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01/11 03:35
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary and Q&A revealed mixed signals. While there is optimism in community engagement and product launches, concerns about FX volatility and unchanged pricing strategy temper expectations. Shareholder returns through buybacks are positive, but the lack of specific guidance adjustments and evasive responses in the Q&A suggest uncertainty. These factors, combined with the lack of market cap data, suggest a neutral stock price movement.
Net Bookings $1.3 billion, up 3% year-over-year. Reasons for change: Strong contributions from Split Fiction, Global Football, and better-than-expected performance from catalog and Apex Legends.
Full Game Net Bookings $214 million, up 27% year-over-year. Reasons for change: Ongoing momentum from Split Fiction and a resurgence in Star Wars Battlefront II.
Live Services Net Bookings $1.08 billion, down 1% year-over-year. Reasons for change: Excluding Apex Legends, live services grew in the low single digits, driven by resilience and growth in core franchises like Global Football.
Net Revenue $1.67 billion, up 1% year-over-year. Reasons for change: Strong performance from royalty-bearing titles such as Split Fiction.
Gross Margin 83.3%, down 90 basis points year-over-year. Reasons for change: Strong performance from royalty-bearing titles.
Operating Expenses $1.12 billion, up 9% year-over-year. Reasons for change: Increased people costs due to strategic investments in growth priorities and near-term launches.
Earnings Per Share (EPS) $0.79. Reasons for change: Reflects the overall financial performance and increased operating expenses.
Operating Cash Flow $17 million for Q1. Reasons for change: Not explicitly mentioned.
Trailing 12-Month Operating Cash Flow $1.98 billion. Reasons for change: Not explicitly mentioned.
Free Cash Flow $1.75 billion for the trailing 12 months. Reasons for change: Not explicitly mentioned.
Shareholder Returns $423 million returned through buybacks and dividends. Reasons for change: Reflects the company's capital allocation strategy.
Battlefield 6: Highly anticipated launch this year, featuring innovative destruction, unmatched scale, and a massive multiplayer showcase. Positioned as a cornerstone for dynamic, expanding experiences.
skate.: New creator-driven platform rooted in street culture, with over 1 million registered players for play-test.
Apex Legends: Sequential growth in engagement driven by strong player retention and positive reception of new legend, Sparrow. Next season, Apex Legends: Showdown, launching soon.
EA SPORTS FC 26: Worldwide launch on September 26, with a community-centric approach and positive early indicators.
Global Football: Net bookings up year-over-year, with FC Online up double digits and FC Mobile having a record quarter. Over 50 million installs for FC Mobile, with DAU growth year-over-year.
American Football: Sustained engagement across Madden NFL and College Football. College Football 26 launched successfully, with strong reviews and deeper engagement in Ultimate Team.
F1 Franchise: 27% year-over-year increase in net bookings, driven by innovative gameplay advancements and collaboration with Apple.
Net Bookings: Q1 net bookings of $1.3 billion, up 3% year-over-year, exceeding guidance.
Live Services: Net bookings of $1.08 billion, with resilience in core franchises despite a slight decline.
Operating Cash Flow: $17 million in Q1, with trailing 12-month free cash flow of $1.75 billion.
Community-Centric Strategy: Focus on integrating content across platforms and geographies, driving deeper engagement and expanding reach.
Partnerships: Long-term collaborations with major sports franchises (NFL, FC, F1, etc.) to connect fans with teams and athletes through innovative gameplay and real-world content integration.
Market Conditions: The company faces challenges in maintaining growth in live services net bookings, which were down 1% year-over-year. This indicates potential difficulties in sustaining engagement and monetization in this segment.
Competitive Pressures: The gaming industry is highly competitive, and EA's reliance on blockbuster franchises like Battlefield 6 and Madden NFL 26 means underperformance of these titles could significantly impact financial results.
Regulatory Hurdles: No explicit mention of regulatory hurdles was made in the transcript.
