Electronic Arts (EA) has presented its quarterly report for the months October to December 2021: Revenue is up, but profit is down.
The magnitudes reported in the gaming and eSports sector in recent weeks are impressive. Microsoft bought Activision Blizzard for just under 70 billion US dollars, the Saudi company Savvy took over ESL and FACEIT for around 1.5 billion and most recently Sony acquired the developer studio Bungie for 3.6 billion US dollars.
The new figures in EA’s quarterly report fit the picture perfectly: the developer generated net sales of 1.789 billion US dollars in October, November and December 2021. In the same period of 2020, the net revenue still amounted to 1.673 billion – the increase is therefore just under seven percent.
Profit in Q3 comparison less than one third
However, EA was left with only 66 million of these 1.789 billion US dollars as net profit, compared to 211 million in 2020. This discrepancy can be explained by the operating expenses, which at 1.056 billion US dollars in the third quarter of the 2022 fiscal year were more than 200 million higher than in Q3 2021.
Also, in a twelve-month comparison – ending on 31 December each year – net profit in 2021 slumped to 640 million from 1.179 billion US dollars in 2020. On the other hand, EA was able to buy back a total of 1.3 billion worth of shares last year, which is 187 per cent of the value from 2020.
“Biggest quarter in company history “
Q3 was the largest quarter in the company’s history in terms of net bookings, underlying profitability and cash generation,” CFO Blake Jorgensen said in a statement. EA puts said net bookings at US$7.254 billion for the full year 2021.
Meanwhile, EA’s network of unique and active accounts was expanded to more than 540 million. The share of these EA accounts in the global population is thus almost 6.8 percent – an impressive rate. In fiscal year 2022, gamers spent nearly 20 per cent more time in EA titles than in 2021.
Profit forecast to double in Q4
EA also provided in its report a calculated outlook on the fourth quarter in the period between 1 January and 31 March 2022, forecasting net revenue of $1.759 billion and net profit of $130 million. The profit is therefore expected to almost double compared to Q3.
