Electronic Arts FY2024 Q1 Earnings Release

Aug, 2023 Electronic Arts Inc.
Q1 FY24 Results
August 1, 2023

Table of
Contents
Safe Harbor Statement
Select Q1 FY24 Highlights
Net Bookings Results
Existing Live Services and FY24 Title Slate
Introducing EA SPORTS FC
Guidance
Appendix

Safe Harbor Statement
Some statements set forth in this document, including the information relating to EA’s fiscal 2024 guidance information and title slate 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 among competing platforms ; the Company’s ability to develop and implement new technology ; foreign currency exchange rate
fluctuations ;economic and geopolitical conditions ; changes in our tax r ates or tax l aws ; and other factors described in Part I, Item 1A of Electronic Arts’ latest
Annual Report on Fo rm 10-K under the heading “Risk Factors”, as well as in other documents we have filed with the Securities and Exchange Commission .
These forward -looking statements are current as of August 1, 2023 . Electronic Arts assumes no obligation to revise or update any forw ard -looking statement
for any reason, except as required by law . In addition, 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-Q for the fiscal quarter ended June 30 , 2023 . 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 June 30 , 2023 .
Re fe r to Appe ndix for additional disc losure s
Please review our risk factors on Form 10 -K filed with the SEC

Select Q1 FY24 Highlights
Re fe r to Appe ndix for additional disc losure s
$7.6B
Total TTM Net Bookings
Live Services
represented 75% of
total net bookings
in Q1
$5.6B
Live Services TTM
Net Bookings
$2.0B
TTM Operating Cash Flow
FIFA Ultimate Team
daily average users
increased 15% year
over year in Q1
EA reported record
net bookings for Q1
with growth of 21%
year over year

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)
1,054 1,134 1,177
282 165
401
Q 1 F Y22 Q 1 F Y23 Q 1 F Y24
1,336 1,299
1,578
+4%
Quarterly
+21%
+143%
YoY YoY CC
+25%
+152%
+7%
4,543 5,450 5,573
1,593
2,028 2,047
Q 1 F Y22 Q 1 F Y23 Q 1 F Y24
6,136
Trailing 12 Months
+1%
+2%
+2%
YoY
7,478 7,620
Live services and other Full game
•Record Q1 FY24 net bookings, up 21% or 25% in CC
•Accelerating EA Sports FIFA franchise growth and release of Star
Wars Jedi: Survivor, partially offset by lower -than -expected
performance of Apex Season 17

272 314 303
370 348 374
694 637
901
Q 1 F Y22 Q 1 F Y23 Q 1 F Y24
1,336 1,299
1,578
Net Bookings by Platform
(in $ millions)
+41%
Quarterly
+21%
+7%
YoY YoY CC
+25%
+11%
+46%
Trailing 12 Months
+1%
+6%
+2%
YoY
(4%) (2%) 829 1,235 1,233
1,340
1,685 1,785
3,967
4,558 4,602
Q 1 F Y22 Q 1 F Y23 Q 1 F Y24
6,136
7,478 7,620
0%
Re fe r to Appe ndix for additional disc losure s , including constant currency (“CC”)
Console Mobile PC & Other

FY24: Announced Titles*
Massive Online
Communities
PGA Tour (launched 4/7) Star Wars: Jedi Survivor (launched 4/28) Lord of the Rings: Heroes of Middle -Earth (launched 5/10) Super Mega Baseball 4 (launched 6/2) F1 23 (launched 6/16)
Blockbusters &
Original IP
Madden NFL 24 (8/18) Immortals of Aveum (8/22) EAS FC 24 (9/29)
EA SPORTS NHL 24
Existing Live Services and FY24 Title Slate
Denotes annual full game release
Denotes new title release in FY24
*UFC 5 and one unannounced Racing title not included above
Re fe r to Appe ndix for additional disc losure s

Delivering a breakthrough experience in FC24 with
authenticity and innovation at its core
Building a connected ecosystem with
to serve the world’s largest
global football community
150M+ and growing
Introducing EA SPORTS FC
Unrivaled authenticity
19,000+ players
700+ teams
300+ license partners
30+ leagues
Gameplay Trinity of
Technology
HyperMotionV *
Frostbite ™ Engine
PlayStyles optimized by Opta
Exclusive partnerships
with football leagues
UEFA, Premier
League, LaLiga
Bundesliga, Serie A, MLS
CONMEBOL Libertadores
*Hype rMotion V te c h n ology on ly available on PlayStation 5, Xbox Se rie s X|S, an d PC ve rsion s

