Exhibit 99.1
 
Electronic Arts Reports Q3 FY18
graphic050614a06.jpg
 
 
 
 
Financial Results
 
REDWOOD CITY, CA - January 30, 2018 - Electronic Arts Inc. (NASDAQ: EA) today announced preliminary financial results for its third fiscal quarter ended December 31, 2017.

“Players enjoyed hundreds of millions of hours in our games across console, mobile and PC during the holiday quarter, and we’re thrilled to see our titles driving excitement for more fans around the world,” said Chief Executive Officer Andrew Wilson. “We’re expanding the reach of our top franchises across more geographies, our competitions are growing in participation and viewership, and we’re continuing to grow our network with more amazing games and content coming this quarter and beyond.”

“Our diversity in portfolio, platforms, geographies, and business models is the foundation of a robust business that enables us to deliver dependable cash flow,” said Chief Financial Officer Blake Jorgensen. “Through the fourth quarter and fiscal 2019, we’ll be launching games across five different genres, on three different platforms, and to players around the world. We expect growth in full-game downloads, subscriptions, extra content, and in our mobile business.”

News and ongoing updates regarding EA and its games are available on EA’s blog at www.ea.com/news.

Selected Operating Highlights and Metrics

•
Digital net bookings* for the trailing twelve months was a record $3.375 billion, up 18% year-over-year, and represents 67% of total net bookings for the same period.
•
The FIFA community grew to nearly 42 million players, on console alone, during the calendar year.
•
FIFA Mobile added 26 million players to its total player base in the quarter.
•
FIFA Ultimate Team™ player base grew 12% year-over-year, from launch to the end of the quarter.
•
In Star Wars™ Battlefront™ II, nearly 70% of players engaged in the single-player campaign.
•
Battlefield™ 1 now has more than 25 million unique players life to date.
•
The Sims™ 4 player base grew more than 35% year-over-year and delivered the highest-performing expansion pack to date during the quarter.
•
The Madden Challenge entertainment special on The CW Network was the #1 esports television broadcast in the U.S. for 2017.

* Net bookings is defined as the net amount of products and services sold digitally or sold-in physically in the period. Net bookings is calculated by adding total net revenue to the change in deferred net revenue for online-enabled games.

Selected Financial Highlights and Metrics
All financial measures are presented on a GAAP basis.

•
Net cash provided by operating activities was $849 million.
•
Net cash provided by operating activities for the trailing twelve months was $1.514 billion.
•
During the quarter, EA repurchased 1.4 million shares for $150 million.
•
For the trailing twelve months, EA repurchased 5.6 million shares for $578 million.






Quarterly Financial Highlights
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended December 31,
 
2017
 
2016
(in $ millions, except per share amounts)
 
 
 
Digital net revenue
780

 
685

Packaged goods and other net revenue
380

 
464

          Total net revenue
1,160

 
1,149

 
 
 
 
Net loss
(186)*

 
(1)

Loss per share
(0.60)*

 
(0.00)

 
 
 
 
Operating cash flow
849

 
1,137**

 
 
 
 
Value of shares repurchased
150

 
127

Number of shares repurchased
1.4

 
1.5

 
*During the three months ended December 31, 2017, EA recognized $176 million of incremental income tax expense, or approximately $0.57 per share, due to the application of the Tax Cuts and Jobs Act, enacted on December 22, 2017. This amount is a reasonable estimate provided in accordance with Securities and Exchange Commission guidance. EA will provide additional information about these reasonable estimates in its forthcoming Form 10-Q for the fiscal quarter ending December 31, 2017.
**At the beginning of fiscal 2018, EA adopted FASB ASU 2016-09, related to stock-based compensation. Operating cash flow for the three months ended December 31, 2016 has been recast to reflect the impact of this standard.
While EA no longer reports certain non-GAAP financial measures, the following GAAP-based financial data and a long-term tax rate of 21% are used internally by company management to adjust its GAAP results in order to assess EA’s operating results:
 
Three Months Ended December 31, 2017
 
 
 
GAAP-Based Financial Data
(in $ millions)
Statement of Operations
 
Acquisition-related expenses
 
Change in deferred net revenue (online-enabled games)
 
Stock-based compensation
Total net revenue
1,160

 
—

 
811

 
—

          Cost of revenue
501

 
(1
)
 
—

 
—

Gross profit
659

 
1

 
811

 
—

          Total operating expenses
680

 
(1
)
 
—

 
(63
)
Operating income (loss)
(21
)
 
2

 
811

 
63

Interest and other income, net
5

 
—

 
—

 
—

Income (loss) before provision for (benefit from) income taxes
(16
)
 
2

 
811

 
63

Number of shares used in computation:
 
 
 
 
 
 
 
          Basic and diluted
308

 
 
 
 
 
 
EA's GAAP loss per share for the three months ended December 31, 2017 was calculated using the basic share count of 308 million. Had EA reported a profit, the diluted share count would have been 311 million shares.

