Electronic Arts (EA) - Q1 2026 Earnings Call
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Call Details
Call Title: Electronic Arts Q1 2026 Earnings Call
Date held: July 29, 2025
Management team members present:
Andrew Wilson - Chief Executive Officer and Director
Stuart Canfield - Chief Financial Officer and EVP, Finance
Call Summary
Financial Performance
EA reported net bookings of $1.3 billion, representing a 3% increase year over year and exceeding the guidance. CEO Andrew Wilson stated, “This quarter’s performance highlights EA’s unique position in the industry.”
Full game net bookings were $214 million, showing a significant 27% rise, driven by franchises like Split Fiction and the resurgence of Star Wars Battlefront II.
Live services net bookings totaled $1.08 billion, which exhibited a 1% decrease, primarily impacted by the performance of Apex Legends, which provided a better-than-expected boost of two percentage points.
The company’s GAAP net revenue reached $1.67 billion, reflecting a 1% increase despite an increase in operating expenses attributed to strategic investments.
EA’s gross margin was reported at 83.3%, slightly decreasing by 90 basis points due to strong year-on-year performances from royalty-bearing titles.
Operating expenses rose by 9% to $1.12 billion, reflecting increased investment in talent and marketing to support upcoming launches.
The company’s earnings per share (EPS) for Q1 was 79 cents, reaffirming the strength of their financial performance.
EA maintained a GAAP free cash flow of $1.75 billion, emphasizing robust cash generation capabilities.
Guidance
For Q2 FY26, EA expects net bookings to fall between $1.8 billion and $1.9 billion, which indicates a decline of 9% to 13% year over year due to strategic phasing of content.
CFO Stuart Canfield noted, “This includes a four-point headwind related to phasing of the EA Sports FC Deluxe Edition content.”
The company anticipates a headwind from full game sales of College Football 26, although the subsequent Madden NFL 26 is expected to partially offset this decline.
EA’s fiscal year guidance remains unchanged and is underpinned by a strong lineup of launches in the back half of FY26, including Madden NFL 26 and Battlefield 6.
Canfield also indicated that they expect operating expenses to rise by 3% to 4% in Q2, primarily due to marketing costs associated with their new titles.
Capital Allocation
EA continued its disciplined approach to capital allocation, returning $423 million to shareholders through buybacks and dividends during the quarter.
The management stressed that investments are targeted towards largest franchises, demonstrating strategic foresight in expanding operational scale and maintaining long-term growth.
Wilson highlighted that these financial strategies lay “the foundation for durable multi-year growth.”
There were significant investments earmarked for next-generation titles, aligning resources with growth opportunities in franchises, as evidenced by Battlefield and EA Sports.
Macro & Demand Trends
Wilson pointed out that player engagement has strengthened due to the enhancements made to titles, stating that, “We are seeing our core communities of players more deeply engaged and staying with us for longer.”
The demand for EA Sport titles continues to reflect resilience amid macroeconomic challenges; most notably, the enthusiastic reception of College Football 26 and the innovative strategies deployed in the mobile segment.
Data from FC Mobile revealed record installations, with the title achieving over 50 million installs, underpinning the success of their outreach and engagement strategies.
The ongoing integration of real-world events, such as the collaboration with Apple for MLS matches in FC Mobile, showcases EA’s commitment to bridging interactive and real-world sports.
Product Updates
Upcoming launches, including Battlefield 6, and continued innovation across existing titles like Madden NFL 26, are seen as pivotal to ongoing engagement.
Wilson expressed excitement over the developments in the Skate franchise, emphasizing a creator-driven platform that connects strongly to street culture.
The anticipated Battlefield 6 launch, set to be revealed in a live showcase event, is positioned as a substantial elevation in the franchise’s evolution, indicating a “new era” for the series.
The company’s approach to global football continues to adapt with FC 26, where community feedback is being actively integrated into the release strategy, enhancing pre-launch metrics positively.
Competition
Andrew Wilson discussed the competitive landscape, specifically referencing Battlefield vs. Call of Duty, mentioning, “We feel very good about the competitive slate relative to Battlefield this year.”
He highlighted EA’s extensive work ensuring that Battlefield meets fan expectations, indicating a proactive rather than reactive strategy to competition.
The rollout of EA Sports FC also encounters competing sports titles, but Wilson expressed confidence in EA’s positioning, asserting, “Our belief is that in the context of two games, we can capture individuality.”
NOTABLE QUOTES:
“This quarter’s performance highlights EA’s unique position in the industry.” - Andrew Wilson
“We’re not looking to make any changes on pricing at this stage.” - Andrew Wilson
“We’re building on a solid foundation from Q1, carrying positive momentum into Q2.” - Stuart Canfield
“Our long-term partnerships... are some of the most valuable in sports entertainment.” - Andrew Wilson
“Our momentum is the result of years of intentional investment and focused execution.” - Andrew Wilson
“Player engagement has strengthened due to enhancements made to titles.” - Andrew Wilson
“We expect college football full game sales to be a headwind.” - Stuart Canfield
“These iconic sports look to EA Sports to connect fans with their favorite teams and athletes.” - Andrew Wilson
“Each of our games must deliver authentic, individual experiences.” - Andrew Wilson
“We’re shaping what comes next, where play, create, watch, and connect converge.” - Andrew Wilson
Q&A SUMMARY:
Q: Doug Kruitz (TD Cowen), “What are your thoughts on full game pricing, especially in comparison to competitors like Nintendo and Microsoft?”
A: Andrew Wilson stated that EA is not looking to adjust pricing at this time, noting their existing broad pricing strategy. “We’ll continue to look at opportunities to deliver great value to our players through various pricing schemes.”
Q: Colin Sebastian (Baird), “What was the growth of live services excluding Apex, and how are you expecting trends for upcoming titles?”
A: Stuart Canfield responded that live services growth outside of Apex showed “low single-digit growth,” indicating solid performance. He expressed optimism regarding upcoming titles like Battlefield and Skate, expecting strong interest based on early feedback.
Q: Eric Handler (Ross Capital), “Can you provide insights into cohort spending with Ultimate Team and expectations moving forward?”
A: Canfield mentioned that cohort spending is strong entering FY26, reflecting solid engagement with “the key cohorts” built out in the previous quarter, suggesting good momentum as they head into new releases.
Q: Mike Hickey (The Benchmark Company), “How do you view the competitive landscape between Battlefield and Call of Duty this year?”
A: Wilson expressed confidence about Battlefield’s competitive stance, emphasizing that the latest game was designed to meet community expectations and attract new fans, saying, “We feel very good about our launch window.”
Q: Eric Sheridan (Goldman Sachs), “How is consumer receptivity towards bundling Madden and NCAA football games?”
A: Wilson noted the dual purchase strategy was successful last year and expected it to continue, highlighting, “We believe it will act as a multiplier effect” within the growing football ecosystem.
Q: Andrew Merock (Raymond James), “How distinct are the player bases for college football and Madden in terms of gameplay experiences?”
A: Wilson affirmed there is significant crossover, but also a clear expectation of differentiation in gameplay that reflects the unique essence of each sport while ensuring individual fan experiences are honored.
Q: Corey Carpenter (J.P. Morgan), “Have changes in App Store economics changed your view of mobile opportunities?”
A: Wilson remarked that their orientation remains focused on delivering seamless experiences for fans, saying that they would continue meeting players where they are and creating frictionless funding mechanisms.
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