Blog Post

Earnings: Electronic Arts Slims Q2 Loss; Deferred Revenue Boosts Top Line

Stay on Top of Enterprise Technology Trends

Get updates impacting your industry from our GigaOm Research Community
Join the Community!

imageVideo gamer Electronic Arts (NSDQ: ERTS) narrowed its Q2 net loss to $95 million from last year’s net loss of $132 million, with diluted loss per share at $0.30 as compared with diluted loss per share of $0.42 for the prior year. The loss was wider than expected, which sent share in EA down 3 percent, Reuters reported. Meanwhile, EA’s Q2 revenue was $804 million, more than double Q207’s $395 million, though that was primarily due to deferred revenue, not higher sales. During the quarter, EA had a net benefit of $231 million year-over-year related to the recognition of deferred net revenue for certain online enabled packaged goods games.

— Non-GAAP net revenue in Q2 was $609 million, up 41 percent as compared with $431 million for the prior year. The growth was credited to the launches of Battlefield: Bad Company and UEFA EURO 2008, as well as continued sales growth for Rock Band.

— Looking ahead, non-GAAP net revenue is expected to be between $5- to $5.3 billion as compared with $4.020 billion in the prior year, a projected gain of 24-32 percent.

Release | Webcast (5:00 PM EDT)

Update: Weakness in pre-orders appeared to concern investors during the start of the call, particularly with regard to the release of the new Madden NFL game next month. Meanwhile, EA’s NCAA game is also down 20 percent in pre-orders, though executives said the situation is improving. Rock Band 2 will be coming in September, but execs didn’t offer any details about expectations for that game.

Mobile: EA Mobile revenues rose 33 percent to $44 million in Q2. The unit also grew 4.8 percent compared to Q108. It has been steadily increasing its revenue by $2- to 3 million each quarter, boosting the whole mobility section. More details on our sister site,