Electronic Arts Inc.

Good afternoon. My name is Natalie, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Electronic Arts Q4 2019 Earnings Conference Call. Mr. Chris Eviden, VP of Investor Relations, you may begin your conference.

Thanks, Natalie. Welcome to EA's fourth quarter fiscal 2019 earnings call. With me on the call today are Andrew Wilson, our CEO, and Blake Jorgensen, our COO and CFO. Please note that our SEC filings and earnings release are available at ir.ea.com. In addition, we have posted earnings slides to accompany our prepared remarks. Lastly, after the call, we will post our prepared remarks, an audio replay of this call, our financial model, and a transcript. With regards to our calendar, our Q1 fiscal 2020 earnings call is scheduled for Tuesday, July 30, 2019. This presentation and our comments include forward-looking statements regarding future events and the future financial performance of the company. Actual events and results may differ materially from our expectations. We refer you to our most recent Form 10Q for a discussion of risks that could cause actual results to differ materially from those discussed today. Electronic Arts makes these statements as of today, May 7, 2019, and disclaims any duty to update them. During this call, the financial metrics, with the exception of free cash flow, will be presented on a gap basis. All comparisons made in the course of this call are against the same period in the prior year unless otherwise stated. Note that our results reflect our adoption of AFC 606 as of the beginning of fiscal 2019. And for more information on this change, please see the accounting FAQ we have posted on our IR website. Now, I'll turn the call over to Andrew. Thanks, Chris.

