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Video game publisher Electronic Arts (NASDAQ:EA) reported revenue ahead of Wall Street’s expectations in Q1 CY2025, with sales up 6.5% year on year to $1.90 billion. The company expects next quarter’s revenue to be around $1.6 billion, coming in 10.6% above analysts’ estimates. Its GAAP profit of $0.98 per share was 8.2% above analysts’ consensus estimates.

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Electronic Arts (EA) Q1 CY2025 Highlights:

• Revenue: $1.90 billion vs analyst estimates of $1.76 billion (6.5% year-on-year growth, 7.6% beat)

• EPS (GAAP): $0.98 vs analyst estimates of $0.91 (8.2% beat)

• Management’s revenue guidance for the upcoming financial year 2026 is $7.3 billion at the midpoint, missing analyst estimates by 3.9% and implying -2.2% growth (vs -1.1% in FY2025)

• EPS (GAAP) guidance for the upcoming financial year 2026 is $3.44 at the midpoint, missing analyst estimates by 23.4%

• Operating Margin: 20.8%, up from 13.2% in the same quarter last year

• Free Cash Flow Margin: 26.1%, down from 59.8% in the previous quarter

• Market Capitalization: $40.33 billion

Company Overview

Best known for its Madden NFL and FIFA sports franchises, Electronic Arts (NASDAQ:EA) is one of the world’s largest video game publishers.

Sales Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last three years, Electronic Arts grew its sales at a sluggish 2.2% compounded annual growth rate. This wasn’t a great result, but there are still things to like about Electronic Arts.

This quarter, Electronic Arts reported year-on-year revenue growth of 6.5%, and its $1.90 billion of revenue exceeded Wall Street’s estimates by 7.6%. Company management is currently guiding for a 3.6% year-on-year decline in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 1.7% over the next 12 months, similar to its three-year rate. This projection is underwhelming and implies its newer products and services will not catalyze better top-line performance yet. At least the company is tracking well in other measures of financial health.

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