The operator, Bhavish, introduces the Electronic Arts' Fourth Quarter and Fiscal Year End 2024 Earnings Conference Call, welcoming everyone and introducing the speakers, Andrew Uerkwitz, Vice President of Investor Relations, CEO Andrew Wilson, and CFO Stuart Canfield. The SEC filings, earnings release, and detailed earnings slides are available on the company's IR website, and a schedule of upcoming earnings calls is posted. The presentation and comments may include forward-looking statements and financial metrics will be presented on a GAAP basis, with the exception of free cash flow and non-GAAP operating margin. Andrew Wilson then begins his remarks.

In FY 2024, EA entertained and connected millions of people worldwide with innovative content and experiences. They have been navigating and leading through changes in the entertainment landscape, focusing on top franchises and building strategic pillars around online communities, blockbuster stories, and community engagement. They are committed to delivering bigger, bolder, and more connected experiences for players and fans, and have realigned investments and organization to support their growth opportunities. EA believes that by rallying behind a shared goal, they can deliver more creativity, connection, and cutting-edge experiences for players and fans, as they have done in the past with some of the world's largest franchises.

EA has recently launched a multi-platform experience called EA SPORTS FC, which has been a huge success and demonstrates their leadership in the entertainment industry. They will share more details about their development pipeline and new revenue streams at their Investor Day in September. EA Sports has a strong team that delivers innovative and authentic gameplay, resulting in high engagement and revenue growth. In FY 2024, their global football franchise saw a high teens increase in net bookings, despite the absence of the World Cup. The franchise's success goes beyond gameplay, with billions of matches played and a billion hours of content watched by the global football community. This engagement leads to higher retention and in-game spending.

The launch of EA SPORTS FC focused on delivering innovation in gameplay and expanding the game's reach. The company's strategy going forward includes building a platform to deepen connection with players, integrating partners into matchday experiences, and unlocking new sponsorship and advertising opportunities. Madden NFL also saw success with increased engagement and record sales, thanks to innovation in gameplay and live service events. The excitement is expected to continue with the upcoming release of Madden NFL 25.

This summer, EA SPORTS is launching EA SPORTS College Football 25, featuring all 134 Football Bowl Subdivision schools and over 11,000 college athletes. This is part of a larger plan to expand the American football experience and engage with the community. In addition, the popular game Apex Legends has seen success, with $3.4 billion in lifetime net bookings. EA plans to continue investing in the game and expanding its appeal to new and casual players through improved onboarding and simplified modes of play. They also plan to build upon the game's characters and storytelling to attract a wider audience.

The Sims franchise is still going strong after 25 years, with over 85 million players and 500 million downloads of The Sims Online and The Sims Mobile. The franchise has the potential to become a major creator platform in entertainment. The upcoming year will see over 15 content updates for The Sims 4 and new experiences in The Sims universe. The Battlefield franchise is also evolving, with a larger team working on a connected multiplayer and single-player experience. EA is also focusing on mobile games, with a focus on bringing together mobile and HD franchise leadership for EA SPORTS FC, Madden NFL, and The Sims.

Stuart Canfield, Chief Financial Officer, discusses EA's financial performance in fiscal year 2024. The company saw strong earnings growth and record cash flow, with their EA SPORTS brand and sports franchises driving net bookings. EA also launched four new non-annual sports titles, expanding their fan base. Live services net bookings were down slightly, mainly due to the sunset of Apex Mobile.

In the fourth quarter, EA saw a decline in net bookings due to slate timing, but strong performance in live services, particularly in their global football franchise. Their GAAP net revenue and earnings per share exceeded expectations, with record operating cash flow and free cash flow. They returned $1.51 billion to shareholders through buybacks and dividends. For the full fiscal year, they saw overall growth in net revenue, with a significant increase in GAAP earnings per share. However, they did experience declines in Apex Legends and incurred restructuring charges.

In the fourth quarter of fiscal year 2024, Apex Legends saw high levels of engagement and monetization, while other games faced challenges due to record comparables from the previous year. Despite this, EA delivered strong net revenue and operating cash flow. Looking ahead to fiscal year 2025, EA expects to continue driving growth and profitability through new releases, core live services, and strategic growth initiatives. However, the first quarter of fiscal year 2025 may be impacted by difficult comparables and release timing.

The company expects a decrease in net bookings and revenue for Q1 of FY 2025 due to fewer title launches and portfolio optimization decisions. However, they anticipate mid-single-digit growth in their core live services business and a low single-digit increase in their mobile business. For the full fiscal year, they expect net bookings of $7.3 billion to $7.7 billion and net revenue of $7.1 billion to $7.5 billion. They also expect to maintain a strong cash flow and introduce non-GAAP operating margin guidance through FY 2027, reflecting their confidence in accelerating growth and expanding margins.

