Electronic Arts Reports Q3 FY25 Results

Rhea-AI Summary

Electronic Arts (EA) reported Q3 FY25 financial results with net bookings of $2.215 billion and announced plans for a $1 billion accelerated share repurchase program. The company's Global Football franchise saw net bookings growth of over 70% in the last five fiscal years, while EA SPORTS FC 25's gameplay update activated over two million Ultimate Team players.

Key financial metrics include net revenue of $1.883 billion, net income of $293 million, and operating cash flow of $1.176 billion. EA repurchased 2.4 million shares for $375 million during the quarter and declared a quarterly dividend of $0.19 per share.

For FY25 outlook, EA expects net revenue between $7.250-7.400 billion, net income of $1.038-1.130 billion, and net bookings of $7.000-7.150 billion. The company expressed confidence in returning to growth in FY26, supported by strong performance across its sports titles and upcoming releases.

Positive

• Announced $1 billion accelerated share repurchase program
• Global Football franchise net bookings grew over 70% in last five years
• EA SPORTS FC Mobile saw double-digit increase in new players YoY
• American Football on track to exceed $1 billion in net bookings for FY25
• Net income increased to $293M from $290M YoY

Negative

• Net revenue declined to $1.883B from $1.945B YoY
• Net bookings decreased to $2.215B from $2.366B YoY
• Operating cash flow reduced to $1.176B from $1.264B YoY
• Live services revenue dropped to $1.284B from $1.327B YoY

Insights

Financial Analyst

EA's Q3 FY25 results reveal a strategic pivot focused on shareholder returns and sports franchise dominance. The announcement of a $1 billion accelerated share repurchase program, bringing total returns to $2.5 billion within the first year of their $5 billion authorization, signals strong confidence in future cash flows and operational stability.

The company's sports portfolio continues to be the primary growth engine. The Global Football franchise's 70% growth over five years demonstrates EA's ability to successfully transition from FIFA to EA SPORTS FC, while American Football's trajectory toward $1 billion in net bookings validates their sports-centric strategy. The re-activation of over 2 million Ultimate Team players after the January update indicates robust player engagement and monetization potential.

However, the slight year-over-year decline in quarterly revenue (from $1.945 billion to $1.883 billion) and net bookings (from $2.366 billion to $2.215 billion) suggests temporary growth headwinds. The company's FY25 guidance of $7.0-7.15 billion in net bookings reflects these near-term challenges, but management's explicit confidence in FY26 growth, supported by upcoming releases like Battlefield, indicates a potential inflection point ahead.

The maintained quarterly dividend of $0.19 per share, combined with aggressive share repurchases, creates a compelling total shareholder return profile while maintaining flexibility for strategic investments. The strong operating cash flow of $1.176 billion for the quarter supports this capital allocation strategy.

Gaming Industry Analyst

EA's Q3 results underscore the company's successful evolution into a live-service powerhouse, with digital engagement metrics showing particular strength. The double-digit growth in EA SPORTS FC Mobile users represents a critical expansion of the company's mobile footprint, a segment that typically yields higher margins and lifetime value per user.

The introduction of Battlefield Labs marks a strategic shift in game development methodology, adopting a community-driven approach ahead of the franchise's FY26 release. This player-centric testing model could significantly reduce development risks and increase player satisfaction, following industry lessons from recent troubled launches by competitors.

The live services and other revenue segment, at $1.284 billion, continues to dominate the revenue mix, showcasing EA's successful transition from a traditional game publisher to a games-as-a-service provider. The Ultimate Team re-engagement statistics after the January update demonstrate the company's ability to maintain player interest through regular content updates, a important factor for long-term monetization.

EA plans $1 billion accelerated stock repurchase further demonstrating conviction in long-term growth of the business

REDWOOD CITY, Calif.--(BUSINESS WIRE)-- Electronic Arts Inc. (NASDAQ: EA) today announced preliminary financial results for its third quarter ended December 31, 2024.

