Electronic Arts FY2024 Q2 Earnings Release

Nov, 2023 November 1, 2023
Electronic Arts Inc.
Q2 FY24 Results

Table of
Contents
Safe Harbor Statement
Select Q2 FY24 Highlights
Net Bookings Results
Existing Live Services and FY24 Title Slate
Guidance
2023 Impact Report Highlights
Appendix

Safe Harbor Statement
Some statements set forth in this document, including the information relating to EA’s fiscal 2024 guidance information and t itle slate contain forward -looking
statements that are subject to change. Statements including words such as “anticipate,” “believe,” “expect,” “intend,” “estim ate ,” “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 expectati ons. Our actual results
could differ materially from those discussed in the forward -looking statements. Some of the factors which could cause the Compan y’s results to differ
materially from its expectations include the following: sales of the Company’s products and services; the Company’s ability to d evelop and support digital
products and services, including managing online security and privacy; outages of our products, services and technological in fra structure; the Company’s
ability to manage expenses; the competition in the interactive entertainment industry; governmental regulations; the effectiv ene ss of the Company’s sales
and marketing programs; timely development and release of the Company’s products and services; the Company’s ability to reali ze the anticipated benefits
of, and integrate, acquisitions; the consumer demand for, and the availability of an adequate supply of console hardware unit s; the Company’s ability to
predict consumer preferences among competing platforms; the Company’s ability to develop and implement new technology; foreig n c urrency 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, 2023.
These forward -looking statements are current as of November 1,2023 .Electronic Arts assumes no obligation to revise or update any forward -looking
statement for any reason, except as required by law .Inaddition, the preliminary financial results set forth herein 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 inits Quarterly
Report on Form 10-Qfor the fiscal quarter ended September 30 ,2023 .Electronic Arts assumes no obligation and does not intend to update these estimates
prior to filing its Form 10-Qfor the fiscal quarter ended Septem ber 30 ,2023 .
Re fe r to Appe ndix for additional disc losure s
Please review our risk factors on Form 10 -Q filed with the SEC

Select Q2 FY24 Highlights
Re fe r to Appe n dix for addition al disc losu re s
$7.7B
Total TTM Net Bookings
$5.6B
Live Services TTM
Net Bookings
$2.2B
TTM Operating Cash Flow
+6%
EA SPORTS Madden NFL
Net Bookings YoY
73%
Live Services Percent
of TTM Net Bookings
+4%
Total Net Bookings
Growth YoY

Re fe r to Appe ndix for additional disc losure s, inc luding c onstant c urre ncy (“CC”)
Net Bookings by Composition
(in $ millions)
1,155 1,119 1,129
696 635 691
Q 2 F Y22 Q 2 F Y23 Q 2 F Y24
1,851 1,754 1,820
+1%
Quarterly
+4%
+9%
YoY YoY CC
+5%
+10%
+2% 5,054 5,414 5,583
2,023 1,967 2,103
Q 2 F Y22 Q 2 F Y23 Q 2 F Y24
7,077
Trailing 12 Months
+7%
+3%
+4%
YoY
7,381 7,686
Live services and other Full game

279 296 279
403 431 389
1,169 1,027 1,152
Q 2 F Y22 Q 2 F Y23 Q 2 F Y24
1,851 1,754 1,820
Net Bookings by Platform
(in $ millions)
+12%
Quarterly
+4%
(10%)
YoY YoY CC
+5%
(9%)
+14%
Trailing 12 Months
+7%
+2%
+4%
YoY
(6%) (5%) 936 1,252 1,216
1,518 1,713 1,743
4,623 4,416 4,727
Q 2 F Y22 Q 2 F Y23 Q 2 F Y24
7,077 7,381 7,686
(3%)
Re fe r to Appe ndix for additional disc losure s, inc luding c onstant c urre ncy (“CC”)
Console Mobile PC & Other

FY24: Announced Titles
Massive Online
Communities
EA SPORTS PGA Tour (launched Apr 7) Star Wars Jedi: Survivor (launched Apr 28) The Lord of the Rings: Heroes of Middle Earth (launched May 10) EA SPORTS Super Mega Baseball 4 (launched Jun 2) EA SPORTS F1 23 ©(launched Jun 16)
Blockbusters &
Original IP
EA SPORTS Madden NFL 24 (launched Aug 18) Immortals of Aveum (launched Aug 22) EA SPORTS FC 24 (launched Sep 29)
EA SPORTS
EA SPORTS NHL 24 (launched Oct 6) EA SPORTS UFC 5 (launched Oct 27) EA SPORTS WRC 23 (Nov 3)
Existing Live Services and FY24 Title Slate
Denotes annual full game release
Denotes new title release in FY24
Re fe r to Appe ndix for additional disc losure s

