Electronic Arts Inc. (EA) Bundle
A Brief History of Electronic Arts Inc. (EA)
Company Overview
Electronic Arts Inc. (EA), founded in 1982, is a global leader in digital interactive entertainment. The company develops and publishes games across various platforms, including consoles, PCs, and mobile devices. EA's portfolio includes iconic franchises such as FIFA, Madden NFL, and The Sims.
Recent Financial Performance
As of September 30, 2024, EA reported the following financial metrics:
| Metric | Q2 FY2025 | Q2 FY2024 | Change |
|---|---|---|---|
| Total Net Revenue | $2,025 million | $1,914 million | +6% |
| Live Services and Other Revenue | $1,309 million | $1,293 million | +1% |
| Net Income | $294 million | $399 million | -26% |
| Earnings Per Share (Diluted) | $1.11 | $1.47 | -24% |
| Operating Cash Flow | $234 million | $112 million | +109% |
Revenue Composition
For the six-month period ending September 30, 2024, EA's net revenue breakdown was as follows:
| Revenue Source | Amount (in millions) | 2024 vs 2023 Change |
|---|---|---|
| Full Game Downloads | $665 million | +3% |
| Packaged Goods | $301 million | -28% |
| Live Services | $2,719 million | -2% |
| Total Net Revenue | $3,685 million | -4% |
Expenses and Cash Flow
EA's operational expenses for Q2 FY2025 included:
| Expense Type | Q2 FY2025 (in millions) | Q2 FY2024 (in millions) | Change |
|---|---|---|---|
| Research and Development | $1,277 | $1,198 | +7% |
| Marketing and Sales | $272 | $280 | -3% |
| General and Administrative | $197 | $173 | +14% |
Stock Repurchase Program
As of September 30, 2024, EA had repurchased a total of 5.4 million shares for approximately $750 million under its stock repurchase programs, reflecting the company's commitment to returning value to shareholders.
Future Outlook
EA continues to focus on expanding its live services and mobile gaming segments, with an emphasis on enhancing user engagement and monetization strategies. The company expects to invest significantly in its production studios to support new game releases and updates.
A Who Owns Electronic Arts Inc. (EA)
Ownership Structure
As of 2024, Electronic Arts Inc. (EA) has a diverse ownership structure comprising institutional investors, individual shareholders, and company insiders. The following table outlines the significant shareholders and their respective ownership percentages:
| Shareholder Type | Shareholder Name | Ownership Percentage | Number of Shares Owned (approx.) |
|---|---|---|---|
| Institutional Investor | The Vanguard Group, Inc. | 8.7% | 22.7 million |
| Institutional Investor | BlackRock, Inc. | 8.1% | 21.3 million |
| Institutional Investor | State Street Corporation | 4.9% | 12.8 million |
| Mutual Fund | Fidelity Investments | 4.5% | 11.8 million |
| Company Insider | Andrew Wilson (CEO) | 0.5% | 1.3 million |
| Other Individuals | Various Individual Shareholders | 73.3% | 192.9 million |
Stock Performance
As of September 30, 2024, the stock performance of EA has shown a healthy trajectory. The stock price was approximately $65.81, reflecting a market capitalization of about $17.4 billion. The stock has experienced a year-to-date increase of 14% compared to the previous year.
Recent Financial Data
For the three months ended September 30, 2024, EA reported:
- Total net revenue: $2,025 million
- Net income: $294 million
- Earnings per share (diluted): $1.11
- Operating income: $384 million
- Cash dividends paid: $51 million
Insider Ownership and Compensation
Insider ownership at EA is relatively modest, with key executives holding a combined total of 1.5% of the company's shares. The compensation for executives includes stock options and restricted stock units, which are contingent upon performance metrics.
| Executive | Position | Ownership Percentage | Stock Options Held (approx.) |
|---|---|---|---|
| Andrew Wilson | CEO | 0.5% | 1 million |
| Blake Jorgensen | CFO | 0.3% | 800,000 |
| Laura Miele | Chief Studios Officer | 0.2% | 500,000 |
Market Trends and Implications
EA's ownership structure reflects a strong presence of institutional investors, which is indicative of confidence in the company's long-term strategy and market position. The increasing digital sales and live services revenue bolster EA's growth potential, as seen in the recent financial results where live services contributed $1,309 million to total net revenue for the quarter.
Conclusion
The ownership landscape of Electronic Arts Inc. is characterized by significant institutional investment and a broad base of individual shareholders. The company's strategic focus on digital and live services positions it well for continued growth in the competitive gaming industry.
Electronic Arts Inc. (EA) Mission Statement
Current Mission Statement
As of 2024, Electronic Arts Inc. (EA) states its mission as follows: "We create the world’s best interactive entertainment experiences, and we believe that our games can inspire the world. We are committed to delivering unforgettable gaming experiences across all platforms and genres.”