Supply Chain Disruptions: No explicit mention of supply chain disruptions was made in the transcript.
Economic Uncertainties: The company faces potential economic headwinds, as evidenced by a deliberate change in approach to phasing net bookings for EA SPORTS FC deluxe edition content, which could impact short-term revenue.
Strategic Execution Risks: EA's strategy to normalize demand curves for titles like College Football 26 and its reliance on community-centric approaches for new launches like FC 26 and Battlefield 6 carry execution risks. Failure to meet community expectations or deliver on these strategies could adversely affect engagement and financial performance.
Launch of Battlefield 6: Highly anticipated launch this year, with a massive multiplayer showcase and global events planned. Battlefield 6 is expected to become a cornerstone of EA's vision for dynamic, continually expanding experiences.
EA SPORTS FC 26: Worldwide launch on September 26, with a community-centric approach driving prelaunch campaign. Early indicators are positive, and the title is expected to drive deeper engagement and value for the core community.
Madden NFL 26: Launching worldwide on August 14, featuring a new AI-driven system, enhanced gameplay, and deeper experiences. Expected to build a connected year-round experience for American football fans.
College Football 26: Following a strong launch, the title is expected to settle into a normalized demand curve while establishing itself as a core franchise. Strong retention and deeper engagement in Ultimate Team are anticipated.
Apex Legends: Momentum expected to continue with the launch of the next season, Apex Legends: Showdown, featuring new gameplay innovations.
skate.: Launch planned this year, with over 1 million registered players for the play-test. Expected to serve as the foundation of a new creator-driven platform.
Financial Guidance for Q2 FY '26: Net bookings expected to be $1.8 billion to $1.9 billion, with a deliberate change in approach to deliver more value for players over a longer period. American Football ecosystem expected to return to growth in the second half of the fiscal year.
Long-term Financial Framework: Focus on expanding scale, improving operating leverage, and laying the foundation for durable multiyear growth.
Dividends: We returned $423 million to shareholders during the quarter through buybacks and dividends.
Share Buybacks: We returned $423 million to shareholders during the quarter through buybacks and dividends.
The earnings call summary and Q&A revealed mixed signals. While there is optimism in community engagement and product launches, concerns about FX volatility and unchanged pricing strategy temper expectations. Shareholder returns through buybacks are positive, but the lack of specific guidance adjustments and evasive responses in the Q&A suggest uncertainty. These factors, combined with the lack of market cap data, suggest a neutral stock price movement.
The earnings call reflects a mixed sentiment. Financial performance shows slight declines in net bookings and revenue, but strong Q4 results and a robust shareholder return plan provide positive signals. The acquisition of TRACAB Technologies and new initiatives like Battlefield Labs indicate potential growth. However, lowered guidance and management's unclear responses in the Q&A, especially regarding World Cup impacts, introduce uncertainty. The overall sentiment is balanced, with no strong catalysts for significant stock movement, leading to a neutral prediction.
The earnings call presents mixed signals: strong Q4 financial performance with increased net bookings and EPS, but declining FY25 guidance and revenue. The acquisition of TRACAB and investment in new technologies are positives, while economic uncertainties and market transitions pose risks. The Q&A highlights management's focus on community engagement and strategic growth, yet vague responses about competition and future guidance temper optimism. Shareholder returns are strong, but the overall sentiment remains balanced due to the combination of positive and negative factors.
EA's earnings call highlights several concerns: missed earnings expectations, competitive pressures, and decreased player engagement. Despite a positive response to Battlefield Labs, guidance was lowered, indicating caution. A $1 billion stock repurchase reflects confidence but also a need to stabilize shareholder value. The Q&A revealed management's vague responses on crucial issues, adding uncertainty. Overall, the combination of disappointing financial results, lowered guidance, and strategic challenges suggests a negative sentiment, likely leading to a stock price decline of 2% to 8% over the next two weeks.
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