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Electronic Arts Inc. (EA) SEC Filing 8-K Material Event for the period ending Tuesday, May 5, 2020

Electronic Arts Inc.

CIK: 712515 Ticker: EA


Exhibit 99.1
 
Electronic Arts Reports Q4 and Full Year FY20 Financial Results
ealogo050520.jpg
 
 
 
 
 
REDWOOD CITY, CA – May 5, 2020 – Electronic Arts Inc. (NASDAQ: EA) today announced preliminary financial results for its fiscal fourth quarter and full year ended March 31, 2020.

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

“We’re humbled to see people around the world connecting through our games during this unprecedented period,” said CEO Andrew Wilson. “Our focus continues to be on everything we can do for our people, our players, and our communities. Thanks to the amazing dedication and determination of our teams at Electronic Arts, we’re able to deliver the games, experiences and content choices that our players are looking for during this challenging time.”

“We’ve had a strong year. Our results this quarter prove the value of the live services path we’ve been on now for a decade. The breadth and depth of our live services give the flexibility we need at times like this to meet player needs,” said COO and CFO Blake Jorgensen. “I want to thank everyone at EA for rising to the challenge. People across the company have shown extraordinary innovation, energy and ingenuity. Learnings from this period will forever change the way we work at EA.”


Selected Operating Highlights and Metrics

Digital net bookings* for the fiscal year was $4.052 billion, up 9% year-over-year and now represents 78% of total net bookings.
FIFA 20 has more than 25 million unique players to date.
Madden NFL 20 reached the highest engagement levels in franchise history.
Apex LegendsTM was the most downloaded free-to-play game on PS4 in calendar 2019.
Star Wars Jedi: Fallen OrderTM has more than 10 million unique players to date.
In every quarter of fiscal 2020, monthly average players in The Sims 4TM were higher than the comparable period in the prior year.

* 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 and mobile platform fees.

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

Net cash from operating activities was $498 million for the quarter and $1.797 billion for the fiscal year.
EA repurchased 2.7 million shares for $291 million during the quarter, bringing the total for the last twelve months to 12.3 million shares for $1.207 billion.







Quarterly Financial Highlights
 
Three Months Ended
 
March 31,
 
2020
 
2019
(in $ millions, except per share amounts)
 
 
 
Digital net revenue
1,219

 
1,065

Packaged goods and other net revenue
168

 
173

          Total net revenue
1,387

 
1,238

 
 
 
 
Net income
418

 
209

Diluted earnings per share
1.43

 
0.69

 
 
 
 
Operating cash flow
498

 
599

 
 
 
 
Value of shares repurchased
291

 
301

Number of shares repurchased
2.7

 
3.2



The following GAAP-based financial data and tax rate of 18% was used internally by company management to adjust its GAAP results in order to assess EA’s operating results:

 
Three Months Ended March 31, 2020
 
 
 
GAAP-Based Financial Data
(in $ millions)
Statement of Operations
 
Acquisition-related expenses
 
Change in deferred net revenue (online-enabled games)
 
Mobile platform fees
 
Stock-based compensation
Total net revenue
1,387

 

 
(131
)
 
(43
)
 

          Cost of revenue
269

 
(3
)
 

 
(43
)
 
(1
)
Gross profit
1,118

 
3

 
(131
)
 

 
1

          Total operating expenses
717

 
(6
)
 

 

 
(90
)
Operating income
401

 
9

 
(131
)
 

 
91

Interest and other income, net
13

 

 

 

 

Income before provision for income taxes
414

 
9

 
(131
)
 

 
91

Number of shares used in computation:
 
 
 
 
 
 
 
 
 
          Diluted
292

 
 
 
 
 
 
 
 

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 December 31, 2019.








Fiscal Year Financial Highlights
 
Twelve Months Ended
 
March 31,
 
2020
 
2019
(in $ millions, except per share amounts)
 
 
 
Digital net revenue
4,314

 
3,710

Packaged goods and other net revenue
1,223

 
1,240

          Total net revenue
5,537

 
4,950

 
 
 
 
Net income
3,039*

 
1,019

Diluted earnings per share
10.30*

 
3.33

 
 
 
 
Operating cash flow
1,797

 
1,547

 
 
 
 
Value of shares repurchased
1,207

 
1,192

Number of shares repurchased
12.3

 
11.0

 
 
 
 
 
*Includes the impact of one-time tax benefits recognized during the fiscal year.

