EX-99.1 2 earningsrelease72717.htm PRESS RELEASE Exhibit


Exhibit 99.1
 
Electronic Arts Reports Q1 FY18
graphic050614a04.jpg
 
 
 
 
Financial Results
 
REDWOOD CITY, CA — July 27, 2017 — Electronic Arts Inc. (NASDAQ: EA) today announced preliminary financial results for its first fiscal quarter ended June 30, 2017.

“Q1 was an outstanding quarter, with thriving player communities in our top franchises like Battlefield, our EA SPORTS portfolio, Star Wars, and The Sims continuing to grow our network and drive our digital business,” said Chief Executive Officer Andrew Wilson. “We have built strong momentum, and now we are accelerating into a year of tremendous innovation, where extraordinary new games, content-rich live services, and expanding global competitions will deliver more fun for our players and fuel growth for Electronic Arts.”

“We had a great start to the fiscal year, primarily due to our event-driven live services,” said Chief Financial Officer Blake Jorgensen. “Our operating cash flow was the highest ever for a first quarter, and underlines how live services have fundamentally transformed our business model. Driven by innovation and live services, we expect to continue to grow our profitability and cash generation.”

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 sales* of $3.147 billion for the trailing-twelve-month period represents 63% of total net sales, up 23% year-over-year.
Ultimate TeamTM total unique player population grew 11% year-over-year.
BattlefieldTM 1 had more than 21 million players joining the game as of quarter end.
Monthly active players for The SimsTM 4 on PC increased more than 20% year-over-year.
FIFA Mobile unique player base grew to more than 95 million.
Since launching its first season, NBA LIVE Mobile has engaged more than 70 million unique users.

* Net sales is defined as the net amount of products and services sold digitally or sold-in physically in the period.

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

Net cash provided by operating activities was $176 million, a record for the first fiscal quarter.
Net cash provided by operating activities for the trailing-twelve-months was a record $1.872 billion.
In Q1, EA repurchased 1.4 million shares for $150 million.









Quarterly Financial Highlights:
 
 
 
 
(in $ millions, except per share amounts)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended June 30,
 
2017
 
2016
Digital net revenue
879

 
 
689

Packaged goods and other net revenue
570

 
 
582

          Total net revenue
1,449

 
 
1,271

 
 
 
 
 
Net income
644

 
 
440

Diluted earnings per share
2.06

 
 
1.40

 
 
 
 
 
Operating cash flow
176

 
 
(118)*

 
 
 
 
 
Value of shares repurchased
150

 
 
129

Number of shares repurchased
1.4

 
 
1.9

 
*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 June 30, 2016 has been recast to reflect 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 June 30, 2017
 
 
 
GAAP-Based Financial Data
(in $ millions)
Statement of Operations
 
Acquisition-related expenses
 
Change in deferred net revenue (online-enabled games)
 
Stock-based compensation
Net revenue
1,449

 

 
(674
)
 

          Cost of revenue
154

 

 

 
(1
)
Gross profit
1,295

 

 
(674
)
 
1

          Total operating expenses
552

 
(1
)
 

 
(47
)
Operating income
743

 
1

 
(674
)
 
48

Interest and other income (expense), net
6

 

 

 

Income before provision for income taxes
749

 
1

 
(674
)
 
48

Number of shares used in computation
 
 
 
 
 
 
 
          Diluted
313

 
 
 
 
 
 


For more information about the nature of the GAAP-based financial data, please refer to EA’s Form 10-K for the fiscal year ended March 31, 2017.











Business Outlook as of July 27, 2017

The following forward-looking statements reflect expectations as of July 27, 2017. 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 $5.075 billion.
Change in deferred net revenue (online-enabled games) is expected to be approximately $25 million.
Net income is expected to be approximately $1.125 billion.
Diluted earnings per share is expected to be approximately $3.57.
Operating cash flow, reflecting the recently adopted accounting standard related to stock-based compensation discussed below, is expected to be approximately $1.575 billion.
The Company estimates a share count of 315 million for purposes of calculating fiscal year 2018 diluted earnings per share.