“The record success of our EA SPORTS FC 25 Team of the Year event demonstrates our creative teams’ ability to adapt, innovate, and execute at scale,” said Andrew Wilson, CEO of Electronic Arts. “As we build on this momentum across EA, we are confident in a return to growth in FY26 and beyond as we bring our next wave of iconic entertainment to players and fans worldwide.”

“Today we announced plans for a $1 billion accelerated share repurchase, which is expected to bring total stock repurchases to $2.5 billion within the first year of our $5 billion authorization,” said Stuart Canfield, CFO of Electronic Arts. “This reflects both our confidence in EA’s long-term strategy and our ability to balance investment in growth with capital returns.”

Selected Operating Highlights and Metrics

• Net bookings¹ for the quarter totaled $2.215 billion.
• Our Global Football franchise net bookings have grown more than 70% over the last five fiscal years, making it one of the biggest sports entertainment properties in the world.
• Our gameplay update for EA SPORTS FC^™ 25, released on January 16th, drove engagement levels above our expectations, with over two million Ultimate Team players re-activated from earlier in the launch cycle.
• EA SPORTS FC Mobile saw a double-digit increase in new players and engagement year-over-year.
• American Football saw double-digit growth in weekly active users year-over-year in the third quarter, and remains on pace to surpass $1 billion in net bookings for fiscal year 2025.
• EA unveiled Battlefield^™ Labs, a new initiative allowing player-driven testing and innovation ahead of the franchise’s expected fiscal year 2026 release.

Selected Financial Highlights and Metrics

• Net revenue was $1.883 billion.
• Net cash provided by operating activities was $1.176 billion for the quarter and $2.110 billion for the trailing twelve months.
• EA repurchased 2.4 million shares for $375 million during the quarter under the stock repurchase program, bringing the total for the trailing twelve months to 10.1 million shares for $1.450 billion.
• EA plans for an accelerated stock repurchase program of $1 billion, which is expected to bring the total stockholder return to $2.5 billion within the first year of our $5 billion authorization.

Dividend

EA has declared a quarterly cash dividend of $0.19 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 February 26, 2025.

Quarterly Financial Highlights
	Three Months Ended
	December 31,
(in $ millions, except per share amounts)	2024		2023
Full game	599		618
Live services and other	1,284		1,327
Total net revenue	1,883		1,945
Net income	293		290
Diluted earnings per share	1.11		1.07
Operating cash flow	1,176		1,264
Value of shares repurchased	375		325
Number of shares repurchased	2.4		2.5
Cash dividend paid	50		51

Trailing Twelve Months Financial Highlights
	Twelve Months Ended
	December 31,
(in $ millions)	2024		2023
Full game	1,898		2,054
Live services and other	5,449		5,603
Total net revenue	7,347		7,657
Net income	1,049		1,079
Operating cash flow	2,110		2,352
Value of shares repurchased	1,450		1,300
Number of shares repurchased	10.1		10.4

Operating Metric
The following is a calculation of our total net bookings1 for the periods presented:
	Three Months Ended December 31,				Twelve Months Ended December 31,
(in $ millions)	2024		2023		2024			2023
Total net revenue	1,883		1,945		7,347			7,657
Change in deferred net revenue (online-enabled games)	332		421		(125	)		53
Total net bookings	2,215		2,366		7,222			7,710

Business Outlook as of February 4, 2025

Fiscal Year 2025 Expectations – Ending March 31, 2025

Financial outlook metrics:

• Net revenue is expected to be approximately $7.250 billion to $7.400 billion.
  • Change in deferred net revenue (online-enabled games) is expected to be approximately ($250) million.
• Net income is expected to be approximately $1.038 billion to $1.130 billion.
• Diluted earnings per share is expected to be approximately $3.90 to $4.25.
• Operating cash flow is expected to be approximately $1.800 billion to $1.900 billion.
• The Company estimates a share count of 266 million for purposes of calculating diluted earnings per share.

