EA — Electronic Arts Inc.

EA Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics

• Net Bookings: $1.3 billion, up 3% year-over-year, exceeding guidance.
• Full Game Net Bookings: $214 million, up 27%, driven by Split Fiction and Star Wars Battlefront II.
• Live Services Net Bookings: $1.08 billion, down 1% (excluding Apex Legends, grew in low single digits).
• Net Revenue: $1.67 billion, up 1%.
• Gross Margin: 83.3%, down 90 basis points.
• Operating Expenses: $1.12 billion, up 9%, primarily due to increased personnel costs.
• Earnings Per Share: $0.79.
• Operating Cash Flow: $17 million; trailing 12-month cash flow was $1.98 billion.
• Free Cash Flow: $1.75 billion; $423 million returned to shareholders through buybacks and dividends.

2. Strategic Updates and Business Highlights

• EA SPORTS Growth: Strong engagement in Global Football, with FC Mobile achieving over 50 million installs and record DAUs. Upcoming FC 26 launch is anticipated to drive deeper engagement.
• American Football Ecosystem: College Football 26 launched successfully, with strong reviews and retention metrics. Madden NFL 26 is set to launch on August 14, featuring enhanced gameplay.
• Apex Legends: Continued growth with strong player retention and engagement; upcoming season expected to maintain momentum.
• Upcoming Releases: Battlefield 6 and skate. are positioned as major launches, with significant marketing investments planned.
• Community-Centric Strategy: Focus on building massive online communities and integrating real-world sports content into games.

3. Forward Guidance and Outlook

• Q2 Net Bookings Guidance: Expected to be between $1.8 billion and $1.9 billion, reflecting a 9% to 13% decline year-over-year, partly due to the phasing of EA SPORTS FC deluxe edition content.
• Full Year Guidance: Unchanged; however, full year bookings in constant currency terms are now projected to be 100-200 basis points lower than previously expected.
• Expectations for American Football: Anticipated headwinds from College Football sales, offset by growth in Madden NFL.

4. Bad News, Challenges, or Points of Concern

• Live Services Decline: Live services net bookings down 1%, indicating potential challenges in sustaining growth outside of Apex Legends.
• Competitive Pressures: Concerns regarding the competitive landscape with upcoming titles from rival companies, particularly Call of Duty.
• Market Dynamics: The need to adapt to changing pricing strategies in the industry, particularly with rising prices for new games.
• FX Headwinds: Potential volatility in foreign exchange rates could impact future guidance.

5. Notable Q&A Insights

• Pricing Strategy: EA plans to maintain its current pricing structure without immediate changes, focusing on a broad pricing scheme to capture various player segments.
• Cohort Spending: Strong engagement and spending in Ultimate Team for FC, with plans to continue enhancing the experience.
• Battlefield Marketing: Significant investment in marketing for Battlefield 6, with a focus on building it as a platform rather than just a product.
• American Football Ecosystem: EA sees potential for growth in both College Football and Madden, emphasizing the interconnectedness of the two franchises.
• Mobile Opportunities: Changes in App Store economics may open new avenues for engagement and monetization, with a focus on providing a frictionless experience for players.

Overall, EA reported a strong start to FY 2026, with positive momentum across its franchises, but faces challenges in sustaining growth in live services and navigating competitive pressures.