Q3 2025 Earnings Summary
- EA expects to return to growth in fiscal year 2026, driven by a strong pipeline of new experiences including EA Sports College Football 26, Battlefield, SCAPE, and expansion of The Sims franchise. Even without Battlefield, they anticipate growth due to these initiatives. * *
- Recent gameplay updates and events have led to a significant turnaround in momentum for EA Sports FC. After addressing gameplay issues and launching the Team of the Year event, they reactivated over 2 million Ultimate Team players, achieved record net bookings during the event, and saw positive trends across all cohorts. This suggests the underperformance was temporary, and they are confident in the sustainable long-term growth of Global Football. * *
- The overwhelmingly positive response to Battlefield Labs indicates strong community support and excitement for the upcoming Battlefield release. EA is engaging closely with players to ensure a successful launch of the biggest Battlefield game ever made, which could lead to significant growth upon release. * *
| Metric | YoY Change | Reason |
|---|---|---|
Total Revenue | -3% | The prior year saw increased contribution from major sports titles and steady live services, but this period experienced softer Apex Legends performance and slower mobile growth, reversing last year’s momentum. Macroeconomic factors, including regional spending softness, also tempered overall revenue growth. |
Full Game | -3% | Previous quarters benefited from new blockbuster releases like Star Wars Jedi: Survivor, whereas this quarter’s lineup lacked similarly large launches. Additionally, digital adoption continued, but not enough to offset the falloff from last year’s titles. |
Live Services & Other | -3% | After several periods of growth powered by Ultimate Team and Apex Legends, weakened in-game spending—particularly in Apex Legends—contributed to the decline. While EA SPORTS franchises remained relatively solid, they could not fully compensate for the shortfall in other franchises. |
International Revenue | -6% | Compared to earlier strong growth in key regions, European markets showed heightened caution in consumer spending, and fewer high-profile releases with global appeal led to a drop in overall international sales. Currency headwinds in select territories also impacted the reported figures. |
Cost of Goods Sold (COGS) | -14% | Building on cost efficiencies and digital distribution gains from prior quarters, COGS declined further due to lower packaged goods volumes and reduced amortization expenses. This enhanced gross margins even as revenue dipped. |
Net Income | +910% | Despite weaker top-line performance, one-time tax and restructuring benefits—combined with tighter operating expenses—significantly boosted net income relative to a low prior-year comparison. This provides improved flexibility for future investments, though sustaining such a high growth rate will be challenging. |
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Net Bookings | FY 2025 | $7.5B–$7.8B (+1% to +5% YoY) | $7.0B–$7.15B (−6% to −4% YoY) | lowered |
Net Revenue | FY 2025 | $7.4B–$7.7B | $7.25B–$7.4B | lowered |
Cost of Revenue | FY 2025 | $1.53B–$1.56B | $1.48B–$1.49B | lowered |
Operating Expenses | FY 2025 | $4.15B–$4.445B | $4.38B–$4.39B | raised |
GAAP Operating Margin | FY 2025 | 19.3%–21.1% | 19.2%–20.5% | lowered |
Non-GAAP Operating Margin | FY 2025 | 30.7%–32.1% | 30.5%–31.6% | lowered |
Impact from Deferred Net Revenue | FY 2025 | +90 to +80 bps | −250 to −240 bps | lowered |
Operating Cash Flow | FY 2025 | $2.075B–$2.275B | $1.8B–$1.9B | lowered |
Capital Expenditures | FY 2025 | $225M | $225M | no change |
Free Cash Flow | FY 2025 | $1.85B–$2.05B | $1.575B–$1.675B | lowered |
Net Bookings | Q4 2025 | no prior guidance | $1.444B–$1.594B (−13% to −4% YoY) | no prior guidance |
Net Revenue | Q4 2025 | no prior guidance | $1.682B–$1.832B | no prior guidance |
Cost of Revenue | Q4 2025 | no prior guidance | $305M–$315M | no prior guidance |
Operating Expenses | Q4 2025 | no prior guidance | $1.112B–$1.122B | no prior guidance |
Earnings Per Share (EPS) | Q4 2025 | no prior guidance | $0.65–$1.00 | no prior guidance |
| Metric | Period | Guidance | Actual | Performance |
|---|---|---|---|---|
Net Revenue | Q3 2025 | "$1.875B - $2.025B" | $1.883B | Met |
Cost of Revenue | Q3 2025 | "$450M - $480M" | $456M | Met |
Operating Expenses | Q3 2025 | "$1.1B - $1.15B" | $1.033B (427M SG&A+ 606M R&D) | Beat |
EPS (Diluted) | Q3 2025 | "$0.85 - $1.02" | $1.11 | Beat |
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EA Sports FC Underperformance
Q: Why was there slower uptake of the new FC title?
A: The underperformance of EA Sports FC was unexpected, with acquisition levels lower than anticipated. We believe this was due to players being satisfied with previous versions, as we had over 40 million people playing across iterations. Feedback indicated the gameplay was too defensively focused, so we implemented a major update to make it more attacking. Following this, we saw positive momentum with record net bookings, record weekly active users, and reactivated 2 million Ultimate Team players during the Team of the Year event. -
Apex Legends Trajectory
Q: How is Apex Legends performing and what's the outlook?
A: Apex Legends hasn't met our desired trajectory. We're supporting the core community of over 200 million players with quality updates and new content. We plan a significant update after the Battlefield launch, and in the longer term, we're envisioning an Apex 2.0 to expand the franchise. Financially, Q3 was in line with expectations, with sequential improvements in player conversion and monetization. -
Battlefield Launch Timing
Q: How does competition affect Battlefield's launch timing?
A: We're targeting an FY '26 launch for Battlefield, but given this year's competitive landscape, we may adjust timing to ensure it launches when we can maximize its potential. We aim to deliver the biggest Battlefield ever and will consider industry dynamics in our timing. -
Fiscal '26 Growth Without Battlefield
Q: Can you grow in FY '26 without Battlefield?
A: Yes, we expect growth in FY '26 even without Battlefield. Key drivers include a rebound in FC, the launch of College Football in the summer, and expansions in our lifestyle brands like SCAPE and The Sims. We remain committed to our multi-year growth framework. -
College Football Outlook
Q: How will College Football contribute to growth?
A: College Football had an exceptional launch with pent-up demand. Featuring 12,000 young athletes, it serves as a powerful ambassador. The sport is growing, and combined with the NFL, we see an opportunity to build a massive online community across American football. -
Opportunity with New Switch Console
Q: What opportunities does the new Switch console present?
A: New consoles benefit us by allowing access to new players. Our franchises like FC and Madden have performed well on Nintendo platforms. Titles like The Sims and the MySims: Cozy Bundle exceeded expectations on Switch, with 50% of players new to EA. -
FC '25 Rush Mode Impact
Q: Did Rush mode affect FC's performance?
A: Rush is the second most played mode in FC '25 and hasn't diluted monetization. We believe it will ultimately be additive. The Q3 softness was due to acquisition challenges and gameplay balancing, which we have addressed. -
Server Issues in FC '25
Q: Are server issues affecting FC '25 performance?
A: Our data shows FC '25 is at least as stable as previous versions. While server issues can occur, they have a very low impact on overall player experience.
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