Operational outlook metric:

• Net bookings¹ is expected to be approximately $7.000 billion to $7.150 billion.

Fourth Quarter Fiscal Year 2025 Expectations – Ending March 31, 2025

Financial outlook metrics:

• Net revenue is expected to be approximately $1.682 billion to $1.832 billion.
  • Change in deferred net revenue (online-enabled games) is expected to be approximately ($238) million.
• Net income is expected to be approximately $171 million to $263 million.
• Diluted earnings per share is expected to be approximately $0.65 to $1.00.
• The Company estimates a share count of 264 million for purposes of calculating diluted earnings per share.

Operational outlook metric:

• Net bookings¹ is expected to be approximately $1.444 billion to $1.594 billion.

Conference Call and Supporting Documents

Electronic Arts will host a conference call on February 4, 2025 at 2:00 pm PT (5:00 pm ET) to review its results for the third fiscal quarter ended December 31, 2024 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 (855) 761-5600 (domestic) or (646) 307-1097 (international), using the conference code 5939891 or via webcast at EA’s IR Website at http://ir.ea.com.

EA has posted a slide presentation with 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 11, 2025 at (800) 770-2030 (domestic) or (609) 800-9099 (international) using conference code 5939891. 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 expectations under the heading “Business Outlook as of February 4, 2025” and other information regarding EA's expectations contain forward-looking statements that are subject to change. Statements including words such as “anticipate,” “believe,” “expect,” “intend,” “estimate,” “plan,” “predict,” “seek,” “goal,” “will,” “may,” “likely,” “should,” “could” (and the negative of any of these terms), “future” and similar expressions also identify forward-looking statements. These forward-looking statements are not guarantees of future performance and reflect management’s current expectations. Our actual results could differ materially from those discussed 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 products and services; the Company’s ability to develop and support digital products and services, including managing online security and privacy; outages of our products, services and technological infrastructure; the Company’s ability to manage expenses; the competition in the interactive entertainment industry; governmental regulations; the effectiveness of the Company’s sales and marketing programs; timely development and release of the Company’s products and services; the Company’s ability to realize the anticipated benefits of, and integrate, acquisitions; the consumer demand for, and the availability of an adequate supply of console hardware units; the Company’s ability to predict consumer preferences and trends; the Company’s ability to develop and implement new technology; foreign currency exchange rate fluctuations; economic and geopolitical conditions; changes in our tax rates or tax laws; and other factors described in Part II, Item 1A of Electronic Arts’ latest Quarterly Report on Form 10-Q under the heading “Risk Factors”, as well as in other documents we have filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the fiscal year ended March 31, 2024.

These forward-looking statements are current as of February 4, 2025. Electronic Arts assumes no obligation to revise or update any forward-looking statement, except as required by law. 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, 2024. 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, 2024.

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.

In fiscal year 2024, EA posted GAAP net revenue of approximately $7.6 billion. Headquartered in Redwood City, California, EA is recognized for a portfolio of critically acclaimed, high-quality brands such as EA SPORTS FC™, Battlefield™, Apex Legends™, The Sims™, EA SPORTS™ Madden NFL, EA SPORTS™ College Football, Need for Speed™, Dragon Age™, Titanfall™, Plants vs. Zombies™ and EA SPORTS F1^®. More information about EA is available at www.ea.com/news.

EA, EA SPORTS, EA SPORTS FC, Battlefield, Need for Speed, Apex Legends, The Sims, Dragon Age, Titanfall, and Plants vs. Zombies are trademarks of Electronic Arts Inc. John Madden, NFL, FIFA and F1 are the property of their respective owners and used with permission.

¹ 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.

ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Operations
(in $ millions, except per share data)
	Three Months Ended December 31,				Nine Months Ended December 31,
	2024		2023		2024		2023
Net revenue	1,883		1,945		5,568		5,783
Cost of revenue	456		529		1,175		1,353
Gross profit	1,427		1,416		4,393		4,430
Operating expenses:
Research and development	606		584		1,883		1,782
Marketing and sales	251		276		728		785
General and administrative	176		170		553		506
Amortization of intangibles	16		21		50		70
Restructuring	1		—		54		3
Total operating expenses	1,050		1,051		3,268		3,146
Operating income	377		365		1,125		1,284
Interest and other income (expense), net	28		17		73		45
Income before provision for income taxes	405		382		1,198		1,329
Provision for income taxes	112		92		331		238
Net income	293		290		867		1,091
Earnings per share
Basic	1.12		1.08		3.28		4.03
Diluted	1.11		1.07		3.26		4.01
Number of shares used in computation
Basic	262		269		264		271
Diluted	265		271		266		272

Results (in $ millions, except per share data)

The following table reports the variance of the actuals versus our guidance provided on October 29, 2024 for the three months ended December 31, 2024 plus a comparison to the actuals for the three months ended December 31, 2023.

	Three Months Ended December 31,
	2024 Guidance (Mid-Point)						2024 Actuals			2023 Actuals
				Variance
Net revenue
Net revenue	1,950			(67	)		1,883			1,945
GAAP-based financial data
Change in deferred net revenue (online-enabled games)1	525			(193	)		332			421
Cost of revenue
Cost of revenue	465			(9	)		456			529
GAAP-based financial data
Acquisition-related expenses	(10	)		—			(10	)		(16	)
Stock-based compensation	(5	)		2			(3	)		(2	)
Operating expenses
Operating expenses	1,125			(75	)		1,050			1,051
GAAP-based financial data
Acquisition-related expenses	(20	)		4			(16	)		(21	)
Restructuring and related charges	(5	)		5			—			—
Stock-based compensation	(165	)		5			(160	)		(149	)
Income before tax
Income before tax	371			34			405			382
GAAP-based financial data
Acquisition-related expenses	30			(4	)		26			37
Change in deferred net revenue (online-enabled games)1	525			(193	)		332			421
Restructuring and related charges	5			(5	)		—			—
Stock-based compensation	170			(7	)		163			151
Tax rate used for management reporting	19	%					19	%		19	%
Earnings per share
Basic	0.94			0.18			1.12			1.08
Diluted	0.94			0.17			1.11			1.07
Number of shares used in computation
Basic	264			(2	)		262			269
Diluted	266			(1	)		265			271

¹The change in deferred net revenue (online-enabled games) in the unaudited condensed consolidated statements of cash flows does not necessarily equal the change in deferred net revenue (online-enabled games) in the unaudited condensed consolidated statements of operations primarily due to the impact of unrecognized gains/losses on cash flow hedges.

ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Balance Sheets
(in $ millions)
	December 31, 2024			March 31, 20242
ASSETS
Current assets:
Cash and cash equivalents	2,776			2,900
Short-term investments	379			362
Receivables, net	742			565
Other current assets	375			420
Total current assets	4,272			4,247
Property and equipment, net	566			578
Goodwill	5,376			5,379
Acquisition-related intangibles, net	320			400
Deferred income taxes, net	2,467			2,380
Other assets	450			436
TOTAL ASSETS	13,451			13,420
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable, accrued, and other current liabilities	1,298			1,276
Deferred net revenue (online-enabled games)	1,806			1,814
Total current liabilities	3,104			3,090
Senior notes, net	1,883			1,882
Income tax obligations	573			497
Other liabilities	479			438
Total liabilities	6,039			5,907
Stockholders’ equity:
Common stock	3			3
Retained earnings	7,472			7,582
Accumulated other comprehensive loss	(63	)		(72	)
Total stockholders’ equity	7,412			7,513
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	13,451			13,420