Operational metric:
Net sales is expected to be approximately $5.100 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
3,295

 

 
80

 

Packaged goods & other net revenue
1,780

 

 
(55
)
 

Total net revenue
5,075

 

 
25

 

Cost of revenue
1,276

 

 

 
(1
)
Operating expense
2,420

 
(6
)
 

 
(239
)
Income before provision for income taxes
1,364

 
6

 
25

 
240

Net income
1,125

 
 
 
 
 
 
Number of shares used in computation
 
 
 
 
 
 
 
Diluted shares
315

 
 
 
 
 
 






Second Quarter Fiscal Year 2018 Expectations — Ending September 30, 2017

Financial metrics:
Net revenue is expected to be approximately $955 million.
Change in deferred net revenue (online-enabled games) is expected to be approximately $205 million.
Net loss is expected to be approximately ($57) million.
Loss per share is expected to be approximately ($0.18).
The Company estimates a GAAP basic and diluted share count of 310 million shares due to a forecasted net loss. If the Company reports net income instead of a net loss, diluted share count for calculating diluted earnings per share would be 314 million shares.

Operational metric:
Net sales is expected to be approximately $1.160 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 September 30, 2017
 
 
 
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
955

 

 
205

 

Cost of revenue
389

 

 

 

Operating expense
638

 
(2
)
 

 
(61
)
Income/(loss) before provision for income taxes
(69
)
 
2

 
205

 
61

Net income/(loss)
(57
)
 
 
 
 
 
 
Number of shares used in computation
 
 


 
 
 
 
Basic shares
310

 
 
 
 
 
 


Impact of Recently Adopted Accounting Standard

At the beginning of fiscal 2018, EA adopted FASB ASU 2016-09, related to stock-based compensation. In the first quarter of fiscal 2018, we recorded a $39 million benefit to income tax expense that would have been recognized in additional paid-in capital under rules in effect prior to adoption.  
 
This pronouncement also requires EA to change how it reports the cash effects of stock-based compensation in the Consolidated Statement of Cash Flow. It does not impact total cash and cash flow, but it does increase operating cash flow and decrease cash flow from financing activities. The following table reflects the impact of this standard on operating cash flow for the periods presented:

 
 
Three Months Ended June 30,
(in $ millions)
 
2017
 
2016
Operating cash flow under historical GAAP
 
42

 
(248
)
Operating cash flow under ASU 2016-09
 
176

 
(118
)
Impact of ASU 2016-09 on operating cash flow
 
134

 
130







Conference Call and Supporting Documents
    
Electronic Arts will host a conference call on July 27, 2017 at 2:00 pm PT (5:00 pm ET) to review its results for the first fiscal quarter ended June 30, 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 August 9, 2017 at 855-859-2056 (domestic) or 404-537-3406 (international) using pin code 90758729. 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 July 27, 2017,” 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 Annual Report on Form 10-K for the fiscal year ended March 31, 2017. 

These forward-looking statements are current as of July 27, 2017. 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 June 30, 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 June 30, 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, Battlefield 1, The Sims, Need for Speed, Dragon Age, and Plants vs. Zombies are trademarks of Electronic Arts Inc. NBA, 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 June 30,
 
2017
 
2016
Net revenue
 
 
 
Product
828

 
684

Service and other
621

 
587

Total net revenue
1,449

 
1,271

Cost of revenue
 
 
 
Product
64

 
90

Service and other
90

 
89

Total cost of revenue
154

 
179

Gross profit
1,295

 
1,092

Operating expenses:
 
 
 
Research and development
325

 
294

Marketing and sales
121

 
128

General and administrative
105

 
108

Amortization of intangibles
1

 
2

Total operating expenses
552

 
532

Operating income
743

 
560

Interest and other income (expense), net
6

 
(8
)
Income before provision for income taxes
749

 
552

Provision for income taxes
105

 
112

Net income
644

 
440

Earnings per share
 
 
 
Basic
2.08

 
1.46

Diluted
2.06

 
1.40

Number of shares used in computation
 
 
 
Basic
309

 
301

Diluted
313

 
315
























Results (in $ millions, except per share data)
The following table reports the variance of the actuals versus our guidance for the three months ended June 30, 2017 plus a comparison to the actuals for the three months ended June 30, 2016.


