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It has been about a month since the last earnings report for Electronic Arts (EA). Shares have added about 2.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Electronic Arts due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Electronic Arts Q3 Earnings and Revenues Decline Year Over Year
Electronic Arts reported third-quarter fiscal 2025 earnings of $2.83 per share, which fell 4.4% year over year. Revenues decreased 6.38% year over year to $2.22 billion due to a decline in Live services and full-game revenues.
The Zacks Consensus Estimate for earnings was pegged at $2.99 per share. The consensus mark for revenues was pinned at $2.29 billion.
Net bookings for the fiscal third quarter were $2.22 billion, down 6.4% year over year, but with minimal impact from FX.
Full-game net bookings were $633 million, down 3% year over year, but with double-digit growth in weekly active users of American Football. Live services net bookings were $1.58 billion, down 8% year over year.
Quarter Details
EA’s full-game revenues (31.8% of total revenues) decreased 3.1% year over year to $599 million. Full-game download revenues increased 3% year over year to $431 million. Revenues from packaged goods plunged 18% year over year to $187 million.
Live services and other revenues (68.2% of total revenues) decreased 3.2% year over year to $1.28 billion.
Based on platforms, revenues from consoles decreased 1% year over year to $1.23 billion in the reported quarter. Revenues from PC & Other declined 7% year over year to $420 million. Revenues from the mobile platform decreased 7% year over year to $296 million.
EA's Operating Details
EA’s GAAP gross profit increased 0.8% from the year-ago quarter’s levels to $1.43 billion. Gross margin expanded 300 basis points (bps) on a year-over-year basis to 75.8%.
Operating expenses decreased 0.1% year over year to $1.05 billion. As a percentage of revenues, operating expenses expanded 170 bps on a year-over-year basis at 55.8%.
Operating income on a GAAP basis increased 3.3% year over year to $377 million. The operating margin contracted 130 bps year over year to 20% in the reported quarter.
EA’s Balance Sheet and Cash Flow
As of Dec. 31, 2024, EA had $3.16 billion in cash and short-term investments compared with $2.56 billion as of Sept. 30, 2024.
Net cash provided by operating activities was $1.176 billion for the quarter and $2.110 billion for the trailing 12 months.
EA repurchased 2.4 million shares for $375 million during the quarter under the stock repurchase program, bringing the total for the trailing 12 months to 10.1 million shares for $1.45 billion.
The company has declared a quarterly cash dividend of 19 cents per share of the company’s common stock. The dividend is payable on March 19, 2025, to stockholders of record as of the close of business on Feb. 26, 2025.