Electronic Arts Reports $185M Profit, Initiates First Dividend in its History

Game publisher Electronic Arts (EA) reported its earnings for the second quarter of its fiscal year 2021, which ended Sept. 30. The developer and publisher recorded a 15% decrease in net revenues to $1.15B USD from $1.35B in the same period last year.

For the period, EA recorded a year-over-year 30.7% decline in net bookings, which is calculated by adding total net revenues to the change in deferred net revenues for online and mobile game fees as net bookings dropped from $1.3B in FY 2020 Q2 to $910M in FY 2021 Q3. Although decreasing by 45%, net bookings from console products remained the primary contributor to total net bookings at $513M. Net bookings from PC and mobile each slightly increased by 4% to $225M and $172M, respectively.

The company explained the decline of its financial performance with the impact of launching Madden NFL 21 later than Madden NFL 20 and moving FIFA 21 out of Q2 and into Q3. Consequently, EA expects roughly $525 in net bookings to be moved from Q2 to the remaining periods of its fiscal year 2021. 

EA highlighted several milestones for its games’ metrics, including the FIFA 20 player base reaching nearly 35M, Madden NFL 21 players increased by 30% year-over-year, and Apex Legends, which grew 24% year-over-year and is likely to deliver more than $500M in revenues during the fiscal year, is on track to become EA’s latest billion-dollar franchise by the end of the fiscal year according to Blake Jorgensen, EA COO and CFO.

In total, EA generated a net income of $185M or $0.64 per share for its FY 2021 Q2, which is a decrease of 78% compared to $854B in the same period of FY 2020. The significant decline in profits year-over-year can mostly be attributed to $570M in income tax benefits realized during FY 2020 Q2 partially caused by EA completing an internal transfer of some of its intellectual property rights to its Swiss subsidiary and income tax rates changing in Switzerland.

Furthermore, EA’s board of directors initiated a dividend of $0.17 per stock for the first time in the history of EA and approved a new two-year share repurchase program of up to $2.6B.