Financial Performance Overview
EA's financial performance reflects its mission through its revenue generation and strategic initiatives. For the six months ended September 30, 2024, EA reported:
| Metrics | Six Months Ended September 30, 2024 | Six Months Ended September 30, 2023 | $ Change | % Change |
|---|---|---|---|---|
| Total Net Revenue | $3,685 million | $3,838 million | $(153) million | (4%) |
| Full Game Downloads | $665 million | $647 million | $18 million | 3% |
| Packaged Goods | $301 million | $417 million | $(116) million | (28%) |
| Live Services and Other | $2,719 million | $2,774 million | $(55) million | (2%) |
Digital Transformation
EA continues to shift towards digital sales, with digital full game downloads making up a significant portion of its revenue. In fiscal year 2024, EA reported:
Net revenue attributable to digital full game downloads was $1,343 million, compared to $1,262 million in 2023. In contrast, packaged goods sales declined to $672 million from $675 million in 2023.
Live Services Revenue
Live services remain a crucial aspect of EA’s mission to engage players long-term. The following details reflect the live services revenue:
| Metrics | Six Months Ended September 30, 2024 | Six Months Ended September 30, 2023 | $ Change | % Change |
|---|---|---|---|---|
| Live Services Revenue | $2,719 million | $2,774 million | $(55) million | (2%) |
| Extra Content Revenue | $4,393 million | $4,374 million | $19 million | 0.4% |
Investment in Research and Development
EA emphasizes innovation in gaming, reflected in its investment in research and development. For the six months ended September 30, 2024, EA's R&D expenses were:
| Metrics | Six Months Ended September 30, 2024 | Six Months Ended September 30, 2023 | $ Change | % Change |
|---|---|---|---|---|
| Research and Development Expenses | $1,299 million | $1,093 million | $206 million | 19% |
Stockholder Returns
EA remains committed to returning value to its shareholders. In the six months ended September 30, 2024, EA reported:
| Metrics | Value |
|---|---|
| Shares Repurchased | 5.4 million shares |
| Total Cash Dividends Paid | $101 million |
Conclusion on Strategic Alignment
EA's mission statement aligns with its strategic initiatives and financial performance, emphasizing engagement, innovation, and shareholder value. The company continues to adapt to market trends and consumer preferences, focusing on digital transformation and live services to enhance player experiences.
How Electronic Arts Inc. (EA) Works
Overview of Operations
Electronic Arts Inc. (EA) operates within the interactive entertainment industry, focusing on the development, marketing, publishing, and distribution of video games. The company generates revenue through various channels, including full game sales, live services, subscriptions, and licensing agreements.
Financial Performance
For the fiscal quarter ending September 30, 2024, EA reported total net revenue of $2,025 million, representing a 6% increase compared to the same period in the previous year. This growth was driven primarily by sales from its sports franchises.
| Financial Metric | Q2 2024 | Q2 2023 | Change ($) | Change (%) |
|---|---|---|---|---|
| Total Net Revenue | $2,025 million | $1,914 million | $111 million | 6% |
| Live Services Revenue | $1,309 million | $1,293 million | $16 million | 1% |
| Full Game Revenue | $716 million | $621 million | $95 million | 15% |
Revenue Composition
EA's revenue is categorized into full game downloads, packaged goods, and live services. The following table illustrates the revenue composition for the six months ending September 30, 2024:
| Revenue Composition | 2024 | 2023 | Change ($) | Change (%) |
|---|---|---|---|---|
| Full Game Downloads | $665 million | $647 million | $18 million | 3% |
| Packaged Goods | $301 million | $417 million | ($116 million) | (28%) |
| Live Services and Other | $2,719 million | $2,774 million | ($55 million) | (2%) | Total Net Revenue | $3,685 million | $3,838 million | ($153 million) | (4%) |
Cost Structure
EA's cost of revenue includes expenses related to royalties, platform fees, data center costs, and personnel-related costs. For the three months ending September 30, 2024, the cost of revenue was $456 million, which accounted for 23% of net revenue.
| Cost of Revenue | Q2 2024 | Q2 2023 | Change ($) | Change (%) |
|---|---|---|---|---|
| Cost of Revenue | $456 million | $456 million | $0 | 0% |
| Research and Development | $648 million | $602 million | $46 million | 8% |
| Marketing and Sales | $272 million | $280 million | ($8 million) | (3%) |
| General and Administrative | $197 million | $173 million | $24 million | 14% |
Net Income and Earnings Per Share
For the three months ending September 30, 2024, EA reported a net income of $294 million, with diluted earnings per share of $1.11. This reflects a decrease from the previous year's net income of $399 million.
