Electronic Arts Inc.

Good afternoon, my name is Ashley and I will be your conference operator today. At this time, I would like to welcome everyone to the Electronic Arts Q2 Fiscal 2022 Earnings Conference Call. Mr. Chris Evenden, VP of Investor Relations, you may begin your conference.

Thanks, Ashley. Welcome to EA's second quarter fiscal 2022 earnings call. With me on the call today are Andrew Wilson, our CEO, and Blake Jorgensen, our CFO. Please note that our SEC filings and our earnings release are available at ir.ea.com. In addition, we have posted detailed earnings slides to accompany our prepared remarks. And lastly, after the call, we will post our prepared remarks, an audio replay of this call, our financial model, and a transcript. With regard to our calendar, our fiscal Q3 2022 earnings call is scheduled for Tuesday, February 1st. And as a reminder, we post the schedule of our entire fiscal 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 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 the 3rd, 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 GAAP basis. All comparisons made in the course of this call are against the same period in the prior year, unless otherwise stated. And now I'll turn the call over to Andrew. Thanks, Chris.

I hope all of you are well and staying healthy. Let me begin with a big thank you to our teams who continue to work from home and do amazing things for our players. I also want to extend a warm welcome to everyone at Playdemic who are now officially part of our Electronic Arts team. We're thrilled to have them on board, adding to our continued strength in sports and mobile. Q2 FY22 was the strongest second quarter in the history of Electronic Arts. We are growing. with our leading franchises, new launches, and live services all performing well during the quarter, and our acquisitions are driving additional growth beyond our core business. With more than 500 million unique active accounts, we are connecting players all over the world to each other through more of our favorite content. As a result, net revenue, net bookings, and EPS were above our Q2 guidance, and we are now raising our full-year net revenue, net bookings, and EPS guidance for the second time this fiscal year. Our core strategy is built on four key opportunities. The creation of amazing games and content, tools for the community to engage more deeply with our experiences, the aggregation and distribution of content and experiences to an aggregated audience across platforms, business models, and geographies, and harnessing the power of the social ecosystems in and around our games. As part of this, we are executing against three growth drivers in FY22. Expanding our blockbuster franchises, building on our leadership in sports, and growing live services across our portfolio. I'll focus my comment on these today. With our talented creative teams, powerful IP, and platform reach, we continue to grow leading blockbuster franchises. Experiences like EA Sports FIFA, Apex Legends, Madden NFL, Battlefield, and The Sims continue are some of the most prominent and powerful properties in all of entertainment. Apex Legends continues to grow as one of the top franchises in the industry, a brand new IP that has scaled to more than 100 million players and is closing in on a billion dollars in net bookings annually. Season 9 and Season 10 each respectively set new marks for the highest active players since Season 1, and Q2 was the biggest quarter of in-game spending in Apex that we've had to date. Apex has grown beyond the game as well. It was one of the most watched titles on Twitch during a quarter, with more than 130 million hours of season 10 content watched to date, up nearly 40% from the previous season. As the success of Apex Legends continues, it demonstrates how we are building long-term ecosystems in and around our biggest franchises. At its core is outstanding gameplay. embedded in an immersive world of lore and characters that continues to expand. Seasons of new content and in-game events like the recent collection event keep the experience fresh for new and returning players. We've introduced new experiences like the squad-based arenas and recently added a ranked mode. The Apex Legends esports ecosystem is growing as well, with the second year of Apex Legends Global Series now underway. Apex is moving from strength to strength, And we'll add to that when we bring Apex Legends to mobile platforms later this year. Battlefield, another of our blockbuster properties, is beloved by tens of millions of fans. Ahead of our upcoming Battlefield 2042 launch this month, 7.7 million players participated in the Battlefield 2042 open beta in October, including 3.1 million during the early access period, which is the largest early access event we've ever had. These are an opportunity to take an early version of the game, still in development, bring in a large audience into the experience, and test and learn ahead of launch. With a small slice of the game in our open beta, we brought players into the full-scale 128-player combat and many of the only in-battlefield moments that make this franchise so special. The engagement and feedback from players also helped our teams with areas of the gameplay to polish and refine as we moved towards launch. We've now revealed all three of the game's pillars. All-out