The following GAAP-based financial data and tax rate of 18% was used internally by company management to adjust its GAAP results in order to assess EA’s operating results:
 
Twelve Months Ended March 31, 2020
 
 
 
GAAP-Based Financial Data
(in $ millions)
Statement of Operations
 
Acquisition-related expenses
 
Change in deferred net revenue (online-enabled games)
 
Mobile platform fees
 
Stock-based compensation
Total net revenue
5,537

 

 
(165
)
 
(161
)
 

          Cost of revenue
1,369

 
(12
)
 

 
(161
)
 
(4
)
Gross profit
4,168

 
12

 
(165
)
 

 
4

          Total operating expenses
2,723

 
(27
)
 

 

 
(343
)
Operating income
1,445

 
39

 
(165
)
 

 
347

Interest and other income, net
63

 

 

 

 

Income before provision for income taxes
1,508

 
39

 
(165
)
 

 
347

Number of shares used in computation:
 
 
 
 
 
 
 
 
 
          Diluted
295

 
 
 
 
 
 
 
 

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 December 31, 2019.






Operating Metric
The following is a calculation of our total net bookings for the periods presented:

 
Three Months Ended
March 31,
 
Twelve Months Ended
March 31,
 
2020
 
2019
 
2020
 
2019
(in $ millions)
 
 
 
 
 
 
 
Total net revenue
1,387

 
1,238

 
5,537

 
4,950

Change in deferred net revenue (online-enabled games)
(131
)
 
173

 
(165
)
 
182

Mobile platform fees
(43
)
 
(47
)
 
(161
)
 
(188
)
Net bookings
1,213

 
1,364

 
5,211

 
4,944



Impact of COVID-19 on our Business Operations and Outlook

We have focused on actions to support our people, our players, and our communities around the world affected by the COVID-19 pandemic. Substantially all of our global workforce has shifted to work from home, and our primary focus continues to be the safety and well-being of our employees. Our IT, security and digital platform teams mobilized to add capacity to our remote working systems to scale to a fully distributed workforce.

Throughout this time, our studio teams have continued to deliver live service content while working from home.  We launched our “Stay Home, Play Together” initiative to bring our players together when physical distancing is keeping us apart, and we’ve delivered dozens of Stay & Play programs to date, from special community livestreams and giveaways, to athletes and celebrities playing our games with fans. Our esports teams have conducted major online tournaments, and we’ve executed or plan to execute in the coming months more than 100 celebrity, athlete, community and charity online esports events.

With more people staying at home, we have experienced, and are continuing to experience, heightened levels of engagement and live services net bookings growth to date. The full extent of the impact of the COVID-19 pandemic to our business, operations and financial results will depend on numerous evolving factors that we are not able to predict. The key risks to EA’s business are set forth under the heading “Forward-Looking Statements” in this release.


Business Outlook as of May 5, 2020

The following forward-looking statements reflect expectations as of May 5, 2020. 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 2021 Expectations – Ending March 31, 2021

Beginning in fiscal year 2021, we will make two changes to the way we report net bookings.

First, we will report mobile bookings gross of platform fees, instead of net, to align with industry practice. This will result in a gross up in net bookings but no change to underlying profit.
Second, we will update the presentation of net bookings by composition to focus on full game and live services sales & other, in line with the direction we continue to drive the business.







Our fiscal year 2021 guidance reflects both of these changes. Where relevant, financial data for fiscal 2020 is recast for comparability. Please refer to our FY21 Financial Reporting Update on our IR website for additional information.
Financial metrics:
Net revenue is expected to be approximately $5.525 billion.
Change in deferred net revenue (online-enabled games) is expected to be approximately $25 million.
Net income is expected to be approximately $978 million.
Diluted earnings per share is expected to be approximately $3.35.
Operating cash flow is expected to be approximately $1.575 billion.
The Company estimates a share count of 292 million for purposes of calculating fiscal year 2021 diluted earnings per share.

Operational metric:
Net bookings is expected to be approximately $5.550 billion. For comparison purposes, if fiscal 2020 were to be recast in the same way, we would have reported net bookings of $5.375 billion.

