Electronic Arts Inc.

Good afternoon. My name is Brandy and I will be your conference operator today. At this time, I would like to welcome everyone to the Electronic Arts Q2 Fiscal 20 Earnings Conference Call. Mr. Chris Evenden, VP of Investor Relations, you may begin your conference.

Thanks, Brandy. Welcome to EA's second quarter Fiscal 2020 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 finance and our 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 Q3 fiscal 2020 earnings call is scheduled for Thursday, January 30, 2020. 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, and 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, October 29th, 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 GAAP basis. All comparisons made in the course of this call are against the same period in the prior year, unless otherwise stated. Now, I'll turn the call over to Andrew.

Thanks, Chris. We continued a strong FY20 with an excellent second quarter. Our latest EA Sports titles are captivating a growing global player base and deep engagement in these titles and our ongoing live services fueled our continued momentum through Q2. As a result, our revenue and earnings per share exceeded our expectations for Q2 and we are raising our full year guidance today. Electronic Arts, we are focused on creating amazing new games and content, offering live services that extend and enhance the experience and reaching more players when and where they want to play. I'll show a few highlights here of how we delivered against these focus areas during Q2. First, let's cover our new games. EA Sports is innovating for a growing audience of fans. Madden NFL 20 is off to an outstanding start, growing year over year in player engagement, unit sold, and ultimate team. The excellent core gameplay and fresh new experiences in franchise mode are delivering for our loyal fans. while superstar X-Factors and the all-new superstar KO Mode are resonating with a broader football community. With a launch that began earlier in the preseason and a second major beat at the NFL kickoff weekend that brought more players into the game, we've delivered growth across the board in Madden. Unique players were up 12% year-over-year in Q2, games played in franchise mode more than doubled to over 100 million in the same period, and Madden Ultimate Team players are up nearly 20% year-over-year. Our Madden competitive gaming season has kicked off as well. Our major tournaments are aligned to key moments in the NFL season. We have a groundbreaking virtual stadium rights partner and other major brands are partnering with us throughout the Madden NFL 20 Championship Series. The innovation in FIFA 20 is also deeply engaging fans and bringing new players into the franchise. Total players in FIFA were up nearly 15% year over year in Q2 and with the addition of Volta Football Street Soccer experience new to franchise players have grown 7% year over year. Enhancements to the core gameplay and Ultimate Team are also re-engaging more franchise veterans, with unique players in FIFA Ultimate Team growing 22% over last year. People are playing more FIFA than ever before, with total in-game matches up more than 30% year over year. And as players continue to engage in the FIFA 20 experience and Ultimate Team, our FIFA 20 Global Series is kicking off in November. with millions set to compete in our unparalleled nine-month worldwide esports competition. Last season, more than 800 million minutes of FIFA esports content were watched, and with sponsors like Adidas and others breaking new ground with us this year, we're excited to reach an expanding audience with more great content. We also saw growth across our broader EA Sports portfolio. With innovations in NHL 20 delivering for hockey fans, Hockey Ultimate Team grew year-over-year in Q2. FIFA Online in Korea had some of our strongest ever months on PC and we're also seeing growth in China. FIFA Mobile has been downloaded more than 250 million times live to date following the launch of our latest season that includes 650 new in-game events. It was a very strong Q2 for EA Sports and we're excited to build on that momentum throughout FY20. Q2 also showed the strength of our ongoing live services. In Apex Legends, we continue to deepen our long-term investment in the game and its community. With each successive season of new content, we are building, adding to the experience, and learning. For the first season in March, we launched the Battle Pass and began the regular introduction of new Legends. In the second season in July, we brought more content, a map update, ranked leagues, and larger events. The third season, which launched in October, is our biggest yet. With an entirely new map, amazing events like the Halloween-themed content in the game now, and much more to come. Weekly average player peaks in Season 3 are significantly above our Season 2 peaks, and we're continuing to bring new players into the game. Apex Legends is a major long-term franchise for us. Since launch, we've significantly expanded the team working on the game, and it continues to grow. Our pipeline of future content is packed with really fun experiences that will be delivered through upcoming seasons and a regular cadence of updates for the community. With the Apex Legends community now growing past 70 million players, we're focused on expanding to mobile, new platforms, and new geographies, as well as launching an Apex competitive gaming program that we'll share details on soon. The Sims 4 also continues to be an incredible long-term live service with a growing audience. Monthly average players are up more than 40% year-over-year in The Sims 4, and engagement across the franchise has led The Sims to surpass $5 billion in lifetime sales. The Sims