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Electronic Arts' (EA) Q1 Earnings and Revenues Increase Y/Y
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Electronic Arts (EA - Free Report) reported first-quarter fiscal 2023 earnings of $1.11 per share, which surged 53.6% year over year.
Revenues exceeded the guidance of $1.675 billion to $1.725 billion and increased 13.9% year over year to $1.76 billion, driven by strength in the FIFA franchise and the F1 22 launch. FIFA Online 4 hit a new high in engagement and FIFA Mobile delivered its biggest net bookings quarter ever.
The Zacks Consensus Estimate for loss and revenues was pegged at 6 cents per share and $1.25 billion, respectively.
Net bookings exceeded the expected range of $1.20 to $1.25 billion but decreased 2.8% year over year to $1.29 billion.
Electronic Arts Inc. Price, Consensus and EPS Surprise
EA’s full-game revenues (19.3% of total revenues) increased 5.9% year over year to $341 million. Full-game download revenues increased 2% year over year to $237 million. Revenues from packaged goods rose 17% year over year to $104 million.
Live services and other revenues (80.7% of total revenues) rose 16% year over year to $1.42 billion.
Based on platforms, revenues from consoles increased 7% year over year to $1.04 billion in the reported quarter. Revenues from PC & Other increased 11% year over year to $402 million. Revenues from the mobile platform increased 48% year over year to $323 million.
Operating Details
EA’s GAAP gross profit rose 17.6% from the year-ago quarter’s levels to $1.45 billion. Gross margin expanded 250 basis points (bps) on a year-over-year basis to 82.2%.
Operating expenses increased 10.7% year over year to $1.01 billion. As a percentage of revenues, operating expenses contracted 170 basis points (bps) on a year-over-year basis to 57.3%.
Operating income on a GAAP basis increased 37% year over year to $441 million. The operating margin expanded 420 bps year over year to 25% in the reported quarter.
Balance Sheet and Cash Flow
As of Jun 30, 2022, EA had $2.41 billion in cash and short-term investments compared with $3.06 billion as of Mar 31, 2022.
Net cash used in operating activities in the reported quarter was $78 million against net cash provided by operating activities of $444 million in the previous quarter.
EA repurchased 2.5 million shares for $320 million in the reported quarter, bringing the total for the trailing twelve months to 9.7 million shares for $1.295 billion.
The company also declared a quarterly cash dividend of 19 cents per share. The dividend will be paid out on Sep 21, 2022, to shareholders of record as of the close of business on Aug 31, 2022.
Guidance
For second-quarter fiscal 2023, EA expects GAAP revenues between $1.85 billion and $1.9 billion and earnings in the range of 78-86 cents per share. Net bookings are expected to be between $1.725 and $1.775 billion.
For fiscal 2023, EA expects revenues in the range of $7.6 billion-$7.8 billion and earnings of $2.79 to $2.87 per share. The company expects net bookings for the year to be between $7.9 billion and $8.1 billion.
Operating cash flow is estimated to be in the band of $1.6 billion to $1.65 billion.
Zacks Rank & Stocks to Consider
EA currently carries a Zacks Rank #3 (Hold).
EA is down 2.3% in the year-to-date period compared with the Consumer Discretionary sector’s fall of 31%.
Image: Bigstock
Electronic Arts' (EA) Q1 Earnings and Revenues Increase Y/Y
Electronic Arts (EA - Free Report) reported first-quarter fiscal 2023 earnings of $1.11 per share, which surged 53.6% year over year.
Revenues exceeded the guidance of $1.675 billion to $1.725 billion and increased 13.9% year over year to $1.76 billion, driven by strength in the FIFA franchise and the F1 22 launch. FIFA Online 4 hit a new high in engagement and FIFA Mobile delivered its biggest net bookings quarter ever.
The Zacks Consensus Estimate for loss and revenues was pegged at 6 cents per share and $1.25 billion, respectively.
Net bookings exceeded the expected range of $1.20 to $1.25 billion but decreased 2.8% year over year to $1.29 billion.
Electronic Arts Inc. Price, Consensus and EPS Surprise
Electronic Arts Inc. price-consensus-eps-surprise-chart | Electronic Arts Inc. Quote
Quarter Details
EA’s full-game revenues (19.3% of total revenues) increased 5.9% year over year to $341 million. Full-game download revenues increased 2% year over year to $237 million. Revenues from packaged goods rose 17% year over year to $104 million.
Live services and other revenues (80.7% of total revenues) rose 16% year over year to $1.42 billion.
Based on platforms, revenues from consoles increased 7% year over year to $1.04 billion in the reported quarter. Revenues from PC & Other increased 11% year over year to $402 million. Revenues from the mobile platform increased 48% year over year to $323 million.
Operating Details
EA’s GAAP gross profit rose 17.6% from the year-ago quarter’s levels to $1.45 billion. Gross margin expanded 250 basis points (bps) on a year-over-year basis to 82.2%.
Operating expenses increased 10.7% year over year to $1.01 billion. As a percentage of revenues, operating expenses contracted 170 basis points (bps) on a year-over-year basis to 57.3%.
Operating income on a GAAP basis increased 37% year over year to $441 million. The operating margin expanded 420 bps year over year to 25% in the reported quarter.
Balance Sheet and Cash Flow
As of Jun 30, 2022, EA had $2.41 billion in cash and short-term investments compared with $3.06 billion as of Mar 31, 2022.
Net cash used in operating activities in the reported quarter was $78 million against net cash provided by operating activities of $444 million in the previous quarter.
EA repurchased 2.5 million shares for $320 million in the reported quarter, bringing the total for the trailing twelve months to 9.7 million shares for $1.295 billion.
The company also declared a quarterly cash dividend of 19 cents per share. The dividend will be paid out on Sep 21, 2022, to shareholders of record as of the close of business on Aug 31, 2022.
Guidance
For second-quarter fiscal 2023, EA expects GAAP revenues between $1.85 billion and $1.9 billion and earnings in the range of 78-86 cents per share. Net bookings are expected to be between $1.725 and $1.775 billion.
For fiscal 2023, EA expects revenues in the range of $7.6 billion-$7.8 billion and earnings of $2.79 to $2.87 per share. The company expects net bookings for the year to be between $7.9 billion and $8.1 billion.
Operating cash flow is estimated to be in the band of $1.6 billion to $1.65 billion.
Zacks Rank & Stocks to Consider
EA currently carries a Zacks Rank #3 (Hold).
EA is down 2.3% in the year-to-date period compared with the Consumer Discretionary sector’s fall of 31%.
Take-Two Interactive (TTWO - Free Report) , DraftKings (DKNG - Free Report) and Universal Technical Institute (UTI - Free Report) are some better-ranked stocks that investors can consider in the broader sector. All three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Take-Two Interactive is set to announce first-quarter fiscal 2022 results on Aug 8. TTWO shares have been down 26.3% year to date.
DraftKings is set to announce second-quarter 2022 results on Aug 5. DKNG shares have been down 51.5% year to date.
Universal is set to announce third-quarter fiscal 2022 results on Aug 3. UTI shares have been up 1.9% year to date.