Electronic Arts It said today that its results for the third fiscal quarter and fiscal year March 31 will be lower than expected due to weaker than expected sales Dragon Age: Veil And international football games.
EA stock fell 10.71% to $127.11 in after-hours trading following the announcement.
EA’s initial guidance for fiscal 2025 forecast mid-single-digit growth in net live service bookings. However, the company now expects a mid-single-digit decline, with global football accounting for the majority of the change.
Separately, Dragon Age: Veilguard engaged with just 1.5 million players during the quarter, down nearly 50% from EA’s expectations. Our area Rachel Kasser I loved it.
World football has seen two consecutive financial years of double-digit net bookings growth. However, the franchise saw a slowdown as early momentum in the third fiscal quarter did not continue to the end. As a result, EA has revised its global soccer forecast to end the financial year with a mid-single-digit decline at the midpoint of the new forecast.
As a result, EA is providing preliminary results for the fiscal third quarter and updating its net bookings forecast for fiscal year 2025. It now expects net bookings to be approximately $2.215 billion for the fiscal third quarter and an updated range of $7 billion to $7.150 billion for fiscal year 2025. EA had forecast Previously $7.5 billion to $7.8 billion.
For the fiscal third quarter, EA now expects its GAAP net revenue to be approximately $1.883 billion and approximately $1.11 in GAAP diluted earnings per share.
“During the third quarter, we continued to deliver high-quality games and experiences across our portfolio; However, EA CEO Andrew Wilson said in a statement: “Dragon Age and EA Sports FC 25 underperformed our expectations for net bookings.” “This month our teams provided a comprehensive gameplay update as well as our annual FC25 Team of the Year update; positive player feedback and early results are encouraging. We remain confident in our long-term strategy and expect to return to growth in FY26, as we execute on our future plans.
“We continue to balance investing for future growth with operational discipline, and remain committed to EA’s long-term financial framework,” Stuart Canfield, EA’s chief financial officer, said in a statement. “As we look forward to FY26, we expect to grow as we launch more of our iconic franchises.”
Dragon Age: The Veilguard was released in October on PS5, Xbox Series And this month, game director Corinne Bush confirmed that she was leaving BioWare with an offer she couldn’t refuse.
Colin Sebastian, an analyst at Baird Equity Research, said in a note that he expects growth trends to moderate for EA, but not to the extent indicated in today’s advance announcement.
“Consistent with our checks, FC titles appear to be OK, and Dragon Age also missed expectations (not a huge surprise given poor sales reports). However, FC’s decline is concerning given the game’s historical resilience and its significant contribution to EA’s profitability “In the near term, industry headwinds will persist, and FC issues will raise further concerns about the resilience of top recurring franchises. The results from Take-Two will be clear.
Fiscal Q3 net bookings were approximately $2.22 billion (-6.5% y/y), below Baird estimates of $2.49 billion (consensus slightly higher at $2.51 billion) with a shortfall of approximately $200 million from FC/$100 million Dragon Age.
Additionally, EA’s revised full-year guidance indicates fiscal fourth-quarter bookings will decline by approximately $315 million, as trends may not improve month-to-month. EA now expects a ~MSD% y/y decline in football bookings versus previously positive y/y growth.
“So what happens from here? It’s hard to say, but we expect EA to increase its support for FC, likely in the form of marketing spending and a more detailed review of the franchise’s pipeline plans,” Sebastian wrote. “Although this may impact margins, However, EA can also accelerate efficiency initiatives, such as ramping up uses of productivity-enhancing technology (e.g., GenAI). Additionally, we expect EA to comment on Mass Effect plans, since the Dragon Age team is now working on that title, and the commercial success of Battlefield will now be even more important if FC trends do not pick up.
While industry trends remain volatile, Sebastian wrote that the second half of 2025 should be better.
“After a tough couple of years (supply chain issues, fewer blockbuster games, more expensive hardware, consumer spending shifts, competition for user time), we still expect a better 2025, perhaps starting with the launch of the Nintendo Switch 2, and assuming the main video,” he wrote. Game software and hardware releases on time (for example, the release of GTA VI may be delayed). “In the near term, industry headwinds are likely to persist, console hardware needs price cuts, and we expect trends to spark FC New Concerns About Flexibility of Best Recurring Franchises. “
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