January 30, 2018

Electronic Arts Reports Q3 FY18 Financial Results

REDWOOD CITY, Calif.--(BUSINESS WIRE)-- Electronic Arts Inc. (NASDAQ: EA) today announced preliminary financial results for its third fiscal quarter ended December 31, 2017.

"Players enjoyed hundreds of millions of hours in our games across console, mobile and PC during the holiday quarter, and we're thrilled to see our titles driving excitement for more fans around the world," said Chief Executive Officer Andrew Wilson. "We're expanding the reach of our top franchises across more geographies, our competitions are growing in participation and viewership, and we're continuing to grow our network with more amazing games and content coming this quarter and beyond."

"Our diversity in portfolio, platforms, geographies, and business models is the foundation of a robust business that enables us to deliver dependable cash flow," said Chief Financial Officer Blake Jorgensen. "Through the fourth quarter and fiscal 2019, we'll be launching games across five different genres, on three different platforms, and to players around the world. We expect growth in full-game downloads, subscriptions, extra content, and in our mobile business."

News and ongoing updates regarding EA and its games are available on EA's blog at www.ea.com/news.

Selected Operating Highlights and Metrics

  • Digital net bookings* for the trailing twelve months was a record $3.375 billion, up 18% year-over-year, and represents 67% of total net bookings for the same period.
  • The FIFA community grew to nearly 42 million players, on console alone, during the calendar year.
  • FIFA Mobile added 26 million players to its total player base in the quarter.
  • FIFA Ultimate Team™ player base grew 12% year-over-year, from launch to the end of the quarter.
  • In Star Wars™ Battlefront™ II, nearly 70% of players engaged in the single-player campaign.
  • Battlefield™ 1 now has more than 25 million unique players life to date.
  • The Sims™ 4 player base grew more than 35% year-over-year and delivered the highest-performing expansion pack to date during the quarter.
  • The Madden Challenge entertainment special on The CW Network was the #1 esports television broadcast in the U.S. for 2017.

* Net bookings is defined 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.

Selected Financial Highlights and Metrics

All financial measures are presented on a GAAP basis.

  • Net cash provided by operating activities was $849 million.
  • Net cash provided by operating activities for the trailing twelve months was $1.514 billion.
  • During the quarter, EA repurchased 1.4 million shares for $150 million.
  • For the trailing twelve months, EA repurchased 5.6 million shares for $578 million.

Quarterly Financial Highlights

         

Three Months Ended
December 31,

2017 2016  
(in $ millions, except per share amounts)
Digital net revenue 780 685
Packaged goods and other net revenue 380 464  
Total net revenue 1,160 1,149  
 
Net loss (186)* (1 )
Loss per share (0.60)* (0.00 )
 
Operating cash flow 849 1,137**
 
Value of shares repurchased 150 127
Number of shares repurchased 1.4 1.5
 
*During the three months ended December 31, 2017, EA recognized $176 million of incremental income tax expense, or approximately $0.57 per share, due to the application of the Tax Cuts and Jobs Act, enacted on December 22, 2017. This amount is a reasonable estimate provided in accordance with Securities and Exchange Commission guidance. EA will provide additional information about these reasonable estimates in its forthcoming Form 10-Q for the fiscal quarter ending December 31, 2017.
 
**At the beginning of fiscal 2018, EA adopted FASB ASU 2016-09, related to stock-based compensation. Operating cash flow for the three months ended December 31, 2016 has been recast to reflect the impact of this standard.

While EA no longer reports certain non-GAAP financial measures, the following GAAP-based financial data and a long-term tax rate of 21% are used internally by company management to adjust its GAAP results in order to assess EA's operating results:

 

Three Months Ended December 31, 2017

GAAP-Based Financial Data
(in $ millions)

Statement of
Operations

Acquisition-
related expenses

 

Change in
deferred net
revenue
(online-enabled
games)

 

Stock-based
compensation

 

Total net revenue 1,160 - 811 -
Cost of revenue 501   (1 ) - -  
Gross profit 659 1 811 -
Total operating expenses 680   (1 ) - (63 )
Operating income (loss) (21 ) 2 811 63
Interest and other income, net 5   -   - -  
Income (loss) before provision for (benefit from) income taxes (16 ) 2 811 63
Number of shares used in computation:
Basic and diluted 308

EA's GAAP loss per share for the three months ended December 31, 2017 was calculated using the basic share count of 308 million. Had EA reported a profit, the diluted share count would have been 311 million shares.

