Video-game giant Electronic Arts beat revenue forecasts for the June quarter, and although it didn’t release any new titles during the period the company talked up the strength of its current and upcoming slate of titles.
Shares of EA rose 4.5% in after-hours trading on the results.
For the quarter ended June 30, the company’s first quarter of fiscal 2020, EA reported $1.209 billion in net sales, up 6.3% year over year. EA reported net bookings of $743 million (down 0.8% year over year), topping Wall Street expectations of $719 million. The company calculates net bookings by adding total net revenue to the change in deferred net revenue for online-enabled games and mobile platform fees.
EA’s newest release is season 2 of “Apex Legends” (pictured above), which launched on July 2. On Tuesday, the company and studio Respawn Entertainment announced the Apex Legends Preseason Invitational, an esports tournament with a $500,000 prize pool to be held Sept. 13-15 in Kraków, Poland, featuring a field of 80 teams from around the world. Upcoming releases are slated to include new “Madden NFL” and “EA Sports FIFA” editions, while “Star Wars: Jedi Fallen Order” is on tap for November 2019.
“We had a strong start to FY20, bringing rich new experiences to our growing communities for ‘Apex Legends,’ ‘EA Sports,’ ‘The Sims’ and more,” CEO Andrew Wilson said in announcing the results. “From great new games to live services with longevity, subscriptions on more platforms and competitive gaming for more franchises, we’re pushing to lead with innovation, quality and choice for our players.”
During the June quarter, “FIFA Ultimate Team” had more than 3 million players logging in daily during the Team of the Season in-game event, while downloads of “The Sims 4” expansion packs and game pack increased 55% year-over-year. In addition, the company said, “Star Wars: Galaxy of Heroes” had nearly 80 million players to date as of the end of the quarter.
The company posted net income of $1.42 billion ($4.75 per share), missing analyst EPS estimates of $5.65. The quarterly net income included a $1.08 billion tax benefit related to an internal transfer of some of its intellectual property rights to its Swiss subsidiary (where EA’s international business is headquartered) where Swiss income tax rates are set to change, as well as a decision by the Ninth Circuit Court of Appeals regarding stock-based compensation expenses that required EA to record a tax accrual.
According to EA, digital net bookings for the trailing 12 months was $3.73 billion, up 5% year-over-year, representing 76% of total net bookings.
For the September 2019 quarter, EA expects net revenue to be approximately $1.315 billion and net bookings of $1.23 billion, with net income of $776 million (approximately $620 million of which is related to income tax benefits).