 
Three Months Ended June 30,
 
2017
 
 
 
2017
 
2016
 
Guidance
 
Variance
 
Actuals
 
Actuals
Net revenue
 
 
 
 
 
 
 
Net revenue
1,425

 
24

 
1,449

 
1,271

GAAP-based financial data
 
 
 
 
 
 
 
Change in deferred net revenue (online-enabled games)
(675
)
 
1

 
(674
)
 
(589
)
Cost of revenue
 
 


 
 
 
 
Cost of revenue
157

 
(3
)
 
154

 
179

GAAP-based financial data
 
 
 
 
 
 
 
Acquisition-related expenses

 

 

 
(13
)
Stock-based compensation

 
(1
)
 
(1
)
 
(1
)
Operating expenses
 
 


 
 
 
 
Operating expenses
546

 
6

 
552

 
532

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

 
(1
)
 
(2
)
Stock-based compensation
(50
)
 
3

 
(47
)
 
(47
)
Income before tax
 
 


 
 
 
 
Income before tax
724

 
25

 
749

 
552

GAAP-based financial data
 
 
 
 
 
 
 
Acquisition-related expenses
1

 

 
1

 
15

Amortization of debt discount and loss on conversion of notes

 

 

 
2

Change in deferred net revenue (online-enabled games)
(675
)
 
1

 
(674
)
 
(589
)
Stock-based compensation
50

 
(2
)
 
48

 
48

Tax rate used for management reporting
21
%
 


 
21
%
 
21
%
Earnings per share
 
 
 
 
 
 
 
Basic
1.95

 
0.13

 
2.08

 
1.46

Diluted
1.93

 
0.13

 
2.06

 
1.40

Number of shares
 
 
 
 
 
 
 
Basic
310

 
(1
)
 
309

 
301

Diluted
314

 
(1
)
 
313

 
315




























ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Balance Sheets
(in $ millions)
 
 
 
 
 
June 30, 2017
 
March 31, 20171
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
2,248

 
2,565

Short-term investments
2,222

 
1,967

Receivables, net of allowances of $136 and $145, respectively
222

 
359

Other current assets
210

 
308

Total current assets
4,902

 
5,199

Property and equipment, net
436

 
434

Goodwill
1,708

 
1,707

Acquisition-related intangibles, net
7

 
8

Deferred income taxes, net
232

 
286

Other assets
90

 
84

TOTAL ASSETS
7,375

 
7,718

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
38

 
87

Accrued and other current liabilities
709

 
789

Deferred net revenue (online-enabled games)
882

 
1,539

Total current liabilities
1,629

 
2,415

Senior notes, net
991

 
990

Income tax obligations
114

 
104

Deferred income taxes, net
1

 
1

Other liabilities
154

 
148

Total liabilities
2,889

 
3,658

 
 
 
 
Stockholders’ equity:
 
 
 
Common stock
3

 
3

Additional paid-in capital
891

 
1,049

Retained earnings
3,663

 
3,027

Accumulated other comprehensive loss
(71
)
 
(19
)
Total stockholders’ equity
4,486

 
4,060

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
7,375

 
7,718










1Derived from audited consolidated financial statements.







ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Cash Flows
(in $ millions)
 
 
 
 
 
Three Months Ended
June 30,
 
2017
 
20162
OPERATING ACTIVITIES
 
 
 
Net income
644

 
440

Adjustments to reconcile net income to net cash provided by (used in) operating activities:
 
 
 
Depreciation, amortization and accretion
31

 
46

Stock-based compensation
48

 
48

Change in assets and liabilities
 
 
 
Receivables, net
135

 
(12
)
Other assets
80

 
6

Accounts payable
(44
)
 
(32
)
Accrued and other liabilities
(116
)
 
(72
)
Deferred income taxes, net
55

 
43

Deferred net revenue (online-enabled games)
(657
)
 
(585
)
Net cash provided by (used in) operating activities
176

 
(118
)
INVESTING ACTIVITIES
 
 
 
Capital expenditures
(33
)
 
(40
)
Proceeds from maturities and sales of short-term investments
438

 
276

Purchase of short-term investments
(693
)
 
(317
)
Net cash used in investing activities
(288
)
 
(81
)
FINANCING ACTIVITIES
 
 
 
Payment of convertible notes

 
(27
)
Proceeds from issuance of common stock
30

 
4

Cash paid to taxing authorities for shares withheld from employees
(95
)
 
(97
)
Repurchase and retirement of common stock
(150
)
 
(129
)
Net cash used in financing activities
(215
)
 
(249
)
Effect of foreign exchange on cash and cash equivalents
10

 
(3
)
Decrease in cash and cash equivalents
(317
)
 
(451
)
Beginning cash and cash equivalents
2,565

 
2,493

Ending cash and cash equivalents
2,248

 
2,042










2Operating and financing cash flow figures for the three months ended June 30, 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)
 
 
 
 
 
 
 
 
 
 
 
 
 
Q1
 
Q2
 
Q3
 
Q4
 
Q1
 
YOY %
 
FY17
 
FY17
 
FY17
 
FY17
 
FY18
 
Change
Net revenue
 
 
 
 
 
 
 
 
 
 
 
 Net revenue
1,271
 
898
 
1,149
 
1,527
 
1,449
 
14
%
GAAP-based financial data
 
 
 
 
 
 
 
 
 
 
 
Change in deferred net revenue (online-enabled games)3
(589)
 
200
 
921
 
(435)
 
(674)
 
 
Gross profit
 
 
 
 
 
 
 
 
 
 
 
Gross profit
1,092

 
497

 
633

 
1,325

 
1,295

 
19
%
GAAP-based financial data
 
 
 
 
 
 
 
 
 
 
 
Acquisition-related expenses
13

 
12

 
18

 

 

 
 
Change in deferred net revenue (online-enabled games)3
(589
)
 
200

 
921

 
(435
)
 
(674
)
 
 
Stock-based compensation
1

 
1

 

 
1

 
1

 
 
Gross profit (as a % of net revenue)
86
%
 
55
%
 
55
%
 
87
%
 
89
%
 
 
Operating income (loss)
 
 
 
 
 
 
 
 
 
 
 
Operating income (loss)
560

 
(49
)
 
(4
)
 
717

 
743

 
33
%
GAAP-based financial data
 
 
 
 
 
 
 
 
 
 
 
Acquisition-related expenses
15

 
13

 
20

 
1

 
1

 
 
Change in deferred net revenue (online-enabled games)3
(589
)
 
200

 
921

 
(435
)
 
(674
)
 
 
Stock-based compensation
48

 
48

 
48

 
52

 
48

 
 
Operating income (loss) (as a % of net revenue)
44
%
 
(5
%)
 

 
47
%
 
51
%
 
 
Net income (loss)
 
 
 
 
 
 
 
 
 
 
 
Net income (loss)
440

 
(38
)
 
(1
)
 
566

 
644

 
46
%
GAAP-based financial data
 
 
 
 
 
 
 
 
 
 
 
Acquisition-related expenses
15

 
13

 
20

 
1

 
1

 
 
Amortization of debt discount and loss on conversion of notes
2

 

 

 

 

 
 
Change in deferred net revenue (online-enabled games)3
(589
)
 
200

 
921

 
(435
)
 
(674
)
 
 
Stock-based compensation
48

 
48

 
48

 
52

 
48

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


Net income (loss) (as a % of net revenue)
35
%
 
(4
%)
 

 
37
%
 
44
%
 


Diluted earnings (loss) per share
1.40

 
(0.13
)
 
(0.00)

 
1.81

 
2.06

 
47
%
Number of diluted shares used in computation
 
 
 
 
 
 
 
 
 
 
 
Basic
301

 
301

 
303

 
308

 
309

 
 
Diluted
315

 
301

 
303

 
312

 
313

 
 
Anti-dilutive shares excluded for loss position4

 
13

 
10

 

 

 
 
Shares from convertible bond hedge
(2
)
 

 

 

 

 
 



3The difference between the balances of deferred net revenue (online-enabled games) 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.


