Electronic Arts Inc. (EA) — Agentic Tribune

Item 1: Business

Overview

What We Offer

We create innovative games and experiences that deliver high-quality interactive entertainment and drive engagement across our global network of hundreds of millions of players. 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 harnessing our communities to grow in, around, and beyond our games. We develop and publish games and experiences across diverse genres, such as sports, racing, first-person shooter, action, role-playing and simulation. We believe that our creative talent, production capabilities, broad portfolio of owned and licensed IP, and technological foundation, coupled with our network of hundreds of millions of players, provide us with strategic advantages.

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 outside of the sale of our full games. Our digital live services and other net revenue represented 71 percent of our total net revenue during fiscal year 2026. We offer live services through our global football and American football franchises (which includes EA SPORTS College Football and EA SPORTS Madden NFL) and based on our iconic IP such as The Sims, Apex Legends and Battlefield. Our most popular live services are the extra content in the Ultimate Team mode associated with our sports franchises. Ultimate Team allows players to collect current and former players in order to build and compete as a personalized team. Live services net revenue generated from extra content purchased within Ultimate Team, a substantial portion of which was derived from FC Ultimate Team, is material to our business.

Our players engage with our products and services on consoles, PCs and mobile devices. Players can access our products and services through traditional single-game purchase or through subscription offerings; and certain of our products and services are available through a “free-to-play” model whereby players download the game for free and engage with services provided on an ongoing basis. For example, we develop products and services within the EA SPORTS FC franchise that allow players to engage through multiple business models, distribution channels and devices, including: (1) our annualized console and PC games and associated experiences, which can be purchased through both digital distribution and retail channels and also are available through subscription services; (2) a mobile free-to-play offering; and (3) a PC free-to-play game available in certain countries. Revenue from our EA SPORTS FC franchise, as well as revenue from our American football franchise, is material to our business and will continue to be so.

Distribution of Products and Services

Console. We primarily distribute our console products and services through partners, such as Sony and Microsoft. Under the terms of publishing agreements our products and services are developed, marketed, published, and distributed with PlayStation

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and Xbox consoles. Our direct sales to Sony and Microsoft represented approximately 39 percent and 16 percent of total net revenue, respectively, in fiscal year 2026. Under these agreements, we have the non-exclusive right to use, for a fixed term and in a designated territory, technology that is owned or licensed by them to publish our games on their respective consoles. With respect to our digitally-delivered products and services, the console manufacturers pay us either a wholesale price or a royalty percentage on the revenue they derive from their sales of our products and services. Our transactions for packaged goods products are made pursuant to individual purchase orders, which are accepted on a case-by-case basis. Our packaged goods games are sold directly to mass market retailers, specialty stores and through distribution arrangements. For packaged goods products, we pay the console manufacturers a per-unit royalty for each unit manufactured. Many key commercial terms of our relationships with Sony and Microsoft — such as manufacturing terms, delivery times, policies and approval conditions — are determined unilaterally, and are subject to change by the console manufacturers.

Our publishing agreements also require us to indemnify the console manufacturers for any loss, liability and expense resulting from any claim against the console manufacturer regarding our products and services, including any claims for patent, copyright or trademark infringement brought against the console manufacturers. Each agreement may be terminated by the console manufacturers if a breach or default by us is not cured after we receive written notice from the console manufacturers, or if we become insolvent. The console manufacturers are not obligated to enter into license agreements with us for any future consoles, products or services.

Mobile and PC. We distribute our mobile applications and additional content through distributors such as Apple and Google. Our applications are downloaded for mobile devices from third party application storefronts. The distributor collects payment from consumers for content purchased within the application or charges consumers a one-time fee to download the application. Our distribution agreements establish the amounts that are retained by the distributor and the amounts passed through to us. These arrangements are typically terminable on short notice. The agreements generally do not obligate the distributors to market or distribute any of our applications. Application storefront policies are determined unilaterally by the distributors and are subject to change.

Our PC products and services can be downloaded directly through the EA app, and EA’s digital storefront, as well as through third-party online download stores, such as Steam. We also have agreements with companies, such as Tencent Holdings Limited, Nexon Co., Ltd and Garena Online Private Limited, or their respective affiliates, that allow these companies to publish our mobile and PC free-to-play games in certain countries. Our players access games from the publishers’ online storefronts and are charged for additional content purchased within our game environment. The agreements generally establish the amounts that are retained by the publisher and the amounts passed through to us.