Q3 and FY24 Guidance
(in $ millions, except EPS)
Re fe r to Appe ndix for additional disc losure s
Q3 FY24E FY24E
Net Revenue 1,825 to 2,025 7,300 to 7,700
Cost of Revenue 495 to 535 1,670 to 1,750
GAAP EPS $0.75 to $1.01 $4.10 to $4.66
Operating Cash Flow n/a 1,950 to 2,100
Net Bookings 2,250 to 2,450 7,300 to 7,700
Note: Our EPS guidance calculation does not factor in future share repurchases

3 years of
consistent growth
in underrepresented talent in
executive (VP+) roles
$6.8M and 11,700
volunteer hours
investing in communities
through social impact
programs
Set our ambition to be
carbon neutral by
2027
Continued increase
in company – wide
representation
among women and
underrepresented talent
Continued leadership in
Inclusive Design
6 patents
added to our accessibility
patent pledge
Re fe r to Appe ndix for additional disc losure s. For the c omplete report, ple ase se e our 2023 Impac t Re port
Environmental, Social, & Governance Highlights and Commitments
2023 Impact Report

Appendix
Guidance Details
Cash Flow Selected Data
Currency Assumptions
Constant Currency Reconciliation
Additional Disclosures

Guidance Details: FY24
Twelve Months Ending March 31, 2024
GAAP -Based Financial Data*
(in $ millions )
GAAP Guidance Range
Acquisition – related experiences
Change in deferred net revenue (online -enabled games) Restructuring and related charges Stock -based compensation
Total net revenue 7,300 to 7,700 – – – –
Cost of revenue 1,670 to 1,750 (65) – – (5)
Operating expense 4,213 to 4,333 (95) – (3) (595)
Income before provision for income taxes 1,462 to 1,664 160 – 3 600
Net income 1,118 to 1,273
Number of shares used in computation:
Diluted shares 273
*The mid -point of the range has been used for purposes of presenting the reconciling items
The following provides guidance for EA’s Fiscal 2024 financial perform ance as of No vember 1,2023 .The following outlook for GAAP -based financial data and a
long -term tax rate of 19%are used internally by EA to adjust our GAAP expectations to assess EA’s operating results and plan for future periods .
For more information about the nature of the GAAP -based financial data, please refer to EA’s Form 10-Kfor the fiscal year ended March 31,2023 .
This information isalso available inExcel format inour financial model at ir.ea.com .

Guidance Details: Q3 FY24
Three Months Ending December 31, 2023
GAAP -Based Financial Data*
(in $ millions )
GAAP Guidance Range
Acquisition – related experiences
Change in deferred net revenue (online -enabled games) Restructuring and related charges Stock -based compensation
Total net revenue 1,825 to 2,025 – 425 – –
Cost of revenue 495 to 535 (15) – – –
Operating expense 1,050 to 1,110 (25) – – (155)
Income before provision for income taxes 286 to 387 40 425 – 155
Net income 203 to 275
Number of shares used in computation:
Diluted shares 272
*The mid -point of the range has been used for purposes of presenting the reconciling items.
The following provides guidance for EA’s Q3Fiscal 2024 financial performance as of November 1,2023 .The following outlook for GAAP -based financial data
and along -term tax rate of 19%are used internally by EA to adjust our GAAP expectations to assess EA’s operating results and plan for future periods .
For more information about the nature of the GAAP -based financial data, please refer to EA’s Form 10-Kfor the fiscal year ended March 31,2023 .
This information isalso available inExcel format inour financial model at ir.ea.com .

Cash Flow Selected Data
(in $ millions)
Actuals
Q2 2024 Q2 2023 TTM Q2 2024 TTM Q2 2023
Operating Cash Flow 112 (112) 2,211 1,788
Capital Expenditures 51 53 191 213
Free Cash Flow 61 (165) 2,020 1,575
Investing Cash Flow (63) (54) (205) (201)
Financing Cash Flow (351) (348) (1,609) (1,617)

