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目錄
美國
證券交易委員會
華盛頓特區20549
表格 10-Q
☑
根據1934年證券交易法第13或15(d)條款的季度報告。
截止至本季度結束 2024年9月30日
或
☐
根據1934年證券交易法第13或15(d)條款的過渡報告
在從某某至某某的過渡期間
委員會檔案號碼。 000-17948
藝電
（依憑章程所載的完整登記名稱）
特拉華州94-2838567
(依據所在地或其他管轄區)
的註冊地或組織地點)		(國稅局雇主識別號碼)
識別號碼)
209 紅木樹岸公園道
94065
紅木市加利福尼亞州
(總部辦公地址)（郵政編碼）
(650) 628-1500
(註冊人電話號碼，包括區號)
根據法案第12(b)條登記的證券：
每個班級的標題  交易符號註冊的每個交易所的名稱
普通股，每股面值0.01美元  藝電納斯達克全球精選市場
請在核選記號區域表明：（1）本登記申請人在過去12個月（或申請人需要提交此項申報的較短期間）內已提交證券交易所法案第13條或第15(d)條要求提交的所有報告，且（2）本申請人在過去90日內已遵守上述提交要求。是  ☑不☐
請在勾選符號上註明，是否在過去的12個月內（或更短的時間內，如果註冊人需提交此類文件），根據Regulation S-t第405條規定向本章第232.405條提交所需提交的每個交互式資料檔案。是  ☑不☐
請勾選指示登記者是否為大型快速提交人、快速提交人、非快速提交人、較小的報告公司或新興成長型公司。請參閱交易所法規120億2條，了解「大型快速提交人」、「快速提交人」、「較小的報告公司」和「新興成長型公司」的定義。
大型加速歸檔人
☑
加速歸檔人
☐
非加速歸檔人
☐
小型報告公司
☐
新興成長型企業
☐
☐
如果一家新興成長公司，則請打勾表示發行人已選擇不使用依據交易所第13(a)條提供的任何新的或修訂的財務會計準則的延長過渡期進行遵循。
行動。 ☐  
請打勾表示是否申報人是一家外殼公司（如交易所法規第120億2條所定義）。是☐否☑
截至2024年10月30日，有 262,272,821 股份屬人登記股票，每股面值$0.01，正發行中。
1

目錄
藝電
表格10-Q
於2024年9月30日結束的期間
目錄
 
  頁面
項目 1。
項目2。
第3項目。
項目 4。
項目 1。
第1項事項
項目2。
第3項目。
項目 4。
項目5。
第六項。
2

目錄
財務報表第一部分

项目1。基本報表合併財務報表 (未經審核)

藝電及其附屬公司
縮表合併資產負債表
(未經查核)
(以百萬為單位，除每股面值資料外)		2024年9月30日
2024年3月31日 (a)
資產
流動資產:
現金及現金等價物$2,197 $2,900 
短期投資366 362 
應收帳款淨額 1,012 565 
其他流動資產397 420 
全部流動資產3,972 4,247 
物業及設備，扣除折舊後淨值578 578 
商譽5,381 5,379 
收購相關無形資產，淨值346 400 
递延所得税资产，扣除递延所得税负债后净额2,431 2,380 
其他資產428 436 
總資產$13,136 $13,420 
負債及股東權益
流動負債：
應付帳款、應計負債及其他流動負債$1,312 $1,276 
遞延淨營業收入（在線遊戲）1,475 1,814 
流動負債合計2,787 3,090 
優先票據淨值1,883 1,882 
所得稅負債552 497 
其他負債506 438 
總負債5,728 5,907 
承擔與掛帳事項 (參閱 附註12)
股東權益：
0.010.01 每股面額。 1,000 授權股份為 263 和 266 個股的發行量和流通量分別為32,814股和23,915股。
3 3 
資本公積額額外增資— — 
保留收益7,520 7,582 
其他綜合損益（損失）累積額(115)(72)
股東權益總額7,408 7,513 
總負債及股東權益$13,136 $13,420 

查看隨附的未經查核的總合財務報表附註。
(a) 源自經過審計的合併基本報表。
3

目錄
藝電及其附屬公司
綜合營業損益匯縮陳述
(未經查核)三個月結束了
九月三十日，		六個月結束
九月三十日，
（單位：百萬美元，每股數據除外）2024202320242023
營業收入$2,025 $1,914 $3,685 $3,838 
營業成本 456 456 719 824 
毛利潤1,569 1,458 2,966 3,014 
營業費用：
研發費用648 602 1,277 1,198 
計算基本每股凈利潤所使用的加權平均股份272 280 477 509 
總務與行政197 173 377 336 
無形資產攤銷和減值17 24 34 49 
重組（詳見 附註7)
51 2 53 3 
營業費用總計1,185 1,081 2,218 2,095 
營收384 377 748 919 
利息及其他收入（費用），淨15 14 45 28 
扣除所得稅前收益399 391 793 947 
所得稅費用（收益）提存105 (8)219 146 
凈利潤$294 $399 $574 $801 
每股盈餘：
基礎$1.11 $1.47 $2.17 $2.94 
稀釋$1.11 $1.47 $2.15 $2.93 
計算中使用的股份數量:
基礎264 271 265 272 
稀釋266 272 267 273 

查看隨附的未經查核的總合財務報表附註。

4

目錄
藝電及其附屬公司
綜合損益簡明合併財務報表
(未經查核)三個月結束了
九月三十日，		六個月結束
九月三十日，
（以百萬為單位）2024202320242023
凈利潤$294 $399 $574 $801 
其他綜合損益（稅後淨額）：
可供出售证券净收益（损失）1 — 1 — 
衍生工具的净收益（损失）(72)56 (56)41 
外匯轉換調整16 (15)12 (8)
其他綜合損益(淨額)(稅後)(55)41 (43)33 
累計綜合收益$239 $440 $531 $834 

查看隨附的未經查核的總合財務報表附註。
5

目錄
藝電及其附屬公司
股東權益簡明合併財務報表
(未經查核)
 普通股
股本溢價資本額
資本		保留收益
累積盈餘		累計
其他
綜合
收入（損失）		總計
股東权益
股權
(以百萬為單位，除每股數據以千為單位)股份金額
截至2024年3月31日的賬戶餘額
266,415 $3 $— $7,582 $(72)$7,513 
累計綜合收益— — — 280 12 292 
股份報酬— — 143 — — 143 
發行普通股股票1,565 — (121)— — (121)
普通股回購和過度稅(2,847)— (22)(355)— (377)
現金股利宣告（$0.19 每股普通股)
— — — (50)— (50)
截至2024年6月30日的結餘265,133 $3 $— $7,457 $(60)$7,400 
累計綜合收益— — — 294 (55)239 
股份報酬— — 174 — — 174 
發行普通股股票602 — 24 — — 24 
普通股票回購和消費稅(2,587)— (198)(180)— (378)
現金股利宣告（$0.19 每股普通股)
— — — (51)— (51)
2024年9月30日的余额263,148 $3 $— $7,520 $(115)$7,408 
(未經查核)
 普通股
股本溢價資本額
資本		保留收益
累積盈餘		累計
其他
綜合
收入（損失）		總計
股東权益
股權
(單位：百萬美元，股份數據以千為單位)股份金額
截至2023年3月31日的結餘
272,914 $3 $— $7,357 $(67)$7,293 
累計綜合收益— — — 402 (8)394 
股份報酬— — 130 — — 130 
發行普通股股票1,408 — (105)— — (105)
普通股回購和消費稅(2,574)— (25)(301)— (326)
現金股利宣告（$0.19 每股普通股)
— — — (52)— (52)
2023年6月30日賬戶餘額271,748 $3 $— $7,406 $(75)$7,334 
累計綜合收益— — — 399 41 440 
股份報酬— — 155 — — 155 
發行普通股股票673 — 25 — — 25 
普通股票回購和消費稅(2,581)— (180)(148)— (328)
現金股利宣告（$0.19 每股普通股)
— — — (51)— (51)
2023年9月30日賬戶餘額269,840 $3 $— $7,606 $(34)$7,575 

查看隨附的未經查核的總合財務報表附註。
6

目錄
藝電及其附屬公司
簡明財務報表現金流量表
(未經查核)六個月結束
九月三十日，
（以百萬為單位）20242023
營業活動
凈利潤$574 $801 
調整淨利潤以達經營活動所提供之淨現金流量：
折舊、攤提、逐步減值及減損202 173 
股份報酬317 285 
資產及負債變動：
應收賬款，淨額(447)(367)
其他資產(20)74 
應付賬款、應計費用及其他負債117 (200)
递延所得税资产，扣除递延所得税负债后净额(50)108 
遞延淨營業收入（在線遊戲）(339)(403)
經營活動產生的淨現金流量354 471 
投資活動
資本支出(117)(96)
自到期及短期投資出售所得239 302 
購買短期投資(237)(313)
投資活動中使用的淨現金(115)(107)
融資活動
普通股發行所得款項42 40 
支付的現金股利(101)(103)
支付現金給稅務機關，用於扣減員工持有的股份(139)(120)
普通股回購(750)(650)
籌集資金的淨現金流量(948)(833)
匯率期貨對現金及現金等價物的影響6 (9)
現金及現金等價物的增加（減少）(703)(478)
期初現金及現金等價物2,900 2,424 
現金及現金等價物結餘$2,197 $1,946 
補充現金流量信息：
該期間支付的所得稅凈額現金$209 $56 
本期支付之利息現金28 28 

查看隨附的未經查核的總合財務報表附註。
7

目錄
藝電及其附屬公司
基本報表附註
(未經查核)

(1) 業務描述和報告基礎
電子藝術是數位互動娛樂領域的全球領導者。我們開發、營銷、發佈和提供可在遊戲機、PC、手機和平板電腦上體驗的遊戲、內容和服務。我們的核心是知識產權組合，我們從中創造創新的遊戲和體驗，以提供高質量的娛樂，並在我們擁有數百萬個獨特活躍帳戶的網絡中促進參與度。我們的產品組合包括我們完全擁有的品牌（例如 艾克斯傳奇、《戰地風雲》和《模擬市民》）或其他人授權（例如 EA 體育俱樂部和 EA 體育馬登 NFL 內的授權）。透過我們的即時服務，我們提供高品質的體驗，旨在為玩家提供價值，並擴展和增強遊戲玩法。除了銷售完整遊戲之外，這些即時服務還包括額外內容、訂閱服務和產生的其他收入。我們專注於打造遊戲和體驗，讓全球線上社群發展我們的主要特許經營；透過將互動故事講解連結至關鍵知識產權，以及透過擴展現場服務以及年度運動遊戲、我們的主機、PC 和行動型錄遊戲的成長來建立再次收入。
我們的財政年度是以52或53週為週期，截至最靠近3月31日的星期六結束。我們截至2025年3月31日結束的財政年度的業績報告包含52週，截至2025年3月29日。我們截至2024年3月31日結束的財政年度業績報告包含52週，截至2024年3月30日。我們截至2024年9月30日結束的三個月和六個月的業績報告包含13和26週，分別截至2024年9月28日。我們截至2023年9月30日結束的三個月和六個月的業績報告包含13和26週，截至2023年9月30日。為了簡化披露，所有財政期間都被稱為以日曆月結束。
這些簡明綜合基本報表未經稽核，並反映所有調整事項（僅包括正常週期性應計，除非另有說明），在管理層認為是必要的，才能公正呈現所呈報的中期結果。 製作這些簡明綜合基本報表需要管理層進行估計和假定，影響綜合基本報表和相關附註中所報金額。實際結果可能與這些估計有實質差異。當前中期運營結果不一定能反映出當前年度或任何其他時期的預期結果。
應該與截至2024年3月31日的財政年度提交給美國證券交易委員會（“SEC”）的Form 10-k年度報告中包含的綜合財務報表及附註一起閱讀。
最近發布的會計準則s
2023年11月，FASb發布了ASU 2023-07，旨在改善可報告的部門披露，以及增強有關顯著可報告的部門費用的披露。此指引將於我們的年度報告開始生效，即2024年12月31日結束的財政年度及其後的中期期間，并要求對所有已呈報的前期期間進行追溯應用。由於這些修訂不改變營運部門的識別方法，營運部門的匯總或定量門檻的應用以確定可報告的部門，我們不認為此指引對我們的財務狀況或經營業績產生實質影響。 板塊報告 （主題280）： 改善可報告部門披露此修訂擴大了關於可報告板塊的年度和中期披露要求，主要通過加強對重要板塊費用的披露。本次修訂自2025財年的年度報告及其後的中期報告生效，可提前適用，並將追溯應用於基本報表中呈現的所有以往期間。我們目前正在評估此ASU對我們的綜合基本報表和相關披露的影響。
2023年12月，FASB發布了ASU 2023-09「 所得稅 （主題740）： 改進所得稅披露修訂進一步增強所得稅披露，主要通過標準化和分離率調解類別以及按管轄區支付的所得稅。本ASU將於2026財政年度的我們年度報告生效，可提前適用，並應適用於前瞻性或追溯性。我們目前正在評估採納該ASU的時間和對我們基本報表及相關披露的影響。


8

目錄
(2) 公平價值計量
有各種估值技術用於估計公平價值，其中主要的方法是在測量日期，通過有秩序的市場參與者之間進行的交易而獲得的銷售資產或轉讓負債所支付的價格。在確定公平價值時，我們考慮進行交易的主要或最有利的市場，並考慮市場參與者在定價資產或負債時會使用的假設。我們對某些金融和非金融資產和負債進行公平價值的再發生和非再發生基礎測量。
公允價值分類
可用於衡量公平價值的三個層面包括：
•一級在活躍市場中報價的相同資產或負債。
•二級。 Level 1之外的可觀察輸入包括類似資產或負債報價價格，交易量不足或交易不頻繁的市場中的報價價格（不活躍市場），或者重要輸入完全可觀察或主要可從可觀察市場數據推導或經可觀察市場數據準確證實的模型估值在資產或負債的整個存續期內。
•等級 3對於資產或負債公平價值評估方法重要但無法觀察的輸入。
資產和負債的公允價值以重複的方式衡量
截至2024年9月30日和2024年3月31日，我們的資產和負債按公允價值重複衡量及記錄，數字如下（以百萬計）：
  使用報告日期的公允價值衡量  
 
截至
2024年9月30日
報價價格在
活躍市場
對於相同的事物
金融
金融衍生品		輸入數
其他
可觀察到的輸入數
重要輸入數		輸入數
難以觀察的
重要輸入數		資產負債表 
分類
 （1級）（2級）（3級）
資產
銀行和時間存款$61 $61 $— $— 現金等價物
貨幣市場基金535 535 — — 現金等價物
可供出售證券：
公司債券140 — 140 — 短期投資
美國國債91 91 — — 短期投資和現金等值物
美國機關債券4 — 4 — 短期投資
商業本票78 — 78 — 短期投資和現金等價物
外國政府證券5 — 5 — 短期投資
資產支持證券43 — 43 — 短期投資
存款證明19 — 19 — 短期投資
外匯衍生工具16 — 16 — 其他流动资产和其他资产
递延薪酬计划资产 (a)
35 35 — — 其他資產
公允價值的全部資產$1,027 $722 $305 $— 
負債
外匯衍生工具$73 $— $73 $— 應付賬款、應計、其他當前負債及其他負債
推遲薪酬計劃負債 (a)
36 36 — — 其他負債
公平價值的總負債$109 $36 $73 $— 
9

目錄
  報告日期使用的公允價值計量 
 
截至
2024年3月31日
報價價格在
活躍市場相同資產
金融工具		輸入數
其他
可觀察到的輸入數
重要輸入數		輸入數
難以觀察的
重要輸入數		資產負債表
分類
 （1級）（2級）（3級）
資產
銀行和定期存款$58 $58 $— $— 現金等價物
貨幣市場基金1,038 1,038 — — 現金等價物
可供出售證券：
公司債券130 — 130 — 短期投資
美國國債95 95 — — 短期投資
美國機關債券9 — 9 — 短期投資
商業本票74 — 74 — 短期投資和現金等價物
外國政府證券8 — 8 — 短期投資
資產支持證券41 — 41 — 短期投資
存款憑證 13 — 13 — 短期投資
外匯衍生工具29 — 29 — 其他流動資產和其他資產
透支薪酬計劃資產 (a)
30 30 — — 其他資產
公允價值的全部資產$1,525 $1,221 $304 $— 
負債
外匯衍生工具$20 $— $20 $— 應付賬款、應計負債及其他流動負債和其他負債
推遲薪酬計劃負債 (a)
31 31 — — 其他負債
公平價值的總負債$51 $31 $20 $— 

(a)這個延期薪酬計劃包括各種不同基金。請參閱 註15 在我們截至2024年3月31日財政年度的年度報告第10-k表格中，以獲取有關我們延期薪酬計劃的其他信息。

(3) 金融工具
現金及現金等價物
截至2024年9月30日和2024年3月31日，我們的現金及現金等價物分別為$2,197 百萬美元和2,900 百萬。現金等價物的價值是使用引用市場價格或其他便利市場資訊評估的。
10

目錄
短期投資
截至2024年9月30日和2024年3月31日，短期投資包括以下項目（以百萬計）：
 
截至2024年9月30日
截至2024年3月31日
 Cost or
攤銷後成本
成本		毛額未實現公正的
價值		Cost or
攤銷後成本
成本		未能體現的總額公正的
價值
 收益虧損收益虧損
公司債券$139 $1 $— $140 $130 $— $— $130 
美國國債84 — — 84 95 — — 95 
美國機關債券4 — — 4 9 — — 9 
商業本票71 — — 71 66 — — 66 
外國政府證券5 — — 5 8 — — 8 
資產支持證券43 — — 43 41 — — 41 
存款證明19 — — 19 13 — — 13 
短期投資$365 $1 $— $366 $362 $— $— $362 
下表總結了我們的短期投資的攤銷成本和公允價值，按照所述到期日分類，截至2024年9月30日和2024年3月31日（以百萬計）：
 
截至2024年9月30日
截至2024年3月31日
 攤銷後成本
成本		公正的
價值		攤銷後成本
成本		公正的
價值
短期投資
一年內到期$264 $264 $231 $231 
期限為1年至5年96 97 126 126 
五年後到期5 5 5 5 
短期投資$365 $366 $362 $362 

