Electronic Arts Q4 FY25 slides: Strong finish drives optimistic FY26 outlook

Introduction & Market Context

Electronic Arts Inc . (NASDAQ:EA) reported its fourth quarter and full fiscal year 2025 results on May 6, 2025, showcasing a strong finish to the year with accelerating growth in Q4. The gaming giant’s shares jumped 6.76% in after-hours trading to $164.99, reflecting investor enthusiasm for both the quarterly performance and the company’s optimistic outlook for fiscal year 2026.

The company highlighted robust performance from its recent release "Split Fiction" and continued strength in its sports franchises, particularly in American Football titles. Despite a slightly down year overall in terms of net bookings, EA’s Q4 momentum and forward guidance suggest a return to growth in the coming fiscal year.

Quarterly Performance Highlights

EA delivered Q4 FY25 net bookings of $1.8 billion, representing 8% year-over-year growth (9% in constant currency). This strong fourth quarter helped offset earlier weakness, bringing full-year net bookings to $7.4 billion, down 1% from the previous year but up 1% on a constant currency basis.

The company’s financial highlights for the fiscal year included $1.9 billion in free cash flow and $2.7 billion returned to shareholders through stock repurchases and dividends. EA reported GAAP earnings per share of $4.25 for the full year, with operating margins of 20.4% on a GAAP basis and 31.2% on a non-GAAP basis.

As shown in the following chart of key FY25 performance metrics:

Live services continued to dominate EA’s business model, accounting for 73% of total net bookings in FY25. In Q4, live services generated $1.4 billion in net bookings compared to $384 million from full game sales. This trend underscores EA’s successful transition to a recurring revenue model centered around ongoing player engagement.

The following chart breaks down EA’s net bookings by composition, showing the relative contribution of full game sales versus live services:

From a platform perspective, console gaming remains EA’s largest segment, representing approximately 65% of total net bookings for both Q4 and the full fiscal year. Mobile gaming contributed $288 million in Q4 and $1.1 billion for the full year, while PC and other platforms generated $415 million in Q4 and $1.5 billion for the full year.

The platform distribution of EA’s net bookings is illustrated in this breakdown:

FY26 Outlook & Title Slate

Looking ahead to fiscal year 2026, EA provided an optimistic outlook with net bookings guidance of $7.6 billion to $8.0 billion, representing growth of 3% to 9% compared to FY25. For the first quarter of FY26, the company expects net bookings between $1.18 billion and $1.28 billion.

The company’s guidance for FY26 also includes:

• Net revenue of $7.1 billion to $7.5 billion
• GAAP EPS of $3.09 to $3.79
• Operating cash flow of $2.2 billion to $2.4 billion
• GAAP operating margin of 16.3% to 18.9%
• Non-GAAP operating margin of 27.2% to 29.2%

The complete financial guidance is presented in this comprehensive overview:

EA’s FY26 release slate features several major titles across its core franchises. The upcoming releases include EA Sports F1 25 in Q1 (May 30), followed by EA Sports College Football 26, EA Sports Madden NFL 26, EA Sports NHL 26, and EA Sports FC 26 in Q2. The company also plans to release Skate and a new Battlefield title later in the fiscal year.

The company’s core business and upcoming title slate are illustrated in this strategic overview:

Strategic Initiatives

EA’s presentation highlighted several key strategic successes from FY25, including the strong performance of "Split Fiction," which has sold nearly 4 million units since its March launch. The company’s American Football franchise delivered over $1 billion in net bookings, underscoring the continued strength of EA’s sports portfolio.

The company continues to focus on building massive online communities around its key franchises, including EA Sports FC, The Sims, Apex Legends, Madden, College Football, and Battlefield. This community-centric approach aligns with EA’s emphasis on live services, which now represent nearly three-quarters of the company’s business.

While EA’s operating margins are projected to decline slightly in FY26 compared to FY25, the company’s strong cash flow generation capabilities remain intact, with operating cash flow guidance of $2.2 billion to $2.4 billion for the coming fiscal year.

Financial Analysis

EA’s cash flow performance remained solid in FY25, with operating cash flow of $2.08 billion and free cash flow of $1.86 billion after accounting for $221 million in capital expenditures. The company’s financing cash flow of negative $2.86 billion primarily reflects its significant capital return program.

The detailed cash flow metrics for both Q4 and the full fiscal year are presented in this financial summary:

The company’s reconciliation between GAAP and non-GAAP measures shows that adjustments for acquisition-related expenses, restructuring charges, and stock-based compensation significantly impact operating margins. For FY25, these adjustments increased operating margin from 20.4% on a GAAP basis to 31.2% on a non-GAAP basis.

Looking ahead to FY26, EA expects a similar pattern, with non-GAAP operating margins projected to be approximately 11 percentage points higher than GAAP margins due to these adjustments.

Overall, EA’s Q4 results and FY26 guidance suggest the company is well-positioned to return to growth after a relatively flat FY25. The positive market reaction to the results indicates investor confidence in EA’s strategy and upcoming title slate, particularly its continued focus on sports franchises and live services.

Full presentation:

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