EA Reports Lower-than-Expected Earnings, Citing Dragon Age and EA Sports FC Performance
Electronic Arts (EA) has released its latest quarterly earnings results, which fell short of expectations primarily due to weaker performance from "Dragon Age: The Veilguard" and "EA Sports FC 25."
In preliminary results announced on January 22nd, EA indicated a downward revision in its outlook, attributing it to a slowdown in "Global Football" (comprising "EA Sports FC") after strong initial momentum in the fiscal third quarter. "EA Sports FC 25," released on September 27th, was particularly affected.
EA also noted that "Dragon Age" attracted only 1.5 million players during the October-December quarter, significantly below the company's expectations. This led to layoffs at the responsible developer, BioWare, as part of a studio realignment.
Finalized financial results released on Thursday reiterate EA's revised expectations. Net bookings are now projected to range from $7 billion to $7.2 billion for the fiscal year ending in March, compared to an earlier forecast of $7.4 billion to $7.7 billion. For the fiscal fourth quarter, net bookings are anticipated to be between $1.4 billion and $1.6 billion.
Wall Street analysts expected diluted EPS of $1.08 on revenue of $2.34 billion, while EA reported non-GAAP diluted EPS of $1.11 on net bookings of $2.2 billion.
Despite the setbacks, EA CEO Andrew Wilson remains optimistic, emphasizing the success of the "EA Sports FC 25" Team of the Year event. He anticipates a return to growth in fiscal year 2026 and beyond as the company releases new and iconic entertainment experiences.
EA CFO Stuart Canfield announced an accelerated share repurchase plan of $1 billion, bringing total stock repurchases within the first year of the $5 billion authorization to $2.5 billion. This move reflects EA's confidence in its long-term strategy and its ability to invest in growth while also returning capital to shareholders.