(4) 衍生金融工具
與我們的衍生工具和避險活動相關的資產或負債以其公允價值記錄在其他流動資產/其他資產或應付帳款、應計負債和其他流動負債/其他負債，分別列示在我們的簡明合並資產負債表上。正如下文所述，由於衍生工具使用情況不同以及是否指定並符合避險會計要求，導致的公允價值變動盈虧的會計處理也有所不同。
我們在各種外幣進行業務往來，並有大量以外幣計價的國際銷售和支出，使我們面臨外幣風險。我們購買外匯遠期合約，通常到期日為數個月或更短的時間，以減少現金流量的波動，主要是與某些外幣計價的預測營業收入和支出相關。我們的現金流量風險主要與歐元、英鎊、加幣、瑞典克朗、澳幣、日幣、人民幣、韓元和波蘭茲羅提幣的波動有關。此外，我們利用外匯遠期合約來減輕與以外幣計價的貨幣資產和負債（主要是公司間應收款和應付款）相關的外匯兌換風險。通常，未指定為避險工具的外匯遠期合約基本上會有約數月的合約期限，通常在月底附近交易。我們不使用外匯遠期合約進行投機交易。 18 我們的現金流量風險主要與歐元、英鎊、加幣、瑞典克朗、澳幣、日幣、人民幣、韓元和波蘭茲羅提幣的波動有關。此外，我們利用外匯遠期合約來減輕與以外幣計價的貨幣資產和負債（主要是公司間應收款和應付款）相關的外匯兌換風險。未指定為避險工具的外匯遠期合約通常具有約數月的合約期限，通常在月底附近交易。我們不使用外匯遠期合約進行投機交易。 。 在月底附近進行。我們不透過外匯遠期合約進行投機性交易。
11

目錄
現金流量避險活動
我們的某些遠期合約被指定並符合現金流量避險的資格。為了符合避險會計處理的要求，在避險關係的創建時必須正式記錄，並且在對沖交易中未來現金流變動方面必須具有高度有效性。與我們的避險活動相關的衍生資產或負債在我們的簡明合併資產負債表上分別按公允價值記錄在其他流動資產/其他資產，或應付帳款、應計費用和其他流動負債/其他負債。這些避險的公允價值變動所造成的利得或損失最初按照稅後淨額，作為拋諸股東權益的累積其他綜合收益（損失）的組成部分進行報告。這些避險的公允價值變動所造成的利得或損失隨後將按情況重新分類為淨收入或研發費用，於預測交易被識別在我們的簡明合併損益表時。如果基礎預測交易未發生，或者變得不大可能在定義的避險期內發生，則有關現金流量避險的利得或損失將從累積其他綜合收益（損失）重新分類為淨收入或研發費用，在我們的簡明合併損益表中。
具有現金流量對沖會計指定的貨幣衍生工具的總名義金額和公允值如下（以百萬為單位）：
截至2024年9月30日
截至2024年3月31日
名義金額公平價值名義金額公平價值
資產責任。資產責任。
買入遠期合約$305 $5 $— $413 $1 $4 
賣出遠期合約$1,929 $2 $59 $2,329 $24 $11 
2024年和2023年9月30日結束的三個月和六個月的營運概括合併表中現金流對沖會計的影響如下（以百萬為單位）：
截至9月30日的三個月截至9月30日止六個月,
2024202320242023
營業收入研發費用營業收入研發費用營業收入研發費用營業收入研發費用
我們簡明綜合損益表中呈現的總額，其中記錄了現金流量避險的影響。$2,025 $648 $1,914 $602 $3,685 $1,277 $3,838 $1,198 
作為現金流量避險指定的外匯遠期合同之增值（損失）。$(2)$(1)$11 $(2)$5 $(3)$41 $(7)
資產負債表避險活動
我們未指定為避險工具的外匯遠期合約被列為衍生金融工具，合約的公允價值按照其他流動資產或應付賬款、應計費用以及其他流動負債的形式在我們的簡明合併資產負債表上進行報告，以公允價值變動所導致的收益和虧損在我們的簡明合併損益表中報告為利息和其他收入（費用），淨額。這些外匯遠期合約的收益和虧損通常能抵銷基礎的外匯貨幣計價資產和負債的收益和虧損，這些收益和虧損也在我們的簡明合併損益表中報告為利息和其他收入（費用），淨額。
12

目錄
對於未指定作為避險工具的貨幣衍生工具，其總名義金額和公允價值按照以下方式予以記錄(以百萬計):
截至2024年9月30日
截至2024年3月31日
名義金額公平價值名義金額公平價值
資產責任。資產責任。
買方合約$670 $9 $— $452 $— $5 
賣出方合約$977 $— $14 $419 $4 $— 
本公司截至2024年9月30日和2023年9月30日三個月和六個月的簡明綜合損益表中，未指定為避險工具的外匯远期合约的效应如下（以百萬計）：
 三個月結束了
九月三十日，		六個月結束
九月三十日，
 2024202320242023
利息和其他收入（支出），淨
在我們簡明綜合損益表中呈現的總金額中，記錄資產負債表避險的效果$15 $14 $45 $28 
外匯远期合约未指定為避險工具的收益（損失）$(3)$13 $3 $16 

(5) 其他綜合收益（損失）累計
截至2024年9月30日和2023年同比起見（以百萬計）的其他綜合收益（損失）變動，扣稅後，詳情如下：
可供出售證券未實現淨收益（損失）衍生工具未實現淨收益（損失）外幣翻譯調整總計
截至2024年6月30日的結餘$— $26 $(86)$(60)
其他綜合收益（虧損）（未考慮重新分類前）1 (75)16 (58)
從累積其他綜合損益（損失）中重新分類的金額— 3 — 3 
其他綜合損益(淨額)(稅後)
1 (72)16 (55)
2024年9月30日的余额$1 $(46)$(70)$(115)
可供出售证券的未实现净收益（损失）衍生工具的未实现净收益（损失）外幣翻譯調整總計
2023年6月30日賬戶餘額$(1)$(2)$(72)$(75)
其他綜合收益（虧損）（未考慮重新分類前）— 65 (15)50 
從累積其他綜合損益（損失）中重新分類的金額— (9)— (9)
其他綜合損益(淨額)(稅後)
— 56 (15)41 
2023年9月30日賬戶餘額$(1)$54 $(87)$(34)
13

目錄
截至2024年9月30日止六個月的累積其他全面收益（損失），扣除稅後，情況如下（以百萬為單位）:
可供出售證券未實現淨收益（損失）衍生工具未實現淨收益（損失）外幣翻譯調整總計
截至2024年3月31日的餘額$— $10 $(82)$(72)
其他綜合收益（虧損）（未考慮重新分類前）1 (54)12 (41)
從累積其他綜合損益（損失）中重新分類的金額— (2)— (2)
其他綜合損益(淨額)(稅後)
1 (56)12 (43)
2024年9月30日的余额$1 $(46)$(70)$(115)
可供出售證券的未實現淨收益（損失）衍生工具的未實現淨收益（損失）外幣翻譯調整總計
截至2023年3月31日之餘額$(1)$13 $(79)$(67)
其他綜合收益（虧損）（未考慮重新分類前）— 75 (8)67 
從累積其他綜合損益（損失）中重新分類的金額— (34)— (34)
其他綜合損益(淨額)(稅後)
— 41 (8)33 
2023年9月30日賬戶餘額$(1)$54 $(87)$(34)
從截至2024年9月30日為止的三個月和六個月內從積累其他綜合收益（虧損）重新分類的金額對凈利潤的影響如下（以百萬計）:
 從積累其他綜合收益（損失）重新分類的金額
損益表分類
三個月結束了
2024年9月30日
為期六個月的結束
2024年9月30日
（轉換為現金流對沖的）外幣遠期合約上的（收益）損失
營業收入$2 $(5)
研發費用1 3 
重新分類後的總淨（收益）虧損，稅後淨額$3 $(2)
截至2023年9月30日止三個月和六個月，從累積其他綜合收益（虧損）重新分類的金額對凈利潤的影響如下（單位：百萬）：
 從累積其他綜合收益（虧損）重新分類的金額
營運報表分類
三個月結束了
2023年9月30日，均未發行和流通
截至六個月結束
2023年9月30日，均未發行和流通
（利益）外幣貨幣遠期合約指定之現金流量避險的（收益）損失）
營業收入$(11)$(41)
研發費用2 7 
重新分类的净(利润)损失总额，税后净额$(9)$(34)

14

目錄
(6) 商譽和併購相關無形資產，淨值
截至2024年9月30日止六個月的商譽攤銷金額變動情况如下（單位：百萬）：
截至
2024年3月31日
活動外幣貨幣轉換影響
截至
2024年9月30日
商譽$5,747 $— $2 $5,749 
累積損耗(368)— — (368)
總計$5,379 $— $2 $5,381 
與收購相關的無形資產如下（單位：百萬美元）：
 
截至2024年9月30日
截至2024年3月31日
 毛額
攜帶
金額		累計
攤提費用是由公司研發費用中所列示。 		Acquisition-
相關
無形資產淨值		毛額
攜帶
金額		累計
攤提費用是由公司研發費用中所列示。 		Acquisition-
相關
無形資產淨值
已開發和核心科技$1,025 $(852)$173 $1,025 $(821)$204 
商標名稱和商標502 (329)173 502 (306)196 
已註冊用戶基礎和其他無形資產56 (56)— 56 (56)— 
總計$1,583 $(1,237)$346 $1,583 $(1,183)$400 
截至2024年和2023年9月30日止三個月和六個月無形資產攤銷列於簡明合併營業費用清單中，金額如下（以百萬計）：
三個月結束了
九月三十日，		六個月結束
九月三十日，
2024202320242023
營業成本 $10 $15 $20 $31 
營業費用17 24 34 49 
總計$27 $39 $54 $80 
截至2024年和2023年9月30日止三個月及六個月期間，發生了 無 為收購相關無形資產記錄的減值費用。
併購相關無形資產通常以直線法分攤，分攤期限為其估計有用壽命或協議條款中較小者，目前範圍為 2 天從發票日期計算，被視為商業合理。 7 年。截至2024年9月30日及2024年3月31日，併購相關無形資產的加權平均剩餘有用壽命約為 3.6 年和 4.1 年。
截至2024年9月30日，預計將記錄於綜合營運報表中的有限壽命收購相關無形資產未來攤銷金額如下（以百萬計）：
財政年度截至3月31日， 
2025年（剩餘六個月）$53 
2026102 
202783 
202880 
202928 
總計$346 

15

目錄
(7) 重組活動
在2024財政年度，我們宣布了一項重組計劃（“2024重組計劃”），旨在支持我們的戰略優先事項和增長舉措，對齊我們的投資組合、投資和資源。該計劃反映了通過投資組合合理化驅使的行動，包括與許可方承諾相關的成本，以及房地產業和員工人數的減少。
根據這項計劃，我們估計將支付約$的費用125$百萬165百萬美元，主要包括：
•$50$百萬65與辦公空間削減相關的百萬美元。
•$40$百萬55與員工遣散和員工相關成本相關的數百萬
•$35$百萬45與授權方承諾相關的成本達到了百萬美元。

到2024年9月30日為止，我們預計這項計劃相關的行動將在2025年3月31日前基本完成。
自2024年重組計劃開始至2024年9月30日，我們已經承擔了總計$的淨支出。119百萬。
截至2024年9月30日，根據該計畫進行的重組活動如下（單位:百萬）：
許可方的承諾 (a)
勞動力 (a)
辦公空間減少 總計
對業務的負擔 $30 $29 $2 $61 
以現金結算的費用(17)(5)— (22)
損耗和其他費用
(13)— (2)(15)
截至2024年3月31日的責任 $— $24 $— $24 
營運的收入（支出）5 (2)55 58 
以現金結算的費用— (22)— (22)
減值與其他費用
(5)— (55)(60)
截至2024年9月30日的負債$— $— $— $— 
（a）費用已在綜合損益表的重組中記錄。
在完成收購之前，KNL已向前任擁有者支付了600萬美元中的100萬美元，其餘的500萬美元將分為幾個階段支付給賣方。57截至2024年重組計劃，與辦公空間減少有關的費用已達到xxxxxx百萬美元。50在截至2024年9月30日的六個月內，作為與某些營運租賃的使用權資產及相關物業、廠房和設備減值相關的費用（xxxxxx百萬美元）已記錄在重組費用中；7在簡明合併損益表中，xxxxxx百萬美元已記錄在一般和行政費用中。

(8) 版稅和許可證
我們的特許費用包括支付給（1）內容授權人、（2）獨立軟體開發人員和（3）共同出版和/或發行聯盟的費用。內容授權費用包括支付給名人、專業體育組織、電影製片廠和其他組織，用於我們使用其商標、版權、個人形象權、內容和/或其他知識產權。支付給獨立軟體開發人員的特許金是為了開發與我們的遊戲相關的知識產權。共同出版和分發的特許費是支付給第三方以交付產品。
截至2024年和2023年9月30日止三個月和六個月內，我們並未就基於版稅的承諾認列任何重大損失或減值損失。
預付版稅及最低保證版稅相關資產的當前部分和長期部分，包含在其他流動資產和其他資產中，其中包括（以百萬計）：
截至
2024年9月30日
截至
2024年3月31日
其他流動資產$89 $98 
其他資產17 24 
版稅相關資產$106 $122 
16

目錄
根據我們支付給內容授權方、獨立軟體開發人員、共同出版和/或分銷聯盟合作夥伴的時間，我們會將應向這些方支付但尚未支付的專利金額歸類為應計負債。應計的專利金額的當前部分和長期部分，包含在應付帳款、應計負債和其他流動負債及其他負債中，金額如下（以百萬計）：
截至
2024年9月30日
截至
2024年3月31日
應付帳款、應計負債及其他流動負債$207 $189 
其他負債52 20 
與皇室相關的負債$259 $209 
截至2024年9月30日，我們已經承諾向內容許可商、獨立軟體開發人員以及共同出版和／或分銷聯盟支付約$百萬，但履行義務仍由交易對方負責（即產品或內容的交付或其他因素），因此這些承諾並未記錄在我們的簡明合併基本報表中。參見1,760 有關我們開發人員和許可商承諾的更多信息。 附註12 百萬。

(9) 資產負債表詳細資料
資產和設備，淨值
於2024年9月30日和2024年3月31日，淨財產和設備的組成如下（單位：百萬）：
截至
2024年9月30日
截至
2024年3月31日
計算機、設備和軟體$1,001 $965 
建築物378 376 
租賃改良220 190 
設備、傢具和裝置，以及其他104 92 
土地67 67 
在建工程31 47 
1,801 1,737 
減：累積折舊(1,223)(1,159)
物業及設備，扣除折舊後淨值$578 $578 
與物業和設備相關的折舊費用分別為2024年9月30日結束的三個月和六個月，為$51 百萬美元和102 百萬。
與財產和設備相關的折舊費用分別為2023年9月30日結束的三個和六個月，分別為$49 百萬美元和98 百萬。
17

目錄
應付帳款、應計項目和其他流動負債
2024年9月30日和2024年3月31日的應付帳款、應計費用及其他流動負債如下（單位：百萬）：
截至
2024年9月30日
截至
2024年3月31日
應付賬款$171 $110 
應計的薪資和福利費用360 476 
應計權利金207 189 
逕延淨營業收入 (其他)79 59 
營業租賃負債69 66 
其他應計費用349 286 
銷售退貨和價格保護儲備77 90 
應付帳款、應計負債及其他流動負債$1,312 $1,276 
逾期的淨營業收入（其他）包括許可安排、訂閱收入以及其他尚未符合營業收入確認標準的收入的推遲。
透過購買商品或服務抵扣的未來營業收入
2024年9月30日及2024年3月31日期末之已延遲的淨營業收入（以百萬計）：
截至
2024年9月30日
截至
2024年3月31日
遞延淨營業收入（在線遊戲）$1,475 $1,814 
已延遲的淨營業收入（其他）79 59 
已延遲的淨營業收入（非流動）81 85 
總遞延淨營業收入$1,635 $1,958 
截至2024年和2023年9月30日止之六個月內，我們分別承認了營業收入$1,710 百萬美元和1,762 百萬，這些收入已包含在期初的逕留收入餘額中。
待履行績效義務
截至2024年9月30日，分配給剩餘履約義務的營業收入包括我們的透過$ 變量的递延收入餘額1,635 百萬和未來期間將開具發票金額為$ 變量332.224過去12個月預計將於未來12個月內作為營業收入確認的的$ 變量
(10) INCOME TAXES
The provision for income taxes for the three and six months ended September 30, 2024 is based on our projected annual effective tax rate for fiscal year 2025, adjusted for specific items that are required to be recognized in the period in which they are incurred. Our effective tax rate for the three and six months ended September 30, 2024 was 26 percent and 28 percent, respectively, as compared to negative 2 percent and 15 percent for the same periods in prior year. Our effective tax rate for the three months ended September 30, 2023 included one-time tax benefits related to the remeasurement of our Swiss deferred tax assets due to the change in statutory tax rate as well as the R&D capitalization guidance issued by the U.S. Treasury in that period. Excluding these one-time tax benefits, our effective tax rate for the three and six months ended September 30, 2023 would have been 25 percent and 27 percent, respectively.

We are subject to income tax examinations in various jurisdictions with respect to fiscal years after 2013. The timing and potential resolution of income tax examinations is highly uncertain.

While we continue to measure our uncertain tax positions, the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities may differ materially from the amounts accrued. For example, in the period ended June 30,
18

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2020, the decision of the Ninth Circuit Court of Appeals in Altera Corp. v Commissioner (“the Altera opinion”) resulted in a partial decrease of our unrecognized tax benefits. A complete resolution and settlement of the matters underlying the Altera opinion may result in an additional reduction of our gross unrecognized tax benefits. However, it is uncertain whether a complete resolution and settlement of such matters would also result in resolution of all related and unrelated U.S. positions for all applicable years. Therefore, it is not possible to provide a range of potential outcomes associated with a reversal of our gross unrecognized tax benefits. We expect changes in unrecognized tax benefits unrelated to the Altera opinion which may occur within the next twelve months to be insignificant.


