EA plans $1 billion accelerated stock
repurchase further demonstrating conviction in long-term growth of
the business
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
Electronic Arts (NASDAQ:EA)
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