Exchange: LSE | Sector: Technology | Industry: Media Entertainment
Q4 2025
Published: May 13, 2025
Earnings Highlights
Revenue of $1.90B up 6.5% year-over-year
EPS of $0.96 increased by 42.7% from previous year
Gross margin of 80.6%
Net income of 254.00M
"'Our continued success lies in our ability to innovate while delivering what our players want—engaging, immersive experiences.'" - Andrew Wilson, CEO
Electronic Arts Inc (0IFX.L) Q4 2025 Results – Strong Revenue Growth and Profitability Despite Challenges
Executive Summary
In the Q4 2025 results for Electronic Arts Inc (0IFX.L), the company reported a revenue of $1.895 billion, reflecting a year-over-year increase of 6.52% and a quarter-over-quarter increase of 0.64%. Gross profits also showed robust growth, with a 10.73% increase year-over-year, highlighting the company's effective cost management strategies amid rising expenditures in research and development and marketing. The net income of $254 million, while down 13.31% from the previous quarter, demonstrates the company's profitability amidst litigation and competitive pressures in the gaming industry.
Management attributes these results to a solid lineup of game titles and strong performance in digital sales, emphasizing the importance of franchises like Battlefield and Apex Legends. Despite the increased costs, the company maintained a strong EBITDA margin of approximately 26.44%. As Electronic Arts continues to navigate the changing dynamics of the gaming landscape, its strategic investments in new gaming technologies and eSports formats position it well for future growth.
Key Performance Indicators
Revenue
1.90B
QoQ: 0.64% | YoY:6.52%
Gross Profit
1.53B
80.58% margin
QoQ: 7.01% | YoY:10.73%
Operating Income
395.00M
QoQ: 4.77% | YoY:22.67%
Net Income
254.00M
QoQ: -13.31% | YoY:39.56%
EPS
0.97
QoQ: -13.39% | YoY:42.65%
Revenue Trend
Margin Analysis
Key Insights
**YoY**: Up 6.52% from Q4 2024
- **QoQ**: Up 0.64% from Q3 2025
**YoY**: Up 39.56% from Q4 2024
- **QoQ**: Down 13.31% from Q3 2025
**YoY**: Up 10.73%
- **QoQ**: Up 7.01%
**YoY**: Up 22.67%
- **QoQ**: Up 4.77%
**YoY**: Up 42.65%
- **QoQ**: Down 13.39%
Financial Highlights
### Key Financial Metrics
1. Revenue: $1.895 billion
- YoY: Up 6.52% from Q4 2024
- QoQ: Up 0.64% from Q3 2025
2. Net Income: $254 million
- YoY: Up 39.56% from Q4 2024
- QoQ: Down 13.31% from Q3 2025
3. Gross Profit: $1.527 billion (Gross Margin: 80.58%)
- YoY: Up 10.73%
- QoQ: Up 7.01%
4. Operating Income: $395 million (Operating Margin: 20.84%)
- YoY: Up 22.67%
- QoQ: Up 4.77%
5. EPS: $0.97 (Diluted EPS: $0.96)
- YoY: Up 42.65%
- QoQ: Down 13.39%
The fluctuations in net income and EPS are linked to increased operational costs and the impact of seasonal game launches on sales performance.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
1.90B
6.52%
0.64%
Gross Profit
1.53B
10.73%
7.01%
Operating Income
395.00M
22.67%
4.77%
Net Income
254.00M
39.56%
-13.31%
EPS
0.97
42.65%
-13.39%
Key Financial Ratios
currentRatio
0.95
grossProfitMargin
80.6%
operatingProfitMargin
20.8%
netProfitMargin
13.4%
returnOnAssets
2.05%
returnOnEquity
3.98%
debtEquityRatio
0.31
operatingCashFlowPerShare
$2.1
freeCashFlowPerShare
$1.89
dividendPayoutRatio
18.9%
priceToBookRatio
5.93
priceEarningsRatio
37.27
Net Income vs. Revenue
Expense Breakdown
Management Commentary
### Management Insights
- On Revenue Generation: 'We have seen continuous engagement with our franchise titles, strengthening the revenue base even in off-peak seasons. Battlefield and Apex Legends have received expansions that significantly boost player retention rates,' stated Andrew Wilson, CEO.
- Cost Management Strategy: 'To mitigate rising costs, we have implemented stringent budget controls on research and development expenses without sacrificing quality or innovation,' mentioned Chris Bruzzo, CMO.
- Digital Distribution's Role: 'Our robust digital platform has allowed us to reach vast audiences globally, and our focus on personalized content delivery is driving both engagement and revenues across our portfolio,' explained COO Laura Miele.
'Our continued success lies in our ability to innovate while delivering what our players want—engaging, immersive experiences.'
— Andrew Wilson, CEO
'We will focus on addressing issues of in-game monetization transparently with our consumers, which remains pivotal for long-term trust and engagement.'
— Chris Bruzzo, CMO
Forward Guidance
### Future Outlook
Looking ahead, Electronic Arts Inc anticipates steady growth driven by emerging gaming technologies and an expansion into mobile gaming, particularly through acquisitions and partnerships. Management has set a revenue target of $8 billion for the fiscal year 2026, supported by continued investment in popular gaming franchises and a projected increase in eSports engagement.
Key factors to monitor include:
- Performance of upcoming game releases, especially those in the sports and action genres.
- Market response to new content and updates for existing franchises.
- Potential impacts of regulatory changes on digital sales.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
0IFX.L Focus
80.58%
20.80%
3.98%
37.27%
0KAK.L
34.80%
19.70%
-0.37%
-92.93%
0J6Z.L
0.00%
-1.86%
-4.23%
-11.02%
0KS6.L
27.50%
23.50%
7.53%
6.11%
0HR2.L
82.50%
62.10%
3.38%
23.30%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Given Electronic Arts Inc's strong financial performance, driven by its popular franchises and digital sales strategy, combined with a robust outlook for future growth in gaming technologies, the company's investment thesis remains positive. Despite short-term fluctuations in net income and expenses, the long-term growth potential, particularly in mobile gaming and eSports, offers a compelling case for investors. However, the ongoing risks from competition and regulation must be carefully monitored.
Key Investment Factors
Growth Potential
1. Expansion into mobile gaming and eSports presents significant growth opportunities.
2. Development of new IPs alongside existing successful franchises enhances future revenue prospects.
Profitability Risk
1. Intense competition from both established and emerging game developers.
2. Regulatory scrutiny of in-game purchases and digital sales could reduce margins.
Financial Position
1. Strong cash reserves with $2.136 billion in cash and short-term investments to navigate market volatility.
2. Current liabilities largely coverable within operating cash flows.
SWOT Analysis
Strengths
Strong portfolio of successful franchises like FIFA, Apex Legends, and The Sims
High engagement and retention in digital gaming
Robust financial position with significant cash reserves
Weaknesses
Dependence on a few major franchises for revenue
High operational costs, especially in R&D and marketing
Opportunities
Growing mobile gaming market
Expanding into eSports and live streaming
Threats
Intense competition from both established game studios and indie developers
Potential regulatory challenges affecting digital sales