(11) 融資安排
優先票據
2021年2月，我們發行了1,000萬美元的償還債券750 百萬的總本金 1.85償還截至2031年2月15日到期的1,000萬美元債券（「2031年債券」）和償還截至2051年2月15日到期的1,000萬美元債券（「2051年債券」）750 百萬的總本金 2.95我們的籌款金額為5,000萬美元，扣除折扣500萬美元和發行成本150萬美元後，淨額為4,350萬美元1,478，其中折扣為500萬美元，發行成本為150萬美元6，其中折扣為500萬美元，發行成本為150萬美元16。折扣和發行成本均按照2031年和2051年債券各自的有效利率方法分攤至利息費用。有效利率為 1.98%為2031年票據的 3.04%為2051年票據的。利息每年2月15日和8月15日逆期支付。
2016年2月，我們發行了$億的2026年3月1日到期的償還的高級票據（“2026票據”）。我們的收益為$百萬，扣除$百萬的折扣和$百萬的發行成本，淨額為$百萬。這次折扣和發行成本均按照2026票據期限透支利息費用使用有效利率法分攤。有效利率為％。利息每年3月1日和9月1日逆期兩次支付。400 百萬的總本金 4.802016年2月，我們發行了$百萬的2026年3月1日到期的償還的高級票據（“2026票據”）。我們的收益為$百萬，扣除$百萬的折扣和$百萬的發行成本，淨額為$百萬。這次折扣和發行成本均按照2026票據期限透支利息費用使用有效利率法分攤。有效利率為％。利息每年3月1日和9月1日逆期兩次支付。395 2016年2月，我們發行了$百萬的2026年3月1日到期的償還的高級票據（“2026票據”）。我們的收益為$百萬，扣除$百萬的折扣和$百萬的發行成本，淨額為$百萬。這次折扣和發行成本均按照2026票據期限透支利息費用使用有效利率法分攤。有效利率為％。利息每年3月1日和9月1日逆期兩次支付。1 2016年2月，我們發行了$百萬的2026年3月1日到期的償還的高級票據（“2026票據”）。我們的收益為$百萬，扣除$百萬的折扣和$百萬的發行成本，淨額為$百萬。這次折扣和發行成本均按照2026票據期限透支利息費用使用有效利率法分攤。有效利率為％。利息每年3月1日和9月1日逆期兩次支付。4 2016年2月，我們發行了$百萬的2026年3月1日到期的償還的高級票據（“2026票據”）。我們的收益為$百萬，扣除$百萬的折扣和$百萬的發行成本，淨額為$百萬。這次折扣和發行成本均按照2026票據期限透支利息費用使用有效利率法分攤。有效利率為％。利息每年3月1日和9月1日逆期兩次支付。 4.972016年2月，我們發行了$百萬的2026年3月1日到期的償還的高級票據（“2026票據”）。我們的收益為$百萬，扣除$百萬的折扣和$百萬的發行成本，淨額為$百萬。這次折扣和發行成本均按照2026票據期限透支利息費用使用有效利率法分攤。有效利率為％。利息每年3月1日和9月1日逆期兩次支付。
高級票據的攜帶和公平價值如下（以百萬為單位）：
  
截至
2024年9月30日
截至
2024年3月31日
債券：
4.80% 2026年到期的優先票據
$400 $400 
1.85到期日為2031年的優先票據
750 750 
2.95% 2051年到期的優先票據
750 750 
總本金金額$1,900 $1,900 
未攤銷折價(5)(5)
未分攤債務發行成本(12)(13)
優先票據的淨攜帶價值$1,883 $1,882 
優先票據（2級）的公平價值$1,569 $1,515 
As of September 30, 2024, the remaining life of the 2026 Notes, 2031 Notes and 2051 Notes is approximately 1.4 years, 6.4 years, and 26.4 years, respectively.
The Senior Notes are senior unsecured obligations and rank equally with all our other existing and future unsubordinated obligations and any indebtedness that we may incur from time to time under our Credit Facility.
The 2026 Notes, 2031 Notes and 2051 Notes are redeemable at our option at any time prior to December 1, 2025, November 15, 2030, and August 15, 2050, respectively, subject to a make-whole premium. After such dates, we may redeem each such series of Notes, respectively, at a redemption price equal to 100% of the aggregate principal amount plus accrued and unpaid interest. In addition, upon the occurrence of a change of control repurchase event, the holders of each such series of Notes may require us to repurchase all or a portion of these Notes, at a price equal to 101% of their principal amount, plus accrued and unpaid interest to the date of repurchase. Each such series of Notes also include covenants that limit our ability to incur liens on assets and to enter into sale and leaseback transactions, subject to certain allowances.
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Credit Facility
On March 22, 2023, we entered into a $500 million unsecured revolving credit facility (the “Credit Facility") with a syndicate of banks. The Credit Facility terminates on March 22, 2028 unless the maturity is extended in accordance with its terms. The Credit Facility contains an option to arrange with existing lenders and/or new lenders to provide up to an aggregate of $500 million in additional commitments for revolving loans. Proceeds of loans made under the Credit Facility may be used for general corporate purposes.
The loans denominated in U.S. dollars bear interest, at our option, at the base rate plus an applicable spread or at a forward-looking term rate based upon the secured overnight financing rate plus a credit spread adjustment of 0.10% per annum (the “Adjusted Term SOFR Rate”) plus an applicable spread, in each case with such spread based on our debt credit ratings. We are also obligated to pay other customary fees for a credit facility of this size and type. Interest is due and payable in arrears quarterly for loans bearing interest at the base rate and at the end of an interest period in the case of loans bearing interest at the Adjusted Term SOFR Rate. Principal, together with all accrued and unpaid interest, is due and payable on the maturity date, as such date may be extended in connection with the extension option. We may prepay the loans and terminate the commitments, in whole or in part, at any time without premium or penalty, subject to certain conditions.

信貸額度包含慣例的肯定和否定性條款，包括限制或限制我們的能力去承擔子公司的債務、設定留置權以及處置所有或幾乎所有的資產等條款，但在這個規模和類型的信貸額度中有慣例的例外情況。我們也需要保持符合債務與EBITDA比率的要求。截至2024年9月30日，我們符合債務與EBITDA比率的要求。
信貸授信額度包含慣例性違約事件，包括但不限於，未償還違約、契約違約、涉及重要債務的交叉違約、破產和無力清償的違約、重要判決違約和控制權變更違約，每種情況均受此規模和類型信貸授信額度的慣例性例外情況所約束。違約事件發生可能導致信貸授信額度下的債務加速和適用利率上升。
截至2024年9月30日，信貸計劃下無任何款項尚未未清償。 $2 發行此信貸計劃時支付的百萬美元債務發行成本正在按利息費用攤銷至信貸計劃的 5年期 期限。
Interest Expense
The following table summarizes our interest expense recognized for the three and six months ended September 30, 2024 and 2023 that is included in interest and other income (expense), net on our Condensed Consolidated Statements of Operations (in millions):
Three Months Ended
September 30,		Six Months Ended
September 30,
2024202320242023
Amortization of debt issuance costs$— $— $(1)$(1)
Coupon interest expense(14)(14)(28)(28)
Total interest expense$(14)$(14)$(29)$(29)
20

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(12) COMMITMENTS AND CONTINGENCIES
Development, Celebrity, Professional Sports Organizations and Other Content Licenses: Payments and Commitments
The products we produce in our studios are designed and created by our employee designers, artists, software programmers and by non-employee software developers (“independent artists” or “third-party developers”). We typically advance development funds to the independent artists and third-party developers during development of our games, usually in installment payments made upon the completion of specified development milestones. Contractually, these payments are generally considered advances against subsequent royalties on the sales of the products. These terms are set forth in written agreements entered into with the independent artists and third-party developers. In addition, we have certain celebrity, professional sports organizations and other content license contracts that contain minimum guarantee payments and marketing commitments to promote the games we publish that may not be dependent on any deliverables.
These developer and content license commitments represent the sum of the cash payments for flat fees, minimum guaranteed payments, and service payments. The majority of these commitments are conditional upon performance by the counterparty. These payments and any related marketing and development commitments are included in the table below.
The following table summarizes our minimum contractual obligations as of September 30, 2024 (in millions):
Fiscal Years Ending March 31,
2025
(Remaining
Totalsix mos.)20262027202820292030Thereafter
Unrecognized commitments
Developer/licensor commitments$1,760 $188 $407 $481 $225 $218 $140 $101 
Marketing commitments1,265 82 291 295 211 122 149 115 
Senior Notes interest698 22 54 36 36 36 36 478 
Operating lease imputed interest55 6 10 9 7 6 5 12 
Operating leases not yet commenced (a)
12 — — 1 1 1 1 8 
Other purchase obligations420 119 191 71 22 12 5 — 
Total unrecognized commitments4,210 417 953 893 502 395 336 714 
Recognized commitments
Senior Notes principal and interest1,906 6 400 — — — — 1,500 
Operating leases336 36 58 46 33 23 25 115 
Transition Tax and other taxes7 — 7 — — — — — 
Total recognized commitments2,249 42 465 46 33 23 25 1,615 
Total Commitments$6,459 $459 $1,418 $939 $535 $418 $361 $2,329 
(a)As of September 30, 2024, we have entered into an office lease that is expected to commence in fiscal year 2026, with aggregate future lease payments of approximately $12 million and a lease term of 10 years.
The unrecognized amounts represented in the table above reflect our minimum cash obligations for the respective fiscal years, but do not necessarily represent the periods in which they will be recognized and expensed in our Condensed Consolidated Financial Statements. In addition, the amounts in the table above are presented based on the dates the amounts are contractually due as of September 30, 2024; however, certain payment obligations may be accelerated depending on the performance of our operating results.
In addition to the amounts included in the table above, as of September 30, 2024, we had a net liability for unrecognized tax benefits and an accrual for the payment of related interest totaling $552 million, of which we are unable to make a reasonably reliable estimate of when cash settlement with a taxing authority will occur.
Legal Proceedings
21

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We are subject to claims and litigation arising in the ordinary course of business. We do not believe that any liability from any reasonably foreseeable disposition of such claims and litigation, individually or in the aggregate, would have a material adverse effect on our Condensed Consolidated Financial Statements.


(13)  STOCK-BASED COMPENSATION
Valuation Assumptions
We recognize compensation cost for stock-based awards to employees based on the awards’ estimated grant-date fair value using a straight-line approach over the service period for which such awards are expected to vest. We account for forfeitures as they occur.
The estimation of the fair value of market-based restricted stock units, stock options and Employee Stock Purchase Plan (“ESPP”) purchase rights is affected by assumptions regarding subjective and complex variables. Generally, our assumptions are based on historical information and judgment is required to determine if historical trends may be indicators of future outcomes. We estimate the fair value of our stock-based awards as follows:
•Restricted Stock Units and Performance-Based Restricted Stock Units. The fair value of restricted stock units and performance-based restricted stock units (other than market-based restricted stock units) is determined based on the quoted market price of our common stock on the date of grant.
•Market-Based Restricted Stock Units. Market-based restricted stock units consist of grants of performance-based restricted stock units to certain members of executive management that vest contingent upon the achievement of pre-determined market and service conditions (referred to herein as “market-based restricted stock units”). The fair value of our market-based restricted stock units is estimated using a Monte-Carlo simulation model. Key assumptions for the Monte-Carlo simulation model are the risk-free interest rate, expected volatility, expected dividends and correlation coefficient.
•Stock Options and ESPP. The fair value of stock options and stock purchase rights granted pursuant to our equity incentive plans and our 2000 Employee Stock Purchase Plan, as amended, respectively, is estimated using the Black-Scholes valuation model based on the multiple-award valuation method. Key assumptions of the Black-Scholes valuation model are the risk-free interest rate, expected volatility, expected term and expected dividends. The risk-free interest rate is based on U.S. Treasury yields in effect at the time of grant for the expected term of the option. Expected volatility is based on a combination of historical stock price volatility and implied volatility of publicly-traded options on our common stock. An expected term is estimated based on historical exercise behavior, post-vesting termination patterns, options outstanding and future expected exercise behavior.
There were an insignificant number of stock options granted during the three and six months ended September 30, 2024 and 2023.
The assumptions used in the Black-Scholes valuation model to estimate the value of our ESPP purchase rights were as follows:

 Three Months Ended
September 30,
20242023
Risk-free interest rate
4.5 - 5.0%
5.4 - 5.5%
Expected volatility
21 - 22%
23 - 24%
Weighted-average volatility21 %24 %
Expected term
6 - 12 months
6 - 12 months
Expected dividends0.6 %0.8 %
22

目錄
股票期權
以下表格彙總了截至2024年9月30日為止的六個月內我們的期權活動：
期權
（以千為單位）		加權平均的期限：
平均價格
行使價格		加權平均的期限：
平均價格
仍未行使的期權數量：
合約上的
期限（年）		總計
內在價值
(以百萬為單位)
至2024年3月31日止未清償
12 $64.00 
已授予股份2 137.55 
行使(4)88.68 
被放棄、取消或過期(1)58.76 
至2024年9月30日為止優越的
9 $65.81 3.88$1 
已經和預期的授權共同持有9 $65.81 3.88$1 
至2024年9月30日為止可行的
9 $65.81 3.88$1 
總內在價值代表根據我們截至2024年9月30日的收盤股價計算出的總稅前內在價值，該價值將根據當時所有期權持有人行使其期權而獲得。我們會根據授權股份發行新的普通股以行使期權。
限制性股票單位
以下表格概述了截至2024年9月30日的六個月內我們的受限股票單位活動：
受限制
股票單位
（以千為單位）		加權平均的期限：
平均補助金額
日期公平價值
截至2024年3月31日的未解除股票單位7,480 $128.31 
已授予股份4,173 137.78 
已行使股票數(2,585)129.89 
遭到喪失或取消的特權股票 (SARs)(250)130.26 
截至2024年9月30日的優秀表現8,818 $132.28 
基於績效的限制性股票單位
我們基於績效的限制性股票單位，在達到預先確定的績效里程碑時將發放，這些里程碑包括但不僅限於凈訂單和營業收入等管理報告里程碑，以及服務條件。如果這些基於績效的里程碑未達到，但滿足了服務條件，則基於績效的限制性股票單位將不會發放，這樣我們至今確認的任何報酬費用將被撤銷。一般來說，我們的基於績效的限制性股票單位的計量期是 3 年，每個年度計量期後或總累積計量期完成後，獎勵將發放或總計量期後一次性發放。
每個季度，我們會更新對達成績里程碑機率的評估。我們將以相應的服務期間攤銷基於績效的限制性股票單位的公平價值。這些基於績效的限制性股票單位包含每個基於績效的里程碑的閾值、目標和最大里程碑。在授予時發行的普通股數量將在區間內。 零級 天從發票日期計算，被視為商業合理。 200 根據公司的表現與這些基於績效的閾值、目標和最大里程碑相比，授予時發行的普通股數量將占每個基於績效里程碑的目標數量的百分之一。每個基於績效里程碑的權重相同，而基於每個基於績效里程碑的授予的股數與其他里程碑獨立。
23

目錄
以下表格概括了我們基於表現的限制性股票單位活動，並列出了可能授予股份的最大數量，截至2024年9月30日止六個月為止：
表現-
基於限制的股票單位
股票單位
（以千為單位）		加權平均的期限：
平均補助金額
公允價值日期
截至2024年3月31日，未償還的金額優秀。836 $129.60 
已授予股份763 137.53 
已行使股票數(277)133.67 
遭到喪失或取消的特權股票 (SARs)(318)129.29 
截至2024年9月30日，未償還的金額優秀。1,004 $134.60 
Market-Based Restricted Stock Units
Our market-based restricted stock units vest contingent upon the achievement of pre-determined market and service conditions. If these market conditions are not met but service conditions are met, the market-based restricted stock units will not vest; however, any compensation expense we have recognized to date will not be reversed. The number of shares of common stock to be issued at vesting for these awards are based on our total stockholder return (“TSR”) relative to the performance of either companies in the Nasdaq-100 or the S&P 500 Index over a three-year period (“Relative TSR”). Payout with respect to the Relative TSR component ranges from zero to 200 percent of the target number of Relative TSR units granted. Market-based restricted stock units granted in fiscal year 2025 also vest based on absolute TSR performance measured against pre-established goals over a three-year period (“Absolute TSR”). Payout with respect to the Absolute TSR component ranges from zero to 75 percent of the target number of units underlying the base award (which is comprised of Performance-Based Restricted Stock Units and Relative TSR units).

We amortize the fair values of market-based restricted stock units over the requisite service period.
The following table summarizes our market-based restricted stock unit activity, presented with the maximum number of shares that could potentially vest, for the six months ended September 30, 2024:
Market-Based
Restricted  Stock
Units
(in thousands)		Weighted-
Average  Grant
Date Fair Value
Outstanding as of March 31, 2024354 $168.53 
Granted381 80.91 
Vested(25)173.25 
Forfeited or cancelled(73)173.25 
Outstanding as of September 30, 2024637 $115.43 
Stock-Based Compensation Expense
The following table summarizes stock-based compensation expense resulting from stock options, restricted stock units, market-based restricted stock units, performance-based restricted stock units, and the ESPP purchase rights included in our Condensed Consolidated Statements of Operations (in millions):
 Three Months Ended
September 30,		Six Months Ended
September 30,
 2024202320242023
Cost of revenue$4 $2 $8 $4 
Research and development122 113 223 206 
Marketing and sales16 13 28 24 
General and administrative32 27 58 51 
Stock-based compensation expense$174 $155 $317 $285 
During the three and six months ended September 30, 2024, we recognized $22 million and $42 million, respectively, of deferred income tax benefit related to our stock-based compensation expense. During the three and six months ended September 30, 2023, we recognized $21 million and $50 million, respectively, of deferred income tax benefit related to our stock-based compensation expense.
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As of September 30, 2024, our total unrecognized compensation cost related to stock options, restricted stock units, market-based restricted stock units, and performance-based restricted stock units was $1,047 million and is expected to be recognized over a weighted-average service period of 2.0 years. Of the $1,047 million of unrecognized compensation cost, $973 million relates to restricted stock units, $52 million relates to performance-based restricted stock units, $22 million relates to market-based restricted stock units.
Stock Repurchase Program
In August 2022, our Board of Directors authorized a program to repurchase up to $2.6 billion of our common stock. This program was terminated on May 8, 2024.
In May 2024, the Company’s Audit Committee, upon delegation from the Company’s Board of Directors, authorized a new program to repurchase up to $5.0 billion of our common stock. This program supersedes and replaces the August 2022 program and expires on May 9, 2027. Under this program, we may purchase stock in the open market or through privately negotiated transactions in accordance with applicable securities laws, including pursuant to pre-arranged stock trading plans. The timing and actual amount of the stock repurchases will depend on several factors including price, capital availability, regulatory requirements, alternative investment opportunities and other market conditions. We are not obligated to repurchase a specific number of shares of our common stock under this program and it may be modified, suspended or discontinued at any time. We are actively repurchasing shares under this program.

