Electronic Arts Inc. Q2 FY2025 earnings call

Management Statement and Operational Highlights

• Strategic Pillars: Focus on creating content/experiences for massive online communities, telling blockbuster stories, and harnessing community power.
• EA SPORTS Highlights: Madden NFL and College Football 25 driving 365-day engagement, EA SPORTS FC growing globally with FC 25's social play features, NHL 25 launch with ICE-Q technology, and EA SPORTS APP soft launch in Spain with LALIGA partnership.
• Apex Legends: Season 22 launch with new features but monetization shortfall; focus on retention and content breadth.
• The Sims: Rebuilding The Sims 4, launch of Life and Death Expansion Pack, Creator Kits and MySims: Cozy Bundle, and Sims Labs testing new innovations.
• Dragon Age: Upcoming launch of The Veilguard with strong early critic scores, highlighting BioWare's return to strong storytelling and world-building.

Segment Performance

• EA SPORTS American Football: Q2 total hours played up over 140% year-over-year. College Football 25 was best-selling HD title in North America, with new players doubling year-over-year and representing ~25% of player base. Madden NFL and College Football 25 have an aggregated community and expanded ecosystem, with MVP Bundle performing strongly.
• EA SPORTS Global Football: EA SPORTS FC is the largest franchise in the Western world on a trailing 12-month basis. FC Mobile and FC Online reach over 130% more players globally. FC 25 has social play features like RUSH driving engagement, with matches played with friends doubling year-over-year.
• Apex Legends: Season 22 launched with new features but didn't see expected monetization lift. Focus on retention and content breadth for the global community.
• The Sims Universe: Rebuilding The Sims 4 as the foundation, with Life and Death Expansion Pack trending ahead of previous episodes. Creator Kits and MySims: Cozy Bundle launched, with Sims Labs testing new innovations.
• Dragon Age: Dragon Age: The Veilguard launching with strong early critic scores, representing high-quality blockbuster storytelling.

Guidance

• Raised FY25 net bookings guidance to $7.5 billion to $7.8 billion (up 1% to 5% year-over-year) and net revenue guidance to $7.4 billion to $7.7 billion.
• Q3 net bookings expected $2.4 billion to $2.55 billion, net revenue $1.875 billion to $2.025 billion.
• American Football business expected over $1 billion in net bookings for FY25. FC franchise expected to grow over a record FY24. Apex Legends expected mid-single digit growth in core live services. Dragon Age: The Veilguard launch factored in.

Risks

• Actual results may differ materially from forward-looking statements as per SEC filings.
• Competition in the free-to-play FPS category affecting Apex Legends' growth.
• Dependencies on successful launches and partnerships for continued growth, such as with sports leagues and creators.

Question and Answer

Q: Colin Sebastian asks about capturing momentum in American football and the rollout cadence of the EA SPORTS app.

A: Andrew Wilson responds that the EA SPORTS team has a deliberate plan for American football, aiming to be a preeminent football fan platform with NFL and College symbiosis. For the EA SPORTS app, it's a phased rollout starting in Spain with La Liga partnership, leveraging sports partnerships to integrate real-world and virtual content.

Q: Eric Handler inquires about live services guidance and Apex Legends learnings.

A: Stuart Canfield states live services growth is mid-single digits, driven by sports franchises. Andrew Wilson explains Apex Legends focuses on season-by-season content innovation and avoiding requiring players to reset progress, aiming to innovate without disrupting existing investments.

Q: Andrew Marok asks about systematic rethink of Apex Legends and Dragon Age: The Veilguard's success drivers.

A: Andrew Wilson says Apex Legends innovates season-by-season without requiring player reset, and Dragon Age: The Veilguard has breakout potential due to BioWare's return to its strength in rich worlds, nuanced characters, and compelling stories.

Q: Doug Creutz asks about BioWare's turnaround for Dragon Age: The Veilguard.

A: Andrew Wilson explains BioWare returned to its core strengths after Anthem, focusing on rich worlds, nuanced characters, and compelling stories, leading to the strong development of Dragon Age: The Veilguard.