warfare with 128-player multiplayer in conquest and breakthrough modes. Battlefield Portal, a new way to play that has the community very excited to create their own Battlefield experiences. And Hazard Zone, with completely new squad-focused combat and tactical gameplay that fans are going to love. We're looking forward to players getting to all of these experiences when the full Battlefield 2032 game launches on November 19th. Through FY22, we continue to grow our leadership in sports through new games, acquisitions, and new areas of expansion. Our global football, or soccer for us in North America, franchise continues to be one of the leading game properties in the world with approximately 100 million players across all platforms in the first six months of the fiscal year. EA Sports FIFA 22, which launched at the very end of Q2, is off to the strongest start in franchise history. The innovation in our new HyperMotion technology revolutionized gameplay and has inspired, engaged, and grown the community. Total players are up 16%, and new to franchise players are up nearly 50% year-over-year from launch, with net bookings also up significantly year-over-year from launch. We're seeing growth across the game, with ultimate team engagement up 15% year-over-year, and more players coming into Volta and career modes. There is strength in all areas of our global football franchise, including mobile, where later this fiscal year, we'll bring new modes, new features, and improved gameplay to FIFA Mobile, creating our most rewarding mobile football experience to date. For nearly 30 years, EA Sports has been driven to create the best global football franchise in the world. Moving forward, we're in a position to drive greater growth in line with the continued expansion and popularity of the sport. With the talent of our development teams, Our robust portfolio of more than 300 licensed partners, including the Premier League, UEFA, CONMEBOL, the Bundesliga, La Liga, Serie A, the MLS, FIFA Pro, and many more, and our expertise in growth areas, including esports and mobile. EA Sports is ready to activate across the full spectrum of the football world. We have opportunities in new modalities of play and new social experiences that will bring more fans together. As the sport grows, we have opportunities to expand cultural and lifestyle experiences through brand partnerships and content that our fans want more of in and around their game. And we will continue to lead with the most innovative games on more platforms, bringing a full breadth of the sport to the forefront, from grassroots football to more of women's leagues, teams and players. We are more confident than ever about our bright future of football, and we will grow our franchise's leadership with our partners around the world. We are continually investing in innovation, creativity, and authenticity to bring EA Sports games close to the heart of real-world sports and fans. Engagement in Madden NFL 22 has grown each week of this NFL season as players jump into the refreshed franchise mode and Madden Ultimate team to connect and compete with their friends. We've grown the F1 business year over year as F1 2021 from Codemasters continues to bring in more players and keep fans engaged in one of the most intense F1 title fights in years. NHL 22 launched in October, just as the NHL season began, with a new next-generation console experience delivering a dramatic new visual and gameplay leap for hockey fans. With a portfolio that now spans global football, American football, basketball, hockey, baseball, golf, UFC fighting, and racing, no other entertainment provider in the world has the reach across top-level league teams and partners as EA Sports. We have the unique opportunity to bring together these properties and passionate fan communities, enabling social connections through more innovative experiences and content. Expanding live service across our portfolio, particularly mobile, is our third growth driver for FY22. In Q2, we closed the acquisition of Playdemic, creators of the massively successful Golf Clash mobile game. We're looking forward to combining our strengths to continue the success of Golf Clash as a live service and bringing the Clash mechanic to more of our sports franchises, where our licenses and expertise will enable us to create some great new experiences. Our EA Mobile teams also continue to drive success in live services, including Star Wars Galaxy of Heroes, which surpassed 100 million players last day in Q2. Through the collective talent of the Glue Mobile, Playdemic, and EA Mobile teams, we have built a powerful mobile native organization within EA. This group is sharply focused on accelerating growth in our portfolio of more than 15 top mobile live services, as well as introducing new experiences that take our powerful IP, including Battlefield, into the expanding mobile audience. The opportunities in front of us are exciting. We feel great about the position we are in with strong leaders, including our new Chief Operating Officer managing company-wide operations, creative leaders joining our management team, and our new Chief Experience Officer leading our efforts to grow social ecosystems, all supporting our amazing teams as we drive growth into the next era of interactive entertainment. Now, I'll turn the call over to Blake.