REDWOOD CITY, Calif. - Electronic Arts Inc . (NASDAQ: NASDAQ:EA), the $37.4 billion market cap gaming giant, has released preliminary results for its third fiscal quarter and updated its guidance for fiscal year 2025. According to InvestingPro data, EA maintains strong financial health with a GOOD overall rating and holds more cash than debt on its balance sheet. The company now expects a mid-single-digit decline in live services net bookings, a reversal from its previous forecast of mid-single-digit growth.
The adjustment comes after the Global Football franchise, which had seen two years of double-digit net bookings growth, experienced a drop in momentum towards the end of the third fiscal quarter. Despite these challenges, EA maintains robust fundamentals with a healthy gross profit margin of 78.6% and a strong Altman Z-Score of 7.22, indicating solid financial stability. EA now predicts that Global Football will end the fiscal year with a mid-single-digit decrease at the midpoint of their updated outlook. Additionally, the company reported that Dragon Age engaged around 1.5 million players during the quarter, falling almost 50% short of expectations.
For the third fiscal quarter, EA anticipates net bookings of approximately $2.215 billion. It also projects GAAP net revenue to be about $1.883 billion and GAAP diluted earnings per share to be approximately $1.11.
EA’s CEO, Andrew Wilson, acknowledged the underperformance of Dragon Age and EA SPORTS FC 25 in net bookings, despite the company’s continued delivery of high-quality games and experiences. Wilson expressed confidence in EA’s long-term strategy, hinting at a return to growth in FY26 with the execution of their pipeline.
Stuart Canfield, CFO of EA, reiterated the company’s commitment to balancing investment for future growth with operational discipline, looking forward to growth in FY26 as more iconic franchises are launched.
EA will provide detailed financial results for the third fiscal quarter, which ended on December 31, 2024, on February 4, 2025. A conference call is scheduled for the same day to discuss the quarterly results and financial outlook.
This update is based on a press release statement and reflects the company’s current expectations as of January 22, 2025. These forward-looking statements are subject to change and are not guarantees of future performance. Factors that could cause actual results to differ are detailed in EA’s filings with the Securities and Exchange Commission. The preliminary results are estimates and could vary from the final reported amounts. For a deeper understanding of EA’s financial position and growth prospects, investors can access comprehensive analysis and 10+ additional ProTips through InvestingPro’s detailed research reports, which provide expert insights on what really matters for this gaming industry leader.
In other recent news, Electronic Arts (EA) is in the spotlight with several financial firms adjusting their outlooks. Oppenheimer maintained an Outperform rating on EA’s stock, yet reduced the price target to $165, citing a potential negative investor sentiment trend. Stifel, on the other hand, revised its outlook on EA, reducing the price target to $159 and maintaining a Hold rating due to performance concerns. Meanwhile, Benchmark analysts kept a Buy rating, with a $163 price target, ahead of EA’s third fiscal quarter 2025 results.
These developments come amid concerns over the decreased player base of Apex Legends and modest sales of Dragon Age. Projections for EA’s growth in fiscal year 2026 are more variable than previously estimated due to the uncertain release date of Grand Theft Auto 6. Stifel’s forecasts indicate year-over-year growth in the third fiscal quarter of 2025, with non-GAAP EPS of $3.31, a 12% increase year-over-year, on net bookings of $2.456 billion, a 4% rise.
Investors are also keen to see how EA’s management will address expectations for fiscal year 2026 during the upcoming earnings call. The upcoming earnings report will provide investors with a clearer picture of EA’s performance, including how the new Dragon Age release and EA Sports FC 25 sales have influenced the company’s financials.
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