Competition

The market for interactive entertainment is intensely competitive and changes rapidly as new products, business models and distribution channels are introduced. We also face competition for the right to license certain intellectual property included in our products. In order to remain successful, we are required to anticipate and commit to, sometimes years in advance, the ways in which our products and services will compete in the market. We face significant competition from companies that focus on developing products and services available on consoles, PCs and/or mobile devices. In addition, we compete with large, diversified companies that have strengthened their interactive entertainment capabilities. Their greater financial and 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. We also continue to expect new entrants to emerge as advances in technology and artificial intelligence have lowered the barriers to creating new games.

More broadly, we compete against providers of different sources of entertainment, such as movies, television, social media, online casual entertainment and music that our players could enjoy in their free time. Important competitive factors in our industry include the ability to attract creative and technical talent, game quality and ease of use, innovation, compatibility of products with certain consoles and other distribution channels, brand recognition, reputation, reliability, security, creativity, price, marketing, and quality of customer service. The companies with which we compete, as well as competitive factors, may change and evolve as we execute our strategic plan.

Risks related to competitive factors affecting our business are described in Part I, Item 1A, Risk Factors.

Research and Development

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Because the industries in which we compete are characterized by rapid technological advances, our ability to compete successfully is linked to our ability to deliver competitive products, services and technologies to the marketplace. We have teams focused on developing new technologies to enhance existing products and services and to expand the range of our offerings. For example, we are investing, and intend to continue to invest, in research and development to incorporate artificial intelligence into our products and services. We expect developments in artificial intelligence or our investments in artificial intelligence to accelerate the production of our products and services and enable new experiences for our players.

Intellectual Property and Technology

To establish and protect our intellectual property, we rely on a combination of copyrights, trademarks, patents, patent applications, trade secrets, know-how, license agreements, confidentiality provisions and procedures and other contractual provisions. We actively engage in enforcement and other activities to protect our intellectual property, but the laws of some countries in which we operate, particularly in Asia, either do not protect our intellectual property to the same extent as the laws of the United States or are poorly enforced. As our digital business has grown, our products and services increasingly depend on the reliability, availability and security of our technological infrastructure. In addition, we engage in activities designed to limit the impact of abuse of our digital products and services, including monitoring our games for evidence of exploitation and re-balancing our game environments in the event that such abuse is discovered.

Governmental Regulation

We are a global company subject to various and complex laws and regulations domestically and internationally, including laws and regulations related to gaming, user privacy, data collection and retention, consumer protection, protection of minors, online safety, content, advertising, localization, information security, intellectual property, competition, sanctions, addressing climate change, 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. Certain of our business models, including those that utilize virtual items and virtual currency, are subject to new laws or regulations or evolving interpretations and application of existing laws and regulations that have limited or restricted, and may continue to limit or restrict, the sale of our products and services in certain territories.

Seasonality

We have historically experienced the highest percentage of our net bookings in our third fiscal quarter.

Human Capital

As of March 31, 2026, we employed approximately 14,600 people globally, with 71 percent located internationally. Our Board and its committees oversee our human capital management programs, practices and strategies.

Our focus on people and culture helps our teams create products and services that entertain hundreds of millions of players around the world. We prioritize hiring and retaining a global workforce of top talent that generates the creative ideas that are necessary to build products and services that resonate with global audiences. We aim to bring our workforce together in an environment where creativity thrives, perspectives are invited, and people feel valued. We monitor employee sentiment through regular engagement surveys that address areas such as career development, manager performance and job satisfaction.

Our compensation programs and practices are designed to compensate our employees fairly based on the work that they perform. We invest in developing and retaining employees through access to professional growth resources, skills learning, and other job-specific and general training. We also build technical onboarding and job-specific programs to help our employees onboard to technical roles and grow in their specific domains. We maintain resources, programs and services to support employees' physical, mental, familial and financial health. We offer a wide range of benefits, such as comprehensive health insurance and time-off and leave programs.