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,
	2024		2023		2024		2023
OPERATING ACTIVITIES
Net income	293		290		867		1,091
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization, accretion and impairment	75		82		277		255
Stock-based compensation	163		151		480		436
Change in assets and liabilities
Receivables, net	268		183		(179)		(184)
Other assets	41		112		21		186
Accounts payable, accrued, and other liabilities	44		45		161		(155)
Deferred income taxes, net	(39)		(20)		(89)		88
Deferred net revenue (online-enabled games)	331		421		(8)		18
Net cash provided by operating activities	1,176		1,264		1,530		1,735
INVESTING ACTIVITIES
Capital expenditures	(50)		(52)		(167)		(148)
Proceeds from maturities and sales of short-term investments	127		148		366		450
Purchase of short-term investments	(139)		(147)		(376)		(460)
Net cash used in investing activities	(62)		(51)		(177)		(158)
FINANCING ACTIVITIES
Proceeds from issuance of common stock	1		3		43		43
Cash dividends paid	(50)		(51)		(151)		(154)
Cash paid to taxing authorities for shares withheld from employees	(72)		(58)		(211)		(178)
Common stock repurchases and excise taxes paid	(383)		(325)		(1,133)		(975)
Net cash used in financing activities	(504)		(431)		(1,452)		(1,264)
Effect of foreign exchange on cash and cash equivalents	(31)		14		(25)		5
Change in cash and cash equivalents	579		796		(124)		318
Beginning cash and cash equivalents	2,197		1,946		2,900		2,424
Ending cash and cash equivalents	2,776		2,742		2,776		2,742

ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Supplemental Financial Information and Business Metrics
(in $ millions, except per share data)
	Q3			Q4			Q1			Q2			Q3			YOY %
	FY24			FY24			FY25			FY25			FY25			Change
Net revenue
Net revenue	1,945			1,779			1,660			2,025			1,883			(3	%)
GAAP-based financial data
Change in deferred net revenue (online-enabled games)1	421			(113	)		(398	)		54			332
Gross profit
Gross profit	1,416			1,422			1,397			1,569			1,427			1	%
Gross profit (as a % of net revenue)	73	%		80	%		84	%		78	%		76	%
GAAP-based financial data
Acquisition-related expenses	16			29			10			10			10
Change in deferred net revenue (online-enabled games)1	421			(113	)		(398	)		54			332
Stock-based compensation	2			2			4			4			3
Operating income
Operating income	365			234			364			384			377			3	%
Operating income (as a % of net revenue)	19	%		13	%		22	%		19	%		20	%
GAAP-based financial data
Acquisition-related expenses	37			101			27			27			26
Change in deferred net revenue (online-enabled games)1	421			(113	)		(398	)		54			332
Restructuring and related charges	—			61			6			52			—
Stock-based compensation	151			148			143			174			163
Net income
Net income	290			182			280			294			293			1	%
Net income (as a % of net revenue)	15	%		10	%		17	%		15	%		16	%
GAAP-based financial data
Acquisition-related expenses	37			101			27			27			26
Change in deferred net revenue (online-enabled games)1	421			(113	)		(398	)		54			332
Restructuring and related charges	—			61			6			52			—
Stock-based compensation	151			148			143			174			163
Tax rate used for management reporting	19	%		19	%		19	%		19	%		19	%
Diluted earnings per share	1.07			0.67			1.04			1.11			1.11			4	%
Number of shares used in computation
Basic	269			267			266			264			262
Diluted	271			270			268			266			265

