive cash flow in the prior year, primarily due to higher tax payments and compensation expenses.
  • 6Total cash, cash equivalents, and short-term investments stood at $2.404 billion, providing a healthy liquidity position.
  • 7The acquisition by the investor consortium is nearing completion, with an expected closing date around August 4, 2026, which will lead to the delisting of EA's stock.

Frequently Asked Questions

Electronic Arts entered into a definitive agreement to be acquired by an investor consortium comprised of The Public Investment Fund, Silver Lake Group, and Affinity Partners. All regulatory approvals have been obtained, and the transaction is expected to close on or about August 4, 2026. Upon closing, EA's common stock will be delisted from the NASDAQ.

EA reported a 19% increase in net revenue for the three months ended June 30, 2026, reaching $1.986 billion, up from $1.671 billion in the prior year's quarter. This growth was primarily driven by strong sales in full game downloads and continued growth in live services.

For the three months ended June 30, 2026, EA used $242 million in operating activities, a notable shift from the $17 million generated in the same period last year. This was primarily due to higher cash payments for income taxes and variable compensation. However, the company maintains a strong liquidity position with $2.404 billion in cash, cash equivalents, and short-term investments.

The primary revenue drivers for Electronic Arts are its live services, which include extra content, subscription offerings, and other in-game purchases, and full game downloads. Key franchises such as EA SPORTS FC, Apex Legends, Battlefield, and The Sims are significant contributors to both segments.