For more information about the nature of the GAAP-based financial data, please refer to EA’s Form 10-Q for the fiscal quarter ended September 30, 2017.





TTM Financial Highlights
 
 
 
 
TTM Ended December 31,
 
2017
 
2016
(in $ millions)
 
 
 
Digital net revenue
3,282

 
2,655

Packaged goods and other net revenue
1,813

 
1,971

          Total net revenue
5,095

 
4,626

 
 
 
 
Net income
1,002*

 
1,300

 
 
 
 
Operating cash flow**
1,514

 
1,555

 
 
 
 
Value of shares repurchased
578

 
1,017

Number of shares repurchased
5.6

 
14.9

 
*During the trailing twelve months ended December 31, 2017, EA recognized $176 million of incremental income tax expense due to the application of the Tax Cuts and Jobs Act, enacted on December 22, 2017. This amount is a reasonable estimate provided in accordance with Securities and Exchange Commission guidance. EA will provide additional information about these reasonable estimates in its forthcoming Form 10-Q for the fiscal quarter ending December 31, 2017.
**At the beginning of fiscal 2018, EA adopted FASB ASU 2016-09, related to stock-based compensation. Operating cash flow has been recast to reflect the impact of this standard.
While EA no longer reports certain non-GAAP financial measures, the following GAAP-based financial data and a long-term tax rate of 21% are used internally by company management to adjust its GAAP results in order to assess EA’s operating results:
 
TTM Ended December 31, 2017
 
 
 
GAAP-Based Financial Data
(in $ millions)
Statement of Operations
 
Acquisition-related expenses
 
Change in deferred net revenue (online-enabled games)
 
Stock-based compensation
Total net revenue
5,095

 
—

 
(78
)
 
—

          Cost of revenue
1,246

 
(1
)
 
—

 
(3
)
Gross profit
3,849

 
1

 
(78
)
 
3

          Total operating expenses
2,451

 
(5
)
 
—

 
(222
)
Operating income
1,398

 
6

 
(78
)
 
225

Interest and other income, net
13

 
—

 
—

 
—

Income before provision for income taxes
1,411

 
6

 
(78
)
 
225


For more information about the nature of the GAAP-based financial data, please refer to EA’s Form 10-Q for the fiscal quarter ended September 30, 2017.






Operating Metric

The following is a calculation of our total net bookings for the periods presented:
 
Three Months Ended
December 31,
 
TTM Ended
December 31,
 
2017
 
2016
 
2017
 
2016
(in $ millions)
 
 
 
 
 
 
 
Total net revenue
1,160

 
1,149

 
5,095

 
4,626

Change in deferred net revenue (online-enabled games)
811

 
921

 
(78
)
 
148

Net bookings
1,971

 
2,070

 
5,017

 
4,774







Business Outlook as of January 30, 2018

The following forward-looking statements reflect expectations as of January 30, 2018. Electronic Arts assumes no obligation to update these statements. Results may be materially different and are affected by many factors detailed in this release and in EA’s annual and quarterly SEC filings.


Fiscal Year 2018 Expectations - Ending March 31, 2018

Financial metrics:
•
Net revenue is expected to be approximately $5.100 billion.
◦
Change in deferred net revenue (online-enabled games) is expected to be approximately $50 million.
•
Net income is expected to be approximately $1.015 billion.
•
Diluted earnings per share is expected to be approximately $3.25.
◦
Includes the net impact of approximately ($0.48) per share due to the application of the Tax Cuts and Jobs Act.
•
Operating cash flow is expected to be approximately $1.600 billion.
•
The Company estimates a share count of 312 million for purposes of calculating fiscal year 2018 diluted earnings per share.

Operational metric:
•
Net bookings is expected to be approximately $5.150 billion.


