REDWOOD CITY, CA – May 9, 2017 – Electronic Arts Inc. (NASDAQ: EA) today announced preliminary financial results for its fourth fiscal quarter and fiscal year ended March 31, 2017.

“Fiscal 2017 was a milestone year for Electronic Arts, defined by groundbreaking games and live services that delivered more fun and connected more players with their friends,” said Chief Executive Officer Andrew Wilson. “In Fiscal 2018, we are focused on innovating for our players with extraordinary new experiences across our portfolio, continuing to grow our global network, and extending our reach across new platforms and more ways to play.”

“We generated record net sales and operating cash flow in fiscal 2017, driven by our ongoing transition to digital as well as our increasing success with live services,” said Chief Financial Officer Blake Jorgensen. “Our long-term vision, to leverage deep player engagement to drive growth and profitability, is enabling us to execute on our near-term financial goals to increase revenue, earnings and cash generation.”

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 sales* of $3.034 billion for fiscal 2017; this represents 61% of total net sales, up 20% year-over-year.
• EA was the #1 publisher on PlayStation®4 and Xbox One consoles in the Western World for fiscal 2017, based on available sources and EA estimates.
• Through the end of FY17, Battlefield™ 1 had more than 19 million players joining the game, a 50% increase over Battlefield 4™ in the comparable period.
• More than 21 million players have joined FIFA 17 to date including more than 12 million players that have engaged in our new story mode “The Journey”.
• FIFA Ultimate Team™ had 13% more players year-over-year through the end of Q4. 
• In Q4, average gameplay time per player in STAR WARS™: Galaxy of Heroes reached a new record high of 162 minutes per day.
• Monthly active users in Q4 for The Sims™ 4 increased 33% year-over-year.

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

Selected Financial Highlights and Metrics:

All financial measures are presented on a GAAP basis.

• Net cash provided by operating activities for the fourth quarter was $407 million.
• Net cash provided by operating activities for the fiscal year was a record $1.383 billion.
• In Q4, EA repurchased 1.5 million shares for $125 million.
• In fiscal 2017, EA repurchased 6.5 million shares for $508 million.
• EA announced a new $1.2 billion, two-year stock repurchase program.

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:

For more information about the nature of the GAAP-based financial data, please refer to EA’s Form 10-Q for the quarter ended December 31, 2016.

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:

Stock Repurchase Program

EA has announced a new program to repurchase up to $1.2 billion of EA’s common stock. This new stock repurchase program expires on May 31, 2019.

Under the program, EA may purchase stock in the open market or through privately negotiated transactions in accordance with applicable securities laws, including pursuant to pre-arranged stock trading plans. The timing and actual amount of the stock repurchases will depend on several factors including price, capital availability, regulatory requirements, alternative investment opportunities and other market conditions. EA is not obligated to repurchase any specific number of shares under the program and the repurchase program may be modified, suspended or discontinued at any time.

Business Outlook as of May 9, 2017

The following forward-looking statements reflect expectations as of May 9, 2017. 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 $5.075 billion.
  • Change in deferred net revenue (online-enabled games) is expected to be approximately $25 million.
• Net income is expected to be approximately $1.125 billion.
• Diluted earnings per share is expected to be approximately $3.57.
• Operating cash flow, reflecting the recently adopted accounting standard related to stock-based compensation discussed below, is expected to be approximately $1.575 billion.
• The Company estimates a share count of 315 million for purposes of calculating fiscal year 2018 diluted earnings per share.

Operational metric:

• Net sales is expected to be approximately $5.100 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:

First Quarter Fiscal Year 2018 Expectations – Ending June 30, 2017

Financial metrics:

• Net revenue is expected to be approximately $1.425 billion.
  • Change in deferred net revenue (online-enabled games) is expected to be approximately ($675) million.
• Net income is expected to be approximately $605 million.
• Diluted earnings per share is expected to be approximately $1.93.
• The Company estimates a share count of 314 million for purposes of calculating first quarter fiscal 2018 diluted earnings per share.

Operational metric:

• Net sales is expected to be approximately $750 million.

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: 

Impact of Recently Adopted Accounting Standard

Starting in Q1 fiscal 2018, EA will adopt FASB ASU 2016-09 related to stock-based compensation. The new guidance will require EA to change how it reports the cash effects of stock-based compensation in the statement of cash flow. It does not impact total cash and cash flow, but it does increase operating cash flow and decrease cash flow from financing activities. The following table reflects the impact of this standard on operating cash flow for the periods presented: 

Conference Call and Supporting Documents

Electronic Arts will host a conference call on May 9, 2017 at 2:00 pm PT (5:00 pm ET) to review its results for the fourth quarter and fiscal year ended March 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 May 22, 2017 at 855-859-2056 (domestic) or 404-537-3406 (international) using pin code 90756832. 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 May 9, 2017,” 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 December 31, 2016. 

These forward-looking statements are current as of May 9, 2017.  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 Annual Report on Form 10-K for the fiscal year ended March 31, 2017.  Electronic Arts assumes no obligation and does not intend to update these estimates prior to filing its Form 10-K for the fiscal year ended March 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, Battlefield 4, The Sims, Need for Speed, Dragon Age, and Plants vs. Zombies are trademarks of Electronic Arts Inc. STAR WARS © & TM 2015, 2017 Lucasfilm Ltd. All rights reserved.  John Madden, NFL and FIFA are the property of their respective owners and used with permission.

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