Electronic Arts Inc.

Good afternoon. My name is Jason and I will be your conference operator today. At this time, I would like to welcome everyone to the Electronic Arts Q2 2021 earnings conference call. Mr. Chris Evenden, Vice President of Investor Relations, you may begin your conference.

Thanks, Jason. Welcome to EA's second quarter fiscal 2021 earnings call. With me from their homes today are Andrew Wilson, our CEO, and Blake Jorgensen, our CFO and COO. Please note that our SEC filings and our earnings release are available at ir.ea.com. In addition, we've posted earnings slides to accompany our prepared remarks. Lastly, after the call, we will post our prepared remarks and audio replay of this call, our financial model, and the transcript. Note that we've completely revamped the earnings slides this quarter. They now contain all of the metrics and color that we historically have included in Blake's remarks. These changes free up time on the call for more analysis from Blake and Andrew and provide more opportunity for questions from you. Please let me have your feedback on this change. With regards to our calendar, our Q3 fiscal 2021 earnings call is scheduled for Tuesday, February the 2nd. As a reminder, we post our entire year of earnings calls on our IR website. 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 10-Q 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, November 5, 2020, 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.

I hope this finds everyone well and staying healthy amidst the ongoing pandemic. After the biggest first quarter in the history of Electronic Arts, our second quarter of FY21 showed continued strength with net revenue and earnings above our guidance. We are driving growth through the breadth, depth, and quality of our new games, our industry-leading live services, and expansion to more platforms and more ways to play. Let me first say how thankful I am to our teams for their incredible work and everything they are delivering for our players. The wellbeing of our people remains our top priority. Even amidst these unprecedented circumstances, we are executing and building great strength across our business. Here are a few key examples. We've delivered eight new games so far this year and our network has grown to more than 330 million unique accounts as tens of millions of new players have joined to enjoy more of our amazing games and content. EA Sports continues to be a leader in sports interactive entertainment. Madden NFL 20 was the most successful game in franchise history last year, and now Madden NFL 21 already has nearly 30% more players year over year from launch. Our FIFA franchise is engaging more than 100 million players globally. Even prior to launching FIFA 21, our FIFA franchise was having the biggest calendar year ever, with our business across all platforms up 26% year over year in net bookings. FIFA 20 has reached nearly 35 million players on console and PC, FIFA Mobile continues to perform well, and FIFA Online Asia broke engagement records across China and Korea in Q2. We just launched FIFA Mobile in Japan in October, as we continue to see significant international expansion opportunities for our FIFA franchise. We continue to have an outstanding relationship with Disney and Lucasfilm. Star Wars Squadrons launched a great feedback from critics and the community and has performed above our expectations. This is clearly a special game for fans and continues the extraordinary success we've had bringing great games to life with this IP, including Star Wars Jedi Fallen Order, Star Wars Galaxy of Heroes, Star Wars The Old Republic, and the Star Wars Battlefront franchise. Our live services are among the most successful in the industry, and our live services net bookings have grown more than 28% fiscal year over year to date. EA Sports Ultimate Team has more than 30 million players so far this year, up 25% year over year. Around the world, our multi-platform Sims community continues to grow, and our Sims 4 player base on PC and console is now the largest in franchise history. Apex Legends has established itself as a top global franchise with major year-over-year growth and continued expansion opportunities. Apex in Asia is having great success with each season of content. We've just launched a game to massive Steam community and Crossplay is now live, making it easier for people to play with friends around the world. Our esports programs are scaling to new records in viewership also. Our new Madden NFL episodic content featuring NFL athletes, celebrities, and top Madden NFL players is bringing great entertainment to a much wider audience. And our recent FIFA 21 challenge, which paired esports stars with celebrity soccer players, was our most watched esports event to date, with viewership that placed it amongst top esports broadcasts worldwide. Our EA Play service is the most successful multi-platform subscription in the industry. With the addition of our subscription on PS4 and Steam, we've reached more than 6.5 million paid subscribers. EA Play is now set to go live on Microsoft Game Pass in a few days, and we believe we have the opportunity to double our subscriber base over the next 12 months. In addition to our subscription, we launched more than 125 games and content packs on Steam this year, with new titles like C&C Remastered and Star Wars Squadrons leading the download chat on the platform. Bringing our games to Steam is a new and additive business for us. With the EA and Steam communities able to play together, we're able to harness the full opportunity in the PC space as it continues to show strong growth. We can easily lead the industry as the only developer and publisher with the ability to bring this much quality content to players. We've done this