4Diluted 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)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Q1
 
Q2
 
Q3
 
Q4
 
Q1
 
YOY %
 
 
FY17
 
FY17
 
FY17
 
FY17
 
FY18
 
Change
QUARTERLY NET REVENUE PRESENTATIONS
 
 
 
 
 
 
 
 
 
 
 
 
Net revenue by geography
 
 
 
 
 
 
 
 
 
 
 
 
North America
 
525

 
389

 
561

 
644

 
611

 
16
%
International
 
746

 
509

 
588

 
883

 
838

 
12
%
Total net revenue
 
1,271

 
898

 
1,149

 
1,527

 
1,449

 
14
%
North America
 
(245
)
 
58

 
370

 
(198
)
 
(287
)
 
 
International
 
(344
)
 
142

 
551

 
(237
)
 
(387
)
 
 
Change in deferred net revenue (online-enabled games)3
 
(589
)
 
200

 
921

 
(435
)
 
(674
)
 
 
North America
 
41
%
 
43
%
 
49
%
 
42
%
 
42
%
 
 
International
 
59
%
 
57
%
 
51
%
 
58
%
 
58
%
 
 
Total net revenue %
 
100
%
 
100
%
 
100
%
 
100
%
 
100
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net revenue by composition
 
 
 
 
 
 
 
 
 
 
 
 
Full game downloads
 
137

 
94

 
169

 
259

 
209

 
53
%
Live services5
 
387

 
323

 
369

 
510

 
501

 
29
%
Mobile
 
165

 
149

 
147

 
165

 
169

 
2
%
Total digital
 
689

 
566

 
685

 
934

 
879

 
28
%
Packaged goods and other
 
582

 
332

 
464

 
593

 
570

 
(2
%)
Total net revenue
 
1,271

 
898

 
1,149

 
1,527

 
1,449

 
14
%
Full game downloads
 
(53
)
 
(1
)
 
186

 
(67
)
 
(98
)
 
 
Live services5
 
(44
)
 
(68
)
 
197

 
8

 
(81
)
 
 
Mobile
 
(24
)
 
(11
)
 
27

 
10

 
(19
)
 
 
Total digital
 
(121
)
 
(80
)
 
410

 
(49
)
 
(198
)
 
 
Packaged goods and other
 
(468
)
 
280

 
511

 
(386
)
 
(476
)
 
 
Change in deferred net revenue (online-enabled games)3
 
(589
)
 
200

 
921

 
(435
)
 
(674
)
 
 
Full game downloads
 
11
%
 
10
%
 
15
%
 
17
%
 
14
%
 
 
Live services5
 
30
%
 
36
%
 
32
%
 
33
%
 
35
%
 
 
Mobile
 
13
%
 
17
%
 
13
%
 
11
%
 
12
%
 
 
Total digital
 
54
%
 
63
%
 
60
%
 
61
%
 
61
%
 
 
Packaged goods and other
 
46
%
 
37
%
 
40
%
 
39
%
 
39
%
 
 
Total net revenue %
 
100
%
 
100
%
 
100
%
 
100
%
 
100
%
 
 


3The difference between the balances of deferred net revenue (online-enabled games) 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)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Q1
 
Q2
 
Q3
 
Q4
 
Q1
 
YOY %
 
 
FY17
 
FY17
 
FY17
 
FY17
 
FY18
 
Change
QUARTERLY NET REVENUE PRESENTATIONS
 
 
 
 
 
 
 
 
 
