What to expect when Electronic Arts (EA) reports Q4 earnings next week

Shares of Electronic Arts Inc. (NASDAQ: EA) stayed green on Friday. The stock has gained 9% in the past three months. The company is slated to report its fourth quarter 2023 earnings results on Tuesday, May 9, after market close. Here’s a look at what to expect from the earnings report:

Revenue

Electronic Arts has guided for revenue of $1.70-1.80 billion in Q4 2023. Analysts are projecting revenue of $1.76 billion, which compares to $1.82 billion reported in Q4 2022. In the third quarter of 2023, revenue increased 5% year-over-year to $1.88 billion.

Earnings

EA expects net income for Q4 2023 to range between $14-55 million and EPS to range between $0.05-0.20. The consensus estimate for EPS in Q4 is $1.31. This compares to EPS of $0.80 reported in Q4 2022. In Q3 2023, EPS more than doubled YoY to $0.73.

Points to note

For the fourth quarter of 2023, Electronic Arts has guided for net bookings to range between $1.67-1.77 billion. Net bookings were $1.75 billion in the fourth quarter of 2022 and $2.34 billion in the third quarter of 2023.

Electronic Arts has benefited from strong engagement and player growth driven by popular franchises like EA SPORTS FIFA. The company continues to invest in its leading franchises bringing out updates and fresh content to keep driving engagement. However, the easing of the pandemic-driven boom continues to take a toll on business and this is likely to have continued into Q4.

Last month, EA announced that The Sims 4, its latest offering from The Sims franchise, reached more than 70 million players around the world, becoming the most widely played game in the history of the franchise. The launch of new games such as WILD HEARTS are likely to have driven engagement in the latest quarter.

Electronic Arts continues to take measures to reduce costs. In Q3, operating expenses were down 3% year-over-year and on its quarterly call, the company said the actions it took in Q3 will reduce its operating expenses for the second half of the year by around $140 million.