Investor Information

Our website address is www.ea.com. Our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and any amendments to those reports filed pursuant to Section 13(a) or 15(d) of the Securities Exchange Act, as amended, are available free of charge on the Investor Relations section of our website at http://ir.ea.com as soon as reasonably practicable after they are electronically filed with or furnished to the Securities and Exchange Commission (“SEC”). The SEC

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maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. We announce material financial information and business updates through our SEC filings, press releases, public conference calls and webcasts, the Investor Relations section of our website at http://ir.ea.com, our blog at https://www.ea.com/news and through our X profile @EA. Except as expressly set forth in this Form 10-K annual report, the contents of our website, 2025 Impact Report and/or social media accounts are not incorporated into, or otherwise to be regarded as part of this Form 10-K.

Financial statements

data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .

From 10-Q filed 2026-08-03 (period ending 2026-06-30).

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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, the Merger (as defined herein), 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, 2026. 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 June 30, 2026, 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, 2026 as filed with the SEC on May 11, 2026 and in other documents we have filed with the SEC.

Proposed Merger

On September 28, 2025, we entered into a Merger Agreement pursuant to and subject to the terms and conditions of which we will be acquired by the Consortium. For further details on this proposed transaction, see Note 1 of the Condensed Consolidated Financial Statements and "Part II—Item 1A. Risk Factors" contained elsewhere in this Form 10-Q.

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, and mobile devices. We create innovative games and experiences that deliver high-quality interactive entertainment and drive engagement across our global network of hundreds of millions of players. 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 harnessing our communities to grow in, around, and beyond our games.

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Financial Results

Our key financial results for our fiscal quarter ended June 30, 2026 were as follows:

•Total net revenue was $1,986 million, up 19 percent year-over-year.

•Live services and other net revenue was $1,472 million, up 7 percent year-over-year.

•Gross margin was 86.2 percent, up 3 percentage points year-over-year.

•Operating expenses were $1,199 million, up 7 percent year-over-year.

•Operating income was $513 million, up 89 percent year-over-year.

•Net income was $397 million with diluted earnings per share of $1.56.

•Net cash used in operating activities was $242 million, compared to net cash provided by operating activities of $17 million in the prior-year period.

•Total cash, cash equivalents and short-term investments were $2,404 million.

•We returned $48 million to stockholders through our quarterly cash dividend program.

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 $5,473 million, $5,433 million, and $5,476 million for the trailing twelve months ended June 30, 2026, 2025, and 2024, 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 $4,170 million, $4,293 million, and $4,421 million for the trailing twelve months ended June 30, 2026, 2025, and 2024, respectively. Growth in live services net revenue, including extra content may not be linear due to the competitive landscape, consumer buying patterns, and other factors. Our most popular live services are the extra content in the Ultimate Team mode associated with our sports franchises. Ultimate Team allows players to collect current and former players in order to build and compete as a personalized team. Live services net revenue generated from extra content purchased within Ultimate Team, a substantial portion of which was derived from EA SPORTS FC Ultimate Team, 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 continue to purchase a 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 $1,708 million, $1,478 million, and $1,343 million during fiscal years 2026, 2025, and 2024, respectively; while our net revenue attributable to packaged goods sales was $440 million, $524 million, and $672 million in fiscal years 2026, 2025, and 2024, 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 81 percent, 78 percent, and 73 percent of our total units sold during fiscal years 2026, 2025, and 2024, 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 are 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, we compete with large, diversified companies that have strengthened their interactive entertainment capabilities. Our competitors have access to certain resources such as larger budgets, tools, technologies, or IP portfolios that can lead to greater 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.

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 June 30
(In millions)	2026		2025
Net revenue	$	1,986	$	1,671
Change in deferred net revenue (online-enabled games)	(637)		(373)
Net bookings	$	1,349	$	1,298

Net bookings were $1,349 million for the three months ended June 30, 2026, primarily driven by sales related to our EA SPORTS FC franchise, Apex Legends, and our American football franchise. Net bookings increased $51 million, or 4 percent, as compared to the three months ended June 30, 2025, primarily due to increased sales of extra content from Apex Legends and full game and extra content sales from Battlefield 6, partially offset by a decrease in sales from Split Fiction. Live services and other net bookings were $1,116 million for the three months ended June 30, 2026, and increased $32 million, or 3 percent, as compared to the three months ended June 30, 2025. The increase in live services and other net bookings was primarily due to increased sales of extra content from Apex Legends, partially offset by decreased sales of extra content from Ultimate Team within EA SPORTS FC. Full game net bookings were $233 million for the three months ended June 30, 2026, and increased $19 million, or 9 percent, as compared to the three months ended June 30, 2025, primarily due to a year-over-year increase in sales in EA SPORTS FC and the release of EA SPORTS UFC 6, partially offset by Split Fiction.

