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LONG TERM
VALUE
CREATION
BLAKE JORGENSEN, CFO
SAFE HARBOR STATEMENT
This presentation contains forward-looking statements that are subject to change. Statements including words such as
“anticipate,” "believe,” “estimate” or “expect” and statements in the future tense are forward-looking statements. These forward-
looking statements are preliminary estimates and expectations based on current information and are subject to business and
economic risks and uncertainties that could cause actual events or actual future results to differ materially from the expectations
set forth in the forward-looking statements.
Some of the factors which could cause the Company’s results to differ materially from its expectations include the following:
sales of the Company’s titles; the Company’s ability to manage expenses; the competition in the interactive entertainment
industry; the effectiveness of the Company’s sales and marketing programs; timely development and release of the Company’s
products; the Company’s ability to realize the anticipated benefits of acquisitions; the consumer demand for, and the availability
of an adequate supply of console hardware units; the Company’s ability to predict consumer preferences among competing
platforms; the Company’s ability to service and support digital product offerings, including managing online security; general
economic conditions; and other factors described in the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended
December 31, 2015.
These forward-looking statements are valid only as of May 17, 2016. Electronic Arts assumes no obligation to update these
forward-looking statements or information.
3
FY12
Packaged
Mobile
Extra Content
Full Game
Downloads
Subscriptions
BUSINESS MODEL
KEY BUSINESS METRICS
% DIGITAL 29.3%
GROSS MARGIN 63.1%
OPEX $2,245
OPERATING MARGIN 9.5%
EARNINGS $284
FREE CASH FLOW $105
4On a non-GAAP basis. See the Appendix for a presentation of the GAAP metrics and a reconciliation.
($ IN MILLIONS)
FY12 FY16
Packaged
Mobile
Extra Content
Full Game
Downloads
Subscriptions
BUSINESS MODEL
KEY BUSINESS METRICS
% DIGITAL 55.4%
GROSS MARGIN 71.4%
OPEX $1,961
OPERATING MARGIN 28.5%
EARNINGS $1,018
FREE CASH FLOW $1,130
5On a non-GAAP basis. See the Appendix for a presentation of the GAAP metrics and a reconciliation.
($ IN MILLIONS)
FY12 FY16 FY2020-22E
BUSINESS MODEL
6
Packaged
Mobile
Extra Content
Full Game
Downloads
Subscriptions
On a non-GAAP basis.
FUTURE GROWTH
PLATFORM
INDEPENDENCE
GENRE GEOGRAPHY DIGITAL PLAYER
NETWORK
7
PLATFORM
INDEPENDENCE
LIMIT THE IMPACT OF
PLATFORM CHANGES
• Continue to diversify the product mix
towards live services to reduce or limit the
impact of technology changes
• Minimize the cost of transition to any new
platform with Frostbite
• Invest to stay ahead of the technology curve
8
DIVERSIFIED REVENUE
-
1,000
2,000
3,000
4,000
5,000
6,000
FY13 FY14 FY15 FY16 FY17E
REVENUE OVER TIME ($ IN MILLIONS)
$3,793
$4,021
$4,319
$4,566
9
$4,900
New Releases
Catalog
Mobile
Live Services
Annual
Sports and
Live Services
On a non-GAAP basis. See the Appendix for a presentation of the GAAP metrics and a reconciliation.
Note: Market data is based on a calendar year aligned with EA fiscal years for illustrative purposes (e.g., CY2014 = FY2015)
$0B
$5B
$10B
$15B
$20B
FY
96
FY
97
FY
98
FY
99
FY
00
FY
01
FY
02
FY
03
FY
04
FY
05
FY
06
FY
07
FY
08
FY
09
FY
10
FY
11
FY
12
FY
13
FY
14
FY
15
FY
16
HISTORICAL
CONSOLE CYCLES
10
Gen 1
95-'00 Cycle
Co
ns
ole
Ga
min
g M
ark
et
Siz
e
Gen 2
PS2/Xbox/NGC
Gen 3
PS3/X360/Wii
Gen 4
PS4/Xbox One/
Wii U
$27B
$51B
$105B
Source: NPD, GfK, Famitsu and EA internal estimates
$1.7B
$2.8B
$2.1B
$0.4B
$0.9B$0.1B
$0.4B
$0.1B
$0.5B
FY02 FY07 FY15
$0B
$1B
$2B
$3B
$4B
$5B
$6B
BUSINESS MIX DURING
CONSOLE TRANSITIONS
11
EA
Dig
ita
l a
nd
Pa
ck
ag
ed
Go
od
s R
eve
nu
e
$1.7B
$3.0B
$4.3B
48%
Physical Revenue Digital Extra Content Subs/Ads/OtherFull Game Downloads Mobile
52%
On a non-GAAP basis. See the Appendix for a presentation of the GAAP metrics and a reconciliation.