continues to be one of the great franchises in gaming, and we have plans to bring new experiences to its amazing players for a long time to come. We are also reaching new milestones as we seek to bring great games and services to more players on more platforms. The launch of EA Access on PlayStation 4 significantly grew our subscriber base through the course of Q2. We also announced this morning that our plans to bring EA Access to Steam on PC, adding a fourth platform where players will be able to connect and get the benefits and value of our subscription service. This is a unique and exciting partnership with Valve that will enable us to bring PC players in the Steam and Origin communities together. Helping more players connect to our games whenever and wherever they want to play will be a continuing focus for us. We look forward to sharing more announcements about other platforms in the coming months. For our holiday quarter of FY20, we're delivering great new games and content across our portfolio. First, the irreverent new Plants vs. Zombies Battle for Neighborville launched two weeks ago to praise from fans and critics, and we're looking forward to the holidays for this family-friendly game. In early November, Need for Speed Heat arrives for racing fans, blending street racing by day and underground racing by night, all with the deep customization that fans expect. Players have been getting primed through the new Need for Speed Heat Studio mobile app launched this summer, where they have already customized more than 7 million cars, which can be loaded straight into the game at launch. Then on November 15, Star Wars Jedi Fallen Order arrives worldwide. This game is coming to market at such an amazing time. From the launch of Star Wars Galaxy's Edge at Disney theme parks, to the upcoming Disney Plus series The Mandalorian, to ongoing games like Galaxy of Heroes, Battlefront II, and The Old Republic, to the culmination of the Skywalker saga in the upcoming film, Star Wars, The Rise of Skywalker, this is a year unlike any other for hundreds of millions of Star Wars fans out there. The one fantasy that many of those fans have been telling us they want is to experience the journey of becoming a Jedi, and we're set to deliver that with Jedi Fallen Order. The Respawn team have been pouring their passion into creating this new game in partnership with Lucasfilm, with characters old and new and a story that is now an authentic part of the Star Wars universe. It's going to be a thrilling adventure to play and with more than 140 million views to date of trailers and videos for the game, the community is eager to jump into Star Wars Jedi Fallen Order in just a few more weeks. The holidays will also be a busy season for players in our live services. Battlefield V players will be able to jump into the expansive new Pacific Theater, a major addition to the game that includes new factions, maps, weapons, and vehicles, starting two days from now. And in Apex Legends, our EA Sports franchises, The Sims 4, Anthem, and Star Wars Battlefront II, our communities will all have new content and new experiences to dive into during the holiday quarter. Looking farther ahead, I want to share a few thoughts on FY21 and our plans for the continued growth of Electronic Arts. We reach a massive global audience of players with our games today, and we have a core business fueled by live services that continues to grow. Next year, we will build on that with a full slate of new EA Sports experiences, including new titles that we are adding to our EA Sports portfolio. New consoles are always an opportunity to drive more innovation in our EA Sports games, as our fans are eager to begin experiencing a new generation of play. That will include our plans for NBA Live. With great support from the NBA and the NBA Players Association, we have been working on an innovative new direction for our game timed with the All-Star Weekend, an experience designed around new ways for players to engage, connect, and create through basketball. Now with greater understanding of the new platforms and what they can power, bringing social connection, accessibility, and player creativity to the forefront, we feel we can go so much further with the new design. So we've decided not to ship NBA Live Game in FY20. Instead, we're expanding our vision for NBA Live and continue to work closely with our NBA and NBA Players Association partners on this new project that we'll share more details on next year. Our live services will continue to grow and enhance the experience in our major franchises. We're expanding our Apex Legends team to deliver our content plans for FY21 and we'll reach new audiences through mobile and across Asia. We have ongoing growth expectations for The Sims 4 with new expansions and all new ways to engage and grow the community. Our Battlefield franchise and its community are also a major focus for us and will add new content and new ways to play Battlefield V in FY21. Targeting new innovation that will be enabled by next-gen platforms and a growing install base on the new consoles, our next Battlefield game is set for FY22. We also have plans for new experiences that we've not yet announced for next year. new titles and new IP for multiple platforms. Introducing new games will always be at our core and we look forward to exciting players with unexpected new titles in FY21. We will also be driving new opportunities to connect with more players through expansion of our subscription services, new platforms, cloud gaming and more. We're confident in the continued growth of our business at Electronic Arts through FY20, FY21 and beyond. We have a big holiday quarter ahead of us, and we're excited to continue a strong year. Now I'll hand the call over to Blake.