The following table summarizes total shares repurchased during the three and six months ended September 30, 2024 and 2023:
August 2022 ProgramMay 2024 ProgramTotal
(In millions)Shares
Amount(a)
Shares
Amount(a)
SharesAmount
Three months ended September 30, 2024
— $— 2.6 $375 2.6 $375 
Six months ended September 30, 2024
1.2 $152 $4.2 $598 5.4 $750 
Three months ended September 30, 2023
2.6 $325 — $— 2.6 $325 
Six months ended September 30, 2023
5.2 $650 — $— 5.2 $650 
(a)Amount excludes excise taxes. Accrued excise taxes are included in accounts payable, accrued, and other current liabilities and additional paid-in capital on the Condensed Consolidated Balance Sheets.

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(14) EARNINGS PER SHARE
The following table summarizes the computations of basic earnings per share (“Basic EPS”) and diluted earnings per share (“Diluted EPS”). Basic EPS is computed as net income divided by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur from common shares issuable through stock-based compensation plans including stock options, restricted stock units, market-based restricted stock units, performance-based restricted stock units, and ESPP purchase rights using the treasury stock method.
 Three Months Ended
September 30,		Six Months Ended
September 30,
(In millions, except per share amounts)2024202320242023
Net income$294 $399 $574 $801 
Shares used to compute earnings per share:
Weighted-average common stock outstanding — basic264 271 265 272 
Dilutive potential common shares related to stock award plans2 1 2 1 
Weighted-average common stock outstanding — diluted266 272 267 273 
Earnings per share:
Basic$1.11 $1.47 $2.17 $2.94 
Diluted$1.11 $1.47 $2.15 $2.93 
Certain restricted stock units, market-based restricted stock units and performance-based restricted stock units were excluded from the treasury stock method computation of diluted shares as their inclusion would have had an antidilutive effect. For both the three and six months ended September 30, 2024 and 2023, one million such shares were excluded.

(15) SEGMENT AND REVENUE INFORMATION
Our reporting segment is based upon: our internal organizational structure; the manner in which our operations are managed; the criteria used by our Chief Executive Officer, our Chief Operating Decision Maker (“CODM”), to evaluate segment performance; the availability of separate financial information; and overall materiality considerations. Our CODM currently reviews total company operating results to assess overall performance and allocate resources. As of September 30, 2024, we have only one reportable segment, which represents our only operating segment.
Information about our total net revenue by timing of recognition for the three and six months ended September 30, 2024 and 2023 is presented below (in millions):
Three Months Ended
September 30,		Six Months Ended
September 30,
2024202320242023
Net revenue by timing of recognition
Revenue recognized at a point in time$918 $755 $1,289 $1,301 
Revenue recognized over time1,107 1,159 2,396 2,537 
Net revenue$2,025 $1,914 $3,685 $3,838 
Generally, performance obligations that are recognized upfront upon transfer of control are classified as revenue recognized at a point in time, while performance obligations that are recognized over either the period in which we offer to provide future update rights and/or online hosting for the game and related extra content sold (“Estimated Offering Period”), contractual term or subscription period as the services are provided are classified as revenue recognized over time.
Revenue recognized at a point in time includes revenue allocated to the software license performance obligation. This also includes a portion of revenue from the licensing of software to third-parties.
Revenue recognized over time includes service revenue allocated to the future update rights and the online hosting performance obligations. This also includes online-hosted services such as our Ultimate Team game mode, revenue allocated to the future update rights from licensing of software to third-parties, subscription services, and revenue recognized from third parties that publish games and services under a license to certain of our intellectual property assets.
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Information about our total net revenue by composition for the three and six months ended September 30, 2024 and 2023 is presented below (in millions):
Three Months Ended
September 30,		Six Months Ended
September 30,
2024202320242023
Net revenue by composition
Full game downloads$475 $346 $665 $647 
Packaged goods241 275 301 417 
Full game716 621 966 1,064 
Live services and other
1,309 1,293 2,719 2,774 
Net revenue$2,025 $1,914 $3,685 $3,838 
Full game net revenue includes full game downloads and packaged goods. Full game downloads primarily includes revenue from digital sales of full games on console, PC, and certain licensing revenue. Packaged goods primarily includes revenue from software that is sold physically through traditional channels such as brick and mortar retailers.
Live services and other net revenue primarily includes revenue from sales of extra content for console, PC, and mobile games, certain licensing revenue, subscriptions, and advertising.
Information about our total net revenue by platform for the three and six months ended September 30, 2024 and 2023 is presented below (in millions):
Three Months Ended
September 30,		Six Months Ended
September 30,
 2024202320242023
Platform net revenue
Console$1,374 $1,187 $2,379 $2,354 
PC and other364 423 729 874 
Mobile287 304 577 610 
Net revenue$2,025 $1,914 $3,685 $3,838 
Information about our operations in North America and internationally for the three and six months ended September 30, 2024 and 2023 is presented below (in millions):
Three Months Ended
September 30,		Six Months Ended
September 30,
 2024202320242023
Net revenue from unaffiliated customers
North America$899 $747 $1,515 $1,554 
International1,126 1,167 2,170 2,284 
Net revenue$2,025 $1,914 $3,685 $3,838 

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Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors
Electronic Arts Inc.:
Results of Review of Interim Financial Information
We have reviewed the condensed consolidated balance sheet of Electronic Arts Inc. and subsidiaries (the Company) as of September 28, 2024, the related condensed consolidated statements of operations, comprehensive income, and changes in stockholders’ equity for the three-month and six-month periods ended September 28, 2024 and September 30, 2023, and cash flows for the six-month periods ended September 28, 2024 and September 30, 2023, and the related notes (collectively, the consolidated interim financial information). Based on our reviews, we are not aware of any material modifications that should be made to the consolidated interim financial information for it to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of March 30, 2024, and the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for the year then ended (not presented herein); and in our report dated May 22, 2024, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of March 30, 2024, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results
This consolidated interim financial information is the responsibility of the Company’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our reviews in accordance with the standards of the PCAOB. A review of consolidated interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
(Signed) KPMG LLP
Santa Clara, California
November 1, 2024

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Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

CAUTIONARY NOTE ABOUT FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements. We use words such as “anticipate”, “believe”, “expect”, “intend”, “estimate”, “plan”, “predict”, “seek”, “goal”, “will”, “may”, “likely”, “should”, “could”, “continue”, “potential” (and the negative of any of these terms), “future” and similar expressions to identify forward-looking statements. In addition, any statements that refer to projections of our future financial performance, trends in our business, projections of markets relevant to our business, uncertain events and assumptions and other characterizations of future events or circumstances are forward-looking statements. Forward-looking statements consist of, among other things, statements related to our business, operations and financial results, industry prospects, our future financial performance, and our business plans and objectives, and may include certain assumptions that underlie the forward-looking statements. These forward-looking statements are not guarantees of future performance and reflect management’s current expectations. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that might cause or contribute to such differences include those discussed in Part II, Item 1A of this Quarterly Report under the heading “Risk Factors”, as well as in other documents we have filed with the Securities and Exchange Commission (“SEC”), including our Annual Report on Form 10-K for the fiscal year ended March 31, 2024. We assume no obligation to revise or update any forward-looking statement for any reason, except as required by law.


OVERVIEW
The following overview is a high-level discussion of our operating results, as well as some of the trends and drivers that affect our business. Management believes that an understanding of these trends and drivers provides important context for our results for the three months ended September 30, 2024, as well as our future prospects. This summary is not intended to be exhaustive, nor is it intended to be a substitute for the detailed discussion and analysis provided elsewhere in this Form 10-Q, including in the remainder of “Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”),” “Risk Factors,” and the Condensed Consolidated Financial Statements and related Notes. Additional information can be found in the “Business” section of our Annual Report on Form 10-K for the fiscal year ended March 31, 2024 as filed with the SEC on May 22, 2024 and in other documents we have filed with the SEC.
About Electronic Arts
Electronic Arts is a global leader in digital interactive entertainment. We develop, market, publish and deliver games, content and services that can be experienced on game consoles, PCs, mobile phones and tablets. At our core is a portfolio of intellectual property from which we create innovative games and experiences that deliver high-quality entertainment and drive engagement across our network of hundreds of millions of unique active accounts. Our portfolio includes brands that we either wholly own (such as Apex Legends, Battlefield, and The Sims) or license from others (such as the licenses within EA SPORTS FC and EA SPORTS Madden NFL). Through our live services offerings, we offer high-quality experiences designed to provide value to players, and extend and enhance gameplay. These live services include extra content, subscription offerings and other revenue generated in addition to the sale of our full games. We are focusing on building games and experiences that grow the global online communities around our key franchises; deepening engagement through connecting interactive storytelling to key intellectual property; and building re-occurring revenue from scaling our live services and growth in our annualized sports titles, our console, PC and mobile catalog titles.
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Financial Results
Our key financial results for our fiscal quarter ended September 30, 2024 were as follows:
•Total net revenue was $2,025 million, up 6 percent year-over-year.
•Live services and other net revenue was $1,309 million, up 1 percent year-over-year.
•Gross margin was 77.5 percent, up 1 percentage point year-over-year.
•Operating expenses were $1,185 million, up 10 percent year-over-year.
•Operating income was $384 million, up 2 percent year-over-year.
•Net income was $294 million with diluted earnings per share of $1.11.
•Net cash provided by operating activities was $234 million, up 109 percent year-over-year.
•Total cash, cash equivalents and short-term investments were $2,563 million.
•We repurchased 2.6 million shares of our common stock for $375 million.
•We paid cash dividends of $51 million during the quarter ended September 30, 2024.
Trends in Our Business
Live Services Business. We offer our players high-quality experiences designed to provide value to players and to extend and enhance gameplay. These live services include extra content, subscription offerings and other revenue generated in addition to the sale of our full games and free-to-play games. Our net revenue attributable to live services and other was $5,492 million, $5,535 million, and $5,288 million for the trailing twelve months ended September 30, 2024, 2023, and 2022, respectively, and we expect that live services net revenue will continue to be material to our business. Within live services and other, net revenue attributable to extra content was $4,393 million, $4,374 million, and $4,140 million for the trailing twelve months ended September 30, 2024, 2023, and 2022, respectively. Extra content net revenue has increased as more players engage with our games and services, and purchase additional content designed to provide value to players and extend and enhance gameplay. Our most popular live services are the extra content purchased for the Ultimate Team mode associated with our sports franchises, that allows players to collect current and former professional players in order to build and compete as a personalized team, and extra content purchased for our Apex Legends franchise. Live services net revenue generated from extra content purchased within the Ultimate Team mode associated with our sports franchises, a substantial portion of which is derived from Ultimate Team within our global football franchise and from our Apex Legends franchise, is material to our business.
Digital Delivery of Games. In our industry, players increasingly purchase games digitally as opposed to purchasing physical discs. While this trend, as applied to our business, may not be linear due to a mix of products during a fiscal year, consumer buying patterns and other factors, over time we expect players to purchase an increasingly higher proportion of our games digitally. As a result, we expect net revenue attributable to digital full game downloads to increase over time and net revenue attributable to sales of packaged goods to decrease.
Our net revenue attributable to digital full game downloads was $1,343 million, $1,262 million, and $1,282 million during fiscal years 2024, 2023, and 2022, respectively; while our net revenue attributable to packaged goods sales was $672 million, $675 million, and $711 million in fiscal years 2024, 2023, and 2022, respectively. In addition, as measured based on total units sold on Microsoft’s Xbox One and Xbox Series X and Sony’s PlayStation 4 and 5 rather than by net revenue, we estimate that 73 percent, 68 percent, and 65 percent of our total units sold during fiscal years 2024, 2023, and 2022, were sold digitally. Digital full game units are based on sales information provided by Microsoft and Sony; packaged goods units sold through are estimated by obtaining data from significant retail and distribution partners in North America, Europe and Asia, and applying internal sales estimates with respect to retail partners from which we do not obtain data. We believe that these percentages are reasonable estimates of the proportion of our games that are digitally downloaded in relation to our total number of units sold for the applicable period of measurement.
Increases in consumer adoption of digital purchase of games combined with increases in our live services revenue generally results in expansion of our gross margin, as costs associated with selling a game digitally is generally less than selling the same game through traditional retail and distribution channels.
Increased Competition. Competition in our business is intense. Our competitors range from established interactive entertainment companies to emerging start-ups. In addition, the gaming, technology/internet, and entertainment industries are converging, and we compete with large, diversified technology companies in those industries. Their greater financial or other resources may provide larger budgets to develop and market tools, technologies, products and services that gain consumer success and shift player time and engagement away from our products and services. In addition, our leading position within the interactive entertainment industry makes us a prime target for recruiting our executives, as well as key creative and technical talent, resulting in retention challenges and increased cost to retain and incentivize our key people.
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Concentration of Sales Among the Most Popular Games. In our industry, we see a large portion of games sales concentrated on the most popular titles. Similarly, a significant portion of our revenue has been derived from games based on a few popular titles, such as EA SPORTS FC, EA SPORTS College Football, EA SPORTS Madden NFL, Apex Legends, Battlefield, and The Sims. In particular, we have historically derived a significant portion of our net revenue from our global football franchise, the annualized version of which is consistently one of the best-selling games in the marketplace. We transitioned our global football franchise to a new EA SPORTS FC brand in the second quarter of fiscal 2024. Our continued vision for the future of EA SPORTS FC is to create and innovate across platforms, geographies, and business models to expand our global football experiences and entertain even more fans around the world.

Re-occurring Revenue Sources. Our business model includes revenue that we deem re-occurring in nature, such as revenue from our live services, annualized sports titles (e.g., EA SPORTS FC, EA SPORTS Madden NFL), and our console, PC and mobile catalog titles (i.e., titles that did not launch in the current fiscal year). We have been able to forecast revenue from these areas of our business with greater relative confidence than for new games, services and business models. As we continue to incorporate new business models and modalities of play into our games, our goal is to continue to look for opportunities to expand the re-occurring portion of our business.

Free-to-Play and Free-to-Enter Games. We offer games in some of our largest franchises, including Apex Legends, The Sims 4, and the PC and mobile version of EA SPORTS FC, through a business model that allows consumers to access games with no-upfront cost. These games are then monetized through a live service associated with the game, particularly extra content sales. These business models are dominant in the mobile gaming industry and are becoming increasingly accepted in the online PC and console market. We expect to continue offering games through these business models across console, PC and mobile and expect extra content revenue generated through these business models to continue to be an important part of our business.

