EA earnings analysis
What we found in EA's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
EA reported a strong year-over-year quarter: revenue increased 19% to $1.986 billion, gross margin improved to 86.2%, operating income rose 89% to $513 million, and diluted EPS was $1.56. The main offset is cash conversion, with operating cash flow deteriorating to negative $242 million and cash declining $576 million sequentially, although total cash and short-term investments remained $2.404 billion. Management provided no numeric guidance, while pointing to continued digital mix expansion and the ongoing materiality—but potential nonlinearity—of live-services revenue.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue grew 19% to $1.986B
- Revenue rose $315 million, or 19%, year over year to $1.986 billion, driven by Battlefield 6, EA SPORTS FC and higher Apex Legends extra-content sales. The reported period included 14 weeks versus 13 weeks in the prior-year quarter.
- Gross margin expanded to 86.2%
- Gross margin expanded 3 percentage points year over year to 86.2% as cost of revenue fell $5 million to $274 million despite the $315 million increase in revenue.
- Operating income nearly doubled
- Operating income increased 89% year over year to $513 million. This equates to a 25.8% operating margin, while operating expenses rose 7% to $1.199 billion, materially below revenue growth.
- EPS reached $1.56 on full-game strength
- Diluted EPS was $1.56 on net income of $397 million. Full-game revenue increased 78% to $514 million, led by Battlefield 6 and EA SPORTS FC 26.
- Bookings growth remained positive
- Net bookings increased $51 million, or 4%, to $1.349 billion; live-services bookings rose $32 million, or 3%, to $1.116 billion. Apex Legends extra content was a key contributor, partly offset by lower EA SPORTS FC Ultimate Team extra-content sales.
- Cash resources and revolver support liquidity
- Liquidity remained substantial at $2.404 billion of cash, cash equivalents and short-term investments as of June 30, 2026. The $500 million revolving credit facility was undrawn.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Operating cash flow turned sharply negative
- Operating cash flow swung to an outflow of $242 million from a $17 million inflow in the prior-year quarter, driven primarily by higher cash income-tax, variable-compensation and personnel payments. Cash and equivalents declined $576 million from $2.864 billion at March 31, 2026 to $2.288 billion.
- Merger completion and litigation risk
- The proposed merger remains subject to conditions outside EA's full control and may be delayed or fail to close. EA entered the merger agreement on September 28, 2025, and says related litigation could delay or prevent completion.
- Material foreign-exchange sensitivity
- Foreign-exchange exposure remains meaningful: a hypothetical adverse 10% currency movement would reduce the fair value of cash-flow hedge contracts by $204 million and create an $88 million potential income-statement loss on balance-sheet hedges.
- Franchise and live-services concentration
- Management identified no clearly labeled new or amended risk factor relative to the prior filing in the supplied text. Existing competitive risk remains material because $1.472 billion, or roughly three-quarters of quarterly revenue, came from live services and other revenue tied heavily to major franchises.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $1.56
- Gross margin
- 86.2%
- Operating margin
- 25.8%
- Segment
- Full game revenue: $514 million, up $225 million (78%) year over year; digital full-game downloads were $438 million, up $205 million (88%), and packaged goods were $76 million, up $20 million (36%).
- Segment
- Live services and other: $1.472 billion, up $90 million (7%) year over year.
- Segment
- EA does not provide a reportable operating-segment revenue table in the supplied filing text; these are revenue-composition categories.
What they said about what is next.
The 10-Q provides no quantitative revenue or EPS outlook. Management expects live-services revenue to remain material, expects digital full-game downloads to increase over time and packaged-goods revenue to decrease, and states liquidity should be sufficient for the next 12 months and beyond; formal outlook is deferred to earnings materials/call.
The filing reads about the same as the one before it.
What came before.
- 10-K · July 28, 2026
- This 10-K/A principally adds Part III governance and compensation disclosures rather than updating operating results or risk factors from the original FY2026 10-K. EA delivered $7.531 billion of GAAP revenue, $887…
- 10-K · May 11, 2026
- Electronic Arts (EA) reported a net revenue increase of 1% year-over-year to $7.531 billion for FY2026, with net income of $887 million and diluted EPS of $3.51, a marked decrease from previous year levels. The company…
- 10-Q · November 1, 2024
- EA reported Q2 net revenue of $2,025 million, up $111 million (+5.8%) versus prior-year quarter, with gross profit rising to $1,569 million (gross margin ~77.4%). Operating income was $384 million (operating margin…
- 10-K · May 24, 2023
- EA reported fiscal 2023 net revenue of $7,426 million (up $435 million, or 6% vs FY2022) driven by live services and extra content, producing operating income of $1,332 million and net income of $802 million (diluted…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
Read the next one first.
We read every filing EA makes the day it lands, and put it next to what the options market did about it. Members get both, and an alert when a filing arrives.
Cancel anytime · Month to month · Switch tiers whenever