The company's strategy and future pipeline will provide transparency for shareholders and is expected to result in increased operating margins and accelerated growth. The company plans to return capital to shareholders through a stock repurchase program and is confident in its ability to create value through its creative talent, production strength, and broad portfolio of IP. The company also plans to leverage AI to further enhance its competitive advantages and has a strong track record of leading through industry transformations.

The speaker explains the reasoning behind the change in disclosure of non-GAAP operating margin and how it will benefit investors in understanding the company's business and future plans. The new non-GAAP guidance allows for a clearer picture of the company's performance and shows an expansion in FY 2025 due to licensing changes.

The speaker discusses the company's revenue mix and focus on cost as they look at the 2025 guide and OpEx framework. They also mention the expansion in 2026 and 2027 driven by their pipeline and continued investment in the future. The speaker also mentions the increased stock repurchase program as a signal of where they see the business moving in the later years. In response to a question about the company's expectations for next year, the speaker states that there have been no material shifts from the framework outlined in January, and highlights the challenging headwinds from last year's title comps and slate.

The company is expecting growth in their American football business due to the addition of college football. They anticipate mid-single-digit growth in their core live service business and continued growth in their FC franchise through the next year. They also plan to invest in Apex and expect advancements and innovations in the next couple of seasons. The company has a low-single digit bookings growth for the year, offset by growth in their core live service business. They have also announced a stock repurchase program, aligning it with their extended guidance and increasing the authorization to $5 billion.

The speaker is responding to a question about the breakdown of their live services business, which encompasses multiple categories such as sports, action shooter, and casual games. They decline to provide specific percentages, but mention that their largest components are their online communities, including games like FC, Sims, and Apex. They also mention the addition of college football and Madden to their portfolio. They expect low single digit growth in their mobile business next year.

The speaker discusses the company's service business, which currently makes up 73% of their revenue and provides flexibility and agility for future growth. They highlight the success of their live services, such as the rebranding of FC and record-breaking revenue from Madden and EA SPORTS. They also mention the growth of The Sims and Apex, as well as the potential for their upcoming Battlefield live service. The company aims to expand their live services across platforms, modalities, business models, and geographies to create a broader football fan platform.

The speaker discusses their strategy of creating engaging content for online communities and how it differentiates them in the markets of videogames and entertainment. They also mention the return of a limited-time mode in their game Apex, which was previously not planned due to player behavior, but has now been reconsidered based on player feedback and community engagement.

EA's CEO Andrew Wilson discusses the steps the company is taking to expand its Apex game and attract new global communities. He also mentions the Respawn team's role in the live service business. When asked about the Mobile segment, Wilson explains that they expect low-to-mid-single-digit growth in the next 12 months and that they have been focusing on driving profitability in this area. They have also set long-term growth expectations for the Mobile segment and are prepared for potential changes in the competitive landscape in the coming years.

In the mobile market, there is a high risk and significant cost involved in acquiring users and launching a new game. Development cycles can be lengthy and it may take a long time to see success. However, the company believes their mobile business is in a good position due to its profitability. They plan to leverage their online communities and invest in a few mobile native titles with potential. The company expects growth and margin expansion through 2026 and 2027, driven by team expansion, player acquisition, live services, new IP, and cost structure.

The speaker, Andrew Wilson, discusses the company's use of AI in game development and the potential for further efficiency gains. He mentions a specific example of creating stadiums in six weeks instead of six months and the increase in run cycles from 36 to 1,200 in a new game. He also acknowledges that they are still in the early stages of utilizing generative AI and artificial general intelligence.

The company is focused on using generative AI to create more individualized and immersive gaming experiences. They believe that this technology will make their development processes more efficient and allow them to expand their games and create bigger worlds with more interesting storylines. They plan to offer these tools to the community in the future to enhance the overall interactive entertainment experience. They also have the advantage of 40 years of data to inform their decisions.

The speaker discusses the potential for EA to accelerate their efficiency, expansion, and transformation timelines due to their 40 years of owned data. They also mention the desire of their developers to quickly reach their goal of building bigger and more innovative games to entertain a global audience. The final question from a Goldman Sachs analyst asks about the market opportunity for dynamic ad insertion in AAA games and EA's potential for IT adaptation into the broader media landscape.

The company is focused on listening to their players and providing them with opportunities to play, create, watch, and connect with their favorite IP. They expect this to lead to more content creation and social interaction within the games, as well as the potential for movies and TV shows based on their IP. This trend of gaming IP expanding into other forms of media is seen as a positive for the company.

The speaker discusses the unique ability of their company to provide a personalized experience for players and the potential for advertising to be a significant driver of growth. They mention being thoughtful about advertising and have teams working on implementing it in game experiences and building community. The speaker thanks their team and expresses excitement for the future, mentioning an upcoming Investor Day. The meeting concludes.

This summary was generated with AI and may contain some inaccuracies.