Restructuring. In February 2024, our Board of Directors approved a restructuring plan (the “2024 Restructuring Plan”) focused on aligning our portfolio, investments, and resources in support of our strategic priorities and growth initiatives. This plan reflects actions driven by portfolio rationalization, including costs associated with licensor commitments, as well as reductions in real estate and headcount. As of September 30, 2024, we expect the actions associated with this plan to be substantially completed by March 31, 2025.
Net Bookings. In order to improve transparency into our business, we disclose an operating performance metric, net bookings. Net bookings is defined as the net amount of products and services sold digitally or sold-in physically in the period. Net bookings is calculated by adding total net revenue to the change in deferred net revenue for online-enabled games.
The following is a calculation of our total net bookings for the periods presented:
Three Months Ended
September 30,		Six Months Ended
September 30,
(In millions)
2024202320242023
Total net revenue$2,025 $1,914 $3,685 $3,838 
Change in deferred net revenue (online-enabled games)54 (94)(344)(440)
Net bookings$2,079 $1,820 $3,341 $3,398 
Net bookings were $2,079 million for the three months ended September 30, 2024 primarily driven by sales related to our global football franchise, and our American football franchises (which includes EA SPORTS College Football and EA SPORTS Madden NFL). Net bookings increased $259 million, or 14 percent, as compared to the three months ended September 30, 2023, primarily from our American football franchises, driven by the release of EA SPORTS College Football 25, partially offset by decreased sales of extra content for Apex Legends. Live services and other net bookings were $1,247 million for the three months ended September 30, 2024, and increased $118 million, or 10 percent, as compared to the three months ended September 30, 2023. The increase in live services and other net bookings was primarily driven by sales of extra content from Ultimate Team within our American football and global football franchises, partially offset by decreased sales of extra content for Apex Legends. Full game net bookings were $832 million for the three months ended September 30, 2024, and increased $141 million, or 20 percent, as compared to the three months ended September 30, 2023 primarily from our American football franchises driven by the release of EA SPORTS College Football 25, partially offset by legacy FIFA titles within our global football franchise.
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CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Our Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The preparation of these Condensed Consolidated Financial Statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, contingent assets and liabilities, and revenue and expenses during the reporting periods. The policies discussed below are considered by management to be critical because they are not only important to the portrayal of our financial condition and results of operations, but also because application and interpretation of these policies requires both management judgment and estimates of matters that are inherently uncertain and unknown. As a result, actual results may differ materially from our estimates.
Revenue Recognition
We derive revenue principally from sales of our games, and related extra content and services that can be experienced on game consoles, PCs, mobile phones and tablets. Our product and service offerings include, but are not limited to, the following:
•full games with both online and offline functionality (“Games with Services”), which generally includes (1) the initial game delivered digitally or via physical disc at the time of sale and typically provide access to offline core game content (“software license”); (2) updates on a when-and-if-available basis, such as software patches or updates, and/or additional free content to be delivered in the future (“future update rights”); and (3) a hosted connection for online playability (“online hosting”);
•full games with online-only functionality which require an Internet connection to access all gameplay and functionality (“Online-Hosted Service Games”);
•extra content related to Games with Services and Online-Hosted Service Games which provides access to additional in-game content;
•subscriptions, such as EA Play and EA Play Pro, that generally offer access to a selection of full games, in-game content, online services and other benefits typically for a recurring monthly or annual fee; and
•licensing to third parties to distribute and host our games and content.
We evaluate and recognize revenue by:
•identifying the contract(s) with the customer;
•identifying the performance obligations in the contract;
•determining the transaction price;
•allocating the transaction price to performance obligations in the contract; and
•recognizing revenue as each performance obligation is satisfied through the transfer of a promised good or service to a customer (i.e., “transfer of control”).
Certain of our full game and/or extra content are sold to resellers with a contingency that the full game and/or extra content cannot be resold prior to a specific date (“Street Date Contingency”). We recognize revenue for transactions that have a Street Date Contingency when the Street Date Contingency is removed and the full game and/or extra content can be resold by the reseller. For digital full game and/or extra content downloads sold to customers, we recognize revenue when the full game and/or extra content is made available for download to the customer.
Online-Enabled Games
Games with Services. Our sales of Games with Services are evaluated to determine whether the software license, future update rights and the online hosting are distinct and separable. Sales of Games with Services are generally determined to have three distinct performance obligations: software license, future update rights, and the online hosting.
Since we do not sell the performance obligations on a stand-alone basis, we consider market conditions and other observable inputs to estimate the stand-alone selling price for each performance obligation. For Games with Services, generally 75 percent of the sales price is allocated to the software license performance obligation and recognized at a point in time when control of the license has been transferred to the customer. The remaining 25 percent is allocated to the future update rights and the online hosting performance obligations and recognized ratably as the service is provided (over the Estimated Offering Period).
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Online-Hosted Service Games. Sales of our Online-Hosted Service Games are determined to have one distinct performance obligation: the online hosting. We recognize revenue from these arrangements ratably as the service is provided (over the Estimated Offering Period).
Extra Content. Revenue received from sales of downloadable content are derived primarily from the sale of virtual currencies and digital in-game content that are designed to extend and enhance players’ game experience. Sales of extra content are accounted for in a manner consistent with the treatment for our Games with Services and Online-Hosted Service Games as discussed above, depending upon whether or not the extra content has offline functionality. That is, if the extra content has offline functionality, then the extra content is accounted for similarly to Games with Services (generally determined to have three distinct performance obligations: software license, future update rights, and the online hosting). If the extra content does not have offline functionality, then the extra content is determined to have one distinct performance obligation: the online-hosted service.
Subscriptions
Sales of our subscriptions are determined to have one performance obligation: the online hosting. We recognize revenue from these arrangements ratably over the subscription term as the performance obligation is satisfied.
Licensing Revenue
We utilize third-party licensees to distribute and host our games and content in accordance with license agreements, for which the licensees typically pay us a fixed minimum guarantee and/or sales-based royalties. These arrangements typically include multiple performance obligations, such as a time-based license of software and future update rights. We recognize as revenue a portion of the minimum guarantee when we transfer control of the license of software (generally upon commercial launch) and the remaining portion ratably over the contractual term in which we provide the licensee with future update rights. Any sales-based royalties are generally recognized as the related sales occur by the licensee.
Significant Judgments around Revenue Arrangements
Identifying performance obligations. Performance obligations promised in a contract are identified based on the goods and services that will be transferred to the customer that are both capable of being distinct, (i.e., the customer can benefit from the goods or services either on its own or together with other resources that are readily available), and are distinct in the context of the contract (i.e., it is separately identifiable from other goods or services in the contract). To the extent a contract includes multiple promises, we must apply judgment to determine whether those promises are separate and distinct performance obligations. If these criteria are not met, the promises are accounted for as a combined performance obligation.
Determining the transaction price. The transaction price is determined based on the consideration that we will be entitled to receive in exchange for transferring our goods and services to the customer. Determining the transaction price often requires judgment, based on an assessment of contractual terms and business practices. It further includes review of variable consideration such as discounts, sales returns, price protection, and rebates, which is estimated at the time of the transaction. In addition, the transaction price does not include an estimate of the variable consideration related to sales-based royalties. Sales-based royalties are recognized as the sales occur.
Allocating the transaction price. Allocating the transaction price requires that we determine an estimate of the relative stand-alone selling price for each distinct performance obligation. Determining the relative stand-alone selling price is inherently subjective, especially in situations where we do not sell the performance obligation on a stand-alone basis (which occurs in the majority of our transactions). In those situations, we determine the relative stand-alone selling price based on various observable inputs using all information that is reasonably available. Examples of observable inputs and information include: historical internal pricing data, cost plus margin analysis, pre-release versus post-release costs, and pricing data from competitors to the extent the data is available. The results of our analysis resulted in a specific percentage of the transaction price being allocated to each performance obligation.
Determining the Estimated Offering Period. Because the offering period is not an explicitly defined period, we must make an estimate of the offering period for the service-related performance obligations (i.e., future update rights and online hosting). Determining the Estimated Offering Period is inherently subjective and is subject to regular revision. Generally, we consider the average period of time customers are online when estimating the offering period. We also consider the estimated period of time between the date a game unit is sold to a reseller and the date the reseller sells the game unit to the customer (i.e., time in channel). Based on these two factors, we then consider the method of distribution. For example, games and extra content sold at
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retail would have a composite offering period equal to the online gameplay period plus time in channel as opposed to digitally-distributed games and extra content which are delivered immediately via digital download and therefore, the offering period is estimated to be only the online gameplay period.
Additionally, we consider results from prior analyses, known and expected online gameplay trends, as well as disclosed service periods for competitors’ games in determining the Estimated Offering Period for future sales. We believe this provides a reasonable depiction of the transfer of future update rights and online hosting to our customers, as it is the best representation of the time period during which our games and extra content are experienced. We recognize revenue for future update rights and online hosting performance obligations ratably on a straight-line basis over this period as there is a consistent pattern of delivery for these performance obligations. Revenue for service-related performance obligations for digitally-distributed games and extra content is recognized over an estimated eight-month period beginning in the month of sale, revenue for service-related performance obligations for games and extra content sold through retail is recognized over an estimated ten-month period beginning in the month of sale, and revenue for service related performance obligations related to our PC and console free-to-play games is recognized generally over a twelve-month period beginning in the month of sale.
Principal Agent Considerations
We evaluate sales to end customers of our full games and related content via third-party storefronts, including digital storefronts such as Microsoft’s Xbox Store, Sony’s PlayStation Store, Apple App Store, and Google Play Store, in order to determine whether or not we are acting as the principal in the sale to the end customer, which we consider in determining if revenue should be reported gross or net of fees retained by the third-party storefront. An entity is the principal if it controls a good or service before it is transferred to the end customer. Key indicators that we evaluate in determining gross versus net treatment include but are not limited to the following:
•the underlying contract terms and conditions between the various parties to the transaction;
•which party is primarily responsible for fulfilling the promise to provide the specified good or service to the end customer;
•which party has discretion in establishing the price for the specified good or service; and
•which party has title risk before the specified good or service has been transferred to the end customer.
Based on an evaluation of the above indicators, except as discussed below, we have determined that generally the third party is considered the principal to end customers for the sale of our full games and related content. We therefore report revenue related to these arrangements net of the fees retained by the storefront. However, for sales arrangements via Apple App Store and Google Play Store, EA is considered the principal to the end customer and thus, we report revenue on a gross basis and mobile platform fees are reported within cost of revenue.
Income Taxes
We recognize deferred tax assets and liabilities for both (1) the expected impact of differences between the financial statement amount and the tax basis of assets and liabilities and (2) the expected future tax benefit to be derived from tax losses and tax credit carryforwards. We do not recognize any deferred taxes related to the U.S. taxes on foreign earnings as we recognize these taxes as a period cost.
We record a valuation allowance against deferred tax assets when it is considered more likely than not that all or a portion of our deferred tax assets will not be realized. In making this determination, we are required to give significant weight to evidence that can be objectively verified. It is generally difficult to conclude that a valuation allowance is not needed when there is significant negative evidence, such as cumulative losses in recent years. Forecasts of future taxable income are considered to be less objective than past results. Therefore, cumulative losses weigh heavily in the overall assessment.
In addition to considering forecasts of future taxable income, we are also required to evaluate and quantify other possible sources of taxable income in order to assess the realization of our deferred tax assets, namely the reversal of existing deferred tax liabilities, the carryback of losses and credits as allowed under current tax law, and the implementation of tax planning strategies. Evaluating and quantifying these amounts involves significant judgments. Each source of income must be evaluated based on all positive and negative evidence and this evaluation may involve assumptions about future activity. Certain taxable temporary differences that are not expected to reverse during the carry forward periods permitted by tax law cannot be considered as a source of future taxable income that may be available to realize the benefit of deferred tax assets.
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Every quarter, we perform a realizability analysis to evaluate whether it is more likely than not that all or a portion of our deferred tax assets will not be realized. Our Swiss deferred tax asset realizability analysis relies upon future Swiss taxable income as the primary source of taxable income but considers all available sources of Swiss income based on the positive and negative evidence. We give more weight to evidence that can be objectively verified. However, estimating future Swiss taxable income requires judgment, specifically related to assumptions about expected growth rates of future Swiss taxable income, which are based primarily on third party market and industry growth data. Actual results that differ materially from those estimates could have a material impact on our valuation allowance assessment. Swiss interest rates have an impact on the valuation allowance and are based on published Swiss guidance, which generally occurs in the fourth quarter of our fiscal year. Any significant changes to such interest rates could result in a material impact to the valuation allowance and to our Condensed Consolidated Financial Statements. We have adjusted our valuation allowance for changes in the published interest rates in the past and we may do so again in the future. Switzerland has a seven-year carryforward period and does not permit the carry back of losses. Actions we take in connection with acquisitions could also impact the utilization of our Swiss deferred tax asset.
As part of the process of preparing our Condensed Consolidated Financial Statements, we are required to estimate our income taxes in each jurisdiction in which we operate prior to the completion and filing of tax returns for such periods. This process requires estimating both our geographic mix of income and our uncertain tax positions in each jurisdiction where we operate. These estimates require us to make judgments about the likely application of the tax law to our situation, as well as with respect to other matters, such as anticipating the positions that we will take on tax returns prior to preparing the returns and the outcomes of disputes with tax authorities. The ultimate resolution of these issues may take extended periods of time due to examinations by tax authorities and statutes of limitations. In addition, changes in our business, including acquisitions, changes in our international corporate structure, changes in the geographic location of business functions or assets, changes in the geographic mix and amount of income, as well as changes in our agreements with tax authorities, valuation allowances, applicable accounting rules, applicable tax laws and regulations, rulings and interpretations thereof, developments in tax audit and other matters, and variations in the estimated and actual level of annual pre-tax income can affect the overall effective tax rate.

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
The information under the subheading “Other Recently Issued Accounting Standards” in Note 1 — Description of Business and Basis of Presentation to the Condensed Consolidated Financial Statements in this Form 10-Q is incorporated by reference into this Item 2.

RESULTS OF OPERATIONS
Our fiscal year is reported on a 52- or 53-week period that ends on the Saturday nearest March 31. Our results of operations for the fiscal year ending March 31, 2025 contains 52 weeks and ends on March 29, 2025. Our results of operations for the fiscal year ended March 31, 2024 contained 52 weeks and ended on March 30, 2024. Our results of operations for the three and six months ended September 30, 2024 contained 13 weeks and 26 weeks, respectively, and ended on September 28, 2024. Our results of operations for the three and six months ended September 30, 2023 contained 13 weeks and 26 weeks, respectively, and ended on September 30, 2023. For simplicity of disclosure, all fiscal periods are referred to as ending on a calendar month end.

Net Revenue
Net revenue consists of sales generated from (1) full games sold as digital downloads or as packaged goods and designed for play on game consoles and PCs, (2) live services which primarily includes sales of extra content for console, PC, and mobile games, (3) subscriptions that generally offer access to a selection of full games, in-game content, online services and other benefits, and (4) licensing our games to third parties to distribute and host our games.
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Net Revenue Quarterly Analysis
Net Revenue
Net revenue for the three months ended September 30, 2024 was $2,025 million, primarily driven by sales related to our global football and American football franchises, and Apex Legends. Net revenue for the three months ended September 30, 2024 increased $111 million as compared to the three months ended September 30, 2023. This increase was due to a $301 million increase in net revenue primarily from our American football franchises driven by the release of EA SPORTS College Football 25, partially offset by a $190 million decrease in net revenue primarily driven by decreased sales of extra content for Apex Legends, and the prior year release of Star Wars Jedi: Survivor.

Net Revenue by Composition
Our net revenue by composition for the three months ended September 30, 2024 and 2023 was as follows (in millions):
Three Months Ended September 30,
20242023$ Change% Change
Net revenue:
Full game downloads$475 $346 $129 37 %
Packaged goods241 275 (34)(12)%
Full game$716 $621 $95 15 %
Live services and other$1,309 $1,293 $16 1 %
Total net revenue$2,025 $1,914 $111 6 %
Full Game Net Revenue
Full game net revenue includes full game downloads and packaged goods. Full game downloads primarily includes revenue from digital sales of full games on console, PC, and certain licensing revenue. Packaged goods primarily includes revenue from software that is sold physically through traditional channels such as brick and mortar retailers.
For the three months ended September 30, 2024, full game net revenue was $716 million, primarily driven by the releases of EA SPORTS FC 25, EA SPORTS College Football 25, and EA SPORTS Madden NFL 25. Full game net revenue for the three months ended September 30, 2024 increased $95 million, or 15 percent, as compared to the three months ended September 30, 2023, primarily due to our American football franchises driven by EA SPORTS College Football 25, partially offset by a decrease in net revenue from legacy FIFA titles within our global football franchise, and the prior year release of Star Wars Jedi: Survivor.

Live Services and Other Net Revenue
Live services and other net revenue primarily includes revenue from sales of extra content for console, PC, and mobile games, certain licensing revenue, subscriptions, and advertising.
For the three months ended September 30, 2024, live services and other net revenue was $1,309 million, primarily driven by sales of extra content for our global football franchise, Apex Legends, and The Sims 4. Live services and other net revenue for the three months ended September 30, 2024 increased $16 million, or 1 percent, as compared to the three months ended September 30, 2023. This increase was primarily due to sales of extra content from our American football and global football franchises, partially offset by decreased sales of extra content for Apex Legends.

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Net Revenue Year-to-Date Analysis
Net Revenue
Net revenue for the six months ended September 30, 2024 was $3,685 million, primarily driven by sales related to our global football and American football franchises, and Apex Legends. Net revenue for the six months ended September 30, 2024 decreased $153 million as compared to the six months ended September 30, 2023. This decrease was driven by a $509 million decrease in net revenue primarily due to the prior year release of Star Wars Jedi: Survivor and decreased sales of extra content for Apex Legends, partially offset by a $356 million increase in net revenue primarily from our American football franchises driven by the release of EA SPORTS College Football 25.

Net Revenue by Composition
Our net revenue by composition for the six months ended September 30, 2024 and 2023 was as follows (in millions):
Six Months Ended September 30,
20242023$ Change% Change
Net revenue:
Full game downloads$665 $647 $18 3 %
Packaged goods301 417 (116)(28)%
Full game$966 $1,064 $(98)(9)%
Live services and other$2,719 $2,774 $(55)(2)%
Total net revenue$3,685 $3,838 $(153)(4)%
Full Game Net Revenue
For the six months ended September 30, 2024, full game net revenue was $966 million, primarily driven by EA SPORTS FC 25, EA SPORTS College Football 25, EA SPORTS FC 24, and EA SPORTS Madden NFL 25. Full game net revenue for the six months ended September 30, 2024 decreased $98 million, or 9 percent, as compared to the six months ended September 30, 2023. This decrease was primarily driven by the prior year release of Star Wars Jedi: Survivor, and legacy FIFA titles within our global football franchise, partially offset by our American football franchises driven by the release of EA SPORTS College Football 25, and our EA SPORTS FC franchise.

Live Services and Other Net Revenue
For the six months ended September 30, 2024, live services and other net revenue was $2,719 million, primarily driven by sales of extra content for our global football franchise, Apex Legends, and our American football franchises. Live services and other net revenue for the six months ended September 30, 2024 decreased $55 million, or 2 percent, as compared to the six months ended September 30, 2023. This decrease was primarily driven by decreased sales of extra content for Apex Legends, partially offset by an increase in net revenue primarily driven by sales of extra content for Ultimate Team within our global football and American football franchises.

Cost of Revenue Quarterly Analysis
Cost of revenue consists of (1) certain royalty expenses for celebrities, professional sports leagues, movie studios and other organizations, and independent software developers, (2) mobile platform fees associated with our mobile revenue (for transactions in which we are acting as the principal in the sale to the end customer), (3) data center, bandwidth and server costs associated with hosting our online games and websites, (4) inventory costs, including manufacturing royalties, (5) payment processing fees, (6) amortization and impairments of certain intangible assets, and (7) personnel-related costs.

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Cost of revenue for the three months ended September 30, 2024 and 2023 was as follows (in millions):
September 30,
2024		% of Net RevenueSeptember 30,
2023		% of Net Revenue% ChangeChange as a % of Net Revenue
$456 23 %$456 24 %— %(1)%
Cost of Revenue
Cost of revenue remained flat during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, primarily due to an increase in royalty costs due to the mix of sales from royalty bearing titles, offset by a decrease in platform and online hosting fees.

Cost of Revenue Year-to-Date Analysis
Cost of revenue for the six months ended September 30, 2024 and 2023 was as follows (in millions):
September 30,
2024		% of Net RevenueSeptember 30,
2023		% of Net Revenue% ChangeChange as a % of Net Revenue
$719 20 %$824 21 %(13)%(1)%
Cost of Revenue
Cost of revenue decreased by $105 million during the six months ended September 30, 2024, as compared to the six months ended September 30, 2023. The decrease was primarily due to a decrease in royalty costs associated with our global football franchise and the mix of sales from royalty bearing titles, and a decrease in platform and online hosting fees.

