A digital entertainment maker behind blockbuster games like EA SPORTS FC, Madden NFL, The Sims, Apex Legends, and Battlefield, played by millions on consoles, PCs, and mobile devices. Founded in 1982 by Trip Hawkins, who wanted to treat game developers as artists rather than anonymous coders, the company first planned to call itself "SoftArt" before settling on Electronic Arts — a nod to treating software as an art form.
Q1 FY2027 revenue rose 18.9% to $1,986M as Battlefield 6 and EA SPORTS FC lifted results
The live-services decline that defined last year reversed this quarter. rose 18.9% to $1,986M, expanded 2.9 points to 86.2%, and rose 89.3% to $513M, driven by and . The pending merger now sits over a business that has returned to growth.
Key takeaways
rose 18.9% to $1,986M, led by , , and increased extra content sales, after four straight quarters of single-digit or negative live-services trends.
Full game net rose 78% to $514M primarily from , while and other net revenue rose 7% to $1,472M, ending the multi-year live-services decline flagged in the FY2025 and FY2026 reports.
expanded 3 points to 86.2% from a favorable mix shift toward higher-margin digital and .
Section summaries
Management's Discussion and Analysis
Q1 FY2027 net revenue rose 19% to $1,986M driven by Battlefield 6 and EA SPORTS FC, with operating income up 89%.
⌄
Total net grew 19% to $1,986 million, led by , , and increased extra content sales.
Full game net surged 78% to $514 million, primarily from , while live services and other net revenue rose 7% to $1,472 million.
rose 89.3% to $513M as operating expenses increased 7% to $1,199M, with marketing up 23% on advertising and R&D up 5% on digital infrastructure.
was a $242M outflow versus $17M provided a year earlier, driven by higher tax and variable compensation payments.
The company returned $48M via dividends and held $2,404M in cash, equivalents, and short-term investments, with no amounts drawn on its $500M .
What changed
Q2 FY2026 net was flagged against $1,221M; this quarter live services rose 7% to $1,472M, reversing the prior-year declines.
Cash and equivalents trajectory was flagged from $1,148M at Q2 FY2026 given $423M quarterly capital returns; cash, equivalents, and short-term investments are now $2,404M after the merger suspended buybacks and only $48M was returned.
recovery was flagged from the $17M Q1 FY2026 print; instead of recovering, it swung to a $242M outflow this quarter on higher tax and compensation payments.
The ~$81M net shift from fiscal 2026 to fiscal 2027 via estimated offering period change was flagged; this quarter a change deferred no stated amount, but the shift continues to affect reported revenue.
FY2026 flagged from online-enabled games at $2,233M as a digital signal; this filing does not report the current deferred figure.
Risk factors now emphasize pending acquisition uncertainty, franchise concentration in , AI-driven competition, third-party platform reliance, and evolving virtual-item regulation as updated concerns.
What to watch
Q2 FY2027 and other net against the $1,472M Q1 figure as and cycles mature.
Merger close progress and any $1.0B termination fee trigger under the $210-per-share deal with the Consortium.
recovery from the $242M Q1 outflow as tax and variable compensation payment timing normalizes.
from online-enabled games against the $2,233M FY2026 level as a digital adoption signal.
expanded 3 percentage points to 86.2%, aided by a favorable mix shift toward higher-margin digital and live services .
Operating expenses increased 7% to $1,199 million, with marketing and sales up 23% on higher advertising and R&D up 5% on digital infrastructure investments.
Net cash used in operating activities was $242 million versus $17 million provided a year ago, driven by higher tax and variable compensation payments.
The company returned $48 million to stockholders via dividends and has $2,404 million in cash, equivalents, and short-term investments, with no amounts drawn on its $500 million .
Quantitative and Qualitative Disclosures About Market Risk
The company faces FX and interest-rate risks, using forwards to hedge some FX but not hedging equity or short-term investments.
⌄
International sales expose the company to FX risk, especially from the Euro, British pound, Australian dollar, Japanese yen, Chinese yuan, South Korean won, and Polish zloty, while expenses are affected by the Swedish krona and Canadian dollar.
Cash-flow hedges use FX forwards up to 18 months to partially protect forecasted foreign-currency sales and R&D expenses, with a 10%/20% adverse move potentially reducing fair value by $204M/$408M as of June 30, 2026.
Balance-sheet hedges use short-term (≤3 months) FX forwards for monetary assets and liabilities, mainly intercompany balances; a 10%/20% adverse move could cause $88M/$177M in potential income-statement losses.
Interest-rate risk is concentrated in the short-term investment portfolio, managed by holding high-credit-quality, short-maturity debt instruments without derivatives; a 150bps parallel rate rise would lower fair value by about $1M (1%).
The company does not hedge market-price risk on marketable equity securities and does not use derivatives for speculation.
Refer to Note 11 of the Notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q for disclosures regarding our legal proceedings.
⌄
Refer to Note 11 of the Notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q for disclosures regarding our legal proceedings.
Merger uncertainty, franchise concentration, and competitive disruption are the most emphasized risks this quarter.
⌄
The pending acquisition by a Consortium faces closing conditions and litigation that could delay or prevent the deal, potentially disrupting operations and depressing the stock price.
A significant portion of depends on a few key franchises, especially and its mode, making underperformance of any single major title disproportionately harmful.
Intense competition from established companies and new entrants, including those leveraging advanced AI, threatens player engagement and market share.
Reliance on third-party platforms like Sony, Microsoft, Apple, and Google creates concentration risk, as these partners control distribution, policies, and fees for a material portion of digital sales.
Evolving global regulations on virtual items, data privacy, and AI present increasing compliance costs and could restrict business models or product offerings.