For more information about the nature of the GAAP-based financial data, please refer to EA's Form 10-Q for the fiscal quarter ended September 30, 2017.

TTM Financial Highlights

  TTM Ended December 31,
2017   2016
(in $ millions)
Digital net revenue 3,282 2,655
Packaged goods and other net revenue 1,813 1,971
Total net revenue 5,095 4,626
 
Net income 1,002* 1,300
 
Operating cash flow** 1,514 1,555
 
Value of shares repurchased 578 1,017
Number of shares repurchased 5.6 14.9
 
*During the trailing twelve months ended December 31, 2017, EA recognized $176 million of incremental income tax expense due to the application of the Tax Cuts and Jobs Act, enacted on December 22, 2017. This amount is a reasonable estimate provided in accordance with Securities and Exchange Commission guidance. EA will provide additional information about these reasonable estimates in its forthcoming Form 10-Q for the fiscal quarter ending December 31, 2017.
 
**At the beginning of fiscal 2018, EA adopted FASB ASU 2016-09, related to stock-based compensation. Operating cash flow has been recast to reflect the impact of this standard.

While EA no longer reports certain non-GAAP financial measures, the following GAAP-based financial data and a long-term tax rate of 21% are used internally by company management to adjust its GAAP results in order to assess EA's operating results:

TTM Ended December 31, 2017
  GAAP-Based Financial Data
(in $ millions)

Statement of
Operations

Acquisition-
related expenses

 

Change in
deferred net
revenue
(online-enabled
games)

 

Stock-based
compensation

 

Total net revenue 5,095 - (78 ) -
Cost of revenue 1,246 (1 ) -   (3 )
Gross profit 3,849 1 (78 ) 3
Total operating expenses 2,451 (5 ) -   (222 )
Operating income 1,398 6 (78 ) 225
Interest and other income, net 13 -   -   -  
Income before provision for income taxes 1,411 6 (78 ) 225

For more information about the nature of the GAAP-based financial data, please refer to EA's Form 10-Q for the fiscal quarter ended September 30, 2017.

Operating Metric

The following is a calculation of our total net bookings for the periods presented:

  Three Months Ended   TTM Ended
December 31, December 31,
2017   2016 2017     2016
(in $ millions)
Total net revenue 1,160 1,149 5,095 4,626
Change in deferred net revenue (online-enabled games) 811 921 (78 ) 148
Net bookings 1,971 2,070 5,017   4,774

Business Outlook as of January 30, 2018

The following forward-looking statements reflect expectations as of January 30, 2018. Electronic Arts assumes no obligation to update these statements. Results may be materially different and are affected by many factors detailed in this release and in EA's annual and quarterly SEC filings.

Fiscal Year 2018 Expectations - Ending March 31, 2018

Financial metrics:

  • Net revenue is expected to be approximately $5.100 billion.
    • Change in deferred net revenue (online-enabled games) is expected to be approximately $50 million.
  • Net income is expected to be approximately $1.015 billion.
  • Diluted earnings per share is expected to be approximately $3.25.
    • Includes the net impact of approximately ($0.48) per share due to the application of the Tax Cuts and Jobs Act.
  • Operating cash flow is expected to be approximately $1.600 billion.
  • The Company estimates a share count of 312 million for purposes of calculating fiscal year 2018 diluted earnings per share.

Operational metric:

  • Net bookings is expected to be approximately $5.150 billion.

