Electronic Arts Inc. (EA) 2025 Q1 Earnings Call Summary

Optimistic Highlights

• Strong Q1 FY '25 Performance: EA surpassed net bookings guidance, demonstrating robust execution across its business and strategic priorities.
• EA SPORTS Success: Celebrated football events and released high-quality titles like F1 '24 and Madden NFL 24, driving better than expected monetization and engagement.
• Apex Legends Strategy: Despite a challenging period, EA remains committed to revitalizing Apex Legends with upcoming seasons promising more content and advancements.
• Innovative Use of AI: Utilized AI and machine learning to create 11,000 player likenesses for EA SPORTS College Football 25, showcasing technological leadership.
• Record Engagement with EA SPORTS College Football 25: Achieved record week one engagement in North America, indicating strong momentum for future growth.

Pessimistic Highlights

• Apex Legends Challenges: Acknowledged year-over-year declines in Apex Legends, although improvements are expected with new seasons.
• Industry-Wide Talent Actor Strike: Potential risk to future game releases and content updates, although no immediate impact is anticipated.

Company Outlook

• Q2 FY '25 Expectations: Anticipates the largest Q2 net bookings in history, driven by strong launches and ongoing momentum in EA SPORTS titles.
• Full Year FY '25 Guidance Reaffirmed: Despite a strong start, EA maintains its original net bookings guidance, reflecting cautious optimism for the remainder of the year.
• Long-Term Growth Strategy: Focused on expanding massive online communities, enhancing community power, and leveraging technology to accelerate innovation and development.

Q & A Highlights

• Q: Can you discuss plans for global expansion of Madden and learnings from the EA, FC rebranding? (Eric Sheridan, Goldman Sachs)

  A: Madden aims for demographic and platform growth, leveraging NFL's international push. EA SPORTS FC's rebranding has enabled faster movement and expansion beyond traditional gameplay.

• Q: Is there potential for cannibalization between Madden Ultimate Team and College Football Ultimate Team? (Matthew Cost, Morgan Stanley)

  A: EA views Madden and College Football as complementary, with strategies in place to offer value across both experiences and expand the overall football community.

• Q: Why didn't the strong fiscal Q1 and Q2 guidance lead to an increased full-year outlook? (Chris Schoell, UBS)

  A: EA maintains a cautious full-year outlook, reflecting the need for prudent management despite early momentum and successful launches.

• Q: How is the video game actor strike impacting EA, and could it affect release schedules? (Cory Carpenter, JPMorgan)

  A: The strike currently has no significant impact on EA's development or release schedules, with ongoing negotiations expected to resolve issues.

• Q: How do decisions on releasing games on previous vs. current gen consoles get made, and how has AI helped in developing College Football 25? (Andrew Marok, Raymond James)

  A: Platform decisions are based on player base and financial viability, with AI significantly aiding in creating player likenesses for College Football 25, a task not feasible without such technology.

• Q: Can you discuss industry growth trends and plans for expanding the Sims franchise? (Colin Sebastian, Baird)

  A: Industry growth is influenced by shifts towards major franchises and multi-modal entertainment. The Sims franchise will see updates and expansions to enhance social connections and platform reach.

• Q: How has EA's view on free-to-play monetization evolved, especially in relation to industry pricing power? (Clay Griffin, MoffettNathanson)

  A: EA supports all business models, seeing free-to-play as complementary rather than dilutive to industry growth, with plans to leverage it alongside premium models across major franchises.