¹The change in deferred net revenue (online-enabled games) in the unaudited condensed consolidated statements of cash flows does not necessarily equal the change in deferred net revenue (online-enabled games) in the unaudited condensed consolidated statements of operations primarily 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 %
		FY24			FY24			FY25			FY25			FY25			Change
QUARTERLY NET REVENUE PRESENTATIONS
Net revenue by composition
Full game downloads		431			265			190			475			446			3	%
Packaged goods		187			68			60			241			153			(18	%)
Full game		618			333			250			716			599			(3	%)
Live services and other		1,327			1,446			1,410			1,309			1,284			(3	%)
Total net revenue		1,945			1,779			1,660			2,025			1,883			(3	%)
Full game		32	%		19	%		15	%		35	%		32	%
Live services and other		68	%		81	%		85	%		65	%		68	%
Total net revenue %		100	%		100	%		100	%		100	%		100	%
GAAP-based financial data
Full game downloads		32			(37	)		(47	)		70			25
Packaged goods		4			(37	)		(35	)		46			9
Full game		36			(74	)		(82	)		116			34
Live services and other		385			(39	)		(316	)		(62	)		298
Total change in deferred net revenue (online-enabled games) by composition1		421			(113	)		(398	)		54			332
Net revenue by platform
Console		1,229			1,049			1,005			1,374			1,215			(1	%)
PC & Other		420			423			365			364			392			(7	%)
Mobile		296			307			290			287			276			(7	%)
Total net revenue		1,945			1,779			1,660			2,025			1,883			(3	%)
GAAP-based financial data
Console		377			(94	)		(328	)		108			275
PC & Other		33			(10	)		(70	)		(37	)		33
Mobile		11			(9	)		—			(17	)		24
Total change in deferred net revenue (online-enabled games) by platform1		421			(113	)		(398	)		54			332

¹The change in deferred net revenue (online-enabled games) in the unaudited condensed consolidated statements of cash flows does not necessarily equal the change in deferred net revenue (online-enabled games) in the unaudited condensed consolidated statements of operations primarily 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 %
	FY24			FY24			FY25			FY25			FY25			Change
CASH FLOW DATA
Investing cash flow	(51	)		(49	)		(69	)		(46	)		(62	)
Investing cash flow - TTM	(195	)		(207	)		(232	)		(215	)		(226	)		(16	%)
Financing cash flow	(431	)		(360	)		(546	)		(402	)		(504	)
Financing cash flow - TTM	(1,622	)		(1,624	)		(1,688	)		(1,739	)		(1,812	)		(12	%)
Operating cash flow	1,264			580			120			234			1,176
Operating cash flow - TTM	2,352			2,315			2,076			2,198			2,110			(10	%)
Capital expenditures	52			51			67			50			50
Capital expenditures - TTM	195			199			221			220			218			12	%
Free cash flow3	1,212			529			53			184			1,126
Free cash flow3 - TTM	2,157			2,116			1,855			1,978			1,892			(12	%)
Common stock repurchases and excise taxes paid	325			325			375			375			383			18	%
Cash dividends paid	51			51			50			51			50			(2	%)
DEPRECIATION
Depreciation expense	48			50			51			51			51			6	%
BALANCE SHEET DATA
Cash and cash equivalents	2,742			2,900			2,400			2,197			2,776
Short-term investments	362			362			366			366			379
Cash and cash equivalents, and short-term investments	3,104			3,262			2,766			2,563			3,155			2	%
Receivables, net	867			565			433			1,012			742			(14	%)
STOCK-BASED COMPENSATION
Cost of revenue	2			2			4			4			3
Research and development	108			104			101			122			119
Marketing and sales	14			14			12			16			14
General and administrative	27			28			26			32			27
Total stock-based compensation	151			148			143			174			163
RESTRUCTURING AND RELATED CHARGES
Restructuring	—			59			2			51			1
Office space reductions	—			2			4			1			(1	)
Total restructuring and related charges	—			61			6			52			—

³Free cash flow is defined as Operating cash flow less Capital expenditures.

ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(in $ millions)
The following table provides a reconciliation of non-GAAP operating income and margin to their most directly comparable GAAP financial measure for the three months ended December 31, 2024 plus a comparison to the actuals for the three months ended December 31, 2023.
	Three Months Ended
	December 31,
	2024			2023			YOY % Change
Net revenue	1,883			1,945			(3	%)
GAAP operating income	377			365			3	%
Acquisition-related expenses	26			37
Stock-based compensation	163			151
Non-GAAP operating income	566			553			2	%
GAAP operating margin	20.0	%		18.8	%
Non-GAAP operating margin	30.1	%		28.4	%
Impact from change in deferred net revenue (online-enabled games)	1040 bps			1280 bps