22%31% 23%
FY02 FY07 FY15
$0B
$1B
$2B
$3B
$4B
$5B
$6B
MANAGING THE COST
OF TRANSITION
EA
Re
ve
nu
e a
nd
R&
D E
xp
en
se
s
12
R&D Expenses as
% of Net Revenue
$1.7B
$3.0B
$4.3B
EA Net Revenue R&D Expenses %
GENRE GROWTH
13
PC/Console
Software Market
$13.5B
Action Shooter Sports
Casual
& OtherRPG
Strategy
& Sim Fighting
Racing
1. Time periods: CY15 for market sizes, EA share calculated over last four years.”
2. Revenue models: packaged goods and full game downloads 3. Geo: US + Europe (W. EU and E. EU) Source: NPD, GfK, GSD, and EA internal estimates.
GENRE GROWTH
EA
Segment Share10%
14
PC/Console
Software Market
$13.5B
Action Shooter Sports
Casual
& OtherRPG
Strategy
& Sim Fighting
Racing
33% 22% 3%
1. Time periods: CY15 for market sizes, EA share calculated over last four years.”
2. Revenue models: packaged goods and full game downloads 3. Geo: US + Europe (W. EU and E. EU) Source: NPD, GfK, GSD, and EA internal estimates.
2%1% 67%18%
EA
Segment Share10%67%18% 33% 22% 3% 2%
GENRE GROWTH
15
PC/Console
Software Market
$13.5B
Action Shooter Sports
Casual
& OtherRPG
Strategy
& Sim Fighting
Racing
$6.2B Opportunity
ACTION SHOOTER
• Motive
• Star Wars
• BioWare
• Battlefield
• Battlefront
• Titanfall
1. Time periods: CY15 for market sizes, EA share calculated over last four years.”
2. Revenue models: packaged goods and full game downloads 3. Geo: US + Europe (W. EU and E. EU) Source: NPD, GfK, GSD, and EA internal estimates.
GEOGRAPHIC GROWTH
THE LANDSCAPE
Total Market
Revenue
$44.1B
EA
Market
Revenue
12%8%
2%
Asia (excl. ME) LATAM
Eastern Europe
Middle
East
7%
Increased
Broadband
Penetration
Platform Mix
Evolving
China Japan S. KoreaOther
Asia
EA Consumer Revenue Data Source:
1. Mobile: AppAnnie
2. Console: EA net revenue to consumer revenue conversion from local teams
3. PC F2P: EA China & EA S. Korea
Market Size Data Source: NPD, GfK, Famitsu,
AppAnnie, and EA internal estimate 16
DIGITAL GROWTH
FULL-GAME
DOWNLOADS
EXTRA
CONTENT
SUBSCRIPTIONS MOBILE
17
DIGITAL GROWTH DRIVES
GM AND REVENUE
18On a non-GAAP basis. See the Appendix for a presentation of the GAAP metrics and a reconciliation.
FY12 FY16 FY2020-22E
Packaged
Mobile
Extra Content
Full Game
Downloads
Subscriptions
63.1%
71.4%
Gross
MarginMid
70s%
DOWNLOADS DRIVE MARGINS
0% 25% 50% 75% 100%
FY16
FY16
FY15
FY12
SIGNIFICANT GROWTH POTENTIAL
DISKDIGITAL
DOWNLOAD
Low to
mid-60s%
19
Low to
mid-80s%
Gross
Margin
On a non-GAAP basis.
