REDWOOD CITY, CA – November 1, 2016 – Electronic Arts Inc. (NASDAQ: EA) today announced preliminary financial results for its second fiscal quarter ended September 30, 2016.

“Q2 was an excellent quarter for Electronic Arts, led by breakthrough new EA SPORTS titles engaging players across console and mobile,” said Chief Executive Officer Andrew Wilson.  “We are in an outstanding position for the quarter ahead, with two of the highest-rated games of this console generation in Battlefield 1 and Titanfall 2, global competitive gaming tournaments underway, and our first virtual reality experiences coming soon.   Across all platforms, this holiday season will be a fantastic time to play.”

“Net sales in the quarter were better than expected driven by outperformance in FIFA, and supported by strong year-on-year growth in mobile,” said Chief Financial Officer Blake Jorgensen.  “We are raising our annual guidance today based on the strength of our holiday slate and FIFA 17’s strong performance to date.”

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

Selected Operating Highlights and Metrics:

• Net sales* of $4.507 billion for the trailing twelve-month period is up 8% year-over-year.
• Battlefield™ 1 total player base for the first week was nearly double that of Battlefield 4™, and it continues to grow.
• In the first week of FIFA 17, 20% more players were engaged in the game compared to the first week of FIFA 16 last year and nearly 2/3 of all FIFA 17 players have engaged in “The Journey” story mode.
• Net sales from FIFA, Madden NFL and Hockey Ultimate Team™ are collectively up 15% for the trailing twelve months compared to last year.
• FIFA Mobile reached #1 on the App Store Free Games chart in 138 countries.
• Titanfall™ 2 has been rated 90 or above by more than 40 top outlets.

* Net sales is defined as the net amount of products and services sold digitally or sold-in physically in the period.

Selected Financial Highlights:

All financial measures are presented on a GAAP basis.

• For the quarter, net revenue was $898 million. Of the total net revenue 63%, or $566 million, was digital. Diluted loss per share of $(0.13) was above guidance of $(0.17).
• For the quarter, change in deferred net revenue was $200 million, of which $(80) million was digital.
• Net cash provided by operating activities for the quarter was $109 million. Trailing twelve month operating cash flow was $1.1 billion.
• EA repurchased 1.6 million shares in Q2 for $127 million.

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 our GAAP results in order to assess EA’s operating results:

EA’s GAAP loss per share for the three months ended September 30, 2016 was calculated off the basic share count of 301 million.  Had EA reported a profit, the diluted share count would have been 314 million shares.  For additional information on the GAAP-based financial data, please refer to EA’s Form 10-Q for the quarter ended June 30, 2016.

TTM Financial Highlights:

Business Outlook as of November 1, 2016

The following forward-looking statements, as well as those made above, reflect expectations as of November 1, 2016. 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 2017 Expectations – Ending March 31, 2017

• Net revenue is expected to be approximately $4.775 billion.
• Change in deferred net revenue is expected to be approximately $150 million.
• Net income is expected to be approximately $848 million.
• Diluted earnings per share is expected to be approximately $2.69.
• Operating cash flow is expected to be approximately $1.3 billion.
• The Company estimates a share count of 315 million for purposes of calculating fiscal year 2017 diluted earnings per share.
  

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:

Third Quarter Fiscal Year 2017 Expectations – Ending December 31, 2016

• Net revenue is expected to be approximately $1.125 billion.
• Change in deferred net revenue is expected to be approximately $910 million.
• Net loss is expected to be approximately $(53) million.
• Loss per share is expected to be approximately $(0.17).
• The Company estimates a share count of 304 million for purposes of calculating third quarter fiscal 2017 loss per share. If EA reports a profit, the diluted share count is expected to be 315 million shares.

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:

Conference Call and Supporting Documents

Electronic Arts will host a conference call on November 1, 2016 at 2:00 pm PT (5:00 pm ET) to review its results for the second quarter ended September 30, 2016 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 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 November 14, 2016 at 855-859-2056 (domestic) or 404-537-3406 (international). 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 2017 expectations under the heading “Business Outlook as of November 1, 2016,” 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 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 service and support digital product offerings, including managing online security; general economic conditions; and other factors described in the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2016. 

These forward-looking statements are current as of November 1, 2016.  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 September 30, 2016.  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 September 30, 2016.

About Electronic Arts

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

In fiscal year 2016, EA posted GAAP net revenue of $4.4 billion. Headquartered in Redwood City, California, EA is recognized for a portfolio of critically acclaimed, high-quality blockbuster brands such as The Sims™, Madden NFL, EA SPORTS™ FIFA, Battlefield™, Dragon Age™ and Plants vs. Zombies™. More information about EA is available at www.ea.com/news.

EA SPORTS, Battlefield, Battlefield 4, The Sims, Dragon Age, Ultimate Team and Plants vs. Zombies are trademarks of Electronic Arts Inc. STAR WARS © & TM 2015 Lucasfilm Ltd. All rights reserved. Titanfall is a trademark of Respawn Entertainment, LLC.  John Madden, NFL, NBA and FIFA are the property of their respective owners and used with permission.

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