Electronic Arts raised its guidance for fiscal year 2025, thanks in part to the strong performance of EA Sports College Football 25 and Madden NFL 25.
Sales for the quarter totaled $2.08 billion, up 14% from the year-earlier quarter and above what the company forecasted. EA now expects net revenue this year to come in between $7.4 billion and $7.7 billion, more than its previous estimate by a few hundred million. Net income expectations also rose, with the company forecasting up to $1.16 billion, and EPS is expected to be between $3.82 to $4.33.
“Electronic Arts continued to build positive momentum in its fiscal second quarter,” said Michael Hodel, an analyst at Morningstar, which he attributed to, “a positive reception for Madden NFL 25 and the long-awaited reintroduction of the College Football franchise.”
EA’s strong performance this quarter represents a positive step for the company in an industry which has struggled since the end of pandemic lockdowns and seen record layoffs this year. The positive reception of College Football 25 is also a boon to EA’s sports franchises which have struggled to grow and capture new audiences in recent years.
The success of College Football 25 represents a step towards EA’s goal of developing more sports games across more regions internationally to become, “the most valuable sports business on the planet,” as EA CEO Andrew Wilson said during the earning’s call. As part of that, the company wants to build a “symbiotic relationship” between that game and Madden, he said.
Full game sales for the quarter were up 20% since the same quarter last year, helped by the success of EA Sports College Football 25, which was released in July. Live service revenue increased beyond expectations, up 10% from a year earlier, also driven by the success of College Football 25 which helped capture a larger audience of American football fans who went on to purchase live service content for the game.
College Football 25 has been able to attract more American football fans without significantly cutting into the market of EA’s professional football league franchise, Madden. New players into the community more than doubled to represent around a quarter of the total player base for American football games, Wilson said. He also stated that the new title attracted a large number of lapsed players, which are individuals that haven’t played an EA football game in at least 5 years. These players represent another 25% of the total player base.
EA’s stock closed near its 52-week record, up 3.5% at around $149 a share at the end of Thursday’s session, the day after the company’s earnings call.
The company is placing an emphasis on its upcoming EA sports app as a central location for company produced and user generated content. EA is planning a soft launch of the app in Spain which will be focused on soccer.
One weak spot in EA’s business is Apex Legends, which has struggled to hit player retention targets and seen lower spending on live-service content.
“We don’t think that there is anything wrong with Apex Legends,” said Michael Pacter, an analyst at Wedbush, “but the game’s performance demonstrates how hard it is for developers to maintain a balance between keeping players engaged and inducing them to spend inside an otherwise free-to-play game.”
Still, analysts remain upbeat on EA. The consensus price target rose to $164.35, up significantly from the consensus last quarter which was below $150.