A month has gone by since the last earnings report for Electronic Arts (EA). Shares have added about 2.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Electronic Arts due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Electronic Arts Q3 Earnings Top Estimates, Sales Miss, Both Rise Y/Y
Electronic Arts reported third-quarter fiscal 2026 earnings of $4.82 per share, which surged 70.3% year over year and beat the Zacks Consensus Estimate of $4.77.
Revenues increased 1% year over year to $1.9 billion, reflecting the successful launch of Battlefield 6, which was the best-selling shooter title of 2025. The consensus mark for revenues was pinned at $2.86 billion.
Net bookings for the fiscal third quarter totaled $3.05 billion, up 38% year over year, driven by the landmark launch of Battlefield 6 and continued momentum across EA SPORTS FC and Apex Legends.
Q3 Details of EA
EA's full-game revenues (33.2% of total revenues) increased 5.5% year over year to $632 million. Full-game download revenues increased 22.4% year over year to $546 million. Revenues from packaged goods declined 43.8% year over year to $86 million.
Live services and other revenues (66.8% of total revenues) decreased 1.2% year over year to $1.27 billion.
Based on platforms, revenues from consoles declined 2.7% year over year to $1.18 billion in the reported quarter. Revenues from PC & Other increased 18.6% year over year to $465 million. Revenues from the mobile platform fell 8% year over year to $254 million.
Operating Details of EA
EA's GAAP gross profit decreased 1.7% from the year-ago quarter's levels to $1.4 billion. Gross margin contracted 200 basis points on a year-over-year basis to 73.8%.
Operating expenses increased 21.5% year over year to $1.28 billion. As a percentage of revenues, operating expenses expanded from 55.7% in the year-ago quarter to 67.1%.
Operating income, on a GAAP basis, decreased 66.3% year over year to $127 million. The operating margin contracted from 20% in the year-ago quarter to 6.7% in the reported quarter.
Electronic Arts' Balance Sheet & Cash Flow
As of Dec. 31, 2025, EA had $2.9 billion in cash and short-term investments compared with $1.26 billion as of Sept. 30, 2025.
Net cash provided by operating activities was $1.83 billion for the quarter and $2.52 billion for the trailing 12 months.
EA did not repurchase any shares during the quarter. The company has repurchased 15.1 million shares for $2.13 billion over the trailing 12 months.
EA declared a quarterly cash dividend of 19 cents per share of the company's common stock. The dividend will be paid out on March 18 to its stockholders of record as of the close of business on Feb. 25, 2026.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
At this time, Electronic Arts has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a score of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Electronic Arts has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Electronic Arts Inc. (EA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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