https://ir.ea.com/press-releases/pr...eports-Q3-FY19-Financial-Results/default.aspx
https://seekingalpha.com/news/3429897-electronic-arts-minus-10_6-percent-q3-miss-trimmed-guidance
This chart here compares 2018's guidances versus the actual results + comparison with Q4 CY2017.
EA is currently trading -10.6% following those reports.
Bullet points of the conference call:
- Battlefield V was pushed to November and focused on adding a single player campaign over a battle royale mode at launch. Did not meet sales expectations during the holiday quarter. 27 million have played Battlefield games in the past fiscal year.
- Command and Conquer mobile games did not drive high installs and revenue, thus underperforming. FIFA Online 4 performing well in Korea. Performing better than FIFA Online 3 when launch aligned. The game did not perform in China in the same way.
- 47% of full EA game sales on PS4/XB1 were digital over the past 12 months. It was 37% during the 12 months prior to the period above. Battlefield V had a high digital ratio, more so than Battlefront 2.
- Now that Apex Legends is out, Respawn also plans to launch another "premium game" with a unique twist on the Titanfall universe, this year.
- FIFA 19 unit sales are flat compared to FIFA 18, and have not met internal expectations. Still, calendar year 2018 the company sold more units of FIFA franchise than any before. This implies that prior year games especially FIFA 18 are still tracking well.
- Anthem expected to sell around 5 to 6 million units before the end of the fiscal year (which ends March 31st 2019). The game launches this month.
- EA Access is coming to "a major platform" (PS4).
- Respawn now has two fully staffed teams + access to EA scale and resources. One team working on Shooters, other working on Action Adventure.
- Is developing technology that can accelerate cloud/streaming games.
- Can increase potential addressable market to 2.5b to 3b
- Has an advantage with its already existing subscription service.
- Apex Legends stats: 2.5 million unique users in the game after 24 hours. Trending towards 3 million users. 600K peak concurrent users.
- EA says Apex Legends built from the ground up. Will be operated as a live service with content updates and changes. Opportunities to take the game in different directions. Esports will be part of that. New game modes, legends etc... Looking at mobile ver. and crossplay
(Sources: https://twitter.com/ZhugeEX and https://twitter.com/DomsPlaying)
EA's end remarks and transcript:
https://s22.q4cdn.com/894350492/files/doc_financials/2019/q3/Q3-FY19-Prepared-Remarks-FINAL.pdf
REDWOOD CITY, Calif.--(BUSINESS WIRE)-- Electronic Arts Inc. (NASDAQ: EA) today announced preliminary financial results for its third fiscal quarter ended December 31, 2018.
News and ongoing updates regarding EA and its games are available on EA's blog at www.ea.com/news.
"The video game industry continues to grow through a year of intense competition and transformational change," said CEO Andrew Wilson. "Q3 was a difficult quarter for Electronic Arts and we did not perform to our expectations. We are now applying the strengths of our company to sharpen our execution and focus on delivering great new games and long-term live services for our players. We're very excited about Apex Legends, the upcoming launch of Anthem, and a deep line-up of new experiences that we'll bring to our global communities next fiscal year."
"FIFA stands out as a robust franchise through a tumultuous year in the video game industry," said COO and CFO Blake Jorgensen. "Elsewhere in the business, we're making adjustments to improve execution and we're refocusing R&D. Looking forward, we're delighted to launch Anthem, our new IP, to grow Apex Legends and related Titanfall experiences, to deliver new Plants vs. Zombies and Need for Speed titles, and to add Star Wars Jedi: Fallen Order to our sports titles in the fall."
Selected Operating Highlights and Metrics
- Digital net bookings* for the trailing twelve months was $3.577 billion, up 6% year-over-year and represents 74% of total net bookings.
- During the quarter, launched Battlefield™ V and Command & Conquer™: Rivals.
- On February 4, 2019, launched Apex Legends™, a new battle royale experience from Respawn.
- During the quarter, FIFA Ultimate Team™ matches played increased 15% year-over-year.
- During calendar 2018, FIFA 19 was the highest-selling console game in Europe.
Selected Financial Highlights and Metrics
All financial measures are presented on a GAAP basis.
- Net cash from operating activities was $954 million for the quarter and $1.563 billion for the trailing twelve months, a record third quarter trailing twelve months.