Research and Development
Research and development expenses consist of expenses incurred by our production studios for personnel-related costs, related overhead costs, external third-party development costs, contracted services, and depreciation. Research and development expenses for our online products include expenses incurred by our studios consisting of direct development and related overhead costs in connection with the development and production of our online games. Research and development expenses also include expenses associated with our digital platform, software licenses and maintenance, and management overhead.
Research and development expenses for the three and six months ended September 30, 2024 and 2023 were as follows (in millions):
September 30,
2024		% of Net
Revenue		September 30,
2023		% of Net
Revenue		$ Change% Change
Three months ended$648 32 %$602 32 %$46 8 %
Six months ended$1,277 35 %$1,198 31 %$79 7 %
Research and development expenses increased by $46 million, or 8 percent, during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. This increase was primarily due to a $29 million increase in personnel-related costs primarily due to an increase in continued investment in our studios and an increase in variable compensation and related expenses, and a $9 million increase in stock-based compensation.
Research and development expenses increased by $79 million, or 7 percent, during the six months ended September 30, 2024, as compared to the six months ended September 30, 2023. This increase was primarily due to a $51 million increase in personnel-related costs primarily due to an increase in continued investment in our studios and an increase in variable compensation and related expenses, and a $17 million increase in stock-based compensation.
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Marketing and Sales
Marketing and sales expenses consist of advertising, marketing and promotional expenses, personnel-related costs, and related overhead costs, net of qualified advertising cost reimbursements from third parties.
Marketing and sales expenses for the three and six months ended September 30, 2024 and 2023 were as follows (in millions):
September 30,
2024		% of Net
Revenue		September 30,
2023		% of Net
Revenue		$ Change% Change
Three months ended$272 13 %$280 15 %$(8)(3)%
Six months ended$477 13 %$509 13 %$(32)(6)%
Marketing and sales expenses decreased by $8 million, or 3 percent, during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. This decrease was primarily due to a decrease in advertising and promotional spending related to the prior year release of Immortals of Aveum and the rebranding investments associated with the launch of EA SPORTS FC 24, partially offset by an increase in advertising and promotional spending related to the release of EA SPORTS College Football 25, and the upcoming release of Dragon Age: The Veilguard.
Marketing and sales expenses decreased by $32 million, or 6 percent, during the six months ended September 30, 2024, as compared to the six months ended September 30, 2023. This decrease was primarily due to a decrease in advertising and promotional spending related to the prior year releases of Star Wars Jedi: Survivor and Immortals of Aveum, partially offset by an increase in advertising and promotional spending related to EA SPORTS College Football 25, EA SPORTS FC Mobile, and the upcoming release of Dragon Age: The Veilguard.
General and Administrative
General and administrative expenses consist of personnel and related expenses of executive and administrative staff, corporate functions such as finance, legal, human resources, and information technology (“IT”), related overhead costs, fees for professional services such as legal and accounting, and allowances for doubtful accounts.
General and administrative expenses for the three and six months ended September 30, 2024 and 2023 were as follows (in millions):
September 30,
2024		% of Net
Revenue		September 30,
2023		% of Net
Revenue		$ Change% Change
Three months ended$197 10 %$173 9 %$24 14 %
Six months ended$377 10 %$336 9 %$41 12 %
General and administrative expenses increased by $24 million, or 14 percent, during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. This increase was primarily due to a $8 million increase in personnel-related costs, including an increase in variable compensation and related expenses, a $6 million increase in contracted services and other, and a $5 million increase in stock-based compensation.
General and administrative expenses increased by $41 million, or 12 percent, during the six months ended September 30, 2024, as compared to the six months ended September 30, 2023. This increase was primarily due to a $17 million increase in personnel-related costs, including an increase in variable compensation and related expenses, a $7 million increase in stock-based compensation, and a $7 million increase in contracted services and other.
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Income Taxes
Provision for (benefits from) income taxes for the three and six months ended September 30, 2024 and 2023 were as follows (in millions):
September 30, 2024Effective Tax RateSeptember 30, 2023Effective Tax Rate
Three months ended$105 26 %$(8)(2)%
Six months ended$219 28 %$146 15 %
The provision for income taxes for the three and six months ended September 30, 2024 is based on our projected annual effective tax rate for fiscal year 2025, adjusted for specific items that are required to be recognized in the period in which they are incurred. Our effective tax rate for the three and six months ended September 30, 2024 was 26 percent and 28 percent, respectively, as compared to negative 2 percent and 15 percent for the same periods in fiscal year 2024. Our effective tax rate for the three months ended September 30, 2023 included one-time tax benefits related to the remeasurement of our Swiss deferred tax assets due to the change in statutory tax rate as well as the R&D capitalization guidance issued by the U.S. Treasury in that period. Excluding these one-time tax benefits, our effective tax rate for the three and six months ended September 30, 2023 would have been 25 percent and 27 percent, respectively.

The European Union and other countries, including Switzerland, have enacted, or have committed to enact global minimum taxes, commonly referred to as Pillar II, as proposed by the Organization for Economic Cooperation and Development (“OECD”), effective with our fiscal year 2025. Tax law changes from Pillar II in the relevant countries where we operate did not have an impact on our tax provision for the three or six months ended September 30, 2024. We will continue to monitor proposed and enacted legislation for potential tax impact in future periods.

LIQUIDITY AND CAPITAL RESOURCES
(In millions)
As of
September 30, 2024
As of
March 31, 2024

Increase/(Decrease)
Cash and cash equivalents$2,197 $2,900 $(703)
Short-term investments366 362 4 
Total$2,563 $3,262 $(699)
Percentage of total assets20 %24 %
 Six Months Ended
September 30,		 
(In millions)20242023Change
Net cash provided by operating activities$354 $471 $(117)
Net cash used in investing activities(115)(107)(8)
Net cash used in financing activities(948)(833)(115)
Effect of foreign exchange on cash and cash equivalents6 (9)15 
Net increase (decrease) in cash and cash equivalents$(703)$(478)$(225)
Changes in Cash Flow
Operating Activities. Net cash provided by operating activities decreased by $117 million during the six months ended September 30, 2024, as compared to the six months ended September 30, 2023, primarily driven by higher cash payments for income taxes and lower cash collections, partially offset by lower cash payments for royalties and lower marketing and advertising payments.
Investing Activities. Net cash used in investing activities increased by $8 million during the six months ended September 30, 2024, as compared to the six months ended September 30, 2023, primarily driven by a $63 million decrease in proceeds from maturities and sales of short-term investments, and a $21 million increase in capital expenditures, partially offset by a $76 million decrease in the purchase of short-term investments.
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Financing Activities. Net cash used in financing activities increased by $115 million during the six months ended September 30, 2024, as compared to the six months ended September 30, 2023, primarily due to a $100 million increase in common stock repurchases and a $19 million increase in cash paid to taxing authorities in connection with withholding taxes for stock-based compensation.
Short-term Investments
Due to our mix of fixed and variable rate securities, our short-term investment portfolio is susceptible to changes in short-term interest rates. As of September 30, 2024, our short-term investments had net unrealized gains of $1 million or less than 1 percent of total short-term investments. From time to time, we may liquidate some or all of our short-term investments to fund operational needs or other activities, such as capital expenditures, business acquisitions or stock repurchase programs.
Senior Notes
In February 2021, we issued $750 million aggregate principal amount of the 2031 Notes and $750 million aggregate principal amount of the 2051 Notes. The effective interest rate is 1.98% for the 2031 Notes and 3.04% for the 2051 Notes. Interest is payable semiannually in arrears, on February 15 and August 15 of each year.
In February 2016, we issued $400 million aggregate principal amount of the 2026 Notes. The effective interest rate is 4.97% for the 2026 Notes. Interest is payable semiannually in arrears, on March 1 and September 1 of each year.
See Note 11 — Financing Arrangements to the Condensed Consolidated Financial Statements in this Form 10-Q as it relates to our Senior Notes, which is incorporated by reference into this Item 2.
Credit Facility
On March 22, 2023, we entered into a $500 million unsecured revolving credit facility (the "Credit Facility") with a syndicate of banks. The Credit Facility terminates on March 22, 2028 unless the maturity is extended in accordance with its terms. As of September 30, 2024, no amounts were outstanding. The Credit Facility contains an option to arrange with existing lenders and/or new lenders to provide up to an aggregate of $500 million in additional commitments for revolving loans. Proceeds of loans made under the Credit Facility may be used for general corporate purposes. See Note 11 — Financing Arrangements to the Condensed Consolidated Financial Statements in this Form 10-Q as it relates to our Credit Facility, which is incorporated by reference into this Item 2.
Financial Condition
Our material cash requirements, including commitments for capital expenditure, as of September 30, 2024 are set forth in our Note 12 — Commitments and Contingencies to the Condensed Consolidated Financial Statements in this Form 10-Q, which is incorporated by reference into this Item 2. We expect capital expenditures to be approximately $225 million in fiscal year 2025 primarily due to investments in hardware, software, and real estate. We believe that our cash, cash equivalents, short-term investments, cash generated from operations and available financing facilities will be sufficient to meet these material cash requirements, which include licensing intellectual property from professional sports organizations and players associations used in our EA SPORTS titles (e.g., EA SPORTS FC, NFL Properties LLC, NFL Players Association and NFL Players Inc.) and third-party content and celebrities (e.g., Disney Interactive), debt repayment obligations of $1.9 billion, and to fund our operating requirements for the next 12 months and beyond. Our operating requirements include working capital requirements, capital expenditures, our capital return programs, and potentially, future acquisitions or strategic investments. We may choose at any time to raise additional capital to repay debt, strengthen our financial position, facilitate expansion, repurchase our stock, pursue strategic acquisitions and investments, and/or to take advantage of business opportunities as they arise. There can be no assurance, however, that such additional capital will be available to us on favorable terms, if at all, or that it will not result in substantial dilution to our existing stockholders.

During the six months ended September 30, 2024, we returned $851 million to stockholders through our capital return programs, repurchasing 5.4 million shares for approximately $750 million and returning $101 million through our quarterly cash dividend program.

Our foreign subsidiaries are generally subject to U.S. tax, and to the extent earnings from these subsidiaries can be repatriated without a material tax cost, such earnings will not be indefinitely reinvested. As of September 30, 2024, approximately $857 million of our cash and cash equivalents were domiciled in foreign tax jurisdictions. All of our foreign cash is available for repatriation without a material tax cost.
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We have a “shelf” registration statement on Form S-3 on file with the SEC. This shelf registration statement, which includes a base prospectus, allows us at any time to offer any combination of securities described in the prospectus in one or more offerings. Unless otherwise specified in a prospectus supplement accompanying the base prospectus, we would use the net proceeds from the sale of any securities offered pursuant to the shelf registration statement for general corporate purposes, which may include funding for working capital, financing capital expenditures, research and development, marketing and distribution efforts, and if opportunities arise, for acquisitions or strategic alliances. Pending such uses, we may invest the net proceeds in interest-bearing securities. In addition, we may conduct concurrent or other financings at any time.
Our ability to maintain sufficient liquidity could be affected by various risks and uncertainties including, but not limited to, customer demand and acceptance of our products, our ability to collect our accounts receivable as they become due, successfully achieving our product release schedules and attaining our forecasted sales objectives, economic conditions in the United States and abroad, the impact of acquisitions and other strategic transactions in which we may engage, the impact of competition, the seasonal and cyclical nature of our business and operating results, and the other risks described in the “Risk Factors” section, included in Part II, Item 1A of this report.
As of September 30, 2024, we did not have any off-balance sheet arrangements.
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Item 3.Quantitative and Qualitative Disclosures About Market Risk
MARKET RISK
We are exposed to various market risks, including changes in foreign currency exchange rates, interest rates and market prices, which have experienced significant volatility. Market risk is the potential loss arising from changes in market rates and market prices. We employ established policies and practices to manage these risks. Foreign currency forward contracts are used to hedge anticipated exposures or mitigate some existing exposures subject to foreign exchange risk as discussed below. While we do not hedge our short-term investment portfolio, we protect our short-term investment portfolio against different market risks, including interest rate risk as discussed below. Our cash and cash equivalents portfolio consists of highly liquid investments with insignificant interest rate risk and original or remaining maturities of three months or less at the time of purchase. We do not enter into derivatives or other financial instruments for speculative trading purposes and do not hedge our market price risk relating to marketable equity securities, if any.
Foreign Currency Exchange Risk
Foreign Currency Exchange Rates. International sales are a fundamental part of our business, and the strengthening of the U.S. dollar (particularly relative to the Euro, British pound sterling, Australian dollar, Japanese yen, Chinese yuan, South Korean won and Polish zloty) has a negative impact on our reported international net revenue, but a positive impact on our reported international operating expenses (particularly the Swedish krona and the Canadian dollar) because these amounts are translated at lower rates as compared to periods in which the U.S. dollar is weaker. While we use foreign currency hedging contracts to mitigate some foreign currency exchange risk, these activities are limited in the protection that they provide us and can themselves result in losses.
Cash Flow Hedging Activities. We hedge a portion of our foreign currency risk related to forecasted foreign currency-denominated sales and expense transactions by purchasing foreign currency forward contracts that generally have maturities of 18 months or less. These transactions are designated and qualify as cash flow hedges. Our hedging programs are designed to reduce, but do not entirely eliminate, the impact of currency exchange rate movements in net revenue and research and development expenses.
Balance Sheet Hedging Activities. We use foreign currency forward contracts to mitigate foreign currency exchange risk associated with foreign currency-denominated monetary assets and liabilities, primarily intercompany receivables and payables. These foreign currency forward contracts generally have a contractual term of three months or less and are transacted near month-end.
We believe the counterparties to our foreign currency forward contracts are creditworthy multinational commercial banks. While we believe the risk of counterparty nonperformance is not material, a sustained decline in the financial stability of financial institutions as a result of disruption in the financial markets could affect our ability to secure creditworthy counterparties for our foreign currency hedging programs.
Notwithstanding our efforts to mitigate some foreign currency exchange risks, there can be no assurance that our hedging activities will adequately protect us against the risks associated with foreign currency fluctuations. As of September 30, 2024, a hypothetical adverse foreign currency exchange rate movement of 10 percent or 20 percent would have resulted in potential declines in the fair value on our foreign currency forward contracts used in cash flow hedging of $229 million or $457 million, respectively. As of September 30, 2024, a hypothetical adverse foreign currency exchange rate movement of 10 percent or 20 percent would have resulted in potential losses in the Condensed Consolidated Statements of Operations on our foreign currency forward contracts used in balance sheet hedging of $156 million or $313 million, respectively. This sensitivity analysis assumes an adverse shift of all foreign currency exchange rates; however, all foreign currency exchange rates do not always move in the same manner and actual results may differ materially. See Note 4 — Derivative Financial Instruments to the Condensed Consolidated Financial Statements in this Form 10-Q as it relates to our derivative financial instruments, which is incorporated by reference into this Item 3.
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Interest Rate Risk
Our exposure to market risk for changes in interest rates relates primarily to our short-term investment portfolio. We manage our interest rate risk by maintaining an investment portfolio generally consisting of debt instruments of high credit quality and relatively short maturities. However, because short-term investments mature relatively quickly and, if reinvested, are invested at the then-current market rates, interest income on a portfolio consisting of short-term investments is subject to market fluctuations to a greater extent than a portfolio of longer term investments. Additionally, the contractual terms of the investments do not permit the issuer to call, prepay or otherwise settle the investments at prices less than the stated par value. Our investments are held for purposes other than trading. We do not use derivative financial instruments in our short-term investment portfolio.
As of September 30, 2024, our short-term investments were classified as available-for-sale securities and, consequently, were recorded at fair value with changes in fair value, including unrealized gains and unrealized losses not related to credit losses, reported as a separate component of accumulated other comprehensive income (loss), net of tax, in stockholders’ equity.
Notwithstanding our efforts to manage interest rate risks, there can be no assurance that we will be adequately protected against risks associated with interest rate fluctuations. Changes in interest rates affect the fair value of our short-term investment portfolio. To provide a meaningful assessment of the interest rate risk associated with our short-term investment portfolio, we performed a sensitivity analysis to determine the impact a change in interest rates would have on the value of the portfolio assuming a 150 basis point parallel shift in the yield curve. As of September 30, 2024, a hypothetical 150 basis point increase in interest rates would have resulted in a $3 million, or 1 percent decrease in the fair market value of our short-term investments.



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Item 4.Controls and Procedures
Evaluation of disclosure controls and procedures
Our Chief Executive Officer and our Chief Financial Officer, after evaluating the effectiveness of our disclosure controls and procedures, believe that as of the end of the period covered by this report, our disclosure controls and procedures were effective in providing the requisite reasonable assurance that material information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding the required disclosure.
Changes in internal control over financial reporting
There has been no change in our internal controls over financial reporting identified in connection with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that occurred during the fiscal quarter ended September 30, 2024 that has materially affected or is reasonably likely to materially affect our internal control over financial reporting.

Limitations on effectiveness of disclosure controls
There are inherent limitations to the effectiveness of any system of disclosure controls and procedures. These limitations include the possibility of human error, the circumvention or overriding of the controls and procedures and reasonable resource constraints. In addition, because we have designed our system of controls based on certain assumptions, which we believe are reasonable, about the likelihood of future events, our system of controls may not achieve its desired purpose under all possible future conditions. Accordingly, our disclosure controls and procedures provide reasonable assurance, but not absolute assurance, of achieving their objectives.

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PART II – OTHER INFORMATION
Item 1.Legal Proceedings
Refer to Note 12 of the Notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q for disclosures regarding our legal proceedings.