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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, and mobile devices. 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 service. 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. The offering period is the period in which we offer to provide the future update rights and/or online hosting for the game and related extra content sold. 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

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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 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, and 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. Revenue for service-related performance obligations for our mobile free-to-play games and PC and console free-to-play games is recognized generally over an estimated eleven-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, and considers all available sources of Swiss income based on 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. 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. Any significant changes to the Swiss interest rates or tax laws on loss carryforward period could result in a material impact to the valuation allowance and to our Condensed Consolidated Financial Statements. 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, 2027 contains 53 weeks and ends on April 3, 2027. Our results of operations for the fiscal year ended March 31, 2026 contained 52 weeks and ended on March 28, 2026. Our results of operations for the three months ended June 30, 2026 contained 14 weeks and ended on July 4, 2026. Our results of operations for the three months ended June 30, 2025 contained 13 weeks and ended on June 28, 2025. 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 and content.

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Net Revenue Quarterly Analysis

Net Revenue

Net revenue for the three months ended June 30, 2026 was $1,986 million, primarily driven by sales related to our EA SPORTS FC, Battlefield, and American football franchises. Net revenue for the three months ended June 30, 2026 increased $315 million as compared to the three months ended June 30, 2025. This increase was driven by a $473 million increase in net revenue primarily due to Battlefield 6, our EA SPORTS FC franchise, and increased sales of extra content for Apex Legends, partially offset by a $158 million decrease in net revenue primarily due to EA SPORTS College Football and Split Fiction.

Net Revenue by Composition

Our net revenue by composition for the three months ended June 30, 2026 and 2025 was as follows (in millions):

	Three Months Ended June 30,
	2026		2025		$ Change		% Change
Net revenue:
Full game downloads	$	438	$	233	$	205	88	%
Packaged goods	76		56		20		36	%
Full game	$	514	$	289	$	225	78	%
Live services and other	$	1,472	$	1,382	$	90	7	%
Total net revenue	$	1,986	$	1,671	$	315	19	%

Full Game Net Revenue

Full game net revenue includes full game downloads and packaged goods. Full game downloads primarily include revenue from digital sales of full games on console, PC, and certain licensing revenue. Packaged goods primarily include revenue from full games that are sold physically through distribution arrangements, mass market retailers, and specialty stores.

For the three months ended June 30, 2026, full game net revenue was $514 million, primarily driven by Battlefield 6 and EA SPORTS FC 26. Full game net revenue for the three months ended June 30, 2026 increased $225 million, or 78 percent, as compared to the three months ended June 30, 2025, primarily due to Battlefield 6, partially offset by Split Fiction.

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 June 30, 2026, live services and other net revenue was $1,472 million, primarily driven by sales of extra content for our EA SPORTS FC and American football franchises, and Apex Legends. Live services and other net revenue for the three months ended June 30, 2026 increased $90 million, or 7 percent, as compared to the three months ended June 30, 2025. This increase was primarily driven by increased sales of extra content within our EA SPORTS FC franchise and Battlefield 6, partially offset by decreased sales of Ultimate Team within EA SPORTS College Football.

Cost of Revenue Quarterly Analysis

Cost of revenue consists of (1) certain royalty expenses for sports organizations, movie studios, independent software developers, and others (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 June 30, 2026 and 2025 was as follows (in millions):

June 30, 2026									% of Net Revenue					June 30, 2025					% of Net Revenue					% Change					Change as a % of Net Revenue
$	274								14		%			$	279				17		%			(2)		%			(3)		%

Cost of Revenue

Cost of revenue decreased by $5 million, and cost of revenue as a percentage of total net revenue decreased by 3 percent during the three months ended June 30, 2026, as compared to the three months ended June 30, 2025. This decrease was primarily due to a net decrease in royalty costs driven by the mix of sales from royalty-bearing titles.

