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EA Significantly Exceeds Third Quarter FY15 Guidance, Digital Now 50 Percent Of Revenue
EA has reported its results for its third quarter of the 2015 fiscal year. The company has evidenced strong revenue generation, exceeding its forecast by 12 percent.
The publisher was targeting quarterly revenue of $1.275 billion and closed the quarter with $1.428 billion (Non-GAAP). That is down nearly 10 percent year-over-year however.
Once again, EA is evidencing strong digital sales performance, with that segment reaching over $2.178 billion of the total $4.337 billion revenue (totalling 50.2 percent) for the trailing 12 months. The publisher says this is the first time that it's trailing year revenue is comprised of more than 50 percent from the digital segment.
Ultimate Team sales continue to push ahead. Net revenue for NHL, FIFA, and Madden Ultimate Teams are up 82 percent compared to this time last year. This is on top of 60 percent increases experienced in the same quarter FY2014 over FY2013.
In recognition of the strong quarter, EA is increasing its projected net revenue for the year ending March 31, 2015, from $4.175 billion to $4.253 billion.
Mobile monthly active users climbed slightly from 155 million in the second quarter to 160 million this quarter. This is slower growth than the company experienced in the first half of the year, as first quarter performance was 140 million actives. The company's latest mobile hit, SimCity Buildit arrived in December and has seen 22 million downloads worldwide and sits among the top five most downloaded iOS titles.
We'll have more from the earnings call at 5 p.m. Eastern today.
[Source: EA]
Our Take
Overall, this is an extremely strong quarter for EA. The takeaways are that digital continues to become increasingly important (something we've identified for most publishers in each quarter for the past two years). Ultimate Team will remain a staple of EA's revenue profile. The company seems to have found a balance that doesn't intrude on the core experience, but still entices those willing to commit to in-app purchases.
The mobile profile is something I'll continue to watch. With SimCity BuildIt racking up 22 million installs and monthly actives only increasing 5 percent, there's clearly attrition going on. EA's mobile growth is starting to plateau. Whether it picks back up in the final quarter are starts to downturn will be important, as it may shape adjustments in mobile strategy.
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