Electronic Arts Inc. (NASDAQ:EA) Q2 2024 Earnings Call Transcript

Stuart Canfield: Eric, I’ll chime in here a little bit. We signed this out, and we talked about the restructuring heading out of our Q4 last year. And we continue just to sort of optimize both how we build going forward in both our current footprint today. So ongoing exercise for us, we continue to look at that as we work through the future of work.

Eric Handler: Great. Thank you so much.

Katie Burke: Thank you. Operator, our next question, please.

Operator: Thank you. [Operator Instructions] We’ll take our next question from David Karnovsky with JPMorgan.

David Karnovsky: Hi. Thank you. Maybe just one for Stuart. On the operating cash flow outlook, you’re taking it up, I think, $250 million on a relatively unchanged operating income outlook. Can you just walk through the puts and takes of that? Are there one-off benefits or should we look at this as an underlying improvement in your conversion? Thanks.

Stuart Canfield: Yes. Thanks, Dave, for the question. In short, yes, we’ve got a couple of one-off benefits we talked out in the script before. So we have obviously naturally have improved operating foundations and flow of cash benefit from interest we’re seeing by virtue of the record cash flow we talked to in our narrative. And then secondly, yes, we’re obviously seeing some onetime tax benefits that are flowing through giving us that lift you’re talking about, which is $250 million. In addition, we’re also obviously changing free cash flow as well to the question before from Eric as we pulled down some of our capital future strategy on investment to increase that up as well. So yes, onetime benefits tied around tax and obviously, some operating benefits picked up by having greater cash at hand that’s driving greater interest for us.

David Karnovsky: Thank you.

Katie Burke: Thank you. Operator, our next question, please.

Operator: Thank you. We’ll take our next question from Brian Fitzgerald with Wells Fargo.

Brian Fitzgerald: Thanks, guys. When you think about FC seasonality of spend, has that dynamic shifted any when you look at annual cohorts. We just asked because FIFA engagement was surprisingly robust all the way up to FC launch and with these new FC play modalities, Pro, tactical mobile online, how do you see that impacting spend seasonality, maybe similar along with play styles, all these levers should just broaden out that engagement and spend as well, right?

Andrew Wilson: Yes. I mean that is our assumption. I mean, this is the biggest sport in the world, and it’s growing exponentially. It’s growing meaningfully in this country as well, but also globally, it continues to grow. And as we think about the football fan community kind of growing into being of gaming age, we see an opportunity to serve them across a bunch of different vectors. And so as we think about the value of FC as a platform, it really comes down to three things. One is how many people are in the network and playing, how much time are they playing in the context of that engagement and how deep are the connections they have with those that they play with? And as you look at our strategy as we roll that out across platforms, across modalities, across geographies and across business models, everything we are doing, we are looking to pull on those levers that bring more fans into the community and give them more opportunities to engage deeply with the experiences that we create and connect more meaningfully with the friends that they enjoy those experiences with and what that has meant is just an overall expansion of the opportunity, both in terms of how many people are in the community broadly and the overall seasonality of spend has been elongated throughout the year.