Item 1A.Risk Factors
Our business is subject to many risks and uncertainties, which may affect our future financial performance. In the past, we have experienced certain of the events and circumstances described below, which adversely impacted our business and financial performance. If any of the events or circumstances described below occur, our business or financial performance could be harmed, our actual results could differ materially from our expectations and the market value of our stock could decline. The risks and uncertainties discussed below are not the only ones we face. There may be additional risks and uncertainties not currently known to us or that we currently do not believe could be material that may harm our business or financial performance.
STRATEGIC RISKS
Our business is intensely competitive. We may not deliver successful and engaging products and services, or consumers may prefer our competitors’ products or services over our own.
Competition in our business is intense. Many new products and services are regularly introduced, but only a relatively small number of products and associated services drive significant engagement and account for a significant portion of total revenue. Our competitors range from established interactive entertainment companies to emerging start-ups. In addition, the gaming, technology/internet, and entertainment industries are converging, and we compete with large, diversified companies in those industries. We expect them to continue to pursue and strengthen these businesses. Their greater financial and other resources may provide larger budgets to recruit our key creative and technical talent, develop and market products and services that gain consumer success and shift player time and engagement away from our products and services, or otherwise disrupt our operations. We also expect new competitors to continue to emerge throughout the world. If our competitors develop more successful and engaging products or services, offer competitive products or services at lower price points, or if we do not continue to develop consistently high-quality, well-received and engaging products and services, or if our marketing strategies are not innovative or fail to resonate with players, particularly during key selling periods, our revenue, margins, and profitability will decline.

We strive to create innovative and high-quality products and services that allow us to grow the global online communities around our key franchises and reach more players. However, innovative and high-quality titles, even if highly-reviewed, may not meet our expectations or the expectations of our players. Many financially successful products and services within our industry are iterations of prior titles with large established consumer bases and significant brand recognition, which makes competing in certain categories challenging. In addition, products or services of our direct competitors or other entertainment companies may shift consumer spending or engagement from our products and services, which could cause our products and services to underperform. A significant portion of our revenue historically has been derived from products and services based on a few popular franchises, and the underperformance of a single major title has had, and could in the future have, a material adverse impact on our financial results. For example, we have historically derived a significant portion of our net revenue from sales related to our EA SPORTS FC franchise, annualized versions of which are consistently one of the best-selling games in the marketplace. Any events or circumstances that negatively impact our EA SPORTS FC franchise, including Ultimate Team, such as product or service quality, other products that take a portion of consumer spending and time, the delay or cancellation of a product or service launch, increased competition for key licenses, or real or perceived security or regulatory risks, could negatively impact our financial results to a disproportionate extent.

We may not meet our product and live service development schedules.
Our ability to meet product and live service development schedules is affected by a number of factors both within and outside our control, including feedback from our players, the creative processes involved, the coordination of large and sometimes geographically dispersed development teams, evolving work models, the complexity of our products and the platforms for which they are developed, the need to fine-tune our products prior to their release, and, in certain cases, approvals from third parties. We have experienced development delays for our products and services in the past which caused us to delay or cancel
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release dates. Any failure to meet anticipated production or release schedules likely would result in a delay of revenue and/or possibly a significant shortfall in our revenue, increase our development and/or marketing expenses, harm our profitability, and cause our operating results to be materially different than anticipated. If we miss key selling periods for products or services, including product delays or product cancellations our sales likely will suffer significantly.
Our industry changes rapidly and we may fail to anticipate or successfully implement new or evolving technologies, or adopt successful business strategies, distribution methods or services.
Rapid changes in our industry require us to anticipate, sometimes years in advance, the ways in which our business can remain competitive in the market. We have invested, and in the future may invest, in new business and marketing strategies, tools and technologies, distribution methods, products, and services. There can be no assurance that these strategic investments will achieve expected returns. No assurance can be given that the tools and technology we choose to implement, the business and marketing strategies we choose to adopt and the products, services and platform strategies that we pursue will achieve financial results that meet or exceed our expectations. We also may miss opportunities or fail to respond quickly enough to industry change, including the adoption of tools and technology or distribution methods or develop products, services or new ways to engage with our games that become popular with consumers, which could adversely affect our financial results.
Stakeholders have high expectations for the quality and integrity of our business, culture, products and services and we may be unsuccessful in meeting these expectations.
Expectations regarding the quality, performance and integrity of our business, brand, reputation, culture, products and services are high. Players and other stakeholders have sometimes been critical of our industry, brands, products, services, online communities, business models and/or practices for a wide variety of reasons, including perceptions about gameplay fun, fairness, game content, features or services, or objections to certain of our practices. These negative responses may not be foreseeable. We also may not effectively manage our responses because of reasons within or outside of our control. In addition, we have taken actions, including delaying the release of our games and delaying or discontinuing content, features and services for our games, after taking into consideration, among other things, feedback from our community or geopolitical events even if those decisions negatively impacted our operating results in the short term. These actions have had a negative impact on our financial results and may impact our future development processes. We expect to continue to take actions as appropriate, including actions that may result in additional expenditures and the loss of revenue.

Certain of our games and features on our platforms support online features that allow players and viewers to communicate with one another and post content, in real time, that is visible to other players and viewers. From time to time, this “user generated content” may contain objectionable and offensive content that is distributed and disseminated by third parties and our brands may be negatively affected by such actions. If we fail to appropriately respond to the dissemination of such content, we may be subject to lawsuits and governmental regulation, our players may not engage with our products and services and/or may lose confidence in our brands and our financial results may be adversely affected.

Additionally, our products and services are extremely complex software programs and are difficult to develop and distribute. We have quality controls in place to detect defects, bugs or other errors in our products and services before they are released. Nonetheless, these quality controls are subject to human error, overriding, and resource or technical constraints. If these quality controls and preventative measures are not effective in detecting all defects, bugs or errors in our products and services before they have been released into the marketplace, then our products and services could be below our standards and the standards of our players and our reputation, brand and sales could be adversely affected. In addition, we could be required to, or may find it necessary to, offer a refund for the product or service, suspend the availability or sale of the product or service or expend significant resources to cure the defect, bug or error each of which could significantly harm our business and operating results.

External game developers may not meet product development schedules or otherwise honor their obligations.
We contract with external game developers to develop our games or to publish or distribute their games. While we maintain contractual protections, we have less control over the product development schedules of games developed by external developers. We depend on their ability to meet product development schedules. If we have disputes with external developers or they cannot meet product development schedules, acquire certain approvals or are otherwise unable or unwilling to honor their obligations to us, we may delay or cancel previously announced games, alter our launch schedule or experience increased costs and expenses, which could result in a delay or significant shortfall in anticipated revenue, harm our profitability and reputation, and cause our financial results to be materially affected.

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Our business depends on the success and availability of consoles, platforms and devices developed by third parties and our ability to develop commercially successful products and services for those consoles, platforms and devices.
The success of our business is driven in part by the commercial success and adequate supply of third-party consoles, platforms and devices for which we develop our products and services or through which our products and services are distributed. Our success depends in part on accurately predicting which consoles, platforms and devices will be successful in the marketplace and providing engaging and commercially successful games and services for those consoles, platforms and devices. We must make product development decisions and commit significant resources well in advance of the commercial availability of new consoles, platforms and devices, and we may incur significant expense to adjust our product portfolio and development efforts in response to changing consumer preferences. We may enter into certain exclusive licensing arrangements that affect our ability to deliver or market products or services on certain consoles, platforms or devices. A console, platform or device for which we are developing products and services may not succeed as expected and we may be unable to fully recover the investments we have made in developing our products and services; or new consoles, platforms or devices may take market share away from those for which we have devoted significant resources, causing us to not reach our intended audience and take advantage of meaningful revenue opportunities.

We may experience declines or fluctuations in the re-occurring portion of our business.
Our business model includes revenue that we deem re-occurring in nature, such as revenue from our live services, annualized sports titles (e.g., EA SPORTS FC, EA SPORTS Madden NFL), and our console, PC and mobile catalog titles (i.e., titles that did not launch in the current fiscal year). While we have been able to forecast the revenue from these areas of our business with greater relative confidence than for new games, services and business models, we cannot provide assurances that consumer demand will remain consistent, including in connection with circumstances outside of our control. Furthermore, we may cease to offer games and services that we previously had deemed to be re-occurring in nature. Any decline or fluctuation in the re-occurring portion of our business may have a negative impact on our financial and operating results.
We could fail to successfully adopt new business models.
From time to time we seek to establish and implement new business models. Forecasting the success of any new business model is inherently uncertain and depends on a number of factors both within and outside of our control. Our actual revenue and profit for these businesses may be significantly greater or less than our forecasts. In addition, these new business models could fail, resulting in the loss of our investment in the development and infrastructure needed to support these new business models, as well as the opportunity cost of diverting management and financial resources away from more successful and established businesses. Any failure to successfully implement new business models could materially impact our financial and operating results.
Acquisitions, investments, divestitures and other strategic transactions could result in operating difficulties and other negative consequences.
We have made and may continue to make acquisitions or enter into other strategic transactions including (1) acquisitions of companies, businesses, intellectual properties, and other assets, (2) investments in, or transactions with, strategic partners, and (3) investments in new businesses as part of our long-term business strategy. These acquisitions and other transactions involve significant challenges and risks including that the transaction does not advance our business strategy or strategic goals, that we do not realize a satisfactory return on our investment, cannot realize anticipated tax benefits or incur tax costs, that we acquire liabilities and/or litigation from acquired companies or liabilities and/or litigation results from the transactions, that our due diligence process does not identify significant issues, liabilities or other challenges, diversion of management’s attention from our other businesses, and the incurrence of debt, contingent liabilities or amortization expenses, write-offs of goodwill, intangibles, or acquired in-process technology, or other increased cash and non-cash expenses. In addition, we may not integrate these businesses successfully or achieve expected synergies.

We may fund strategic transactions with (1) cash, which would reduce cash available for other corporate purposes, (2) debt, which would increase our interest expense and leverage and/or (3) equity which would dilute current shareholders’ percentage ownership and also dilute our earnings per share.

Additionally, we have divested and may in the future divest certain products and services that no longer fit our long-term strategies. Divestitures may adversely impact our business, operating results and financial condition if we are unable to achieve the anticipated benefits or cost savings from such divestitures, or if we are unable to offset impacts from the loss of revenue associated with the divested product lines or technologies.
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We may be unable to maintain or acquire licenses to include intellectual property owned by others in our games, or to maintain or acquire the rights to publish or distribute games developed by others.
Many of our products and services are based on or incorporate intellectual property owned by others. For example, our EA SPORTS products include rights licensed from major sports leagues, teams and players’ associations and our Star Wars products include rights licensed from Disney. Competition for these licenses and rights is intense. If we are unable to maintain these licenses and rights or obtain additional licenses or rights with significant commercial value, our ability to develop successful and engaging products and services may be adversely affected and our revenue, profitability and cash flows may decline significantly. Other competitors may assume certain licenses and create competing products, impacting our sales. Competition for these licenses has increased, and may continue to increase, the amounts that we must pay to licensors and developers, through higher minimum guarantees or royalty rates, which could significantly increase our costs and reduce our profitability.
Our business partners may not honor their obligations to us or their actions may put us at risk.
We rely on various business partners, including platform partners, third-party service providers, vendors, licensing partners, development partners and licensees. Their actions may put our business and our reputation and brand at risk. In many cases, our business partners may be given access to sensitive and proprietary information in order to provide services and support, and they may misappropriate our information and engage in unauthorized use of it. In addition, the failure of these third parties to provide adequate services and technologies, or the failure of the third parties to adequately maintain or update their services and technologies, could result in a disruption to our business operations. Further, disruptions in the financial markets, economic downturns, poor business decisions, or reputational harm may adversely affect our business partners and they may not be able to continue honoring their obligations to us or we may cease our arrangements with them. Alternative arrangements and services may not be available to us on commercially reasonable terms or we may experience business interruptions upon a transition to an alternative partner or vendor.
OPERATIONAL RISKS
Catastrophic events may disrupt our business.

Catastrophic events, including natural disasters, cyber-incidents, power disruptions, pandemics, acts of terrorism or other events have caused, and in the future could cause, outages, disruptions and/or degradations of our infrastructure (including our or our partners’ information technology and network systems), a failure in our ability to conduct normal business operations, or the closure of public spaces in which players engage with our games and services all of which could materially impact our reputation and brand, financial condition and operating results. The health and safety of our employees, players, third-party organizations with whom we partner, or regulatory agencies on which we rely could be also affected, any of which may prevent us from executing against our business strategies and/or cause a decrease in consumer demand for our products and services. We recognize the inherent physical risks associated with climate change. Our business relies on the reliable transmission of energy worldwide and is susceptible to weather-related events that could stress the power grid. System redundancy may be ineffective, and our disaster recovery and business continuity planning may not be sufficient for all eventualities. In addition, our corporate headquarters and several of our key studios also are located in seismically active regions and areas that are vulnerable to other natural disasters and weather events such as wildfires and hurricanes. These catastrophic events could disrupt our business and operations, and/or the businesses and operations of our partners and may cause us to incur additional costs to maintain or resume operations.

We have and may continue to experience security breaches and cyber threats.

The integrity of our and our partners’ information technology networks and systems is critical to our ongoing operations, products, and services. Our industry is prone to, and our systems and networks are subject to actions by malfeasant actors, which may include individuals or groups, including state-sponsored attackers. These actions include cyber-attacks, including ransomware, and other information security incidents that seek to exploit, disable, damage, and/or disrupt our networks, business operations, products and services and supporting technological infrastructure, or gain access to consumer and employee personal information, our intellectual property and other assets. Additionally, as artificial intelligence capabilities develop rapidly, individuals or groups of hackers and sophisticated organizations, may use these technologies to create new sophisticated attack methods that are increasingly automated, targeted and coordinated and more difficult to defend against. In addition, our systems and networks could be harmed or improperly accessed due to errors by employees or third parties that are authorized to access these networks and systems. We also rely on technological infrastructure provided by third-party business
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partners to support the online functionality of our products and services, who are also subject to these same cyber risks. Both our partners and we have expended, and expect to continue to expend, financial and operational resources to guard against cyber risks and to help protect our data and systems. However, the techniques used by malfeasant actors change frequently, continue to evolve in sophistication and volume, and often are not detected for long periods of time.

Remote access to our networks and systems, and the networks and systems of our partners is substantial. While we and our partners have taken steps to secure our networks and systems, these networks and systems may be more vulnerable to a successful cyber-attack or information security incident in a hybrid working model. The costs to respond to, mitigate, and/or notify affected parties of cyber-attacks and other security vulnerabilities are significant. It may also be necessary for us to take additional extraordinary measures and make additional expenditures to take appropriate responsive and preventative steps. Consequences of such events, responsive measures and preventative measures have included, and could in the future include, the loss of proprietary and personal data and interruptions or delays in our business operations, exploitation of our data, as well as loss of player confidence and damage to our brand and reputation, financial expenses and financial loss. In addition, such events could cause us to be non-compliant with applicable regulations, and subject us to legal claims or penalties under laws protecting the privacy or security of personal information or proprietary material information. We have experienced such events in the past and expect future events to occur.

In addition, the virtual economies that we have established in many of our games are subject to abuse, exploitation and other forms of fraudulent activity that can negatively impact our business. Virtual economies involve the use of virtual currency and/or virtual assets that can be used or redeemed by a player within a particular game or service. The abuse or exploitation of our virtual economies have included the illegitimate or unauthorized generation and sale of virtual items, including in black markets. Our online services have been impacted by in-game exploits and the use of automated or other fraudulent processes designed to generate virtual items or currency illegitimately or to execute account takeover attacks against our players. We anticipate such activity to continue. These abuses and exploits, and the steps that we take to address these abuses and exploits may result in a loss of anticipated revenue, increased costs to protect against or remediate these issues, interfere with players’ enjoyment of a balanced game environment or cause harm to our reputation and brand.
We may experience outages, disruptions or degradations in our services, products and/or technological infrastructure.
The reliable performance of our products and services depends on the continuing operation and availability of our information technology systems and those of our external service providers, including third-party “cloud” computing services. Our games and services are complex software products and maintaining the sophisticated internal and external technological infrastructure required to reliably deliver these games and services is expensive and complicated. The reliable delivery and stability of our products and services has been, and could in the future be, adversely impacted by outages, disruptions, failures or degradations in our network and related infrastructure, as well as in the online platforms or services of key business partners that offer, support or host our products and services. The reliability and stability of our products and services has been affected by events outside of our control as well as by events within our control, such as the migration of data among data centers and to third-party hosted environments, the performance of upgrades and maintenance on our systems, and effectively scaling our technological infrastructure to accommodate online demand for our products and services.

If we or our external business partners were to experience an event that caused a significant system outage, disruption or degradation or if a transition among data centers or service providers or an upgrade or maintenance session encountered unexpected interruptions, unforeseen complexity or unplanned disruptions, our products and services may not be available to consumers or may not be delivered reliably and stably. As a result, our reputation and brand may be harmed, consumer engagement with our products and services may be reduced, and our revenue and profitability could be negatively impacted. We do not have redundancy for all our systems, many of our critical applications reside in only one of our data centers, and our disaster recovery planning may not account for all eventualities.
Attracting, managing and retaining our talent is critical to our success.
Our business depends on our ability to attract, train, motivate and retain executive, technical, creative, marketing and other talent that are essential to the development, marketing and support of our products and services. The market for highly-skilled workers and leaders in our industry is extremely competitive, particularly in the geographic locations in which many of our key talent are located. We also engage with talent through contracted services. In addition, our leading position within the interactive entertainment industry makes us a prime target for recruiting our executives, as well as key creative and technical talent. If we cannot successfully recruit, train, motivate, attract and retain qualified talent, develop and maintain a healthy culture, or replace key talent following their departure, our reputation, brand and culture may be negatively impacted and our business will be impaired. Our global workforce is primarily non-unionized, but we have unions and works councils outside of
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the United States. In the United States, there has been an increase in prominence in certain sectors of workers exercising their right to form or join a union. If significant employee populations were to unionize or if we experience labor disruptions, we could experience operational changes that may materially impact our business.