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 months ended June 30, 2026 and 2025 were as follows (in millions):

			June 30, 2026					% of Net Revenue					June 30, 2025					% of Net Revenue					$ Change					% Change
Three months ended			$	743				37		%			$	706				42		%			$	37				5		%

Research and development expenses increased by $37 million, or 5 percent, during the three months ended June 30, 2026, as compared to the three months ended June 30, 2025. This increase was primarily due to a $13 million increase in digital infrastructure costs, a $7 million increase in personnel-related costs, including variable compensation, driven by our continued investment in our studios, and a $6 million increase in studio-related contracted services.

Marketing and Sales

Marketing and sales expenses consist of advertising, marketing and promotional expenses, personnel-related costs, and related overhead costs.

Marketing and sales expenses for the three months ended June 30, 2026 and 2025 were as follows (in millions):

			June 30, 2026					% of Net Revenue					June 30, 2025					% of Net Revenue					$ Change					% Change
Three months ended			$	263				13		%			$	214				13		%			$	49				23		%

Marketing and sales expenses increased by $49 million, or 23 percent, during the three months ended June 30, 2026, as compared to the three months ended June 30, 2025. This increase was primarily due to a $25 million increase in advertising and marketing spending primarily driven by our EA SPORTS FC franchise, and a $15 million increase in personnel-related costs.

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, and allowances for doubtful accounts.

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General and administrative expenses for the three months ended June 30, 2026 and 2025 were as follows (in millions):

			June 30, 2026					% of Net Revenue					June 30, 2025					% of Net Revenue					$ Change					% Change
Three months ended			$	181				9		%			$	184				11		%			$	(3)				(2)		%

General and administrative expenses decreased by $3 million, or 2 percent, during the three months ended June 30, 2026, as compared to the three months ended June 30, 2025. This decrease was primarily due to a $11 million decrease in facility-related costs, partially offset by a $3 million increase in personnel-related costs, and a $3 million increase in stock-based compensation.

Income Taxes

Provision for income taxes for the three months ended June 30, 2026 and 2025 were as follows (in millions):

			June 30, 2026					Effective Tax Rate					June 30, 2025					Effective Tax Rate					$ Change
Three months ended			$	133				25		%			$	72				26		%			$	61

The provision for income taxes for the three months ended June 30, 2026 is based on our projected annual effective tax rate for fiscal year 2027, adjusted for specific items that are required to be recognized in the period in which they are incurred. The decrease in effective tax rate year-over-year is primarily due to higher excess tax benefits from stock-based compensation compared to prior year.

LIQUIDITY AND CAPITAL RESOURCES

(In millions)	As of June 30, 2026			As of March 31, 2026			Increase/(Decrease)
Cash and cash equivalents	$	2,288		$	2,864		$	(576)
Short-term investments	116			116			—
Total	$	2,404		$	2,980		$	(576)
Percentage of total assets	19		%	23		%

	Three Months Ended June 30,
(In millions)	2026		2025		Change
Net cash provided by (used in) operating activities	$	(242)	$	17	$	(259)
Net cash used in investing activities	(77)		(89)		12
Net cash used in financing activities	(252)		(568)		316
Effect of foreign exchange on cash and cash equivalents	(5)		22		(27)
Net increase (decrease) in cash and cash equivalents	$	(576)	$	(618)	$	42

Changes in Cash Flow

Operating Activities. Net cash used in operating activities increased by $259 million during the three months ended June 30, 2026, as compared to the three months ended June 30, 2025, primarily driven by higher cash payments for income taxes, higher variable compensation and personnel-related payments, partially offset by higher cash collections from sales.

Investing Activities. Net cash used in investing activities decreased by $12 million during the three months ended June 30, 2026, as compared to the three months ended June 30, 2025, primarily driven by acquisition-related payments made in the prior year.

Financing Activities. Net cash used in financing activities decreased by $316 million during the three months ended June 30, 2026, as compared to the three months ended June 30, 2025, primarily driven by a $375 million decrease in cash paid for common stock repurchases, offset by a $59 million increase in cash paid to taxing authorities in connection with withholding taxes for stock-based compensation.

Short-term Investments

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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 June 30, 2026, our short-term investments had net unrealized losses of less than $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 debt repayment obligations.

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.