ELECTRONIC ARTS INC. AND SUBSIDIARIES
GAAP Guidance to Non-GAAP Guidance
(in $ millions)
The following table provides GAAP to Non-GAAP reconciliation of the Company’s FY25 guidance.
	Twelve Months Ending March 31, 2025
	GAAP-Based Financial Data														GAAP-Based Financial Data
		A			B		C		D
	GAAP Guidance Range				Acquisition- related expenses5		Restructuring and related charges5		Stock-based compensation5		Non-GAAP Guidance Range = A + B +C + D				Change in deferred net revenue (online- enabled games)5
Net revenue	7,250	to	7,400		—		—		—		7,250	to	7,400		(250)
Cost of revenue	1,480	to	1,490		(40)		—		(15)		1,425	to	1,435		—
Operating expense	4,380	to	4,390		(70)		(65)		(630)		3,615	to	3,625		—
Operating margin	19.2%	to	20.5%		150 bps		90 bps		880 bps		30.5%	to	31.6%		(250) bps to (240) bps
Income before provision for income taxes	1,483	to	1,614		110		65		645		2,303	to	2,434		(250)
Net income4	1,038	to	1,130
Number of shares used in computation:
Diluted	266

⁴ The Company uses a tax rate of 19% internally to evaluate its operating performance and to forecast, plan and analyze future periods.

⁵ The mid-point of the range has been used for purposes of presenting reconciling items to operating margin.

ELECTRONIC ARTS INC. AND SUBSIDIARIES
GAAP-Based Financial Data for Guidance
(in $ millions)
The following table provides supplemental information to the Company’s Q4 FY25 guidance.
	Three Months Ending March 31, 2025
	GAAP-Based Financial Data
	GAAP Guidance Range				Acquisition- related expenses		Restructuring and related charges		Stock-based compensation		Change in deferred net revenue (online- enabled games)
Net revenue	1,682	to	1,832		—		—		—		(238)
Cost of revenue	305	to	315		(10)		—		(4)		—
Operating expense	1,112	to	1,122		(20)		(7)		(161)		—
Income before provision for income taxes	285	to	416		30		7		165		(238)
Net income4	171	to	263
Number of shares used in computation:
Diluted	264

⁴ The Company uses a tax rate of 19% internally to evaluate its operating performance and to forecast, plan and analyze future periods.

Non-GAAP Financial Measures

As a supplement to the Company’s financial measures presented in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), the Company presents certain non-GAAP measures of financial performance, including non-GAAP operating margin and free cash flow. These non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. In addition, these non-GAAP measures have limitations in that they do not reflect all of the items associated with the Company’s results of operations as determined in accordance with GAAP. These non-GAAP financial measures do not reflect a comprehensive system of accounting and differ from GAAP measures with the same names and may differ from non-GAAP financial measures with the same or similar names that are used by other companies.

The non-GAAP financial measures exclude acquisition-related expenses, stock-based compensation, restructuring and related charges, and capital expenditures, as applicable in any given reporting period and our outlook. The Company may consider whether other significant items that arise in the future should be excluded from our non-GAAP financial measures. Management believes that these non-GAAP financial measures provide investors with additional useful information to better understand and evaluate the Company’s operating results and future prospects because they exclude certain items that may not be indicative of the Company’s core business, operating results, or future outlook. These non-GAAP financial measures, with further adjustments are used by management to understand ongoing financial and business performance.

The Company uses a tax rate of 19% internally to evaluate its operating performance and to forecast, plan, and analyze future periods. Accordingly, the Company applies the same tax rate to its management reporting financial results.

Investors are encouraged to review the related GAAP financial measures and the reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measure.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250204048278/en/

Andrew Uerkwitz

Vice President, Investor Relations

650-674-7191

auerkwitz@ea.com

Justin Higgs

Vice President, Corporate Communications

925-502-9253

jhiggs@ea.com

Source: Electronic Arts

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