In addition, the following outlook for GAAP-based financial data and a long-term tax rate of 21% are used internally by EA to adjust our GAAP expectations to assess EA's operating results and plan for future periods:

         
Twelve Months Ending March 31, 2018
GAAP-Based Financial Data
 

GAAP
Guidance

Acquisition-
related expenses

Change in
deferred net
revenue
(online-enabled
games)

Stock-based
compensation

(in $ millions)
Digital net revenue 3,405 - 120 -
Packaged goods & other net revenue 1,695   -       (70 )     -  
Total net revenue     5,100   -       50       -  
Cost of revenue 1,278 (2 ) - (3 )
Operating expense 2,462 (7 ) - (245 )
Income before provision for income taxes 1,372 9 50 248
Net income 1,015
Number of shares used in computation:
Diluted shares 312

Fourth Quarter Fiscal Year 2018 Expectations - Ending March 31, 2018

Financial metrics:

  • Net revenue is expected to be approximately $1.532 billion.
    • Change in deferred net revenue (online-enabled games) is expected to be approximately ($307) million.
  • Net income is expected to be approximately $579 million.
  • Diluted earnings per share is expected to be approximately $1.86.
  • The Company estimates a share count of 311 million for purposes of calculating fourth quarter fiscal year 2018 diluted earnings per share.

Operational metric:

  • Net bookings is expected to be approximately $1.225 billion.

In addition, the following outlook for GAAP-based financial data and a long-term tax rate of 21% are used internally by EA to adjust our GAAP expectations to assess EA's operating results and plan for future periods:

       
Three Months Ending March 31, 2018
GAAP-Based Financial Data
 

GAAP
Guidance

Acquisition-
related expenses

Change in
deferred net
revenue
(online-enabled
games)

Stock-based
compensation

(in $ millions)                  
Total net revenue     1,532   -     (307 )   -  
Cost of revenue 234 (1 ) - (1 )
Operating expense 619 (3 ) - (74 )
Income before provision for income taxes 677 4 (307 ) 75
Net income 579
Number of shares used in computation:
Diluted shares 311

Conference Call and Supporting Documents

Electronic Arts will host a conference call on January 30, 2018 at 2:00 pm PT (5:00 pm ET) to review its results for the third fiscal quarter ended December 31, 2017 and its outlook for the future. During the course of the call, Electronic Arts may disclose material developments affecting its business and/or financial performance. Listeners may access the conference call live through the following dial-in number 844-215-4106 (domestic) or 918-534-8313 (international), using the password "EA" or via webcast at EA's IR Website at http://ir.ea.com.

EA has posted a slide presentation and a financial model of EA's historical results and guidance on EA's IR Website. EA will also post the prepared remarks and a transcript from the conference call on EA's IR Website.

A dial-in replay of the conference call will be available until February 13, 2018 at 855-859-2056 (domestic) or 404-537-3406 (international) using pin code 6194018. An audio webcast replay of the conference call will be available for one year on EA's IR Website.

Forward-Looking Statements

Some statements set forth in this release, including the information relating to EA's fiscal 2018 expectations under the heading "Business Outlook as of January 30, 2018," and information regarding EA's fiscal 2019 expectations contain forward-looking statements that are subject to change. Statements including words such as "anticipate," "believe," "estimate" or "expect" and statements in the future tense are forward-looking statements. These forward-looking statements are preliminary estimates and expectations based on current information and are subject to business and economic risks and uncertainties that could cause actual events or actual future results to differ materially from the expectations set forth 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 titles; the Company's ability to develop and support digital products and services, including managing online security and privacy; the Company's ability to manage expenses; the competition in the interactive entertainment industry; the effectiveness of the Company's sales and marketing programs; timely development and release of Electronic Arts' products; the Company's ability to realize the anticipated benefits of 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; general economic conditions; and other factors described in the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2017.

These forward-looking statements are current as of January 30, 2018. Electronic Arts assumes no obligation and does not intend to update these forward-looking statements. In addition, the preliminary financial results set forth in this release 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 in its Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2017. 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 December 31, 2017.