In addition, the following outlook for GAAP-based financial data and a long-term tax rate of 21% are used internally by EA to adjust our GAAP expectations to assess EA’s operating results and plan for future periods:
 
Twelve Months Ending March 31, 2018
 
 
 
GAAP-Based Financial Data
 
GAAP Guidance
 
Acquisition-related expenses
 
Change in deferred net revenue (online-enabled games)
 
Stock-based compensation
(in $ millions)
 
 
 
 
 
 
 
Digital net revenue
3,405

 
—

 
120

 
—

Packaged goods & other net revenue
1,695

 
—

 
(70
)
 
—

Total net revenue
5,100

 
—

 
50

 
—

Cost of revenue
1,278

 
(2
)
 
—

 
(3
)
Operating expense
2,462

 
(7
)
 
—

 
(245
)
Income before provision for income taxes
1,372

 
9

 
50

 
248

Net income
1,015

 
 
 
 
 
 
Number of shares used in computation:
 
 
 
 
 
 
 
Diluted shares
312

 
 
 
 
 
 





Fourth Quarter Fiscal Year 2018 Expectations - Ending March 31, 2018

Financial metrics:
•
Net revenue is expected to be approximately $1.532 billion.
◦
Change in deferred net revenue (online-enabled games) is expected to be approximately ($307) million.
•
Net income is expected to be approximately $579 million.
•
Diluted earnings per share is expected to be approximately $1.86.
•
The Company estimates a share count of 311 million for purposes of calculating fourth quarter fiscal year 2018 diluted earnings per share.

Operational metric:
•
Net bookings is expected to be approximately $1.225 billion.


In addition, the following outlook for GAAP-based financial data and a long-term tax rate of 21% are used internally by EA to adjust our GAAP expectations to assess EA’s operating results and plan for future periods:
 
Three Months Ending March 31, 2018
 
 
 
GAAP-Based Financial Data
 
GAAP Guidance
 
Acquisition-related expenses
 
Change in deferred net revenue (online-enabled games)
 
Stock-based compensation
(in $ millions)
 
 
 
 
 
 
 
Total net revenue
1,532

 
—

 
(307
)
 
—

Cost of revenue
234

 
(1
)
 
—

 
(1
)
Operating expense
619

 
(3
)
 
—

 
(74
)
Income before provision for income taxes
677

 
4

 
(307
)
 
75

Net Income
579

 
 
 
 
 
 
Number of shares used in computation:
 
 


 
 
 
 
Diluted shares
311

 
 
 
 
 
 








Conference Call and Supporting Documents
    
Electronic Arts will host a conference call on January 30, 2018 at 2:00 pm PT (5:00 pm ET) to review its results for the third fiscal quarter ended December 31, 2017 and its outlook for the future. During the course of the call, Electronic Arts may disclose material developments affecting its business and/or financial performance. Listeners may access the conference call live through the following dial-in number 844-215-4106 (domestic) or 918-534-8313 (international), using the password “EA” or via webcast at EA’s IR Website at http://ir.ea.com.

EA has posted a slide presentation and a financial model of EA’s historical results and guidance on EA’s IR Website. EA will also post the prepared remarks and a transcript from the conference call on EA’s IR Website.

A dial-in replay of the conference call will be available until February 13, 2018 at 855-859-2056 (domestic) or 404-537-3406 (international) using pin code 6194018. An audio webcast replay of the conference call will be available for one year on EA’s IR Website.


Forward-Looking Statements

Some statements set forth in this release, including the information relating to EA’s fiscal 2018 expectations under the heading “Business Outlook as of January 30, 2018,” and information regarding EA's fiscal 2019 expectations contain forward-looking statements that are subject to change.  Statements including words such as “anticipate,” “believe,” “estimate” or “expect” and statements in the future tense are forward-looking statements.  These forward-looking statements are preliminary estimates and expectations based on current information and are subject to business and economic risks and uncertainties that could cause actual events or actual future results to differ materially from the expectations set forth in the forward-looking statements. 

Some of the factors which could cause the Company’s results to differ materially from its expectations include the following: sales of the Company’s titles; the Company’s ability to develop and support digital products and services, including managing online security and privacy; the Company’s ability to manage expenses; the competition in the interactive entertainment industry; the effectiveness of the Company’s sales and marketing programs; timely development and release of Electronic Arts’ products; the Company’s ability to realize the anticipated benefits of acquisitions; the consumer demand for, and the availability of an adequate supply of console hardware units; the Company’s ability to predict consumer preferences among competing platforms; the Company’s ability to develop and implement new technology; foreign currency exchange rate fluctuations; general economic conditions; and other factors described in the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2017. 