 
Twelve Months Ended
March 31, 2020
 
Twelve Months Ending
March 31, 2021
 
Actuals
 
Outlook
(in $ millions)
 
 
 
Full game
1,783
 
1,700
Live services & other
3,592
 
3,850
Total net bookings recast
5,375
 
5,550
Platform fee*
(164)
 
(190)
Total net bookings as currently reported
5,211
 
5,360
 
 
 
 
 
 
 
 
 
*Fee charged by third-party providers on various platforms, including mobile.

In addition, the following outlook for GAAP-based financial data and a long-term tax rate of 18% 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, 2021
 
 
 
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
5,525

 

 
25

 

Cost of revenue
1,382

 

 

 

Operating expense
2,850

 
(20
)
 

 
(430
)
Income before provision for income taxes
1,270

 
20

 
25

 
430

Net income
978

 
 
 
 
 
 
Number of shares used in computation:
 
 
 
 
 
 
 
Diluted shares
292

 
 
 
 
 
 








First Quarter Fiscal Year 2021 Expectations – Ending June 30, 2020

Financial metrics:
Net revenue is expected to be approximately $1.220 billion.
Change in deferred net revenue (online-enabled games) is expected to be approximately $(220) million.
Net income is expected to be approximately $270 million.
Diluted earnings per share is expected to be approximately $0.93.
The Company estimates a share count of 291 million for purposes of calculating first quarter fiscal year 2021 diluted earnings per share.

Operational metric:
Net bookings is expected to be approximately $1.000 billion. For comparison purposes, if the first fiscal quarter of 2020 were to be recast in the same way, we would have reported net bookings of $782 million.


In addition, the following outlook for GAAP-based financial data and a long-term tax rate of 18% are used internally by EA to adjust our GAAP expectations to assess EA’s operating results and plan for future periods:
 
Three Months Ending June 30, 2020
 
 
 
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
1,220

 

 
(220
)
 

Cost of revenue
210

 

 

 

Operating expense
635

 
(5
)
 

 
(90
)
Income before provision for income taxes
374

 
5

 
(220
)
 
90

Net Income
270

 
 
 
 
 
 
Number of shares used in computation:
 
 


 
 
 
 
Diluted shares
291

 
 
 
 
 
 

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 December 31, 2019.


Conference Call and Supporting Documents

Electronic Arts will host a conference call on Tuesday, May 5, 2020 at 2:00 pm PT (5:00 pm ET) to review its results for the fiscal fourth quarter and year ended March 31, 2020 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 (866) 393-4306 (domestic) or (734) 385-2616 (international), using the Conference ID 3759016 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. After the conference call, EA will also post the prepared remarks and the transcript from the conference call on EA’s IR Website.






A dial-in replay of the conference call will be available until May 19, 2020 at (855) 859-2056 (domestic) or (404) 537-3406 (international) using pin code 3759016. 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 2021 expectations under the heading “Business Outlook as of May 5, 2020,” and other information regarding EA's fiscal 2021 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: 

The Impact of the COVID-19 Pandemic: Continued disruptions, postponements or cancellations of sports seasons and sporting events around which the Company seeks to launch games and provide live services; worsening economic conditions that negatively impact discretionary consumer spending and consumer demand; the closure of several of the Company’s key locations, including its global headquarters in Redwood City, California and key studios across North America, Europe and Asia which could impact (1) the Company’s ability to meet product and live service development schedules, (2) the effectiveness of the Company’s quality controls and game testing measures, and (3) the Company’s ability to conduct normal business operations; the inability of third-party developers with whom the Company has partnerships to meet product development schedules; sustained closures of the physical stores of key retail partners and deterioration in the financial condition of such retail partners; delays in the release date and the decreased unit volume of next-generation consoles from the Company’s platform partners; volatility in foreign currency exchange rates; and other risks related to the COVID-19 pandemic that may be unforeseen as of the date of this release. 

General Business Risks: 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; the Company’s ability to realize the anticipated benefits of acquisitions; the Company’s ability to predict consumer preferences among competing platforms; the Company’s ability to develop and implement new technology; changes in our tax rates or tax laws timely development and release of the Company’s products and services; and the consumer demand for, and the availability of an adequate supply of console hardware units.

In addition, other factors which could cause the Company’s results to differ materially from its expectations are 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, 2019.  







These forward-looking statements are current as of May 5, 2020. Electronic Arts assumes no obligation to revise or update any forward-looking statement for any reason, 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 Annual Report on Form 10-K for the fiscal year ended March 31, 2020.  Electronic Arts assumes no obligation and does not intend to update these estimates prior to filing its Form 10-K for the fiscal year ended March 31, 2020.