Currency Assumptions
Current FX assumptions 1,2 USD/ Q2 2023 Q2 2024 Q3 -Q4E 2024
Net Bookings
EUR 1.02 1.09 1.05
GBP 1.20 1.27 1.21
Operating Expenses
CAD 1.29 1.33 1.35
SEK 10.39 10.72 11.02
If the U.S. dollar strengthens 10% against the Euro and British pound sterling:
• With hedging, total net bookings decrease ~2.0%
• Total cost of revenue and operating expenses decrease ~2.0%
Note: Our financial guidance includes the forecas ted impact of the FX cas h flow hedging program.1 For FY23 Q2A and FY24 Q2A, FX rates are a s imple average of EA’s actual monthly P&L rates . For FY24 Q3 -Q4E, the s ame FX rates are us ed for all forecas t periods . 2 For all periods , FX rates are quoted us ing mark et convention.
Rule of thumb
If the U.S. dollar strengthens 10% against the Canadian dollar and Swedish
krona:
• Total net bookings decrease ~0.5%
• With hedging, total cost of revenue and operating expenses decrease
~0.5%

Constant Currency Reconciliation – Net Bookings Guidance
(in $ millions)
2024
As Guidance
2023
As Reported
Percentage
Change YoY Currency Impact
Percentage
Change YoY
Constant Currency
Low 7,300 7,341 (1%) 126 +1%
High 7,700 7,341 +5% 126 +7%
Q3 2024
As Guidance
Q3 2023
As Reported
Percentage
Change YoY Currency Impact
Percentage
Change YoY
Constant Currency
Low 2,250 2,342 (4%) 38 (2%)
High 2,450 2,342 +5% 38 +6%
N umbe rs above may not foot du e to rounding and c alc ulation me thodologie s

Constant Currency Reconciliation – Net Bookings
(in $ millions)
Q2 2024
As Reported
Q2 2023
As Reported
Percentage
Change YoY
Q2 2024
Currency Impact
Percentage
Change YoY
Constant Currency
Console 1,152 1,027 +12% 8 +14%
PC & other 389 431 (10%) 8 (9%)
Mobile 279 296 (6%) 2 (5%)
Net Bookings 1,820 1,754 +4% 18 +5%
Q2 2024
As Reported
Q2 2023
As Reported
Percentage
Change YoY
Q2 2024
Currency Impact
Percentage
Change YoY
Constant Currency
Full game 691 635 +9% 3 +10%
Live services & other 1,129 1,119 +1% 15 +2%
Net Bookings 1,820 1,754 +4% 18 +5%
N umbe rs above may not foot du e to rounding and c alc ulation me thodologie s

Additional Disclosures
Net revenue, gross profit and operating cash flow are presented on aGAAP basis .
Net bookings isan operating metric that EA defines as the net amount of products and services sold digitally or sold -inphysically inthe period .Net bookings
iscalculated by adding total net revenue to the change indeferred net revenue for online -enabled games .Ac alculation of net bookings can be found inthe
“Net Bookings” tab of the Financial Model provided on our IRwebsite .
We define EA’s player network as the number of active accounts used to play EA games and services on any platform over the preceding 12 months .We
determine these operating metrics by using internal company data .We also use info rmation provided by third parties, including third party network logins
provided by platform providers .While we believe that the operating metrics we report are reasonable estimates for the applicable period of measurement,
there are inherent challenges in measuring how our games and services are played across l arge global populations .For example, while we seek to remove
duplicate accounts inthese metrics, we do not require players to use acommon identifier or to link their accounts to play an EA game on console/PC and an
EA game on their mobile device, or to play two or more EA games on asingle mobile device .Therefore, aplayer that plays two of our games on asingle mobile
device or plays two of our games (or the same game) across different devices may be counted as two accounts .In addition, we evaluate our systems for
false accounts, which represent user profiles that we believe are intended to be used for purposes that violate our terms of service, and remove them from
our player network .From time to time, our actions may impact the period -by -period comparability of these metrics .For example, we may change our
methodology or we may implement strategic decisions with respect to certain games and services, including sunsetting titles .
From time to time, we make comparisons of current periods to prior periods with reference to constant currency .We evaluate our performance on aconstant
currency basis in order to f acilitate period -to-period comparisons without regard to the impact of changing foreign currency exchange rates .To present
constant currency information (both historical and forward -looking), the current period results are converted into United States dollars using the weighted
average exchange rates f rom the comparative period rather than the rates in effect .Constant currency information ispresented net of the impact of our
foreign exchange hedging programs .
EA, EA SPORTS, EA SP ORTS FC, Battlefield, Need for Speed, Apex Legends, The Sims, Titanfall, and Plants vs.Zombies are trademarks of Electronic Arts
Inc .STAR WARS© isthe property of Lucasfilm Ltd and used with their permission .
Forward -looking statements are valid as of November 1,2023 only .Electronic Arts assumes no obligation to update these forward -looking statements, except
required by law .