About Electronic Arts

Electronic Arts (NASDAQ: EA) is a global leader in digital interactive entertainment. The Company develops and delivers games, content and online services for Internet-connected consoles, mobile devices and personal computers. EA has more than 300 million registered players around the world.

In fiscal year 2017, EA posted GAAP net revenue of $4.8 billion. Headquartered in Redwood City, California, EA is recognized for a portfolio of critically acclaimed, high-quality brands such as The Sims™, Madden NFL, EA SPORTS™ FIFA, Battlefield™, Need for Speed™, Dragon Age™ and Plants vs. Zombies™. More information about EA is available at www.ea.com/news.

Ultimate Team, EA SPORTS, Battlefield, The Sims, Need for Speed, Dragon Age, and Plants vs. Zombies are trademarks of Electronic Arts Inc. STAR WARS © & TM 2018 Lucasfilm Ltd. All rights reserved. John Madden, NFL and FIFA are the property of their respective owners and used with permission.

 
ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statement of Operations
(in $ millions, except share per data)
       

Three Months Ended
December 31,

Nine Months Ended
December 31,

2017 2016 2017 2016
Net revenue
Product 547 649 1,829 1,753
Service and other 613   500   1,739   1,565  
Total net revenue 1,160 1,149 3,568 3,318
Cost of revenue
Product 352 389 716 796
Service and other 149   127   328   300  
Total cost of revenue 501   516   1,044   1,096  
Gross profit 659 633 2,524 2,222
Operating expenses:
Research and development 329 285 985 870
Marketing and sales 230 240 511 511
General and administrative 120 110 343 329
Amortization of intangibles 1   2   4   5  
Total operating expenses 680   637   1,843   1,715  
Operating income (loss) (21 ) (4 ) 681 507
Interest and other income (expense), net 5   (2 ) 14   (13 )
Income (loss) before provision for (benefit from) income taxes (16 ) (6 ) 695 494
Provision for (benefit from) income taxes 170   (5 ) 259   93  
Net income (loss) (186 ) (1 ) 436   401  
Earnings (loss) per share
Basic (0.60 ) (0.00 ) 1.41 1.33
Diluted (0.60 ) (0.00 ) 1.40 1.28
Number of shares used in computation
Basic 308 303 309 302
Diluted 308 303 312 314
 

Results (in $ millions, except per share data)

The following table reports the variance of the actuals versus our guidance for the three months ended December 31, 2017 plus a comparison to the actuals for the three months ended December 31, 2016.

 
  Three Months December 31,
2017
Guidance
  Variance   2017
Actuals
  2016
Actuals
Net revenue
Net revenue 1,135 25 1,160 1,149
GAAP-based financial data
Change in deferred net revenue (online-enabled games) 865 (54 ) 811 921
Cost of revenue
Cost of revenue 521 (20 ) 501 516
GAAP-based financial data
Acquisition-related expenses (1 ) (1 ) (18 )
Stock-based compensation (1 ) 1
Operating expenses
Operating expenses 690 (10 ) 680 637
GAAP-based financial data
Acquisition-related expenses (1 ) (1 ) (2 )
Stock-based compensation (64 ) 1 (63 ) (48 )
Loss before tax
Loss before tax (79 ) 63 (16 ) (6 )
GAAP-based financial data
Acquisition-related expenses 1 1 2 20
Change in deferred net revenue (online-enabled games) 865 (54 ) 811 921
Stock-based compensation 65 (2 ) 63 48
Tax rate used for management reporting 21 % 21 % 21 %
Loss per share
Basic (0.21 ) (0.39 ) (0.60 ) (0.00 )
Diluted (0.21 ) (0.39 ) (0.60 ) (0.00 )
Number of shares
Basic 309 (1 ) 308 303
Diluted 309 (1 ) 308 303
Anti-dilutive shares excluded for loss position1 4 (1 ) 3 10

1Diluted earnings per share reflects the potential dilution from common shares (calculated using the treasury stock method), issuable through stock-based compensation plans. When the company incurs a loss, shares issuable through stock-based compensation plans are excluded from the diluted loss per share calculation as inclusion would be anti-dilutive.

