Electronic Arts Reports

REDWOOD CITY, CA – July 26, 2018 – Electronic Arts Inc. (NASDAQ: EA) today announced preliminary financial results for its first fiscal quarter ended June 30, 2018.

“Across new games, new platforms and new geographies, we connected more players around the world to more great entertainment in our first quarter of FY19,” said CEO Andrew Wilson. “We are striving to pioneer and lead for our players, with new EA SPORTS games and content on every platform, a first-of-its-kind subscription in Origin Access Premier and growing competitive gaming tournaments for FIFA and Madden NFL coming in the months ahead. With every game, every service, and every experience, we are taking steps toward our vision to connect a billion people in play.”

“We started the year strongly as we continued to deliver on our growth strategies with a focus on new genres, new geographies and building engaging live services across our portfolio to drive recurring revenue,” said COO and CFO Blake Jorgensen. “We have a strong slate of products to launch through the rest of the fiscal year, great content coming in our live services, and are continuing to grow our esports competitions.”

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 bookings* for the trailing twelve months was $3.550 billion, up 13% year-over- year and represents 69% of total net bookings.
• The FIFA World Cup content update had more than 15 million unique players during the quarter.
• Launched FIFA Mobile in China this quarter, reaching #1 on the top downloads chart for iOS in China and showing best-in-class engagement on the WeChat platform.
• Launched FIFA Online 4 in Asia during the quarter.
• More than 20 million players participated in the current season of FIFA competitive gaming and had 80% more average viewers over last season.
• The Sims™ 4 player base grew 35% year-over-year.
• EA received more than 60 awards at E3 this year, including “Best of” awards from the E3 Game Critics for Anthem™, Battlefield™ V, and FIFA 19.

*  Net bookings is defined as the net amount of products and services sold digitally or sold-in physically in the period. Net bookings is calculated by adding total net revenue to the change in deferred net revenue for online-enabled games and, for periods after the fourth quarter of fiscal 2018, mobile platform fees.

Selected Financial Highlights and Metrics

All financial measures are presented on a GAAP basis.

• Net cash provided by operating activities was $120 million for the quarter and $1.636 billion for the trailing twelve months.
• EA repurchased 2.3 million shares for $300 million during the quarter and 6.2 million shares for $751 million during the trailing twelve months.

Impact of Recently Adopted Accounting Standard

At the beginning of fiscal year 2019, April 1, 2018, EA adopted FASB ASU 2014-09 (Topic 606), Revenue from Contracts with Customers. Topic 606 significantly changes how EA recognizes and reports revenue and diluted earnings per share; however, it does not materially impact net bookings, EA’s operational metric. For more information about the adoption of Topic 606, including information with respect to mobile platform fees, please refer to the Investor Accounting FAQ document posted on our IR website. Financial data for periods prior to April 1, 2018 has not been restated.

Quarterly Financial Highlights

While EA no longer reports certain non-GAAP financial measures, the following GAAP-based financial data and tax rate of 18% was used internally by company management to adjust its fiscal 2019 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-K for the fiscal year ended March 31, 2018.

TTM Financial Highlights

While EA no longer reports certain non-GAAP financial measures, the following GAAP-based financial data and tax rate of 18% in fiscal year 2019 and 21% in fiscal year 2018 was 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-K for the fiscal year ended March 31, 2018.

Operating Metric

The following is a calculation of our total net bookings for the periods presented:

Business Outlook as of July 26, 2018

The following forward-looking statements reflect expectations as of July 26, 2018. 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 2019 Expectations – Ending March 31, 2019

Financial metrics:

• Net revenue is expected to be approximately $5.600 billion.
  • Change in deferred net revenue (online-enabled games) is expected to be approximately $235 million.
  • Mobile platform fees are expected to be approximately $(285) million.
• Net income is expected to be approximately $1.108 billion.
• Diluted earnings per share is expected to be approximately $3.55.
• Operating cash flow is expected to be approximately $1.825 billion.
• The Company estimates a share count of 312 million for purposes of calculating fiscal year 2019 diluted earnings per share.

Operational metric:

• Net bookings is expected to be approximately $5.550 billion.

In addition, the following outlook for GAAP-based financial data and a long-term tax rate of 18% are used internally by EA to adjust our GAAP expectations to assess EA’s operating results and plan for future periods:

Second Quarter Fiscal Year 2019 Expectations – Ending September 30, 2018

Financial metrics:

• Net revenue is expected to be approximately $1.270 billion.
  • Change in deferred net revenue (online-enabled games) is expected to be approximately $(55) million.
  • Mobile platform fees are expected to be approximately $(55) million.
• Net income is expected to be approximately $150 million.
• Diluted earnings per share is expected to be approximately $0.48.
• The Company estimates a share count of 312 million for purposes of calculating second quarter fiscal year 2019 diluted earnings per share.

Operational metric:

• Net bookings is expected to be approximately $1.160 billion.

In addition, the following outlook for GAAP-based financial data and a long-term tax rate of 18% are used internally by EA to adjust our GAAP expectations to assess EA’s operating results and plan for future periods:

For more information about the nature of the GAAP-based financial data, please refer to EA’s Form 10-K for the fiscal year ended March 31, 2018.

Conference Call and Supporting Documents

Electronic Arts will host a conference call on July 26, 2018 at 2:00 pm PT (5:00 pm ET) to review its results for the first fiscal quarter ended June 30, 2018 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 with a financial model of EA’s historical results and guidance and an Investor Accounting FAQ document 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 August 9, 2018 at 855-859-2056 (domestic) or 404-537-3406 (international) using pin code 8686629. 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 2019 expectations under the heading “Business Outlook as of July 26, 2018,” and other information regarding EA's fiscal 2019 expectations 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 Annual Report on Form 10-K for the fiscal year ended March 31, 2018.

These forward-looking statements are current as of July 26, 2018. 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 June 30, 2018. 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 June 30, 2018.

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 2018, EA posted GAAP net revenue of $5.15 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.

EA SPORTS, Battlefield, The Sims, Need for Speed, Dragon Age, and Plants vs. Zombies are trademarks of Electronic Arts Inc. John Madden, NFL and FIFA are the property of their respective owners and used with permission.

For additional information, please contact:

Chris Evenden
Vice President, Investor Relations
650-628-0255
cevenden@ea.com

John Reseburg
Vice President, Corporate Communications
650-628-3601
jreseburg@ea.com