These forward-looking statements are current as of January 30, 2018. Electronic Arts assumes no obligation and does not intend to update these forward-looking statements. In addition, the preliminary financial results set forth in this release are estimates based on information currently available to Electronic Arts. 

While Electronic Arts believes these estimates are meaningful, they could differ from the actual amounts that Electronic Arts ultimately reports in its Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2017.  Electronic Arts assumes no obligation and does not intend to update these estimates prior to filing its Form 10-Q for the fiscal quarter ended December 31, 2017.







About Electronic Arts

Electronic Arts (NASDAQ: EA) is a global leader in digital interactive entertainment. The Company develops and delivers games, content and online services for Internet-connected consoles, mobile devices and personal computers. EA has more than 300 million registered players around the world.
 
In fiscal year 2017, EA posted GAAP net revenue of $4.8 billion. Headquartered in Redwood City, California, EA is recognized for a portfolio of critically acclaimed, high-quality brands such as The Sims™, Madden NFL, EA SPORTS™ FIFA, Battlefield™, Need for Speed™, Dragon Age™ and Plants vs. Zombies™. More information about EA is available at www.ea.com/news.
 
Ultimate Team, EA SPORTS, Battlefield, The Sims, Need for Speed, Dragon Age, and Plants vs. Zombies are trademarks of Electronic Arts Inc. STAR WARS © & TM 2018 Lucasfilm Ltd.  All rights reserved. John Madden, NFL and FIFA are the property of their respective owners and used with permission.

For additional information, please contact:

Chris Evenden
John Reseburg
Vice President, Investor Relations
Vice President, Corporate Communications
650-628-0255
650-628-3601
cevenden@ea.com
jreseburg@ea.com





    
ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statement of Operations
(in $ millions, except share per data)
 
 
 
 
 
 
 
 
 
Three Months Ended December 31,
 
Nine Months Ended
December 31,
 
2017
 
2016
 
2017
 
2016
Net revenue
 
 
 
 
 
 
 
Product
547

 
649

 
1,829

 
1,753

Service and other
613

 
500

 
1,739

 
1,565

Total net revenue
1,160

 
1,149

 
3,568

 
3,318

Cost of revenue
 
 
 
 
 
 
 
Product
352

 
389

 
716

 
796

Service and other
149

 
127

 
328

 
300

Total cost of revenue
501

 
516

 
1,044

 
1,096

Gross profit
659

 
633

 
2,524

 
2,222

Operating expenses:
 
 
 
 
 
 
 
Research and development
329

 
285

 
985

 
870

Marketing and sales
230

 
240

 
511

 
511

General and administrative
120

 
110

 
343

 
329

Amortization of intangibles
1

 
2

 
4

 
5

Total operating expenses
680

 
637

 
1,843

 
1,715

Operating income (loss)
(21
)
 
(4
)
 
681

 
507

Interest and other income (expense), net
5

 
(2
)
 
14

 
(13
)
Income (loss) before provision for (benefit from) income taxes
(16
)
 
(6
)
 
695

 
494

Provision for (benefit from) income taxes
170

 
(5
)
 
259

 
93

Net income (loss)
(186
)
 
(1
)
 
436

 
401

Earnings (loss) per share
 
 
 
 
 
 
 
Basic
(0.60)

 
(0.00)

 
1.41

 
1.33

Diluted
(0.60)

 
(0.00)

 
1.40

 
1.28

Number of shares used in computation
 
 
 
 
 
 
 
Basic
308

 
303

 
309

 
302

Diluted
308

 
303

 
312

 
314
























Results (in $ millions, except per share data)
The following table reports the variance of the actuals versus our guidance for the three months ended December 31, 2017 plus a comparison to the actuals for the three months ended December 31, 2016.


 
Three Months December 31,
 
2017
 
 
 
2017
 
2016
 
Guidance
 
Variance
 
Actuals
 
Actuals
Net revenue
 
 
 
 
 
 
 
Net revenue
1,135

 
25

 
1,160

 
1,149

GAAP-based financial data
 
 
 
 
 
 
 
Change in deferred net revenue (online-enabled games)
865

 
(54
)
 
811

 
921

Cost of revenue
 
 


 
 
 
 
Cost of revenue
521

 
(20
)
 
501

 
516

GAAP-based financial data
 
 
 
 
 
 
 
Acquisition-related expenses
—

 
(1
)
 
(1
)
 
