EA falls short of targets and provides lackluster forecasts for annual bookings

Electronic Arts (EA) has forecasted full-year bookings for the coming year that fell below Wall Street’s expectations, causing its shares to fall 4.75% in after-hours trading. The Redwood City-based company’s forecast for the fiscal year ending March 31, 2025, ranged from $7.3 billion to $7.76 billion, with the midpoint falling short of analyst expectations at $7.5 billion.

This news comes amidst a trend in the gaming industry, with Microsoft also announcing studio closures on similar concerns. Layoffs in the industry have reached levels comparable to those in 2023, with Nintendo also missing earnings targets recently.

Gamers cutting back on discretionary spending post-COVID has impacted EA, leading to a 5% reduction in its workforce earlier this year. Despite this, CEO Andrew Wilson remains optimistic about the company’s future, citing strong momentum and an upcoming pipeline of new experiences, starting with College Football in FY25.

CFO Stuart Canfield highlighted EA’s record cash flow and earnings growth in FY24, driven by titles like EA Sports FC and Madden NFL. The company also announced an expanded stock repurchase program and plans to share more about its long-term strategy at an investor day this fall.

Looking ahead, EA forecasts fiscal year 2025 bookings at $7.3 billion, below estimates, with net income expected to range from $904 million to $1.085 billion. The company’s recent performance in the fourth quarter fell short of estimates, but EA remains focused on delivering quality titles and content updates to drive growth in the future.