| Income Statement Metrics | Q2 2024 | Q2 2023 | Change ($) |
|---|---|---|---|
| Net Income | $294 million | $399 million | ($105 million) |
| Earnings Per Share (Diluted) | $1.11 | $1.47 | ($0.36) |
Cash Flow and Liquidity
As of September 30, 2024, EA reported total cash, cash equivalents, and short-term investments of $2,563 million. The net cash provided by operating activities during the six months ended was $354 million.
| Cash Flow Metrics | 2024 | 2023 | Change ($) |
|---|---|---|---|
| Net Cash Provided by Operating Activities | $354 million | $471 million | ($117 million) |
| Net Cash Used in Investing Activities | ($115 million) | ($107 million) | ($8 million) |
| Net Cash Used in Financing Activities | ($948 million) | ($833 million) | ($115 million) |
Stock Repurchase and Dividend Program
During the quarter ending September 30, 2024, EA repurchased 2.6 million shares for approximately $375 million and paid cash dividends of $51 million.
Market Position and Competitive Landscape
EA faces intense competition in the interactive entertainment industry, with significant revenue derived from a few popular franchises such as EA SPORTS FC and Apex Legends. The company continues to innovate and expand its offerings to maintain its market position.
How Electronic Arts Inc. (EA) Makes Money
Revenue Streams
Electronic Arts Inc. (EA) generates revenue through several key streams:
- Full Game Sales: Includes digital downloads and packaged goods.
- Live Services: Involves sales of extra content, subscriptions, and in-game purchases.
- Licensing: Revenue from licensing agreements for its games.
Full Game Sales
For the three months ended September 30, 2024, EA reported full game net revenue of $716 million, a 15% increase from $621 million in the same period of 2023. This growth was driven by major releases such as EA SPORTS FC 25 and EA SPORTS College Football 25.
| Revenue Component | Q3 2024 ($ million) | Q3 2023 ($ million) | Change ($ million) | % Change |
|---|---|---|---|---|
| Full Game Downloads | 475 | 346 | 129 | 37% |
| Packaged Goods | 241 | 275 | (34) | (12%) |
| Total Full Game Revenue | 716 | 621 | 95 | 15% |
Live Services Revenue
EA's live services, which include in-game purchases and subscriptions, generated $1,309 million in the three months ended September 30, 2024. This represents a slight increase of 1% compared to $1,293 million in the same quarter of the previous year.
| Revenue Component | Q3 2024 ($ million) | Q3 2023 ($ million) | Change ($ million) | % Change |
|---|---|---|---|---|
| Live Services and Other | 1,309 | 1,293 | 16 | 1% |
Year-to-Date Revenue Analysis
For the six months ended September 30, 2024, EA's total net revenue was $3,685 million, a decrease of 4% from $3,838 million in the same period of 2023. The decline was primarily attributed to decreased sales from prior year releases, particularly Star Wars Jedi: Survivor.
| Revenue Component | H1 2024 ($ million) | H1 2023 ($ million) | Change ($ million) | % Change |
|---|---|---|---|---|
| Full Game Revenue | 966 | 1,064 | (98) | (9%) |
| Live Services and Other | 2,719 | 2,774 | (55) | (2%) |
| Total Net Revenue | 3,685 | 3,838 | (153) | (4%) |
Digital vs. Physical Sales
EA is experiencing a consistent trend towards digital game sales. In fiscal year 2024, digital full game downloads accounted for $1,343 million, compared to $1,262 million in 2023.
| Year | Digital Full Game Downloads ($ million) | Packaged Goods ($ million) |
|---|---|---|
| 2024 | 1,343 | 672 |
| 2023 | 1,262 | 675 |
| 2022 | 1,282 | 711 |
Subscriptions and Licensing Revenue
EA's subscription services, including EA Play, provide a recurring revenue stream. Additionally, licensing agreements contribute to overall revenue, though these figures are typically included within the broader revenue categories above.
Cost Structure and Profitability
For the three months ended September 30, 2024, EA reported operating expenses of $1,185 million, an increase of 10% year-over-year. The gross margin for this period was 77.5%, up 1 percentage point from the previous year.
| Expense Component | Q3 2024 ($ million) | Q3 2023 ($ million) | Change ($ million) | % Change |
|---|---|---|---|---|
| Operating Expenses | 1,185 | 1,075 | 110 | 10% |
| Net Income | 294 | 399 | (105) | (26%) |
Market Trends and Future Outlook
EA anticipates that digital sales will continue to increase, driven by consumer preferences. The company is also focusing on expanding its live services model, which has become a significant component of its revenue strategy.
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Article updated on 8 Nov 2024
Resources:
- Electronic Arts Inc. (EA) Financial Statements – Access the full quarterly financial statements for Q2 2025 to get an in-depth view of Electronic Arts Inc. (EA)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Electronic Arts Inc. (EA)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.