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Digital Transformation Drives Electronic Arts’s Revenues in Fiscal 1Q17

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Rise in digital revenues

The gaming space has seen a massive transition toward digitalization over the last few quarters. Last year, Activision (ATVI) acquired King Digital (KING), which is a major player in the online gaming space.

Electronic Arts’s (EA) digital revenues accounted for 83.2% of its non-GAAP[1. generally accepted accounting principles] revenues in fiscal 1Q17. Its digital revenues also rose by 6.8% YoY (year-over-year) to $568 million in fiscal 1Q17.

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How did EA perform in fiscal 1Q17?

Electronic Arts (EA) declared revenues of $682 million in fiscal 1Q17, easily beating analyst estimates of ~$652.4 million. Non-GAAP earnings per share (or EPS) totaled $0.07 in fiscal 1Q17, compared to analyst estimates of -$0.02.

The CEO of Electronic Arts, Andrew Wilson, stated, “Our first quarter was an excellent start to fiscal year 2017, demonstrating how our digital transformation continues to strengthen and drive growth for Electronic Arts. Revenue and earnings exceeded our guidance as players engaged deeply with their favorite games, and connected with each other across our global network of live services.”

EA is a market leader in the gaming space and has a market cap of $24 billion. Its peers Activision (ATVI), Take-Two Interactive Software (TTWO), and Zynga (ZNGA) have market caps of $29.4 billion, $3.6 billion, and ~$2.4 billion, respectively.

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