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EA's earnings show revenues are up, losses are better than expected

EA's earnings show revenues are up, losses are better than expected

January 31, 2017 | By Alex Wawro

Electronic Arts reported earnings for its most recent quarter -- the holiday quarter -- today, and while the company reported a loss it's evidently much smaller than what was expected.

Here's the highlights: for the three-month period ending December 31st, the company reported a (GAAP) loss of roughly $4 million on roughly $1.15 billion in revenue.

That may seem like bad news, but compared to the same period last year, it's an improvement -- a year ago EA lost about $31 million on revenues of $1.07 billion. It's also better than EA's own guidance of a $53 million loss on $1.12 billion in revenue.

For devs still watching the retail/digital sales split, know that EA claims 60 percent of its net revenue for the quarter (or roughly $685 million) came from digital sales. That's a bit less than the prior fiscal quarter, when revenue was split roughly 63/37 in favor of digital, but it's still notable in light of how much extra business retail establishments tend to see during the holiday season.

Other than noting its FIFA 17 game was "the best-selling console title in the world" last year, EA was surprisingly mum in its earnings report about performance of its games during this quarter, which saw the company release both Battlefield 1 and Titanfall 2.

No mention was made of Respawn's Titanfall 2; the only mention of EA DICE's latest Battlefield game was a note that it was "our biggest Battlefield launch ever" and that Battlefield 1's playerbase in its launch quarter was 50 percent larger than Battlefield 4 in the same timeframe.

Remember that if you want to look back at old EA earnings to compare, remember that the company recently began reporting earnings in accordance with GAAP (generally accepted accounting principles); in previous quarters, the company has reported Non-GAAP numbers.

That means you shouldn't compare earlier Non-GAAP reports of EA earnings against these GAAP numbers, as the GAAP numbers don't reflect deferred revenue from EA games with online components.

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