EA expects GAAP revenue of $5.1 billion in fiscal 2018
Electronic Arts (EA) expects GAAP (generally accepted accounting principles) revenue of $5.1 billion in fiscal 2018, a YoY (year-over-year) rise of 5.3% to $4.84 billion in fiscal 2017, driven by an increase in revenue from Live Services. EA has estimated full-year GAAP EPS (earnings per share) at $3.25, which includes the $0.48 impact of tax reforms.
EA expects operating cash flow of $1.6 billion in fiscal 2018 with free cash flow of $1.8 billion. EA’s CFO Blake Jorgensen stated, “We are reaffirming our guidance for net bookings at $5.150 billion, but, owing to the strength of our lives services, we expect this to skew more digital than originally anticipated, increasing our profitability.”
What do analysts expect from EA in fiscal 4Q18 and beyond?
Analysts expect EA’s revenue to rise 13% YoY from $1.1 billion in fiscal 4Q17 to $1.23 billion in fiscal 4Q18. Similarly, EA’s revenue is expected to rise 4.4% YoY to $5.16 billion in fiscal 2018 and 8.9% YoY to $5.62 billion in fiscal 2019. EA’s non-GAAP EPS (earnings per share) are estimated to rise 36.5% YoY to $1.16 in 4Q18, 8.7% YoY to $4.27 in fiscal 2018, and 17% YoY to $5.00 in fiscal 2019. EA’s EPS are estimated to rise at a CAGR (compound annual growth rate) of 11.3% over the next five years, compared to a growth rate of 15.4% in the last five years.
Revenue for peer gaming companies Activision Blizzard (ATVI), Take-Two Interactive (TTWO), Zynga (ZNGA), and NetEase (NTES) is expected to rise 11%, 19%, 2.3%, and 1.1%, respectively, in the next quarter.