- EA repurchased 3.2 million shares for $292 million during the quarter and 9.0 million shares for $1.039 billion during the trailing twelve months.
https://seekingalpha.com/news/3429897-electronic-arts-minus-10_6-percent-q3-miss-trimmed-guidance
While digital revenues of $1.2B were mostly in line, packaged goods and other revenues of $410M fell well short of consensus for $527.7M.
Gross profit rose to $876M, up 33% Y/Y. Gross margin came in at 77.4%.
Net revenue breakout: Product, $552M (up 0.9%); Service and other, $737M (up 20.2%).
For Q4 it's guiding to net bookings of about $1.17B, below consensus for $1.75B.
It expects 2019 adjusted revenue of about $4.875B, down from a previous forecast for $5.2B, and sees adjusted EPS coming in at $3.85 vs. a prior $4.57.
Conference call to come at 5 p.m. ET.
This chart here compares 2018's guidances versus the actual results + comparison with Q4 CY2017.
EA is currently trading -10.6% following those reports.
Bullet points of the conference call:
- Battlefield V was pushed to November and focused on adding a single player campaign over a battle royale mode at launch. Did not meet sales expectations during the holiday quarter. 27 million have played Battlefield games in the past fiscal year.
- Command and Conquer mobile games did not drive high installs and revenue, thus underperforming. FIFA Online 4 performing well in Korea. Performing better than FIFA Online 3 when launch aligned. The game did not perform in China in the same way.
- 47% of full EA game sales on PS4/XB1 were digital over the past 12 months. It was 37% during the 12 months prior to the period above. Battlefield V had a high digital ratio, more so than Battlefront 2.
- Now that Apex Legends is out, Respawn also plans to launch another "premium game" with a unique twist on the Titanfall universe, this year.
- FIFA 19 unit sales are flat compared to FIFA 18, and have not met internal expectations. Still, calendar year 2018 the company sold more units of FIFA franchise than any before. This implies that prior year games especially FIFA 18 are still tracking well.
- Anthem expected to sell around 5 to 6 million units before the end of the fiscal year (which ends March 31st 2019). The game launches this month.
- EA Access is coming to "a major platform" (PS4).
- Respawn now has two fully staffed teams + access to EA scale and resources. One team working on Shooters, other working on Action Adventure.
- Is developing technology that can accelerate cloud/streaming games.
- Can increase potential addressable market to 2.5b to 3b
- Has an advantage with its already existing subscription service.
- Apex Legends stats: 2.5 million unique users in the game after 24 hours. Trending towards 3 million users. 600K peak concurrent users.
- EA says Apex Legends built from the ground up. Will be operated as a live service with content updates and changes. Opportunities to take the game in different directions. Esports will be part of that. New game modes, legends etc... Looking at mobile ver. and crossplay
(Sources: https://twitter.com/ZhugeEX and https://twitter.com/DomsPlaying)
EA's end remarks and transcript:
https://s22.q4cdn.com/894350492/files/doc_financials/2019/q3/Q3-FY19-Prepared-Remarks-FINAL.pdf
In addition to Apex Legends, another team at Respawn is set to deliver Star Wars Jedi: Fallen Order this fall. The game's development is led by the former director of the God of War series, with a team of veterans from some of the industry's biggest action-adventure games. It's very far along in development, and having spent time with it recently myself, it plays spectacularly well. This game truly captures the fantasy of becoming a Jedi, and we will have a lot more to share soon.
Our plans for FIFA 18 were aggressive in a World Cup year, and we ended up selling an additional 2.4 million units of FIFA 18 throughout the year, with the intention of converting those players to FIFA 19 when it launched.
Fiscal year to date sales for FIFA 19 are approximately 20 million units, and we've also sold over 3 million units of FIFA 18 this fiscal year. And, as Andrew said, FIFA 19 was the bestselling console game in Europe in calendar 2018.
As Andrew discussed, the desire to make changes to Battlefield V led us to move its launch into a more difficult window, and prioritizing the single-player campaign over battle royale also hurt sales. As a result, we sold 7.3 million units, about 1 million less than comprehended by our Q3 guidance.
We will launch Star Wars Jedi: Fallen Order, a new Plants vs. Zombies shooter and a new Need for Speed. We have modest expectations for Battlefield and Anthem live services, given that they are not yet proven. We continue to refine mobile live services and work on new games. Overall, we expect net bookings to grow low single digits and for underlying profitability to grow in line with that.
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