01—Abstract
Summary
Summary of the 10-Q filed August 3, 2026. Cited figures are marked; the original filing is the authoritative source.
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 billiona, 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 millionb, with diluted EPS of $1.56.
However, cash flow from operations turned negative, showing a usage of $242 millionc, 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.
02—Key points
Key Highlights
- Net 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.
- Live services and other revenue increased 7% year-over-year to $1.472 billion, demonstrating the continued success of EA's recurring revenue model.
- Gross margin improved to 86.2%, up 3 percentage points year-over-year, reflecting the increasing contribution of high-margin digital and live services revenue.
- Net 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.
- Net 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.
- Total cash, cash equivalents, and short-term investments stood at $2.404 billion, providing a healthy liquidity position.
- The 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.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2027, Electronic Arts kept $0.20.
- Revenue$1.99B100.0%
- Cost of revenue−$274.0M13.8%
- Gross profit$1.71B86.2%
- Operating costs−$1.20B60.4%
- Operating income$513.0M25.8%
- Interest, other & tax−$116.0M5.8%
- Net income$397.0M20.0%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2027filed August 3, 2026Financial Statements
Q1 FY2027 against Q1 FY2026
| Line item | Q1 FY2027Q1 FY2026 | Change |
|---|---|---|
| Revenue | $1.99B$1.67B | +18.9% |
| Cost of Revenue | $274.00M$279.00M | −1.8% |
| Gross Profit | $1.71B$1.39B | +23.0% |
| Operating Expenses | $1.20B$1.12B | +7.0% |
| Operating Income | $513.00M$271.00M | +89.3% |
| Interest Expense | $9.00M$14.00M | −35.7% |
| Net Income | $397.00M$201.00M | +97.5% |
| EPS (Basic) | $1.58$0.80 | +97.5% |
| EPS (Diluted) | $1.56$0.79 | +97.5% |
| Shares Outstanding (Basic) | 252.00M251.00M | +0.4% |
| Shares Outstanding (Diluted) | 254.00M254.00M | 0.0% |
05—Questions
Frequently Asked Questions
What is the current status of the proposed acquisition of Electronic Arts?
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.
How did EA's revenue performance compare to the previous year?
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.
What is the company's cash flow situation for the quarter?
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.
What are the key revenue drivers for Electronic Arts?
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.
06—Continue