The last year was a period of growth in our industry and one of significant change as transformation accelerated and player behaviors evolved. Throughout OFY19, we saw strength in our business and our portfolio and achieved some powerful milestones in our top games and services. We were also challenged by some things that did not go as we planned. Our learnings are helping us sharpen our execution and we now have key opportunities to drive growth in the year ahead. Overall, our player base grew to more than 500 million active player accounts in FY19. This was driven by engagement in our top franchises and live services on major platforms, as well as the introduction of new IP, including the free-to-play game Apex Legends, that helped us reach new audiences around the world. I'll share a few highlights here. The strength of our EA Sports business in FY19 was powered by some of the deepest and most innovative games that we've ever delivered to our fans. In a year where we had great experiences in both FIFA 18, including World Cup content, and FIFA 19 with the UEFA Champions League, we had more than 45 million unique players in total playing FIFA games on console and PC during FY19. More than 100 million more players engaged with our FIFA franchise on mobile and PC free-to-play during the year as well. FIFA Ultimate Team continued to show strength. and our competitive modes like weekend leagues or engagement double year over year. We've had greater than 60% growth year over year in total unique views and more than half a billion minutes watched of our FIFA Global Series content, and some of our biggest tournaments of the season are still to come. We've seen similar trends in our Madden NFL franchise. Players are staying engaged in Madden NFL for longer, and our Madden Ultimate Team business grew year over year, and Madden Competitive Gaming is driving excitement and viewership of the franchise. Our season-ending Madden Bowl tournament was broadcast directly from our new in-house studio here in Redwood Shores to ESPN2 and digital channels, and guarded seven times as many peak concurrent viewers as last year's event. We're proud of how we're delivering for ESports fans on all platforms, bringing the authenticity, immersion, and competition that players are looking for all year round. On February 4th, we surprised the world with Apex Legends, an all-new free-to-play battle royale game from Respawn. The creativity, innovation, and fun of this game set it apart immediately, and the fluid gameplay mechanics delivered a core experience with the excitement and competition that players around the world had been craving. Apex Legends is the fastest-growing new game we've ever had, quickly reaching a milestone of 50 million players, and millions more have continued to join. It has also helped us tap into new player audiences, as nearly 30% of Apex Legends players are new to EA. We're incredibly excited and humbled by the passion that fans around the world have for Apex Legends. We're now very focused on delivering for this massive global community with a long-term live service, including new seasons with more robust Battle Pass content, new Legends, and exciting evolutions to the in-game environment. We're also working aggressively to bring the game to more players in more markets and platforms around the world, including Korea, where we saw an opportunity in the market and self-published Apex Legends via Origin. We are still at the very beginning of this exciting journey with Apex Legends, and we look forward to sharing more as we go, including the first details of Season 2 at EA Play in June. We also expanded the Battlefield V experience in Q4 with the arrival of Firestorm. our first Battle Royale mode in a Battlefield game. The DICE and Criterion teams built the biggest map in franchise history and brought signature elements of Battlefield gameplay into the 64-player survival mode. In the first week after launch, Firestorm became the biggest Battlefield live service event ever, with nearly 60% growth in active players week over week. We're currently in the middle of our third chapter of live service updates to Battlefield V, with more chapters set to begin in the summer and fall, each bringing more of what fans are looking for with new maps and missions. We'll showcase some of the great new experiences coming to Battlefield V at EA Play. We are similarly committed to the live service for Anthem and delivering for our community in this new IP over the long term. The launch of Anthem in Q4 did not meet our expectations. However, we believe in the team at Bioware, and we also believe in what they set out to achieve with this game, building a new IP and melding genres to reach a new audience. Players have spent more than 150 million hours in Anthem since launch, and we've heard from them that the beauty and expanse of the world is stunning, and that traversing the environment in javelin suits makes for amazing gameplay. However, we've also heard feedback from our community about the issues that began to manifest as the game reached scale. and that they want more depth and variety in the mission modes of the game. The team is now very focused on continued improvements to the game and will then bring more content updates and in-game events that will enhance and expand the Anthem experience. As we wrap up FY19, I also want to highlight the continued success of The Sims 4, which has grown every year since we launched. We launched three new content packs and multiple game updates for our Sims 4 community throughout the year, all of which contributed to a 35% year-over-year increase in active players and our strongest year of engagement yet for this ongoing live service. The passion of our Sims community is incredible, and we look forward to bringing them many more great experiences in the year ahead. Looking to FY20, we see an exciting year ahead. Across HD platforms, mobile, and PC, the global gaming audience is growing. Great games and services will continue to be at the center, and we are focused on bringing new experiences to more players on more platforms in more geographies throughout the year. The variety of new games and experiences that we're planning for players this year demonstrates the breadth and depth of our portfolio. We have new titles and experiences in our biggest sports franchises, FIFA, Madden NFL, NHL, and NBA Live, bringing innovation and excitement to hundreds of millions of EA Sports fans around the world. We're set to deliver on some of the biggest requests that we've had from our communities, including new experiences and gameplay advancements that will more deeply immerse players into the world of their favorite sports. For Star Wars fans, Star Wars Jedi Fallen Order will deliver an amazing single-player adventure, launching in the same window as the movie this holiday. Need for Speed returns to consoles and PC this year, revitalizing the Street Racer vs. Cops fantasy at the core of the franchise. We'll have a new Plants vs. Zombies HD shooter title, fun and irreverent as always. On mobile, we'll have new titles going into early user testing this year, ensuring that we're giving players more time to test and give feedback before we go live globally. And our support of the indie developer community will continue with Sea of Solitude. We are also deeply committed to our live service communities, delivering more content and more ways to play, watch, and create. With the growth of Apex Legends, the team at Respawn is fully focused on live service with a cadence of big new seasonal content launches and continual updates and adjustments to the experience throughout the year. We're set to deliver 20 new content drops and expansion packs this year for our thriving Sims community on console, mobile, and PC. We have robust live service plans for Anthem and Battlefield V and will continue delivering new content for Star Wars Battlefront II. where our commitment to the game has enabled us to build a very strong community over time. Our competitive gaming programs will continue to be a major focus as well, with our competitive modes in FIFA and Madden, global tournament ecosystems, and high-quality esports programming set to grow our audience of players, viewers, and sponsors. We are working to bring more great games and content to our players where they are. Subscriptions are a key element of this approach to provide players with more choice, and we will expand our subscription offerings to include more games and more platforms in FY20. In our Origin subscriptions on PC, there are over 200 games from EA and outside developers, and that will continue to grow. As we announced this morning, we are bringing our EA Access console subscription to players on the Sony PlayStation 4 this summer. We're now positioned to offer a subscription on more platforms than any other publisher and will look to add to that in the coming year. We have a lot ahead of us in FY20. We're committed to our players and we're excited to be pushing forward with our plans. Now I'll hand the call over to Blake.