Release Date: February 04, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• EA Sports FC had a strong start with high-quality launch, winning Sports Game of the Year, and increased player monetization year-over-year.
• The Team of the Year event reactivated over 2 million Ultimate Team players, with record weekly active users and positive trends across all acquisition cohorts.
• EA's American football ecosystem saw double-digit growth in players year-over-year, with Ultimate Team engagement also increasing.
• The acquisition of TRACAB technologies is expected to enhance EA Sports' capabilities in delivering more authentic and immersive gameplay.
• EA's strategic initiatives include a $1 billion accelerated stock repurchase, demonstrating confidence in long-term growth and commitment to returning capital to stockholders.

Negative Points

• Q3 financial performance was below expectations, with net bookings down 6% year-over-year.
• Dragon Age: The Veilguard underperformed due to competitive dynamics in the single-player RPG market.
• EA Sports FC experienced a decline in momentum due to soft top-of-funnel acquisition and lapsed engagement later in the quarter.
• Apex Legends' net bookings were down year-over-year, with the franchise not meeting desired growth trajectories.
• Guidance for FY25 net bookings was revised down, with expectations of a low double-digit decline in global football franchise net bookings for Q4.

Q & A Highlights

• Warning! GuruFocus has detected 4 Warning Signs with EA.

Q: What were the reasons behind the slower-than-anticipated acquisition for EA Sports FC? A: Andrew Wilson, CEO, explained that despite a strong start, the acquisition slowed due to players being satisfied with previous iterations and a more defensively focused gameplay that didn't resonate with competitive players. EA has since made significant gameplay updates, resulting in positive trends and reactivation of players.

Q: How has the community reception been to the Battlefield Labs announcement? A: Andrew Wilson, CEO, stated that the response has been overwhelmingly positive, exceeding expectations. The initiative aims to address community trepidation and ensure the new Battlefield is stable and secure, given the scale and depth of the game.

Q: What is the current status of Apex Legends, and what are the future plans? A: Andrew Wilson, CEO, acknowledged that Apex Legends has not been performing as desired. The focus is on supporting the current community, planning a significant update post-Battlefield launch, and eventually developing Apex 2.0 to expand the franchise.

Q: How does the industry pipeline influence EA's timing for launching new titles like Battlefield? A: Andrew Wilson, CEO, noted that while competition is a factor, EA is focused on launching Battlefield when it can maximize community growth. The FY26 launch window is targeted, but timing may adjust based on market conditions to ensure optimal player acquisition.

Q: What opportunities does the anticipated new Switch console present for EA's IP? A: Andrew Wilson, CEO, expressed optimism about new console launches, which typically allow EA to access new players. EA expects franchises like FC and Madden to perform well on the new platform, similar to past successes.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.