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Investing.com -- Electronic Arts Inc (NASDAQ:EA) delivered a stronger-than-expected start to fiscal 2026, buoyed by robust performance in its sports portfolio, yet investor sentiment turned cautious after the company issued weaker-than-forecast guidance for the second quarter. The Redwood (NYSE:RWT) City-based gaming giant reported adjusted earnings per share (EPS) of $0.79 for the quarter ended June 30, beating analyst expectations of $0.63, alongside $1.3 billion in net bookings, exceeding its own guidance.
Revenue reached $1.67 billion in Q1, up modestly from $1.66 billion a year earlier, with higher-than-expected engagement seen in franchises such as EA SPORTS FC, Apex Legends, and The Sims. Despite the beat on headline figures, EA shares edged down 2.3% in after-hours trading as eyes quickly turned to the softer Q2 outlook.
Executives unveiled second-quarter EPS guidance of $0.29 to $0.46, well below the consensus estimate of $0.79, and projected net bookings between $1.8 billion and $1.9 billion, also underwhelming against hopes of $2 billion. The guidance reflects a shift in revenue timing for EA SPORTS FC 26’s Ultimate Edition, with revenue recognition expected to hit in Q3, as well as increased marketing spend ahead of key launches like Battlefield 6.
“We delivered a strong start to FY26, outperforming expectations ahead of what will be the most exciting launch slate in EA’s history,” said CEO Andrew Wilson. “From deepening player engagement in EA SPORTS to gearing up for Battlefield 6 and Skate, we’re scaling our global communities and continuing to shape the future of interactive entertainment.”
In Q1, global football led the charge with record results for FC Mobile, while F1 25 contributed strong year-over-year growth through real-world integration and enhanced gameplay. Still, signs of softness lingered as live services revenue, which makes up the largest share of EA’s top-line, fell slightly from a year earlier.
The company reiterated its full-year forecast, guiding for net bookings between $7.6 billion and $8 billion, and revenues between $7.1 billion and $7.5 billion. Cash flow from operations for the trailing twelve months reached $1.98 billion, while EPS is expected to land between $3.09 and $3.79 for the full fiscal year.
“We exceeded the high end of our guidance in Q1 highlighting the resilience of our live services and the breadth of our portfolio,” CFO Stuart Canfield said. “With strong fundamentals and a robust pipeline ahead, we remain confident in our full-year guidance and long-term margin framework.”
EA announced it repurchased three million shares for $375 million during the quarter and maintained its quarterly dividend of $0.19 per share, payable in September 2025. The company remains committed to returning at least 80% of free cash flow to shareholders via repurchases and dividends through fiscal 2027.