 
 
 
Net revenue by platform
 
 
 
 
 
 
 
 
 
 
 
 
Xbox One, PLAYSTATION 4
 
776

 
513

 
728

 
1,039

 
974

 
26
%
Other consoles
 
134

 
65

 
65

 
70

 
60

 
(55
%)
Total consoles
 
910

 
578

 
793

 
1,109

 
1,034

 
14
%
PC / Browser
 
179

 
158

 
190

 
246

 
240

 
34
%
Mobile
 
165

 
149

 
148

 
165

 
171

 
4
%
Other
 
17

 
13

 
18

 
7

 
4

 
(76
%)
Total net revenue
 
1,271

 
898

 
1,149

 
1,527

 
1,449

 
14
%
Xbox One, PLAYSTATION 4
 
(441
)
 
177

 
762

 
(375
)
 
(548
)
 
 
Other consoles
 
(92
)
 
43

 
3

 
(40
)
 
(42
)
 
 
Total consoles
 
(533
)
 
220

 
765

 
(415
)
 
(590
)
 
 
PC / Browser
 
(30
)
 
(9
)
 
127

 
(30
)
 
(61
)
 
 
Mobile
 
(24
)
 
(11
)
 
27

 
9

 
(20
)
 
 
Other
 
(2
)
 

 
2

 
1

 
(3
)
 
 
Change in deferred net revenue (online-enabled games)3
 
(589
)
 
200

 
921

 
(435
)
 
(674
)
 
 
Xbox One, PLAYSTATION 4
 
61
%
 
57
%
 
63
%
 
68
%
 
67
%
 
 
Other consoles
 
11
%
 
7
%
 
6
%
 
5
%
 
4
%
 
 
Total consoles
 
72
%
 
64
%
 
69
%
 
73
%
 
71
%
 
 
PC / Browser
 
14
%
 
18
%
 
17
%
 
16
%
 
17
%
 
 
Mobile
 
13
%
 
17
%
 
13
%
 
11
%
 
12
%
 
 
Other
 
1
%
 
1
%
 
1
%
 

 

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


3The difference between the balances of deferred net revenue (online-enabled games) 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)
 
 
 
 
 
 
 
 
 
 
 
 
 
Q1
 
Q2
 
Q3
 
Q4
 
Q1
 
YOY %
 
FY17
 
FY17
 
FY17
 
FY17
 
FY18
 
Change
CASH FLOW DATA
 
 
 
 
 
 
 
 
 
 
 
Operating cash flow6
(118
)
 
122

 
1,137

 
437

 
176

 
249
%
Operating cash flow6 - TTM
1,248

 
1,323

 
1,555

 
1,578

 
1,872

 
50
%
Capital expenditures
40

 
29

 
25

 
29

 
33

 
(18
%)
Capital expenditures - TTM
109

 
120

 
124

 
123

 
116

 
6
%
Repurchase and retirement of common stock
129

 
127

 
127

 
125

 
150

 
16
%
DEPRECIATION
 
 
 
 
 
 
 
 
 
 
 
Depreciation expense
29

 
28

 
29

 
29

 
29

 

BALANCE SHEET DATA
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
2,042

 
1,746

 
2,483

 
2,565

 
2,248

 


Short-term investments
1,385

 
1,520

 
1,736

 
1,967

 
2,222

 


Cash and cash equivalents, and short-term investments
3,427

 
3,266

 
4,219

 
4,532

 
4,470

 
30
%
Receivables, net
246

 
723

 
587

 
359

 
222

 
(10
%)
STOCK-BASED COMPENSATION
 
 
 
 
 
 
 
 
 
 
 
Cost of revenue
1

 
1

 

 
1

 
1

 
 
Research and development
27

 
27

 
27

 
28

 
28

 
 
Marketing and sales
7

 
8

 
8

 
8

 
7

 
 
General and administrative
13

 
12

 
13

 
15

 
12

 
 
Total stock-based compensation
48

 
48

 
48

 
52

 
48

 
 






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