 
ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Balance Sheets
(in $ millions)
   
December 31, 2017 March 31, 20172
ASSETS
Current assets:
Cash and cash equivalents 2,566 2,565
Short-term investments 2,318 1,967
Receivables, net of allowances of $231 and $145, respectively 886 359
Other current assets 196   308  
Total current assets 5,966 5,199
Property and equipment, net 447 434
Goodwill 1,879 1,707
Acquisition-related intangibles, net 81 8
Deferred income taxes, net 159 286
Other assets 110   84  
TOTAL ASSETS 8,642   7,718  
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable 91 87
Accrued and other current liabilities 1,070 789
Deferred net revenue (online-enabled games) 1,946   1,539  
Total current liabilities 3,107 2,415
Senior notes, net 992 990
Income tax obligations 194 104
Deferred income taxes, net 2 1
Other liabilities 261   148  
Total liabilities 4,556 3,658
 
Stockholders' equity:
Common stock 3 3
Additional paid-in capital 723 1,049
Retained earnings 3,455 3,027
Accumulated other comprehensive loss (95 ) (19 )
Total stockholders' equity 4,086   4,060  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 8,642   7,718  

2Derived from audited consolidated financial statements.

 
ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Cash Flows
(in $ millions)
       
Three Months Ended
December 31,
  Nine Months Ended
December 31,
2017 20163 2017 2016 3
OPERATING ACTIVITIES
Net income (loss) (186 ) (1 ) 436 401
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, amortization and accretion 34 49 97 140
Stock-based compensation 63 48 173 144
Change in assets and liabilities
Receivables, net (73 ) 126 (527 ) (367 )
Other assets 13 3 79 40
Accounts payable (88 ) (139 ) 16 (6 )
Accrued and other liabilities 165 167 265 276
Deferred income taxes, net 90 (20 ) 130
Deferred net revenue (online-enabled games) 831   904   408   513  
Net cash provided by operating activities 849   1,137   1,077   1,141  
INVESTING ACTIVITIES
Capital expenditures (24 ) (25 ) (87 ) (94 )
Proceeds from maturities and sales of short-term investments 606 324 1,656 968
Purchase of short-term investments (617 ) (548 ) (2,012 ) (1,372 )
Acquisition, net of cash acquired (150 )   (150 )  
Net cash used in investing activities (185 ) (249 ) (593 ) (498 )
FINANCING ACTIVITIES
Payment of convertible notes (163 )
Proceeds from issuance of common stock 2 57 33
Cash paid to taxing authorities for shares withheld from employees (7 ) (6 ) (112 ) (112 )
Repurchase and retirement of common stock (150 ) (127 ) (453 ) (383 )
Net cash used in financing activities (157 ) (131 ) (508 ) (625 )
Effect of foreign exchange on cash and cash equivalents (8 ) (20 ) 25   (28 )
Increase (decrease) in cash and cash equivalents 499 737 1 (10 )
Beginning cash and cash equivalents 2,067   1,746   2,565   2,493  
Ending cash and cash equivalents 2,566   2,483   2,566   2,483  

3Operating and financing cash flow figures for the three and nine months ended December 31, 2016 have been recast to reflect the impact of ASU 2016-09 which EA adopted at the beginning of FY18.