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 2020, EA posted GAAP net revenue of $5.5 billion. Headquartered in Redwood City, California, EA is recognized for a portfolio of critically acclaimed, high-quality brands such as EA SPORTS™ FIFA, Battlefield™, Apex Legends™, The Sims™, Madden NFL, Need for Speed™, Titanfall™ and Plants vs. Zombies™. More information about EA is available at www.ea.com/news.
 
EA SPORTS, Battlefield, The Sims, Need for Speed, Apex Legends and Plants vs. Zombies are trademarks of Electronic Arts Inc. STAR WARS © & TM 2019 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 Statements of Operations
(in $ millions, except per share data)
 
 
 
 
 
 
 
 
Three Months Ended March 31,
 
Twelve Months Ended March 31,
 
2020
 
2019
 
2020
2019
Net revenue
1,387

 
1,238

 
5,537

4,950

Cost of revenue
269

 
276

 
1,369

1,322

Gross profit
1,118

 
962

 
4,168

3,628

Operating expenses:
 
 
 
 
 
 
Research and development
402

 
398

 
1,559

1,433

Marketing and sales
167

 
229

 
631

702

General and administrative
142

 
123

 
506

460

Acquisition-related contingent consideration

 
11

 
5

14

Amortization of intangibles
6

 
5

 
22

23

Total operating expenses
717

 
766

 
2,723

2,632

Operating income
401

 
196

 
1,445

996

Interest and other income (expense), net
13

 
23

 
63

83

Income before provision for (benefit from) income taxes
414

 
219

 
1,508

1,079

Provision for (benefit from) income taxes
(4
)
 
10

 
(1,531
)
60

Net income
418

 
209

 
3,039

1,019

Earnings per share
 
 
 
 
 
 
Basic
1.44

 
0.70

 
10.37

3.36

Diluted
1.43

 
0.69

 
10.30

3.33

Number of shares used in computation
 
 
 
 
 
 
Basic
290

 
299

 
293

303

Diluted
292

 
301

 
295

306
































Results (in $ millions, except per share data)
The following table reports the variance of the actuals versus our guidance provided on January 30, 2020 for the three months ended March 31, 2020 plus a comparison to the actuals for the three months ended March 31, 2019.


 
Three Months Ended March 31,
 
2020
 
 
 
2020
 
2019
 
Guidance
 
Variance
 
Actuals
 
Actuals
Net revenue
 
 
 
 
 
 
 
Net revenue
1,325

 
62

 
1,387

 
1,238

GAAP-based financial data
 
 
 
 
 
 
 
Change in deferred net revenue (online-enabled games)1
(131
)
 

 
(131
)
 
173

Mobile platform fees2
(42
)
 
(1
)
 
(43
)
 
(47
)
Cost of revenue
 
 


 
 
 
 
Cost of revenue
257

 
12

 
269

 
276

GAAP-based financial data
 
 
 
 
 
 
 
Acquisition-related expenses
(3
)
 

 
(3
)
 
(1
)
Stock-based compensation

 
(1
)
 
(1
)
 
(1
)
Mobile platform fees2
(42
)
 
(1
)
 
(43
)
 
(47
)
Operating expenses
 
 


 
 
 
 
Operating expenses
724

 
(7
)
 
717

 
766

GAAP-based financial data
 
 
 
 
 
 
 
Acquisition-related expenses
(7
)
 
1

 
(6
)
 
(16
)
Stock-based compensation
(94
)
 
4

 
(90
)
 
(72
)
Income before tax
 
 


 
 
 
 
Income before tax
359

 
55

 
414

 
219

GAAP-based financial data
 
 
 
 
 
 
 
Acquisition-related expenses
10

 
(1
)
 
9

 
17

Change in deferred net revenue (online-enabled games)1
(131
)
 

 
(131
)
 
173

Mobile platform fees2

 

 

 

Stock-based compensation
94

 
(3
)
 
91

 
73

Tax rate used for management reporting
18
%
 


 
18
%
 
18
%
Earnings per share
 
 
 
 
 
 
 
Basic
1.06

 
0.38

 
1.44

 
0.70

Diluted
1.05

 
0.38

 
1.43

 
0.69

Number of shares
 
 
 
 
 
 
 
Basic
291

 
(1
)
 
290

 
299

Diluted
293

 
(1
)
 
292

 
301





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.


