Electronic Arts Inc. (EA) is starting the week on a positive note. The gaming giant saw its shares rise in pre-market trading on Wednesday following the release of its second-quarter earnings report. While EA missed revenue expectations, it exceeded earnings per share (EPS) estimates, showcasing a strong performance in certain areas.
Strong Earnings, Cautious Outlook
EA reported net revenue of $2.025 billion for the quarter, falling short of the consensus estimate of $2.037 billion. However, the company’s EPS came in at $1.11, beating the projected $0.88. Net bookings, a key metric reflecting the value of games sold, reached a record $2.079 billion for the second quarter, exceeding the upper end of the company’s guidance range.
Looking ahead, EA remains cautiously optimistic. For the third quarter, the company expects EPS in the range of $0.85 to $1.02, lower than the consensus estimate of $1.33. Revenue is projected to be between $1.875 billion and $2.025 billion, again falling short of the expected $2.508 billion. However, for the full fiscal year, EA raised its EPS guidance to $3.82 to $4.33, compared to the previous range of $3.34 to $4.00. Revenue guidance was also increased to $7.4 billion to $7.7 billion, up from the prior estimate of $7.1 billion to $7.5 billion.
American Football Fuels Growth, AI a Key Driver
One key highlight in EA’s report is the remarkable performance of its American Football franchise. The company stated that the game is on track to surpass $1 billion in net bookings for fiscal year 2025, fueled by a massive 140% year-over-year increase in playtime and more than double the number of new players joining the community.
EA also emphasized its commitment to leveraging artificial intelligence (AI) for growth. The company highlighted how AI is driving efficiency, expansion, and transformation across its operations. This focus on AI is likely to be a key driver of future growth and innovation for EA.
Stock Performance and Investment Opportunities
Following the positive earnings news, EA shares are up 1.24% at $147.43 in pre-market trading on Wednesday. Investors seeking exposure to the gaming sector can consider investing in the Roundhill Video Games ETF (NERD) or the Global X Video Games & Esports ETF (HERO), both of which include EA in their holdings.