(18
)
Stock-based compensation
(1
)
 
1

 
—

 
—

Operating expenses
 
 


 
 
 
 
Operating expenses
690

 
(10
)
 
680

 
637

GAAP-based financial data
 
 
 
 
 
 
 
Acquisition-related expenses
(1
)
 
—

 
(1
)
 
(2
)
Stock-based compensation
(64
)
 
1

 
(63
)
 
(48
)
Loss before tax
 
 


 
 
 
 
Loss before tax
(79
)
 
63

 
(16
)
 
(6
)
GAAP-based financial data
 
 
 
 
 
 
 
Acquisition-related expenses
1

 
1

 
2

 
20

Change in deferred net revenue (online-enabled games)
865

 
(54
)
 
811

 
921

Stock-based compensation
65

 
(2
)
 
63

 
48

Tax rate used for management reporting
21
%
 


 
21
%
 
21
%
Loss per share
 
 
 
 
 
 
 
Basic
(0.21
)
 
(0.39
)
 
(0.60
)
 
(0.00)

Diluted
(0.21
)
 
(0.39
)
 
(0.60
)
 
(0.00)

Number of shares
 
 
 
 
 
 
 
Basic
309

 
(1
)
 
308

 
303

Diluted
309

 
(1
)
 
308

 
303

Anti-dilutive shares excluded for loss position1
4

 
(1
)
 
3

 
10













1Diluted earnings per share reflects the potential dilution from common shares (calculated using the treasury stock method), issuable through stock-based compensation plans. When the company incurs a loss, shares issuable through stock-based compensation plans are excluded from the diluted loss per share calculation as inclusion would be anti-dilutive.












ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Balance Sheets
(in $ millions)
 
 
 
 
 
December 31, 2017
 
March 31, 20172
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
2,566

 
2,565

Short-term investments
2,318

 
1,967

Receivables, net of allowances of $231 and $145, respectively
886

 
359

Other current assets
196

 
308

Total current assets
5,966

 
5,199

Property and equipment, net
447

 
434

Goodwill
1,879

 
1,707

Acquisition-related intangibles, net
81

 
8

Deferred income taxes, net
159

 
286

Other assets
110

 
84

TOTAL ASSETS
8,642

 
7,718

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
91

 
87

Accrued and other current liabilities
1,070

 
789

Deferred net revenue (online-enabled games)
1,946

 
1,539

Total current liabilities
3,107

 
2,415

Senior notes, net
992

 
990

Income tax obligations
194

 
104

Deferred income taxes, net
2

 
1

Other liabilities
261

 
148

Total liabilities
4,556

 
3,658

 
 
 
 
Stockholders’ equity:
 
 
 
Common stock
3

 
3

Additional paid-in capital
723

 
1,049

Retained earnings
3,455

 
3,027

Accumulated other comprehensive loss
(95
)
 
(19
)
Total stockholders’ equity
4,086

 
4,060

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
8,642

 
7,718










2Derived from audited consolidated financial statements.






ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Cash Flows
(in $ millions)
 
 
 
 
 
 
 
 
 
Three Months Ended
December 31,
 
Nine Months Ended
December 31,
 
2017
 
20163
 
2017
 
2016 3
OPERATING ACTIVITIES
 
 
 
 
 
 
 
Net income (loss)
(186
)
 
(1
)
 
436

 
401

Adjustments to reconcile net income (loss) to net cash provided by operating activities:
 
 
 
 
 
 
 
Depreciation, amortization and accretion
34

 
49

 
97

 
140

Stock-based compensation
63

 
48

 
173

 
144

Change in assets and liabilities
 
 
 
 
 
 
 
Receivables, net
(73
)
 
126

 
(527
)
 
(367
)
Other assets
13

 
3

 
79

 
40

Accounts payable
(88
)
 
(139
)
 
16

 
(6
)
Accrued and other liabilities
165

 
167

 
265

 
276

Deferred income taxes, net
90

 
(20
)
 
130

 
—

Deferred net revenue (online-enabled games)
831

 
904

 
408

 
513

Net cash provided by operating activities
849

 
1,137

 
1,077

 
1,141

INVESTING ACTIVITIES
 
 
 
 
 
 
 
Capital expenditures
(24
)
 
(25
)
 
(87
)
 
(94
)
Proceeds from maturities and sales of short-term investments
606

 
324

 
1,656

 
968

Purchase of short-term investments
(617
)
 
(548
)
 
(2,012
)
 