2Mobile Platform Fees differ from Platform Fees due to fees on platforms other than mobile.











ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Balance Sheets
(in $ millions)
 
 
 
 
 
March 31, 2020
 
March 31, 20193
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
3,768

 
4,708

Short-term investments
1,967

 
737

Receivables, net
461

 
623

Other current assets
321

 
313

Total current assets
6,517

 
6,381

Property and equipment, net
449

 
448

Goodwill
1,885

 
1,892

Acquisition-related intangibles, net
53

 
87

Deferred income taxes, net
1,903

 
35

Other assets
305

 
114

TOTAL ASSETS
11,112

 
8,957

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
68

 
113

Accrued and other current liabilities
1,052

 
1,052

Deferred net revenue (online-enabled games)
945

 
1,100

Senior notes, current, net
599

 

Total current liabilities
2,664

 
2,265

Senior notes, net
397

 
994

Income tax obligations
373

 
233

Deferred income taxes, net
1

 
2

Other liabilities
216

 
132

Total liabilities
3,651

 
3,626

 
 
 
 
Stockholders’ equity:
 
 
 
Common stock
3

 
3

Retained earnings
7,508

 
5,358

Accumulated other comprehensive loss
(50
)
 
(30
)
Total stockholders’ equity
7,461

 
5,331

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
11,112

 
8,957




3Derived from audited consolidated financial statements.







ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Cash Flows
(in $ millions)
 
 
 
 
 
 
 
 
 
Three Months Ended March 31,
 
Twelve Months Ended March 31,
 
2020
 
2019
 
2020
 
20193
OPERATING ACTIVITIES
 
 
 
 
 
 
 
Net income
418

 
209

 
3,039

 
1,019

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
 
 
 
Depreciation, amortization and accretion
39

 
37

 
150

 
145

Acquisition-related contingent consideration
5

 
14

 
5

 
14

Stock-based compensation
91

 
73

 
347

 
284

Change in assets and liabilities
 
 
 
 
 
 
 
Receivables, net
340

 
183

 
164

 
(88
)
Other assets
(41
)
 
(65
)
 
35

 
(24
)
Accounts payable
(3
)
 
24

 
(36
)
 
59

Accrued and other liabilities
(145
)
 
(120
)
 
119

 
3

Deferred income taxes, net
(78
)
 
73

 
(1,871
)
 
(16
)
Deferred net revenue (online-enabled games)
(128
)
 
171

 
(155
)
 
151

Net cash provided by operating activities
498

 
599

 
1,797

 
1,547

INVESTING ACTIVITIES
 
 
 
 
 
 
 
Capital expenditures
(40
)
 
(35
)
 
(140
)
 
(119
)
Proceeds from maturities and sales of short-term investments
767

 
733

 
2,142

 
1,688

Purchase of short-term investments
(738
)
 
(198
)
 
(3,359
)
 
(1,342
)
Acquisitions, net of cash acquired

 

 

 
(58
)
Net cash provided by (used in) investing activities
(11
)
 
500

 
(1,357
)
 
169

FINANCING ACTIVITIES
 
 
 
 
 
 
 
Proceeds from issuance of common stock
28

 
25

 
62

 
61

Cash paid to taxing authorities for shares withheld from employees
(5
)
 
(6
)
 
(91
)
 
(122
)
Repurchase and retirement of common stock
(291
)
 
(301
)
 
(1,207
)
 
(1,192
)
Payment of contingent consideration
(32
)
 

 
(122
)
 

Net cash used in financing activities
(300
)
 
(282
)
 
(1,358
)
 
(1,253
)
Effect of foreign exchange on cash and cash equivalents
(22
)
 
4

 
(22
)
 
(13
)
Change in cash and cash equivalents
165

 
821

 
(940
)
 
450

Beginning cash and cash equivalents
3,603

 
3,887

 
4,708

 
4,258

Ending cash and cash equivalents
3,768

 
4,708

 
3,768

 
4,708



3Derived from audited consolidated financial statements.


















ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Supplemental Financial Information and Business Metrics
(in $ millions, except per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
Q4
 
Q1
 
Q2
 
Q3
 
Q4
 
YOY %
 
FY19
 
FY20
 
FY20
 
FY20
 
FY20
 
Change
Net revenue
 
 
 
 
 
 
 
 
 
 
 
 Net revenue
1,238

 
1,209

 
1,348

 
1,593

 
1,387

 
12
%
GAAP-based financial data
 
 
 
 
 
 
 
 
 
 
 
Change in deferred net revenue (online-enabled games)1
173

 
(427
)
 
(35
)
 
428

 
(131
)
 
 
Mobile platform fees2
(47
)
 
(39
)
 
(36
)
 
(43
)
 
(43
)
 
 
Gross profit
 
 
 
 
 
 
 
 
 
 
 
Gross profit
962

 
1,022

 
943

 
1,085

 
1,118

 
16
%
Gross profit (as a % of net revenue)
78
%
 
85
%
 
70
%
 
68
%
 
81
%
 
 
GAAP-based financial data
 
 
 
 
 
 
 
 
 
 
 
Acquisition-related expenses
1

 
2

 
2

 
5

 
3

 
 
Change in deferred net revenue (online-enabled games)1
173

 
(427
)
 
(35
)
 
428

 
(131
)
 
 
Mobile platform fees2

 

 

 

 

 
 
Stock-based compensation
1

 
1

 
1

 
1

 
1

 
 
Operating income
 
 
 
 
 
 
 
 
 
 
 
Operating income
196

 
415

 
268

 
361

 
401

 
105
%
Operating income (as a % of net revenue)
16
%
 
34
%
 
20
%
 
23
%
 
29
%
 
 
GAAP-based financial data
 
 
 
 
 
 
 
 
 
 
 
Acquisition-related expenses
17

 
8

 
10

 
12

 
9

 
 
Change in deferred net revenue (online-enabled games)1
173

 
(427
)
 
(35
)
 
428

 
(131
)
 
 
Stock-based compensation
73

 
73

 
92

 
91

 
91

 
 
Net income
 
 
 
 
 
 
 
 
 
 
 
Net income
209

 
1,421

 
854

 
346

 
418

 
100
%
Net income (as a % of net revenue)
17
%
 
118
%
 
63
%
 
22
%
 
30
%
 
 
GAAP-based financial data
 
 
 
 
 
 
 
 
 
 
 
Acquisition-related expenses
17

 
8

 
10

 
12

 
9

 
 
Change in deferred net revenue (online-enabled games)1
173

 
(427
)
 
(35
)
 
428

 
(131
)
 
 
Stock-based compensation
73

 
73

 
92

 
91

 
91

 
 
Tax rate used for management reporting
18
%
 
18
%
 
18
%
 
18
%
 
18
%
 


Diluted earnings per share
0.69

 
4.75

 
2.89

 
1.18

 
1.43

 
107
%
Number of diluted shares used in computation
 
 
 
 
 
 
 
 
 
 
 
Basic
299

 
297

 
295

 
292

 
290

 
 
Diluted
301

 
299

 
296

 
294

 
292

 
 



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.

2Mobile Platform Fees differ from Platform Fees due to fees on platforms other than mobile.









ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Supplemental Financial Information and Business Metrics
(in $ millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Q4
 
Q1
 
Q2
 
Q3
 
Q4
 
YOY %
 
 
FY19
 
FY20
 
FY20
 
FY20
 
FY20
 
Change
QUARTERLY NET REVENUE PRESENTATIONS
 
 
 
 
 
 
 
 
 
 
 
 
Net revenue by composition
 
 
 
 
 
 
 
 
 
 
 
 
Full game downloads
 
169

 
132

 
180

 
286

 
211

 
25
%
Live services
 
714

 
731

 
573

 
677

 
832

 
17
%
Mobile4
 
182

 
186

 
169

 
161

 
176

 
(3
%)
Total digital
 
1,065

 
1,049

 
922

 
1,124

 
1,219

 
14
%
Packaged goods and other
 
173

 
160

 
426

 
469

 
168

 
(3
%)
Total net revenue
 
1,238

 
1,209

 
1,348

 
1,593

 
1,387

 
12
%
Total digital
 
86
%
 
87
%
 
68
%
 
71
%
 
88
%
 
 
Packaged goods and other
 
14
%
 
13
%
 
32
%
 
29
%
 
12
%
 
 
Total net revenue %
 
100
%
 
100
%
 
100
%
 
100
%
 
100
%
 
 
GAAP-based financial data
 
 
 
