Revised Outlook Driven by New Battlefield V Launch Date, Foreign Exchange Rates, and a Revised Mobile Forecast
REDWOOD CITY, Calif. – Electronic Arts Inc. (NASDAQ: EA) today announced that it is revising its net bookings outlook for fiscal year 2019, driven by an update to the Battlefield V launch date, the continuing impact of foreign exchange rates, and a revised mobile forecast.
“We believe we’ve got one of the best Battlefield games ever coming in Battlefield V,” said Laura Miele, Chief Studios Officer, Electronic Arts. “Tens of thousands of players have been hands on with the game so far, and we’ve been honored to receive best multiplayer awards at E3 and gamescom. We’ve had valuable feedback from our community, and we’re going to take the time to make some final adjustments and deliver a great experience for our fans.”
“We’re updating our fiscal year guidance to reflect the updated launch date for Battlefield V, the ongoing impact of foreign exchange rate changes, and our current outlook for our mobile business,” said COO and CFO Blake Jorgensen. “Our core businesses, including FIFA Ultimate Team, are strong, we think our players are going to love Battlefield V, and excitement is building for our new IP, Anthem.”
More details regarding the Battlefield V launch date change are provided by DICE General Manager Oskar Gabrielson in the blog posting at www.ea.com/news.
Business Outlook as of August 30, 2018
Moving the launch of Battlefield V out by four weeks will enable EA to deliver the best possible experience for gamers but will push some net bookings out of fiscal year 2019 and into fiscal year 2020. In addition, EA has revised its expectations for its mobile business. Finally, as discussed on EA’s July 26, 2018 earnings call, foreign exchange rates have moved significantly since EA initially gave fiscal year 2019 guidance in May. EA’s management now considers it prudent to include this impact in EA’s revised guidance.
As a result, EA is updating fiscal year 2019 net bookings guidance from $5.55 billion to $5.20 billion. About $115 million of this change is driven by the movement in foreign exchange rates. However, the same movement in foreign exchange rates also drives operating expenses lower, and this, combined with our hedging program, significantly limits the impact of foreign exchange rates on net income.
While we expect to maintain investments in R&D and marketing, there will be operational savings to operating expenses. EA estimates this to be approximately $50 million, excluding the impact of foreign exchange rates discussed above and stock-based compensation.
Core businesses, including our EA SPORTS games, Ultimate Team, and our deep catalog of games, are expected to continue their strong operational performances.
EA is reaffirming its second quarter operating guidance provided on July 26, 2018.
EA is currently evaluating the impact that these developments will have on EA’s fiscal year GAAP guidance and quarterly phasing of net bookings, and will provide that information on EA’s next earnings call. Actual results may be materially different and can be affected by many factors detailed in this release and in EA’s annual and quarterly SEC filings.
EA will announce its results for the second fiscal quarter ending September 30, 2018 on October 30, 2018 and will host a conference call at 2:00 pm PT (5:00 pm ET) to discuss the results.
Related: gamescom 2018: BATTLEFIELD V Open Beta Begins Sept. 4 for Early Access, Sept. 6 for All
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