After market close on Tuesday, Electronic Arts (EA) posted a 34% surge in total net revenue of $1.29 billion for the second quarter of 2019, with net bookings inching 3.6% higher to $1.22 billion. Net mobile bookings improved 1% to $152 million for the three months, while console bookings jumped 27% to $358 million pushing the total digital bookings 10% up to $637 million.
The gaming giant posted a net profit of $255 million or $0.83 per diluted share, vs. last year’s loss of $22 million or $0.07 a share.
Analysts had expected earnings of $0.58 a share on a revenue of $1.18 billion, as EA beat both. The FIFA game maker had earlier touted its GAAP revenues to be $1.27 billion with net bookings at $1.16 billion.
EA shares closed at $94.83 on Tuesday, with a consensus PT of $139.29 and a 52-week range of $89.12-151.26. Following the earnings result, the stock initially fell 3% to $91.77 in after-market trade.
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For fiscal 2019, net revenue is expected to be about $5.15 billion on net bookings of $5.2 billion. Mobile platform fees is touted to hit $220 million, while net income is expected to be $962 million or $3.11 per diluted share for the year, on an operating cash flow of about $1.65 billion.
For the third quarter, net revenue is expected to be about $1.375 billion on net bookings of $1.725 billion.
When Electronic Arts posted last quarterly results in July beating earnings estimates, top franchise titles such as Fifa Online, SimCity, The Sims, and Battlefield, performed well.
On Sep 5, EA launched NBA Live Mobile, which added to the growing mobile revenues, which make about 20% of total revenues. Revenues from mobile soared 37% to $231 million in the previous quarter.
EA unveils Project Atlas
Just before the earnings, EA unveiled its “cloud-native gaming” technology called Project Atlas. Electronic Arts CTO Ken Moss revealed the technology in his Medium blog. Project Atlas looks to integrate a game engine and services into a single development platform.
Moss said the company sees a future in which “games go even further beyond the immersive experiences players enjoy today.”
“I’m talking about games that offer living, breathing worlds that constantly evolve. You’ll play them one day, and when you come back the next, things have changed based on inputs from other players, AI, and even the real world,” he added.
Harnessing cloud computing and AI capabilities, Project Atlas aims to give game makers “a powerful, easy to use, one-stop experience.” It will combine with Frostbite engine (which powers Battlefield and FIFA) that will take care of the rendering, game logic, physics, animation, audio, and tools for creating the game. Along with it are services such as secure player identity and authentication, player matchmaking and achievements, and social communications supported by common data management, and game and service hosting.