Electronic Arts Inc.

Good afternoon. My name is Mike, and I will be your conference operator today. At this time, I would like to welcome everyone to the Electronic Arts Q4 2021 Earnings Conference Call. Mr. Chris Eddington, VP of Investor Relations, you may begin your conference.

Thanks, Mike. Welcome, everyone, to EA's fourth 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'll post our prepared remarks and audio replay of this call, our financial model, and a transcript. Once again, I'd like to direct you to the earnings slides this quarter. They now contain the metrics and color that we've historically included in Blake's remarks. With regards to our calendar, our Q1 fiscal 2022 earnings call is scheduled for Wednesday, August the 4th. And as a reminder, we post the schedule of our entire year of upcoming 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 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 11, 2021, 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 stood. Now, I'll turn the call over to Andrew.

Thanks, Chris. I hope this finds all of you staying healthy and well. I want to start today by saying welcome to our newest teammates from Codemasters, Blue Mobile, and Metalhead Software. We're very excited to have added these incredibly talented teams to the EA family, and we're looking forward to creating some amazing new experiences together. FY21 was a record year for Electronic Arts. Engagement in our games continues to expand worldwide, leading industry transformation and fueling demand from a new generation of players that will continue for years to come. We delivered 13 new games in FY21 and welcomed more than 42 million new players to our network of more than 500 million unique accounts. The tremendous engagement across our leading live services is a powerful demonstration of how players are coming together and forming social networks through our experiences. We drove net bookings growth of more than $600 million above our original guidance for the fiscal year and achieved bottom line results significantly ahead of our expectations. Our teams continue to deliver for our players despite the challenges of the pandemic, and our execution of long-term strategies to create exceptional high quality experiences, drive growth through our leading live services, and expand our reach to more players are continuing to build strength in our business. As we look forward to FY22, we are accelerating, powered by organic growth in our existing business, development of new businesses, and layering growth from recent acquisitions. We're forecasting growth in FY22. Our net bookings guidance reflects 18% year-over-year growth to $7.3 billion. This includes organic growth in our core business and the addition of glue, code masters and metal head acquisitions. From this position of strength, we are also investing in the future of our business and we expect to continue to grow underlying profitability. I want to spend time today on three primary growth drivers for us in FY22. Expanding the EA Sports business, growing our Apex Legends and Battlefield franchises, and our mobile growth strategy. We have a foundational strategy for growing these blockbuster brands that we are applying here. Best-in-class premium experiences, deeply engaging live services that create social networks in our games, and expansion of more platforms, new business models, and new geographies. The model is how we built FIFA, Apex Legends, Madden NFL, and The Sims into some of the most successful global live service businesses in the industry, and we're applying it as a blueprint across our franchises. As the undisputed leader in sports games, EA Sports is moving from strength to strength as we grow our current business and include more sports and reach new audiences. In FY21, our EA Sports games brought players together at record levels, Our EA Sports FIFA experiences continue to engage more than 100 million players worldwide. More than 20 million players played FIFA Ultimate Team in the last year, and FIFA Ultimate Team matches were up an incredible 180%. Madden NFL had its biggest year ever, and games across our EA Sports portfolio continue to acquire more players than ever before. We'll now build on that strength with a massive year of innovation and expansion. All of our new EA Sports games in FY22 are designed for next-gen console platforms, including FIFA, Madden, NHL, and EA Sports PGA Tour, our return to golf that is set for Q4 of this year. We're very excited by the opportunity to deliver for baseball fans around the world with the addition of Super Mega Baseball from Metalhead Software and MLB Tap Sports Baseball on mobile from the... EA Sports is also publishing the highest rated sports franchise in the world with F1 2021, our first title from our recently completed Codemasters acquisition. And with the combined expertise of the glue and EA teams focused on engaging more sports fans, we plan to grow our sports mobile business by over 50% this year. We continue to see the consumption of sports move from linear to interactive, representing a major growth opportunity for us, spanning more sports and more platforms, especially mobile. From premium experiences