 
ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Supplemental Financial Information and Business Metrics
(in $ millions, except per share data)
           
Q3
FY17
Q4
FY17
Q1
FY18
Q2
FY18
Q3
FY18
YOY %
Change
Net revenue
Net revenue 1,149 1,527 1,449 959 1,160 1 %
GAAP-based financial data
Change in deferred net revenue (online-enabled games)4 921 (435 ) (674 ) 220 811
Gross profit
Gross profit 633 1,325 1,295 570 659 4 %
GAAP-based financial data
Acquisition-related expenses 18 1
Change in deferred net revenue (online-enabled games)4 921 (435 ) (674 ) 220 811
Stock-based compensation 1 1 1
Gross profit (as a % of net revenue) 55 % 87 % 89 % 59 % 57 %
Operating income (loss)
Operating income (loss) (4 ) 717 743 (41 ) (21 ) (425 %)
GAAP-based financial data
Acquisition-related expenses 20 1 1 2 2
Change in deferred net revenue (online-enabled games)4 921 (435 ) (674 ) 220 811
Stock-based compensation 48 52 48 62 63
Operating income (loss) (as a % of net revenue) 47 % 51 % (4 %) (2 %)
Net income (loss)
Net income (loss) (1 ) 566 644 (22 ) (186 ) (18,500 %)
GAAP-based financial data
Acquisition-related expenses 20 1 1 2 2
Change in deferred net revenue (online-enabled games)4 921 (435 ) (674 ) 220 811
Stock-based compensation 48 52 48 62 63
Tax rate used for management reporting 21 % 21 % 21 % 21 % 21 %
Net income (loss) (as a % of net revenue) 37 % 44 % (2 %) (16 %)
Diluted earnings (loss) per share (0.00 ) 1.81 2.06 (0.07 ) (0.60 ) -
Number of diluted shares used in computation
Basic 303 308 309 309 308
Diluted 303 312 313 309 308
Anti-dilutive shares excluded for loss position1 10 3 3

4The difference between the balances of deferred net revenue (online-enabled games) in the unaudited condensed consolidated balance sheets does not necessarily equal the change in deferred net revenue (online-enabled games) in the unaudited condensed consolidated statements of cash flows due to the impact of unrecognized gains/losses on cash flow hedges.

1Diluted earnings per share reflects the potential dilution from common shares (calculated using the treasury stock method), issuable through stock-based compensation plans. When the company incurs a loss, shares issuable through stock-based compensation plans are excluded from the diluted loss per share calculation as inclusion would be anti-dilutive.

 
ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Supplemental Financial Information and Business Metrics
(in $ millions)
           
Q3
FY17
Q4
FY17
Q1
FY18
Q2
FY18
Q3
FY18
YOY %
Change
QUARTERLY NET REVENUE PRESENTATIONS
Net revenue by geography
North America 561 644 611 427 452 (19 %)
International 588   883   838   532   708   20 %
Total net revenue 1,149   1,527   1,449   959   1,160   1 %
North America 370 (198 ) (287 ) 59 313
International 551   (237 ) (387 ) 161   498  
Change in deferred net revenue (online-enabled games)4 921   (435 ) (674 ) 220   811  
North America 49 % 42 % 42 % 45 % 39 %
International 51 % 58 % 58 % 55 % 61 %
Total net revenue % 100 % 100 % 100 % 100 % 100 %
 
Net revenue by composition
Full game downloads 169 259 209 123 143 (15 %)
Live services5 369 510 501 408 476 29 %
Mobile 147   165   169   158   161   10 %
Total digital 685   934   879   689   780   14 %
Packaged goods and other 464   593   570   270   380   (18 %)
Total net revenue 1,149   1,527   1,449   959   1,160   1 %
Full game downloads 186 (67 ) (98 ) (4 ) 117
Live services5 197 8 (81 ) (98 ) 311
Mobile 27   10   (19 ) (8 ) 22  
Total digital 410   (49 ) (198 ) (110 ) 450  
Packaged goods and other 511   (386 ) (476 ) 330   361  
Change in deferred net revenue (online-enabled games)4 921   (435 ) (674 ) 220   811  
Full game downloads 15 % 17 % 14 % 13 % 12 %
Live services5 32 % 33 % 35 % 43 % 41 %
Mobile 13 % 11 % 12 % 16 % 14 %
Total digital 60 % 61 % 61 % 72 % 67 %
Packaged goods and other 40 % 39 % 39 % 28 % 33 %
Total net revenue % 100 % 100 % 100 % 100 % 100 %

4The difference between the balances of deferred net revenue (online-enabled games) in the unaudited condensed consolidated balance sheets does not necessarily equal the change in deferred net revenue (online-enabled games) in the unaudited condensed consolidated statements of cash flows due to the impact of unrecognized gains/losses on cash flow hedges.