We rely on the consoles, systems and devices of partners who have significant influence over the products and services that we offer in the marketplace.
A significant percentage of our digital net revenue is attributable to sales of products and services through our significant partners, including Sony, Microsoft, Apple and Google. The concentration of a material portion of our digital sales in these partners exposes us to risks associated with these businesses. Any deterioration in the businesses of our significant partners could disrupt and harm our business, including by limiting the methods through which our digital products and services are offered and exposing us to collection risks.
In addition, our license agreements typically provide these partners with significant control over the approval and distribution of the products and services that we develop for their consoles, systems and devices. For products and services delivered via digital channels, each respective partner has policies and guidelines that control the promotion and distribution of these titles and the features and functionalities that we are permitted to offer through the channel. Our partners could choose to exclude our products and services from, or de-emphasize the promotion of our products and services within, some or all of their distribution channels in order to promote their own products and services or those of our competitors. In addition, we are dependent on these partners to invest in, and upgrade, the capabilities of their systems in a manner that corresponds to the preferences of consumers. Failure by these partners to keep pace with consumer preferences could have an adverse impact on the engagement with our products and services and our ability to merchandise and commercialize our products and services which could harm our business and/or financial results.
Moreover, certain significant partners can determine and change unilaterally certain key terms and conditions, including the ability to change their user and developer policies and guidelines and can also set the rates that we must pay to provide our games and services through their online channels, and retain flexibility to change their fee structures or adopt different fee structures for their online channels. These partners also control the information technology systems through which online sales of our products and service channels are captured. If our partners establish terms that restrict our offerings, significantly impact the financial terms on which these products or services are offered to our customers, or their information technology systems experience outages that impact our players’ ability to access our games or purchase extra content or cause an unanticipated delay in reporting, our business and/or financial results could be materially affected.
LEGAL AND COMPLIANCE RISKS
Our business is subject to complex and prescriptive regulations regarding consumer protection and data privacy practices, and could be adversely affected if our consumer protection, data privacy and security practices are not adequate, or perceived as being inadequate.
We are subject to global data privacy, data protection, security and consumer-protection laws and regulations worldwide. These laws and regulations are emerging and evolving and the interpretation, application and enforcement of these laws and regulations often are uncertain, contradictory and changing. The failure to maintain data practices that are compliant with applicable laws and regulations, or evolving interpretations of applicable laws and regulations, could result in inquiries from enforcement agencies or direct consumer complaints, resulting in civil or criminal penalties, and could adversely impact our reputation and brand. In addition, the operational costs of compliance with these regulations is high and will likely continue to increase. Even if we remain in compliance with applicable laws and regulations, consumer sensitivity to the collection and processing of their personal information continues to increase. Any real or perceived failures in maintaining acceptable data privacy practices, including allowing improper or unauthorized access, acquisition or misuse and/or uninformed disclosure of consumer, employee and other information, or a perception that we do not adequately secure this information or provide consumers with adequate notice about the information that they authorize us to collect and disclose could result in brand, reputational, or other harms to the business, result in costly remedial measures, deter current and potential customers from using our products and services and cause our financial results to be materially affected.
Third party vendors and business partners receive access to certain information that we collect. These vendors and business partners may not prevent data security breaches with respect to the information we provide them or fully enforce our policies, contractual obligations and disclosures regarding the collection, use, storage, transfer and retention of personal data. A data security breach of one of our vendors or business partners could cause reputational and financial harm to them and us, negatively impact our ability to offer our products and services, and could result in legal liability, costly remedial measures,
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governmental and regulatory investigations, harm our profitability, reputation and brand, and/or cause our financial results to be materially affected.
Government regulations applicable to us may negatively impact our business.
We are a global company subject to various and complex laws and regulations domestically and internationally, including laws and regulations related to consumer protection, protection of minors, online safety, content, advertising, information security, intellectual property, competition, sanctions, taxation, and employment, among others. Many of these laws and regulations are continuously evolving and developing, and the application to, and impact on, us is uncertain. Enforcement of these laws could harm our business by limiting the products and services we can offer consumers or the manner in which we offer them. The costs of compliance with these laws may increase in the future as a result of changes in applicable laws or changes to interpretation. Any failure on our part to comply with these laws or the application of these laws in an unanticipated manner may harm our business and result in penalties or significant legal liability.

Certain of our business models and features within our games and services are subject to new laws or regulations or evolving interpretations and application of existing laws and regulations. The growth and development of electronic commerce, virtual items and virtual currency has prompted calls for new laws and regulations and resulted in the application of existing laws or regulations that have limited or restricted the sale of our products and services in certain territories. Additionally, in our current phase of innovation, artificial intelligence capabilities are rapidly advancing, and it is possible that we could become subject to new regulations, or the interpretation of existing regulations, aimed at how we incorporate artificial intelligence into our games and development processes, that could negatively impact our operation and results. Our games and services allow players to connect with each other and create and share user-generated content. Such interactions and content may be objectionable or offensive and decrease engagement with our products and services, cause a loss of confidence in our brands and expose us to liability and regulatory oversight, particularly as applicable global laws and regulations are introduced and evolve. New laws related to these business models and features or the interpretation or application of current laws could subject us to additional regulation and oversight, cause us to further limit or restrict the sale of our products and services or otherwise impact our products and services, lessen the engagement with, and growth of, profitable business models, and expose us to increased compliance costs, significant liability, fines, penalties and harm to our reputation and brand.

We are subject to laws in certain foreign countries, and adhere to industry standards in the United States, that mandate rating requirements or set other restrictions on the advertisement, publication or distribution of interactive entertainment software based on content. In addition, certain foreign countries allow government censorship of interactive entertainment software products or require pre-approval processes of uncertain length before our games and services can be offered. Adoption and enforcement of ratings systems, censorship, restrictions on publication or distribution, and changes to approval processes or the status of any approvals could harm our business by limiting the products we are able to offer to our consumers. In addition, compliance with new and possibly inconsistent regulations for different territories could be costly, delay or prevent the release of our products in those territories.

We may be subject to claims of infringement of third-party intellectual property rights.
From time to time, third parties may claim that we have infringed their intellectual property rights. Although we take steps to avoid knowingly violating the intellectual property rights of others, it is possible that third parties still may claim infringement. Existing or future infringement claims against us may be expensive to defend and divert the attention of our employees from business operations. Such claims or litigation could require us to pay damages and other costs. We also could be required to stop selling, distributing or supporting products, features or services which incorporate the affected intellectual property rights, redesign products, features or services to avoid infringement, or obtain a license, all of which could be costly and harm our business.
In addition, many patents have been issued that may apply to potential new modes of delivering, playing or monetizing products and services such as those that we produce or would like to offer in the future. We may discover that future opportunities to provide new and innovative modes of game play and game delivery may be precluded by existing patents that we are unable to acquire or license on reasonable terms.
From time to time we may become involved in other legal proceedings.
We are currently, and from time to time in the future may become, subject to legal proceedings, claims, litigation and government investigations or inquiries, which could be expensive, lengthy, disruptive to normal business operations and occupy a significant amount of our employees’ time and attention. In addition, the outcome of any legal proceedings, claims, litigation,
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investigations or inquiries may be difficult to predict and could have a material adverse effect on our business, reputation, operating results, or financial condition.
Our products and brands are subject to intellectual property infringement, including in jurisdictions that do not adequately protect our products and intellectual property rights.
We regard our products, brands and intellectual property as proprietary and take measures to protect our assets from infringement. We are aware that some unauthorized copying of our products and brands occurs, and if a significantly greater amount were to occur, it could negatively impact our business. Further, our products and services are available worldwide and the laws of some countries, particularly in Asia, either do not protect our products, brands and intellectual property to the same extent as the laws of the United States or are poorly enforced. Legal protection of our rights may be ineffective in countries with weaker intellectual property enforcement mechanisms. In addition, certain third parties have registered our intellectual property rights without authorization in foreign countries. Successfully registering such intellectual property rights could limit or restrict our ability to offer products and services based on such rights in those countries. Although we take steps to enforce and police our rights, our practices and methodologies may not be effective against all eventualities.
FINANCIAL RISKS
Our financial results are subject to currency and interest rate fluctuations.
International sales are a fundamental part of our business. For our fiscal year ended March 31, 2024, international net revenue comprised 60 percent of our total net revenue, and we expect our international business to continue to account for a significant portion of our total net revenue. As a result of our international sales, and also the denomination of our foreign investments and our cash and cash equivalents in foreign currencies, we are exposed to the effects of fluctuations in foreign currency exchange rates, and volatility in foreign currency exchange rates remains elevated as compared to historic levels. We use foreign currency hedging contracts to mitigate some foreign currency risk. However, these activities are limited in the protection they provide us from foreign currency fluctuations and can themselves result in losses. In addition, interest rate volatility can decrease the amount of interest earned on our cash, cash equivalents and short-term investment portfolio.

We utilize debt financing and such indebtedness could adversely impact our business and financial condition.

We have senior unsecured notes outstanding, as well as an unsecured revolving credit facility. While the facility is currently undrawn, we may use the proceeds of any future borrowings for general corporate purposes. We may also enter into other financial instruments in the future. This indebtedness and any indebtedness that we may incur in the future could affect our financial condition and future financial results by, among other things, requiring the dedication of a substantial portion of any cash flow from operations to the repayment of indebtedness and increasing our vulnerability to downturns in our business or adverse changes in general economic and industry conditions.

The agreements governing our indebtedness impose restrictions on us and require us to maintain compliance with specified covenants. In particular, the revolving credit facility requires us to maintain compliance with a debt to EBITDA ratio. Our ability to comply with these covenants may be affected by events beyond our control. If we breach any of these covenants and do not obtain a waiver from the lenders or noteholders, then, subject to applicable cure periods, our outstanding indebtedness may be declared immediately due and payable. There can be no assurance that any refinancing or additional financing would be available on terms that are favorable or acceptable to us, if at all. In addition, changes by any rating agency to our credit rating may negatively impact the value and liquidity of both our debt and equity securities, as well as the potential costs associated with new issuances or any potential refinancing of existing issuances. Downgrades in our credit rating could also restrict our ability to obtain additional financing in the future and could affect the terms of any such financing.

Changes in our tax rates or exposure to additional tax liabilities, and changes to tax laws and interpretations of tax laws could adversely affect our earnings and financial condition.

We are subject to taxes in the United States and in various foreign jurisdictions. Significant judgment is required in determining our worldwide income tax provision, tax assets, and accruals for other taxes, and the ultimate tax determination is uncertain for many transactions. Our effective income tax rate is based in part on our corporate operating structure and how we operate our business and develop, value, and use our intellectual property. Taxing authorities in jurisdictions in which we operate have challenged and audited, and may continue to, challenge and audit our methodologies for calculating our income taxes, which could increase our effective income tax rate. In addition, our provision for income taxes is materially affected by our profit
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levels, changes in our business, changes in our geographic mix of earnings, changes in the elections we make, changes in our corporate structure, or changes in applicable accounting rules, as well as other factors.

Changes to enacted U.S. federal, state or international tax laws, as well as changes to interpretations of existing tax laws, particularly in Switzerland, where our international business is headquartered, and actions we have taken in our business with respect to such laws, have affected, and could continue to affect, our effective tax rates and cash taxes, and could cause us to change the way in which we structure our business and result in other costs. For example, the European Union and other countries, including Switzerland, have enacted or have committed to enact global minimum taxes which could impact our provision for income taxes and cash taxes. Our effective tax rate also could be adversely affected by changes in the measurement of our deferred income taxes, including the need for valuation allowances against deferred tax assets. Our valuation allowances, in turn, are impacted by several factors with respect to our business, industry, and the macroeconomic environments, including changing interest rates and tax laws. Significant judgment is involved in determining the amount of valuation allowances, and actual financial results also may differ materially from our current estimates and could have a material impact on our assessments.

We are required to pay taxes other than income taxes, such as payroll, sales, use, value-added, net worth, property, transfer, and goods and services taxes, in both the United States and foreign jurisdictions. Several foreign jurisdictions have introduced new digital services taxes on revenue of companies that provide certain digital services or expanded their interpretation of existing tax laws with regard to other non-income taxes. There is limited guidance about the applicability of these new taxes or changing interpretations to our business and significant uncertainty as to what will be deemed in scope. If these foreign taxes are applied to us, it could have an adverse and material impact on our business and financial performance.

GENERAL RISKS
Our business is subject to economic, market, public health and geopolitical conditions.
Our business is subject to economic, market, public health and geopolitical conditions, which are beyond our control. The United States and other international economies have experienced cyclical downturns from time to time. Worsening economic conditions, political instability, and adverse political developments in or around any of the countries in which we do business, particularly conditions that negatively impact discretionary consumer spending and consumer demand or increase our operating costs, including conflicts, inflation, slower growth, recession and other macroeconomic conditions have had, and could continue to have, a material adverse impact on our business and operating results. In addition, relations between the United States and countries in which we have operations and sales have been impacted by events such as the adoption or expansion of trade restrictions, including economic sanctions, that have had a negative impact on our financial results and development processes.
We are particularly susceptible to market conditions and risks associated with the entertainment industry, which, in addition to general macroeconomic downturns, also include the popularity, price and timing of our games, changes in consumer demographics, the availability and popularity of other forms of entertainment, and critical reviews and public tastes and preferences, among other factors which may change rapidly and cannot necessarily be predicted.
Our stock price has been volatile and may continue to fluctuate significantly.
The market price of our common stock historically has been, and we expect will continue to be, subject to significant fluctuations. These fluctuations may be due to our operating results or factors specific to our operating results (including those discussed in the risk factors above), changes in securities analysts’ estimates of our future financial performance, ratings or recommendations, our results or future financial guidance falling below our expectations and analysts’ and investors’ expectations, the failure of our capital return programs to meet analysts’ and investors’ expectations, the announcement and integration of any acquisitions we may make, departure of key personnel, cyberattacks, or factors largely outside of our control including, those affecting interactive gaming, entertainment, and/or technology companies generally, national or international economic conditions, investor sentiment or other factors related or unrelated to our operating performance. In particular, economic downturns may contribute to the public stock markets experiencing extreme price and trading volume volatility. These fluctuations could adversely affect the price of our common stock.


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Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

In May 2024, the Company’s Audit Committee, upon delegation from the Company’s Board of Directors, authorized a new program to repurchase up to $5.0 billion of our common stock. This program supersedes and replaces the August 2022 program and expires on May 9, 2027. Under this program, we may purchase stock in the open market or through privately negotiated transactions in accordance with applicable securities laws, including pursuant to pre-arranged stock trading plans. The timing and actual amount of the stock repurchases will depend on several factors including price, capital availability, regulatory requirements, alternative investment opportunities and other market conditions. We are not obligated to repurchase a specific number of shares of our common stock under this program and it may be modified, suspended or discontinued at any time. We are actively repurchasing shares under this program.

The following table summarizes the number of shares repurchased during the three months ended September 30, 2024:
Fiscal MonthTotal Number of Shares PurchasedAverage Price Paid per ShareTotal Number of Shares Purchased as Part of Publicly Announced ProgramsMaximum Dollar Value that May Still Be Purchased Under the Programs (in millions)
June 30, 2024 - July 27, 2024875,349 $142.14 875,349 $4,653 
July 28, 2024 - August 24, 2024784,928 $147.48 784,928 $4,537 
August 25, 2024 - September 28, 2024927,698 $145.14 927,698 $4,403 
2,587,975 $144.83 2,587,975 

Item 3.Defaults Upon Senior Securities

None.

Item 4.Mine Safety Disclosures

Not applicable.

Item 5.     Other Information

Rule 10b5-1 Plans

During the three months ended September 30, 2024, the following EA directors and/or officers entered into trading plans intended to satisfy the requirements of Rule 10b5-1(c) of the Exchange Act as part of managing their EA equity holdings (“10b5-1 Plan”).

•On August 2, 2024, Laura Miele, EA’s President of EA Entertainment & Technology, adopted a 10b5-1 Plan. Up to an aggregate 30,000 shares of our common stock may be sold under this plan with sales occurring periodically from the estimated selling start date of November 1, 2024 through October 31, 2025.

•On August 6, 2024, Andrew Wilson, EA’s Chief Executive Officer, adopted a 10b5-1 Plan. Up to an aggregate 60,000 shares of our common stock may be sold under this plan with sales occurring periodically from the estimated selling start date of November 5, 2024 through October 31, 2025. Mr. Wilson’s 10b5-1 Plan also provides for the sale of an amount of shares of our common stock to be determined to satisfy tax withholding obligations arising from the vesting of EA equity awards in May 2025.

•On August 26, 2024, Stuart Canfield, EA’s Chief Financial Officer, adopted a 10b5-1 Plan. Up to an aggregate 4,000 shares of our common stock may be sold under this plan with sales occurring periodically from the estimated selling start date of December 26, 2024 through August 29, 2025.
    
Item 6.Exhibits

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The exhibits listed in the accompanying index to exhibits on Page 57 are filed or incorporated by reference as part of this report.


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ELECTRONIC ARTS INC.
FORM 10-Q
FOR THE PERIOD ENDED SEPTEMBER 30, 2024
EXHIBIT INDEX
Incorporated by Reference
NumberExhibit Title  Form  File No.  Filing Date  Filed
Herewith
8-K000-179488/13/2021
8-K000-179488/15/2022
8-K000-179488/5/2024
X
        X
        X
Additional exhibits furnished with this report:        
        X
        X
101.INS†
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.        X
101.SCH†
Inline XBRL Taxonomy Extension Schema Document        X
101.CAL†
Inline XBRL Taxonomy Extension Calculation Linkbase Document        X
101.DEF†
Inline XBRL Taxonomy Extension Definition Linkbase Document        X
101.LAB†
Inline XBRL Taxonomy Extension Label Linkbase Document        X
101.PRE†
Inline XBRL Taxonomy Extension Presentation Linkbase Document        X
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)X

†    Attached as Exhibit 101 to this Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2024 are the following formatted in Inline eXtensible Business Reporting Language (“iXBRL”): (1) Condensed Consolidated Balance Sheets, (2) Condensed Consolidated Statements of Operations, (3) Condensed Consolidated Statements of Comprehensive Income, (4) Condensed Consolidated Statements of Stockholders' Equity, (5) Condensed Consolidated Statements of Cash Flows, and (6) Notes to Condensed Consolidated Financial Statements.
*     Management contract or compensatory plan or arrangement.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 ELECTRONIC ARTS INC.
 (Registrant)
 /s/ Stuart Canfield
DATED: Stuart Canfield
November 1, 2024 EVP and Chief Financial Officer (Duly Authorized Officer)

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