to live services to mobile, EA Sports is in an unparalleled position to reach more players with new ways to play, watch, and connect. With Apex Legends and Battlefield, we have two leading franchises in their category. We are positioned for continued growth in Airfly 22 through new launches, expansion of mobile, and preparing for the addition of new business models that will expand our total addressable audience. Apex Legends is one of the most successful games in the market today. We now have more than 100 million unique players in the game on console and PC, with player engagement growing globally at incredible levels throughout the last year. And we are forecasting continued growth. Season 8 saw well over 12 billion weekly active users, the highest levels we've seen since Season 1 in 2019. We're also seeing explosive growth for Apex in Asia, especially in Japan, where it has grown significantly in the last three quarters. As Respawn continues to deliver more new content and evolve the main game this year, we are also beginning regional beta testing of Apex Legends Mobile. This is a new experience designed specifically for touchscreens, which we expect to launch worldwide later this fiscal year. Apex Legends continues to have tremendous momentum and is growing in every dimension. We are forecasting close to 20% year-over-year growth to $750 million in net bookings for Apex Legends in FY22, with significant potential for upside this year and beyond as we launch the mobile game. We are realizing the next phase of growth in our vision for Battlefield with two new experiences launching in FY22. Three world-class studios, DICE Stockholm, Criterion, and DICE LA, and our technology team in Gothenburg now form our largest ever Battlefield development team. They are working in lockstep to deliver the definitive next-gen experience for Battlefield fans. The game has everything fans love about Battlefield. epic scale, all-out warfare, unexpected moments, and game-changing destruction. And it takes it all to the next level through the power of next-gen consoles and PCs. We're excited to reveal the game to fans next month and share a lot more about the game throughout the summer. We also have a battlefield game for mobile platforms and development and industrial toys in close partnership with DICE. Built from the ground up for mobile, the game is going into early testing now, and we're looking forward to players around the world getting their hands on this innovative Battlefield experience later in FY22. As I mentioned before, our strategy is to grow Battlefield as we have with our other blockbuster franchises like FIFA and Apex. Best-in-class gameplay, deeply engaging live service, a new mobile experience, and more ways to play that we'll introduce to reach more players all over the world. Throughout FY22, we will continue transforming mobile into a growth center for our business. With the recent reorganization and hiring of new leadership and talent into our eMobile teams, we are in position to maximize our leading mobile live services, including Star Wars Galaxy of Heroes, The Sims, and World Racing by growing player acquisition, deepening engagement and player investment, and driving new opportunities in non-Western markets. We'll grow in sports mobile with innovation in our leading franchises, including FIFA, Madden and UFC, as well as the addition of MLB Tap Sports Baseball to our mobile sports portfolio. We expect our two biggest shooter franchises to launch on mobile for the first time in FY22, which is another demonstration of our multi-platform strategy for leading global franchises. With the addition of Glue laid into our EA mobile growth plans, we expect to more than double our mobile business to $2 billion in annual net bookings within the next three years. We have a year of strong growth ahead in FY22, and we see many more opportunities as we continue to lead in the expansion and transformation of the industry. We have a very clear long-term growth strategy for our biggest blockbuster franchises. This is the foundation of our business, and you're seeing us grow all major platforms and business models. We're thrilled to have the teams from Codemasters Glue and Metalhead join the electronic community and together we expect to develop many games and experiences that will delight our growing player base and be catalysts for growth in the news to come. We have a deep pipeline of new content including new franchises and new IP, deeper focus on mobile games and experiences that will lean into user-generated content. We also continue to invest in opportunities where we have differentiated ability to reach and engage more players, including our growing subscription service and our esports content and competitions that will expand in scope this year. The three growth drivers that I've focused on today, expanding our EA Sports portfolio, growing our blockbuster shooter franchises, and the transformation of our mobile business, provide clear growth and significant upside for Electronic Arts in FY22 and beyond. We're excited to bring some amazing new games and content to our players and viewers around the world this year. Now I'll turn the call over to Blake.