5Live services includes net revenue previously presented as "Extra Content" and "Subscriptions, Advertising and Other" through Q4 FY17.

 
ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Supplemental Financial Information and Business Metrics
(in $ millions)
           
Q3
FY17
Q4
FY17
Q1
FY18
Q2
FY18
Q3
FY18
YOY %
Change
QUARTERLY NET REVENUE PRESENTATIONS
Net revenue by platform
Xbox One, PLAYSTATION 4, Switch 728 1,039 974 569 785 8 %
Other consoles 65   70   60   26   25   (62 %)
Total consoles 793 1,109 1,034 595 810 2 %
PC / Browser 190 246 240 196 181 (5 %)
Mobile 148 165 171 162 166 12 %
Other 18   7   4   6   3   (83 %)
Total net revenue 1,149   1,527   1,449   959   1,160   1 %
Xbox One, PLAYSTATION 4, Switch 762 (375 ) (548 ) 244 705
Other consoles 3   (40 ) (42 ) 14   5  
Total consoles 765 (415 ) (590 ) 258 710
PC / Browser 127 (30 ) (61 ) (30 ) 83
Mobile 27 9 (20 ) (7 ) 21
Other 2   1   (3 ) (1 ) (3 )
Change in deferred net revenue (online-enabled games)4 921   (435 ) (674 ) 220   811  
Xbox One, PLAYSTATION 4, Switch 63 % 68 % 67 % 59 % 68 %
Other consoles 6 % 5 % 4 % 3 % 2 %
Total consoles 69 % 73 % 71 % 62 % 70 %
PC / Browser 17 % 16 % 17 % 20 % 16 %
Mobile 13 % 11 % 12 % 17 % 14 %
Other 1 %     1 %  
Total net revenue % 100 % 100 % 100 % 100 % 100 %

4The difference between the balances of deferred net revenue (online-enabled games) in the unaudited condensed consolidated balance sheets does not necessarily equal the change in deferred net revenue (online-enabled games) in the unaudited condensed consolidated statements of cash flows due to the impact of unrecognized gains/losses on cash flow hedges.

 
ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Supplemental Financial Information and Business Metrics
(in $ millions)
           
Q3
FY17
Q4
FY17
Q1
FY18
Q2
FY18
Q3
FY18
YOY %
Change
CASH FLOW DATA
Operating cash flow6 1,137 437 176 52 849 (25 %)
Operating cash flow6 - TTM 1,555 1,578 1,872 1,802 1,514 (3 %)
Capital expenditures 25 29 33 30 24 (4 %)
Capital expenditures - TTM 124 123 116 117 116 (6 %)
Repurchase and retirement of common stock 127 125 150 153 150 18 %
DEPRECIATION
Depreciation expense 29 29 29 30 30 3 %
BALANCE SHEET DATA
Cash and cash equivalents 2,483 2,565 2,248 2,067 2,566
Short-term investments 1,736 1,967 2,222 2,288 2,318
Cash and cash equivalents, and short-term investments 4,219 4,532 4,470 4,355 4,884 16 %
Receivables, net 587 359 222 812 886 51 %
STOCK-BASED COMPENSATION
Cost of revenue 1 1 1
Research and development 27 28 28 36 38
Marketing and sales 8 8 7 9 8
General and administrative 13 15 12 16 17
Total stock-based compensation 48 52 48 62 63

6Operating cash flow has been recast to reflect the impact of ASU 2016-09 which EA adopted at the beginning of FY18.

Electronic Arts Inc.
Chris Evenden, 650-628-0255
Vice President, Investor Relations
cevenden@ea.com
or
John Reseburg, 650-628-3601
Vice President, Corporate Communications
jreseburg@ea.com

Source: Electronic Arts Inc.

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