199
7
199
8
199
9
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
201
0
201
1
201
2
201
3
201
4
201
5
201
6
EXTRA CONTENT ACCELERATES
TOP LINE GROWTH
FY NET REVENUE, NON-GAAP, $MILLIONS
FIFA FIFA + FIFA Ultimate Team
FY16 corrected for approx. $160M FX headwind
199
7
199
8
199
9
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
201
0
201
1
201
2
201
3
201
4
201
5
201
6
EXTRA CONTENT ACCELERATES
TOP LINE GROWTH
FY NET REVENUE, NON-GAAP, $MILLIONS
FIFA FIFA + FIFA Ultimate Team
Addition of
FIFA Ultimate
Team
FY16 corrected for approx. $160M FX headwind
0% 50% 100% 150% 200% 250% 300% 350% 400%
Subscribers
Non-Subscribers
TIM
E
PLAY FOR LONGER
SUBSCRIPTIONS GROWTH
0% 50% 100% 150% 200% 250% 300% 350% 400%
Subscribers
Non-Subscribers
GA
ME
S
PLAY MORE GAMES
0% 50% 100% 150% 200% 250% 300% 350% 400%
Subscribers
Non-Subscribers
MO
NE
Y
INVEST MORE
22Source: EA, EA estimates
SUBSCRIPTIONS ARE A KEY DRIVER OF PROFITABILITY
Title 1
Title 2
Title 3
Title 4
Title 5
Title 6
Title 7
Title 8
Title 9
Title 10
Other
Q4 FY16
MOBILE GROWTH
FY16Net Revenue
by Title
DIVERSE…
Q3 FY12
LONG-LIVED…
FY17EFY12A
AND GROWING PROFITABLY.
Mobile
Revenue
19% CAGR
4 years and still growing
23On a non-GAAP basis.
EA PLAYER NETWORK
EA’s OPPORTUNITY TO DRIVE LONG TERM GROWTH
• A connective tissue for the global gaming
population
• Persistent digital identity across devices
• Highly-relevant, socially connected
• Personalized experiences for players
around the world
24
GROWTH
25
Organic Growth
Geographic
FY2020-22E
New Genres
Competitive
Gaming
Subscriptions Player
Network
FY16
INVESTING TO
DRIVE GROWTH
SALES AND
MARKETING
G&APRODUCT
DEVELOPMENT
26
FY12 FY16 FY2020-22E
BUSINESS OPPORTUNITY
FUTURE
OPPORTUNITY
% DIGITAL
GROSS MARGIN
OPEX
OPERATING MARGIN
EARNINGS
FREE CASH FLOW
27
Packaged
Mobile
Extra Content
Full Game
Downloads
Subscriptions
On a non-GAAP basis.
FY12 FY16 FY2020-22E
STRONG AND GROWING CASH GENERATION
Returned to shareholders Retained
$105
$1,130
FREE CASH FLOW
USES OF CASH
28
• Return to
shareholders
• Fund growth
CONCLUSION
STRONG GROWTH:
REVENUE, EARNINGS AND
CASH GENERATION
• Engagement-driven strategy
• Leveraging digital to drive
growth and profitability
• Large untapped growth
opportunities
• Potential to leverage
player network
29
APPENDIX
NON-GAAP FINANCIAL MEASURES
Electronic Arts uses certain non-GAAP measures of financial performance. The presentation of these non-GAAP financial measures is not intended to beconsidered in isolation from, as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and may bedifferent from non-GAAP financial measures used by other companies. The non-GAAP financial measures used by Electronic Arts include: non-GAAP netrevenue, non-GAAP gross profit, non-GAAP operating income (loss), non-GAAP net income (loss) and non-GAAP diluted earnings (loss) per share andnon-GAAP diluted shares. These non-GAAP financial measures are adjusted for the items referenced below, as applicable in a given reporting period,from the Company’s financial statements. The adjustments to the non-GAAP financial measures exclude the following items (other than shares from theConvertible Bond Hedge, which are included):
• Acquisition-related expenses
• Amortization of debt discount and loss on conversion of notes
• Certain non-recurring litigation expenses
• Change in deferred net revenue (online-enabled games)
• College football settlement expenses
• Income tax adjustments
• Loss (gain) on strategic investments
• Loss on licensed intellectual property commitment (COGS)
• Restructuring
• Shares from convertible bond hedge
• Stock-based compensation
The Company uses a fixed, long-term projected tax rate internally to evaluate its operating performance, to forecast, plan and analyze future periods, andto assess the performance of its management team. Accordingly, the Company applies the same tax rate to its non-GAAP financial results. During fiscalyear 2016, the Company applied a tax rate of 22 percent to its non-GAAP financial results. For fiscal years 2014 and 2015, a 25 percent tax rate wasapplied, and during fiscal year 2013 and 2012, the Company applied a 28 percent tax rate. Based on a re-evaluation of the Company’s fixed, long-termprojected tax rate, beginning in fiscal year 2017, the Company will apply a tax rate of 21 percent to its non-GAAP financial results.