Q2 and FY24 Guidance
(in $ millions, except EPS)
Re fe r to Appe ndix for additional disc losure s
Q2 FY24E FY24E
Net Revenue 1,825 to 1,925 7,300 to 7,700
Cost of Revenue 430 to 450 1,670 to 1,750
GAAP EPS $0.72 to $0.89 $3.42 to $3.92
Operating Cash Flow n/a 1,700 to 1,850
Net Bookings 1,700 to 1,800 7,300 to 7,700
Note: Our EPS guidance calculation does not factor in future share repurchases.

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

Guidance Details: Q2 FY24
Three Months Ending September 30, 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 1,925 – (125) – –
Cost of revenue 430 to 450 (15) – – –
Operating expense 1,110 to 1,120 (25) – (10) (155)
Income before provision for income taxes 290 to 358 40 (125) 10 155
Net income 197 to 243
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 performance as of August 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-K for the fiscal year ended March 31, 2023 .
This information is also available in Excel format in our financial model at ir.ea.com .

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 4,248 to 4,368 (95) – (13) (600)
Income before provision for income taxes 1,393 to 1,598 160 – 13 605
Net income 947 to 1,087
Number of shares used in computation:
Diluted shares 277
*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 performance as of August 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-K for the fiscal year ended March 31, 2023 .
This information is also available in Excel format in our financial model at ir.ea.com .

Cash Flow Selected Data
(in $ millions)
Actuals
Q1 2024 Q1 2023 TTM Q1 2024 TTM Q1 2023
Operating Cash Flow 359 (78) 1,987 1,964
Capital Expenditures 45 59 193 203
Free Cash Flow 314 (137) 1,794 1,761
Investing Cash Flow (44) (65) (196) (1,058)
Financing Cash Flow (482) (476) (1,606) (1,617)

Currency Assumptions
Current FX assumptions 1,2 USD/ Q1 2023 Q1 2024 Q2 -Q4E 2024
Net Bookings
EUR 1.08 1.09 1.09
GBP 1.28 1.24 1.26
Operating Expenses
CAD 1.27 1.36 1.33
SEK 9.67 10.47 10.79
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 Q1A and FY24 Q1A, FX rates are a s imple average of EA’s actual monthly P&L rates . For FY24 Q2 -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
(in $ millions)
Q1 2024
As Reported
Q1 2023
As Reported
Percentage
Change YoY
Q1 2024
Currency Impact
Percentage
Change YoY
Constant Currency
Console 901 637 +41% 22 +46%
PC & other 374 348 +7% 12 +11%
Mobile 303 314 (4%) 6 (2%)
Net Bookings 1,578 1,299 +21% 40 +25%
Q1 2024
As Reported
Q1 2023
As Reported
Percentage
Change YoY
Q1 2024
Currency Impact
Percentage
Change YoY
Constant Currency
Full game 401 165 +143% 6 +152%
Live services & other 1,177 1,134 +4% 34 +7%
Net Bookings 1,578 1,299 +21% 40 +25%
N umbe rs above may not foot du e to rounding and c alc ulation me thodologie s

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%) 103 +1%
High 7,700 7,341 +5% 103 +6%
Q2 2024
As Guidance
Q2 2023
As Reported
Percentage
Change YoY Currency Impact
Percentage
Change YoY
Constant Currency
Low 1,700 1,754 (3%) 27 (2%)
High 1,800 1,754 +3% 27 +4%
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 a GAAP basis .
Net bookings is an operating metric that EA defines 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 .A c alculation of net bookings can be found in the
“Net Bookings” tab of the Financial Model provided on our IR website .
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 in these metrics, we do not require players to use a common 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 a single mobile device . Therefore, a player that plays two of our games on a single 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 a constant
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 is presented net of the impact of our
foreign exchange hedging programs .
STAR WARS© is the property of Lucasfilm Ltd and used with their permission .
Forward -looking statements are valid as of August 1,2023 only . Electronic Arts assumes no obligation to update these forward -looking statements, except
required by law .