Electronic Arts (EA): A few notable points from the Q3 2024 earnings report

Shares of Electronic Arts Inc. (NASDAQ: EA) stayed red on Thursday. The stock has gained 18% over the past 12 months. The company delivered revenue and earnings growth for the third quarter of 2024 and witnessed strong performance from its core franchises. It sees meaningful opportunity to drive further growth through these franchises as well as new releases. Here are a few notable points from the Q3 report:

Quarterly performance

Electronic Arts delivered growth in revenue, earnings and net bookings in the third quarter of 2024. Net revenue increased 3% to $1.94 billion while EPS rose 47% to $1.07 compared to the same period last year. Net bookings inched up 1% to $2.37 billion in the quarter.

Franchise strength and opportunity

During the third quarter, Electronic Arts recorded a 5% growth in live services and other revenue, which makes up the majority of its top line. The company saw strong performances from EA SPORTS FC and EA SPORTS Madden NFL in terms of engagement. FC Mobile saw a 29% growth in daily active users while FC Online witnessed a 20% rise in new players versus the year-ago quarter.

On its quarterly conference call, EA said it expects to drive compounding growth across its core franchises, fueled by player acquisition, engagement and retention. It believes the strength in live services will enable this growth on franchises through the future. The company also sees meaningful opportunity for growth through new releases.

EA plans to keep on investing meaningfully in new IP to grow its future pipeline and it believes there is significant opportunity to be unlocked in subscription going forward. The company also believes there is an opportunity to harness the power of its collective sports communities through its most popular EA SPORTS brand to create a ‘metaverse’ at some point in the future.

Outlook

For the fourth quarter of 2024, Electronic Arts expects net revenue of $1.62-1.92 billion. Net income is expected to be $54-183 million and EPS is expected to be $0.20-$0.68. Net bookings are projected to be $1.62-1.92 billion.

For the full year of 2024, the company expects net revenues to range between $7.40-7.70 billion. Net income is estimated to be $1.14-1.27 billion while EPS is projected to be $4.21-4.68. Net bookings is expected to be $7.38-7.68 billion.