through unprecedented circumstances in the last six months, and now we're delivering more great experiences in our current quarter. We started our third quarter by launching two new EA Sports games. When it went live globally on October 9, FIFA 21 already had a record number of players in the game through the early access benefit of our subscription. Our player metrics in FIFA 21 are strong, and FIFA Ultimate Team also continues to grow with matches in the mode up 30% year-over-year. NHL 21, which includes the fan-favorite NHL 94 rewind, That's quickly become the most successful NHL game yet on current gen consoles. The Sims 4 and Apex Legends show how we build great live services into strong ongoing businesses. This quarter we'll launch our 10th expansion pack for The Sims 4 along with some important game updates that add even more cultural customization options for our players. On the heels of a highly successful Season 6, we've just launched Season 7 in Apex Legends, which is said to be our biggest season of content this year. We now have more than 20 top live services across console, PC, and mobile, forming a foundation for continued growth. We'll continue to reach more players across more platforms in Q3. We have more titles launching on Switch and Google Stadia this quarter. Medal of Honor Above and Beyond will launch on Oculus VR in December, our second VR experience this year. And as I mentioned before, we will take another step in our subscription strategy this week with our expansion to Microsoft Game Pass, opening significant new opportunities to grow our subscriber base. This quarter also brings the launch of next-generation consoles from our partners at Microsoft and Sony. EA Sports is always at the center of innovation for us, and it will lead the way on next-gen consoles. FIFA 21 for PS5 and Xbox Series X will leverage the major upgrading technology to bring players unprecedented immersion, innovative gameplay, and minimal load times to put them into the action in under two seconds. Madden NFL 21 for the next-gen consoles will blur the lines with sport even further through a new system that is responsive to the way NFL players perform in the real world. We're excited to have an opportunity to bring even more players into our FIFA and Madden franchises this year, and we're providing a smooth transition for players on current-gen consoles to move over with a next-gen upgrade. Looking ahead, I want to offer a few thoughts on our growth drivers for FY22 and beyond. Each previous console generation has grown the global market and we expect this transition will be the same. We plan to launch at least six new games on the next-gen consoles in FY22. These will include a new Need for Speed game that is bringing some astounding visual leaps, developed by the Criterion team who have launched some of the most highly rated games in franchise history. DICE is creating our next Battlefield game with never-before-seen scale. The technical advancements of the new consoles are allowing the team to deliver a true next-gen vision for the franchise. We have hands-on playtesting underway internally, and the team's been getting very positive feedback on the game as we've begun to engage our community. The next Battlefield is set to launch in holiday 2021. We're excited to share a lot more about the game in the spring. Our live services are positioned to be a long-term growth driver. Having built Apex Legends into an amazing live service with a deeply engaged community, the talented Respawn team in Los Angeles has expanded Apex development to include a full team in our Vancouver location so that we can continue delivering more great content. Japan is now our second largest market for Apex Legends, and we have strong plans to continue growth in that region. In addition, APEX mobile development will be complete in the new year and ready for launch in FY22. We also expect another very strong year for The Sims 4, a testament to the strength of that community as it enters the seventh year of live service. EA Sports will be executing on a significant expansion that will span new games, more geographies, and more ways to engage. FIFA is growing. In addition to FIFA 21 on NextGen this year and Stadia in the new year, the success of our FIFA Online 4 free-to-play game in Asia now leads us to expand that game to new markets, including the Middle East and Eastern Europe. Soccer continues to grow in popularity around the world, and we now have six new soccer mobile games in development for new genres and new markets. Our roster of top soccer league licenses is also unmatched. Our recently extended agreements with the Bundesliga and La Liga, in addition to more than 30 other league partners, including UEFA Champions League, CONMEBOL and the Premier League, enable us to continue delivering this franchise to more players around the world with the authenticity they expect. We also just announced new multi-year agreements with our partners at the NHL, NHLPA, and UFC that is creating more innovative hockey and fighting experiences. We also have plans to add our core EA Sports portfolio with multiple new franchises in the years ahead. In addition to our college esports expansion that we've just announced with IMG Woodfield, in the weeks ahead, we'll share more about another major new development in our esports program, capitalizing on our growing fan base and demand from esports teams, sponsors, and broadcasters. Our business has expanded significantly this year. Our pipeline of new games and live services is robust, and we're positioned well for sustained growth. A huge thank you goes to our amazing teams for their incredible spirit and dedication to our players. I am proud of how we have continued to execute. Now I'll turn the call over to Blake.