See Note 10 — 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 June 30, 2026, 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 10 — 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 June 30, 2026 are set forth in our Note 11 — Commitments and Contingencies to the Condensed Consolidated Financial Statements in this Form 10-Q, which is incorporated by reference into this Item 2. 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 sports organizations and players associations used in our EA SPORTS titles and third-party content, debt repayment obligations, 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, 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 three months ended June 30, 2026, we returned $48 million to stockholders 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 June 30, 2026, approximately $456 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.

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.

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As of June 30, 2026, we did not have any off-balance sheet arrangements.

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Held by

holders ( registered funds via N-PORT, institutional investors via 13F). Showing top by dollar value.

Holder	Type	ETF	MF	Position ($)	% of holder	Δ % of holder	Holder AUM

Recent insider activity

Last 90 days. Open-market trades (purchases & sales) by directors, officers, and 10%+ owners. 14 transactions across 6 insiders. Net: -42,906 shares, -$8,695,518.

Date	Insider	Role	Action	Shares	Price	Value
2026-07-15	Wilson Andrew indirect	Chairman & CEO	Sell	-5,000 ×2	$207.01	-$1,035,037
2026-07-15	Singh Vijayanthimala indirect	Chief People Officer	Sell	-1,200 ×2	$206.98	-$248,381
2026-07-15	Miele Laura	President, Enterprise Dev.	Sell	-2,500 ×2	$207.01	-$517,517
2026-06-15	Miele Laura	President, Enterprise Dev.	Sell	-2,500	$203.10	-$507,762
2026-06-15	Wilson Andrew indirect	Chairman & CEO	Sell	-5,000	$203.12	-$1,015,624
2026-06-15	Singh Vijayanthimala indirect	Chief People Officer	Sell	-1,200	$203.00	-$243,600
2026-05-28	Kelly Eric Charles	Chief Accounting Officer	Sell	-3,000	$200.83	-$602,496
2026-05-21	Wilson Andrew indirect	Chairman & CEO	Sell	-5,066	$201.66	-$1,021,610
2026-05-20	Schatz Jacob J.	EVP, Global Affairs and CLO	Sell	-5,000	$201.19	-$1,005,946
2026-05-20	Canfield Stuart	EVP & Chief Financial Officer	Sell	-1,500	$201.36	-$302,040
2026-05-18	Wilson Andrew indirect	Chairman & CEO	Sell	-2,240	$201.11	-$450,482
2026-05-15	Wilson Andrew indirect	Chairman & CEO	Sell	-5,000	$200.54	-$1,002,709
2026-05-15	Singh Vijayanthimala indirect	Chief People Officer	Sell	-1,200	$200.81	-$240,972
2026-05-15	Miele Laura	President of EA Entertainment	Sell	-2,500	$200.54	-$501,344

Source: SEC Form 4 filings.

Next expected filings

~2026-10-30 10-Q expected by 2026-11-04 (in 83 days)
~2027-02-02 10-Q expected by 2027-02-07 (in 178 days)
~2027-05-10 10-K expected by 2027-05-28 (in 275 days)
~2027-08-02 10-Q expected by 2027-08-07 (in 359 days)

Predicted from historical filing cadence; not an SEC commitment.

Recent SEC filings

2026-08-04 8-K Material Agreement Entered; Material Agreement Terminated; Completion of Acquisition/Disposition; Delisting Notice; Material Modification to Rights; Control Change; Officer/Director Change; Bylaws/Articles Amended; Regulation FD Disclosure; Other Events; Financial Statements and Exhibits
2026-08-03 10-Q Quarterly Report
2026-07-30 8-K Other Events
2026-07-28 10-K/A Annual Report (Amended)
2026-05-11 10-K Annual Report
2026-05-05 8-K Earnings Release; Other Events; Financial Statements and Exhibits
2026-02-10 8-K Other Events
2026-02-03 10-Q Quarterly Report
2026-02-03 8-K Earnings Release; Other Events; Financial Statements and Exhibits
2026-01-06 8-K Material Agreement Terminated; Triggering Event/Obligation; Other Events
2025-12-15 8-K Other Events
2025-10-31 10-Q Quarterly Report
2025-10-28 8-K Earnings Release; Other Events; Financial Statements and Exhibits
2025-09-29 8-K Material Agreement Entered; Regulation FD Disclosure; Financial Statements and Exhibits
2025-08-15 8-K Officer/Director Change; Shareholder Vote Results; Financial Statements and Exhibits

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