It has been about a month since the last earnings report for Electronic Arts (EA Quick QuoteEA - Free Report) . Shares have added about 9.4% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Electronic Arts due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Electronic Arts Q2 Earnings and Revenues Rise Year Over Year

Electronic Arts reported second-quarter fiscal 2025 earnings of $2.15 per share, which jumped 47.3% year over year. Revenues increased 5.8% year over year to $2.02 billion due to recovery in Live services and full game revenues. 

The Zacks Consensus Estimate for earnings was pegged at $2.03 per share. The consensus mark for revenues was pinned at $2.03 billion.

Net bookings for the fiscal second quarter were $2.07 billion, up 14.2% year over year with the strong reception for EA SPORTS College Football 25. Net bookings in the fiscal second quarter saw minimal impact from FX.

Full-game net bookings were $832 million, up 20% year over year, highlighted by the successful expansion of American Football ecosystem. Live services net bookings were $1.25 billion, up 10% year over year as American Football Ultimate Team modes delivered engaging entertainment to players across both College Football and Madden NFL.

Quarter Details

EA’s full-game revenues (35.4% of total revenues) increased 15.3% year over year to $716 million. Full-game download revenues increased 37% year over year to $475 million. Revenues from packaged goods plunged 12% year over year to $241 million.

Live services and other revenues (64.6% of total revenues) increased 1.2% year over year to $1.3 billion. 

Based on platforms, revenues from consoles increased 16% year over year to $1.37 billion in the reported quarter. Revenues from PC & Other declined 14% year over year to $364 million.  Revenues from the mobile platform decreased 5% year over year to $287 million.

Operating Details

EA’s GAAP gross profit increased 7.6% from the year-ago quarter’s levels to $156 billion. Gross margin expanded 130 basis points (bps) on a year-over-year basis to 77.5%.

Operating expenses increased 9.6% year over year to $1.18 billion. As a percentage of revenues, operating expenses expanded 200 bps on a year-over-year basis at 58.5%.

Operating income on a GAAP basis increased 1.9% year over year to $384 million. The operating margin contracted 70 bps year over year to 19% in the reported quarter.

Balance Sheet and Cash Flow

As of Oct 30, 2024, EA had $2.5 billion in cash and short-term investments compared with $2.76 billion as of June 30, 2024.

Net cash provided by operating activities was $234 million for the quarter and $2.198 billion for the trailing 12 months.

EA repurchased 2.6 million shares for $375 million during the quarter under the stock repurchase program, bringing the total for the trailing 12 months to 10.2 million shares for $1.4 billion.

The company has declared a quarterly cash dividend of 19 cents per share of the company’s common stock. The dividend is payable on Dec. 18, 2024, to stockholders of record as of the close of business on Nov. 27, 2024.

Guidance

For third-quarter fiscal 2025, EA expects GAAP revenues between $1.875 billion and $2.025 billion and earnings per share in the range of 85 cents to $1.02. Net bookings are expected between $2.4 billion and $2.55 billion.

For fiscal 2025, EA expects revenues in the range of $7.4-$7.7 billion and earnings in the band of $3.34-$4 per share. 

The company expects net bookings for fiscal 2025 between $7.5 billion and $7.8 billion.

Operating cash flow is estimated in the band of $2.075-$2.275 billion.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month.

VGM Scores

At this time, Electronic Arts has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Electronic Arts has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Electronic Arts belongs to the Zacks Gaming industry. Another stock from the same industry, Boyd Gaming (BYD Quick QuoteBYD - Free Report) , has gained 3.9% over the past month. More than a month has passed since the company reported results for the quarter ended September 2024.

Boyd reported revenues of $961.25 million in the last reported quarter, representing a year-over-year change of +6.4%. EPS of $1.52 for the same period compares with $1.36 a year ago.

Boyd is expected to post earnings of $1.77 per share for the current quarter, representing a year-over-year change of +6.6%. Over the last 30 days, the Zacks Consensus Estimate has changed +1.4%.

Boyd has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.