(1,372
)
Acquisition, net of cash acquired
(150
)
 
—

 
(150
)
 
—

Net cash used in investing activities
(185
)
 
(249
)
 
(593
)
 
(498
)
FINANCING ACTIVITIES
 
 
 
 
 
 
 
Payment of convertible notes
—

 
—

 
—

 
(163
)
Proceeds from issuance of common stock
—

 
2

 
57

 
33

Cash paid to taxing authorities for shares withheld from employees
(7
)
 
(6
)
 
(112
)
 
(112
)
Repurchase and retirement of common stock
(150
)
 
(127
)
 
(453
)
 
(383
)
Net cash used in financing activities
(157
)
 
(131
)
 
(508
)
 
(625
)
Effect of foreign exchange on cash and cash equivalents
(8
)
 
(20
)
 
25

 
(28
)
Increase (decrease) in cash and cash equivalents
499

 
737

 
1

 
(10
)
Beginning cash and cash equivalents
2,067

 
1,746

 
2,565

 
2,493

Ending cash and cash equivalents
2,566

 
2,483

 
2,566

 
2,483





3Operating and financing cash flow figures for the three and nine months ended December 31, 2016 have been recast to reflect the impact of ASU 2016-09 which EA adopted at the beginning of FY18.













ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Supplemental Financial Information and Business Metrics
(in $ millions, except per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
Q3
 
Q4
 
Q1
 
Q2
 
Q3
 
YOY %
 
FY17
 
FY17
 
FY18
 
FY18
 
FY18
 
Change
Net revenue
 
 
 
 
 
 
 
 
 
 
 
 Net revenue
1,149
 
1,527
 
1,449
 
959
 
1,160
 
1
%
GAAP-based financial data
 
 
 
 
 
 
 
 
 
 
 
Change in deferred net revenue (online-enabled games)4
921
 
(435)
 
(674)
 
220
 
811
 
 
Gross profit
 
 
 
 
 
 
 
 
 
 
 
Gross profit
633

 
1,325

 
1,295

 
570

 
659

 
4
%
GAAP-based financial data
 
 
 
 
 
 
 
 
 
 
 
Acquisition-related expenses
18

 
—

 
—

 
—

 
1

 
 
Change in deferred net revenue (online-enabled games)4
921

 
(435
)
 
(674
)
 
220

 
811

 
 
Stock-based compensation
—

 
1

 
1

 
1

 
—

 
 
Gross profit (as a % of net revenue)
55
%
 
87
%
 
89
%
 
59
%
 
57
%
 
 
Operating income (loss)
 
 
 
 
 
 
 
 
 
 
 
Operating income (loss)
(4
)
 
717

 
743

 
(41
)
 
(21
)
 
(425
%)
GAAP-based financial data
 
 
 
 
 
 
 
 
 
 
 
Acquisition-related expenses
20

 
1

 
1

 
2

 
2

 
 
Change in deferred net revenue (online-enabled games)4
921

 
(435
)
 
(674
)
 
220

 
811

 
 
Stock-based compensation
48

 
52

 
48

 
62

 
63

 
 
Operating income (loss) (as a % of net revenue)
—

 
47
%
 
51
%
 
(4
%)
 
(2
%)
 
 
Net income (loss)
 
 
 
 
 
 
 
 
 
 
 
Net income (loss)
(1
)
 
566

 
644

 
(22
)
 
(186
)
 
(18,500
%)
GAAP-based financial data
 
 
 
 
 
 
 
 
 
 
 
Acquisition-related expenses
20

 
1

 
1

 
2

 
2

 
 
Change in deferred net revenue (online-enabled games)4
921

 
(435
)
 
(674
)
 
220

 
811

 
 
Stock-based compensation
48

 
52

 
48

 
62

 
63

 
 
Tax rate used for management reporting
21
%
 
21
%
 
21
%
 
21
%
 
21
%
 


Net income (loss) (as a % of net revenue)
—

 
37
%
 
44
%
 
(2
%)
 
(16
%)
 


Diluted earnings (loss) per share
(0.00)

 
1.81

 
2.06

 
(0.07
)
 
(0.60
)
 
-

Number of diluted shares used in computation
 
 
 
 
 
 
 
 
 
 
 
Basic
303

 
308

 
309

 
309

 
308

 
 
Diluted
303

 
312

 
313

 
309

 
308

 
 
Anti-dilutive shares excluded for loss position1
10

 
—

 
—

 
3

 
3

 
 



4The difference between the balances of deferred net revenue (online-enabled games) in the unaudited condensed consolidated balance sheets does not necessarily equal the change in deferred net revenue (online-enabled games) in the unaudited condensed consolidated statements of cash flows due to the impact of unrecognized gains/losses on cash flow hedges.


