3QFY3/24 earnings surged 47%, raising full-year EPS guidance on continued growth in live services
- EA’s net bookings increased by 1% y-o-y to US$2.37bn and EPS increased 47% to US$1.07 in 3QFY3/24, driven by a favourable revenue mix and higher operating efficiency
- Strong earnings growth momentum to sustain, led by continued growth in live services and higher operating leverage across the business
- Management raised EPS guidance by 2%, representing 46%-61% y-o-y growth for FY3/24
3QFY3/24 earnings beat. EA’s net bookings increased by 1% y-o-y to US$2.37bn in 3QFY3/24, largely in line. The growth was driven by 7% growth in EA SPORTS FC, partially offset by the softer full-game sales trend. Net bookings for its live services business grew by 3%, while full-game sales decreased by 5% due to a high base last year fuelled by the World Cup event. Gross margin increased by 3ppt to 72.8%, driven by the larger revenue contribution from the high-margin live services segment. Operating income increased by 26% y-o-y to US$365m, driven by a higher gross margin and reduced personnel cost. EPS increased 47% y-o-y to US$1.07, better than consensus. EA declared a quarterly cash dividend of US$0.19 per share, or c.0.6% dividend yield.
FY3/24 earnings guidance raised by 2%. Management raised the EPS mid-point guidance range by 2% to US$4.2-4.7 for FY3/24, representing 46%-61% y-o-y growth, 10% ahead of market expectations. The company will focus on growing its biggest franchises and delivering new, innovative games and experiences for global communities. Management expects low-single-digit growth in net bookings for FY3/25, reflecting a lighter release slate, while growth is expected to accelerate in FY3/26 with the release of multiple iconic games (e.g., Battlefield, Sims).