Electronic Arts believes that these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, providemeaningful supplemental information regarding the Company’s performance by adjusting for certain items that may not be indicative of the Company’score business, operating results or future outlook.
31
32
FY17 GUIDANCE RECONCILIATION
The following table provides a reconciliation of the non-GAAP financial measures regarding Electronic Arts’ FY17 guidance to the nearest comparable GAAPfinancial measures. These are preliminary estimates and expectations based on current information as of May 10, 2016 and are subject to business and economicrisks and uncertainties that could cause actual events or actual future results to differ materially from the expectations set forth herein. The reconciliationprovided below reflects rounding and other approximations.
These forward-looking statements are valid as of May 10, 2016 only. Electronic Arts assumes no obligation to update these forward-looking statements.
In millions, except per share data GAAP Guidance Acquisition-
related expenses
Amortization of
Debt Discount
and Loss on
Conversion of
Notes
Change in
Deferred Net
Revenue (online-
enabled games)
Shares from
Convertible
Bond Hedge
Stock-Based
Compensation
Tax
Adjustments
Non-GAAP
Guidance
Approximate Digital Net Revenue $ 2,800 100 $ 2,900
Approximate Packaged Goods &
Other Net Revenue $ 1,950 50 $ 2,000
Approximate Net Revenue $ 4,750 - - 150 - - - $ 4,900
Approximate Gross Margin % 71.0% 0.7% - 0.8% - - - 72.5%
Approximate Operating Expense $ 2,306 (6) - - - (200) - $ 2,100
Approximate Tax Expense $ 215 - - - - - 82 $ 297
Net Income $ 809 38 2 150 - 200 (82) $ 1,117
Earnings Per Share $ 2.53 $ 3.50
Number of shares used in computation
Diluted 320 - - - (1) - - 319
33
HISTORICAL GAAP FINANCIALS
($ in millions) FY2012 FY2013 FY2014 FY2015 FY2016
Net Revenue $4,143 $3,797 $3,575 $4,515 $4,396
% Digital 28% 38% 51% 49% 55%
Gross Margin % 61.4% 63.4% 62.3% 68.3% 69.2%
Operating Expenses $2,510 $2,288 $2,195 $2,138 $2,144
Operating Margin % 0.8% 3.2% 0.9% 21.0% 20.4%
Net Income $76 $98 $8 $875 $1,156
34
HISTORICAL GAAP TO NON-GAAP
REVENUE RECONCILIATION
($ in millions) FY2012 FY2013 FY2014 FY2015 FY2016
PG / Other $2,984 $2,357 $1,742 $2,316 $1,987
Digital 1,159 1,440 1,833 2,199 2,409
GAAP Net Revenue $4,143 $3,797 $3,575 $4,515 $4,396
Change in Deferred Net Revenue (online-enabled games):
PG / Other ($25) ($227) $486 ($227) $48
Digital 68 223 (40) 31 122
Total Change in Deferred Net
Revenue (online-enabled games):$43 ($4) $446 ($196) $170
PG / Other $2,959 $2,130 $2,228 $2,089 $2,035
Digital 1,227 1,663 1,793 2,230 2,531
Non-GAAP Net Revenue $4,186 $3,793 $4,021 $4,319 $4,566
35
HISTORICAL GAAP TO NON-GAAP
NET INCOME RECONCILIATION
($ in millions) FY2012 FY2013 FY2014 FY2015 FY2016
GAAP Net Income $76 $98 $8 $875 $1,156
.
Change in Deferred Net Revenue
(online-enabled games)43 (4) 446 (196) 170
Acquisition-Related Expenses 106 59 41 63 54
Stock-Based Compensation 170 164 150 144 178
Loss on Licensed IP Commitment - - - 122 -
College Football Settlement Expenses - - 48 (5) -
Restructuring & Other 16 27 (1) - -
Certain Non-Recurring Litigation Expenses 27 - - - -
Loss (Gain) on Strategic Investments - (39) - - -
Amortization of Debt Discount 14 20 21 22 27
Income Tax Adjustments (168) (61) (179) (219) (567)
Non-GAAP Net Income $284 $264 $534 $806 $1,018