1Diluted earnings per share reflects the potential dilution from common shares (calculated using the treasury stock method), issuable through stock-based compensation plans. When the company incurs a loss, shares issuable through stock-based compensation plans are excluded from the diluted loss per share calculation as inclusion would be anti-dilutive.








ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Supplemental Financial Information and Business Metrics
(in $ millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Q3
 
Q4
 
Q1
 
Q2
 
Q3
 
YOY %
 
 
FY17
 
FY17
 
FY18
 
FY18
 
FY18
 
Change
QUARTERLY NET REVENUE PRESENTATIONS
 
 
 
 
 
 
 
 
 
 
 
 
Net revenue by geography
 
 
 
 
 
 
 
 
 
 
 
 
North America
 
561

 
644

 
611

 
427

 
452

 
(19
%)
International
 
588

 
883

 
838

 
532

 
708

 
20
%
Total net revenue
 
1,149

 
1,527

 
1,449

 
959

 
1,160

 
1
%
North America
 
370

 
(198
)
 
(287
)
 
59

 
313

 
 
International
 
551

 
(237
)
 
(387
)
 
161

 
498

 
 
Change in deferred net revenue (online-enabled games)4
 
921

 
(435
)
 
(674
)
 
220

 
811

 
 
North America
 
49
%
 
42
%
 
42
%
 
45
%
 
39
%
 
 
International
 
51
%
 
58
%
 
58
%
 
55
%
 
61
%
 
 
Total net revenue %
 
100
%
 
100
%
 
100
%
 
100
%
 
100
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net revenue by composition
 
 
 
 
 
 
 
 
 
 
 
 
Full game downloads
 
169

 
259

 
209

 
123

 
143

 
(15
%)
Live services5
 
369

 
510

 
501

 
408

 
476

 
29
%
Mobile
 
147

 
165

 
169

 
158

 
161

 
10
%
Total digital
 
685

 
934

 
879

 
689

 
780

 
14
%
Packaged goods and other
 
464

 
593

 
570

 
270

 
380

 
(18
%)
Total net revenue
 
1,149

 
1,527

 
1,449

 
959

 
1,160

 
1
%
Full game downloads
 
186

 
(67
)
 
(98
)
 
(4
)
 
117

 
 
Live services5
 
197

 
8

 
(81
)
 
(98
)
 
311

 
 
Mobile
 
27

 
10

 
(19
)
 
(8
)
 
22

 
 
Total digital
 
410

 
(49
)
 
(198
)
 
(110
)
 
450

 
 
Packaged goods and other
 
511

 
(386
)
 
(476
)
 
330

 
361

 
 
Change in deferred net revenue (online-enabled games)4
 
921

 
(435
)
 
(674
)
 
220

 
811

 
 
Full game downloads
 
15
%
 
17
%
 
14
%
 
13
%
 
12
%
 
 
Live services5
 
32
%
 
33
%
 
35
%
 
43
%
 
41
%
 
 
Mobile
 
13
%
 
11
%
 
12
%
 
16
%
 
14
%
 
 
Total digital
 
60
%
 
61
%
 
61
%
 
72
%
 
67
%
 
 
Packaged goods and other
 
40
%
 
39
%
 
39
%
 
28
%
 
33
%
 
 
Total net revenue %
 
100
%
 
100
%
 
100
%
 
100
%
 
100
%
 
 


4The difference between the balances of deferred net revenue (online-enabled games) in the unaudited condensed consolidated balance sheets does not necessarily equal the change in deferred net revenue (online-enabled games) in the unaudited condensed consolidated statements of cash flows due to the impact of unrecognized gains/losses on cash flow hedges.

5Live services includes net revenue previously presented as “Extra Content” and “Subscriptions, Advertising and Other” through Q4 FY17.











ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Supplemental Financial Information and Business Metrics
(in $ millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Q3
 
Q4
 
Q1
 
Q2
 
Q3
 
YOY %
 
 
FY17
 
FY17
 
FY18
 
FY18
 
FY18
 
Change
QUARTERLY NET REVENUE PRESENTATIONS
 
 
 
 
 
 
 
 
 
 
 
 
Net revenue by platform
 
 
 
 
 
 
 
 
 
 
 
 
Xbox One, PLAYSTATION 4, Switch
 
728

 
1,039

 
974

 
569

 
785

 
8
%
Other consoles
 
65

 
70

 
60

 
26

 
25

 
(62
%)
Total consoles
 
793

 
1,109

 
1,034

 
595

 
810

 
2
%
PC / Browser
 
190

 
246

 
240

 
196

 
181

 
(5
%)
Mobile
 
148

 
165

 
171

 
162

 
166

 
12
%
Other
 
18

 
7

 
4

 
6

 
3

 
(83
%)
Total net revenue
 
1,149

 
1,527

 
1,449

 
959

 
1,160

 
1
%
Xbox One, PLAYSTATION 4, Switch
 
762

 
(375
)
 
(548
)
 
244

 
705

 
 
Other consoles
 
3

 
(40
)
 
(42
)
 
14

 
5

 
 
Total consoles
 
765

 
(415
)
 
(590
)
 
258

 
710

 
 
PC / Browser
 
127

 
(30
)
 
(61
)
 
(30
)
 
83

 
 
Mobile
 
27

 
9

 
(20
)
 
(7
)
 
21

 
 
Other
 
2

 
1

 
(3
)
 
(1
)
 
(3
)
 
 
Change in deferred net revenue (online-enabled games)4
 
921

 
(435
)
 
(674
)
 
220

 
811

 
 
Xbox One, PLAYSTATION 4, Switch
 
63
%
 
68
%
 
67
%
 
59
%
 
68
%
 
 
Other consoles
 
6
%
 
5
%
 
4
%
 
3
%
 
2
%
 
 
Total consoles
 
69
%
 
73
%
 
71
%
 
62
%
 
70
%
 
 
PC / Browser
 
17
%
 
16
%
 
17
%
 
20
%
 
16
%
 
 
Mobile
 
13
%
 
11
%
 
12
%
 
17
%
 
14
%
 
 
Other
 
1
%
 
—

 
—

 
1
%
 
—

 
 
Total net revenue %
 
100
%
 
100
%
 
100
%
 
100
%
 
100
%
 
 


4The difference between the balances of deferred net revenue (online-enabled games) in the unaudited condensed consolidated balance sheets does not necessarily equal the change in deferred net revenue (online-enabled games) in the unaudited condensed consolidated statements of cash flows due to the impact of unrecognized gains/losses on cash flow hedges.







ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Supplemental Financial Information and Business Metrics
(in $ millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
Q3
 
Q4
 
Q1
 
Q2
 
Q3
 
YOY %
 
FY17
 
FY17
 
FY18
 
FY18
 
FY18
 
Change
CASH FLOW DATA
 
 
 
 
 
 
 
 
 
 
 
Operating cash flow6
1,137

 
437

 
176

 
52

 
849

 
(25
%)
Operating cash flow6 - TTM
1,555

 
1,578

 
1,872

 
1,802

 
1,514

 
(3
%)
Capital expenditures
25

 
29

 
33

 
30

 
24

 
(4
%)
Capital expenditures - TTM
124

 
123

 
116

 
117

 
116

 
(6
%)
Repurchase and retirement of common stock
127

 
125

 
150

 
153

 
150

 
18
%
DEPRECIATION
 
 
 
 
 
 
 
 
 
 
 
Depreciation expense
29

 
29

 
29

 
30

 
30

 
3
%
BALANCE SHEET DATA
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
2,483

 
2,565

 
2,248

 
2,067

 
2,566

 


Short-term investments
1,736

 
1,967

 
2,222

 
2,288

 
2,318

 


Cash and cash equivalents, and short-term investments
4,219

 
4,532

 
4,470

 
4,355

 
4,884

 
16
%
Receivables, net
587

 
359

 
222

 
812

 
886

 
51
%
STOCK-BASED COMPENSATION
 
 
 
 
 
 
 
 
 
 
 
Cost of revenue
—

 
1

 
1

 
1

 
—

 
 
Research and development
27

 
28

 
28

 
36

 
38

 
 
Marketing and sales
8

 
8

 
7

 
9

 
8

 
 
General and administrative
13

 
15

 
12

 
16

 
17

 
 
Total stock-based compensation
48

 
52

 
48

 
62

 
63

 
 






6Operating cash flow has been recast to reflect the impact of ASU 2016-09 which EA adopted at the beginning of FY18.