Electronic Arts Earnings: Constructive Results Amid a Slimmer Release Schedule

Narrow-moat Electronic Arts started fiscal 2025 by exceeding guidance, albeit on sharply lower bookings and revenue. EA has struggled amid a smaller slate of new titles, though efforts to refocus development of major franchises has largely been positive. While the company has focused on growing gross margin through a greater mix of live services over the past two quarters, we believe the rest of calendar 2024 will provide a more robust release schedule. New titles EA College Football and Dragon Age: The Veilguard should supplement Madden and EA FC’s annual releases, giving us confidence in EA’s ability to reach $7.4 billion in revenue for fiscal-year 2025. We are maintaining our $140 fair value estimate.