Electronic Arts Inc. ((EA)) has held its Q1 earnings call. Read on for the main highlights of the call.
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Electronic Arts Inc. (EA) recently held its earnings call, reflecting a strong start to the fiscal year with notable growth in key franchises and promising future launches. Despite these positive developments, the company faces challenges, including a decline in live services and anticipated headwinds in the second quarter for certain segments.
Strong Start to Fiscal Year 2026
EA kicked off fiscal year 2026 with impressive results, delivering Q1 net bookings of $1.3 billion, marking a 3% increase that surpassed expectations. This achievement highlights the company’s ability to exceed guidance and demonstrates a robust start to the year.
Growth in EA SPORTS Franchises
The EA SPORTS franchises, particularly Global Football, experienced significant growth. Net bookings for Global Football increased by mid-single digits year-over-year, with FC Mobile achieving a record quarter and over 50 million installs, showcasing the franchise’s expanding reach and popularity.
Successful Partnerships and Launches
EA’s strategic partnerships in FC and F1 have paid off, leading to a 27% year-over-year increase in net bookings for EA SPORTS F1 25. This growth underscores the strong engagement and successful collaborations driving the company’s success.
Positive Developments in Apex Legends
Apex Legends continues to thrive, with sequential growth in engagement and strong player retention. Although net bookings remained flat sequentially, the game’s ability to maintain a dedicated player base is a positive indicator of its ongoing success.
Promising Launches Ahead
Excitement is building around EA’s upcoming launches, particularly Battlefield 6 and skate. Battlefield 6 is poised for a significant reveal, generating anticipation and potential for future growth in EA’s portfolio.
Decline in Live Services Net Bookings
While live services net bookings declined by 1%, excluding Apex Legends, there was growth in the low single digits. This indicates that, despite challenges, EA’s live services segment remains resilient with potential for recovery.
Phasing Challenges for Q2
Looking ahead to the second quarter, EA anticipates a decrease in net bookings by 9% to 13%, influenced by a 4-point headwind related to the phasing of EA SPORTS FC deluxe edition content. This presents a challenge that the company is preparing to navigate.
Headwinds in American Football Ecosystem
The American Football ecosystem is expected to face an 8-point headwind year-over-year for Q2, attributed to a normalized demand curve for College Football. This presents another challenge for EA in the upcoming quarter.
Forward-Looking Guidance
EA’s forward-looking guidance for Q2 predicts net bookings between $1.8 billion and $1.9 billion, reflecting a 9% to 13% decrease due to various factors, including changes in their EA SPORTS FC deluxe edition content strategy. Despite these challenges, EA remains optimistic about its strategic initiatives and future growth prospects.
In conclusion, Electronic Arts Inc. has demonstrated a strong start to the fiscal year, with significant growth in key franchises and promising future launches. However, the company faces challenges, including a decline in live services and anticipated headwinds in Q2. As EA navigates these challenges, its strategic initiatives and successful partnerships position it well for continued success.