 
 
 
Full game downloads
 
44

 
(57
)
 
(5
)
 
31

 
(21
)
 
 
Live services
 
131

 
(227
)
 
(80
)
 
316

 
(43
)
 
 
Mobile4
 

 
(25
)
 
(11
)
 
16

 
5

 
 
Total digital
 
175

 
(309
)
 
(96
)
 
363

 
(59
)
 
 
Packaged goods and other
 
(2
)
 
(118
)
 
61

 
65

 
(72
)
 
 
Total change in deferred net revenue (online-enabled games) by composition1
 
173

 
(427
)
 
(35
)
 
428

 
(131
)
 
 
Mobile platform fees2
 
(47
)
 
(39
)
 
(36
)
 
(43
)
 
(43
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net revenue by platform
 
 
 
 
 
 
 
 
 
 
 
 
Console
 
826

 
760

 
923

 
1,163

 
928

 
12
%
PC/Browser
 
217

 
249

 
242

 
257

 
269

 
24
%
Mobile
 
190

 
196

 
177

 
169

 
185

 
(3
%)
Other
 
5

 
4

 
6

 
4

 
5

 

Total net revenue
 
1,238

 
1,209

 
1,348

 
1,593

 
1,387

 
12
%
GAAP-based financial data
 
 
 
 
 


Console
 
87

 
(344
)
 
8

 
388

 
(143
)
 
 
PC/Browser
 
88

 
(59
)
 
(31
)
 
24

 
7

 
 
Mobile
 
(2
)
 
(25
)
 
(11
)
 
16

 
5

 
 
Other
 

 
1

 
(1
)
 

 

 
 
Total change in deferred net revenue (online-enabled games) by platform1
 
173

 
(427
)
 
(35
)
 
428

 
(131
)
 
 
Mobile platform fees2
 
(47
)
 
(39
)
 
(36
)
 
(43
)
 
(43
)
 
 


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.


2Mobile Platform Fees differ from Platform Fees due to fees on platforms other than mobile.


4Mobile Digital: excludes non-Digital mobile items such as licensing









ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Supplemental Financial Information and Business Metrics
(in $ millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
Q4
 
Q1
 
Q2
 
Q3
 
Q4
 
YOY %
 
FY19
 
FY20
 
FY20
 
FY20
 
FY20
 
Change
CASH FLOW DATA
 
 
 
 
 
 
 
 
 
 
 
Operating cash flow
599

 
158

 
37

 
1,104

 
498

 
(17
%)
Operating cash flow - TTM
1,547

 
1,585

 
1,748

 
1,898

 
1,797

 
16
%
Capital expenditures
35

 
45

 
27

 
28

 
40

 
14
%
Capital expenditures - TTM
119

 
132

 
128

 
135

 
140

 
18
%
Repurchase and retirement of common stock
301

 
305

 
306

 
305

 
291

 
(3
%)
DEPRECIATION
 
 
 
 
 
 
 
 
 
 
 
Depreciation expense
31

 
30

 
30

 
29

 
31

 

BALANCE SHEET DATA
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
4,708

 
3,533

 
2,940

 
3,603

 
3,768

 


Short-term investments
737

 
1,654

 
1,943

 
1,999

 
1,967

 


Cash and cash equivalents, and short-term investments
5,445

 
5,187

 
4,883

 
5,602

 
5,735

 
5
%
Receivables, net
623

 
329

 
856

 
798

 
461

 
(26
%)
STOCK-BASED COMPENSATION
 
 
 
 
 
 
 
 
 
 
 
Cost of revenue
1

 
1

 
1

 
1

 
1

 
 
Research and development
49

 
49

 
61

 
60

 
59

 
 
Marketing and sales
9

 
7

 
10

 
10

 
10

 
 
General and administrative
14

 
16

 
20

 
20

 
21

 
 
Total stock-based compensation
73

 
73

 
92

 
91

 
91

 
 




























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Ticker: EA
CIK: 712515
Form Type: 8-K Corporate News
Accession Number: 0000712515-20-000011
Submitted to the SEC: Tue May 05 2020 4:05:57 PM EST
Accepted by the SEC: Tue May 05 2020
Period: Tuesday, May 5, 2020
Industry: Prepackaged Software
Events:
  1. Earnings Release
  2. Financial Exhibit

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