Why Is Electronic Arts (EA) Up 10.5% Since Last Earnings Report?

A month has gone by since the last earnings report for Electronic Arts (EA). Shares have added about 10.5% in that time frame, outperforming the S&P 500.But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Electronic Arts due for a pullback? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent catalysts for Electronic Arts Inc. before we dive into how investors and analysts have reacted as of late.Electronic Arts Q1 Earnings Decline Year Over Year, Revenues IncreaseElectronic Arts reported first-quarter fiscal 2026 earnings of 25 cents per share, which decreased 51.9% year over year. Revenues rose 0.7% year over year to $1.67 billion due to an increase in full-game revenues.The Zacks Consensus Estimate for earnings was pegged at 10 cents per share. The consensus mark for revenues was pinned at $1.24 billion.Net bookings for the fiscal first quarter were $1.3 billion, up 2.9% year over year.Full-game net bookings were $214 million, up 27% year over year. Live services net bookings were $1.08 billion, down 1% year over year.Quarter Details of EAEA’s full-game revenues (17.3% of total revenues) increased 15.6% year over year to $289 million. Full-game download revenues increased 23% year over year to $233 million. Revenues from packaged goods declined 7% year over year to $56 million.Live services and other revenues (82.7% of total revenues) decreased 2% year over year to $1.38 billion.Based on platforms, revenues from consoles remained unchanged year over year at approximately $1 billion in the reported quarter. Revenues from PC & Other increased 2% year over year to $374 million. Revenues from the mobile platform remained unchanged year over year at $290 million.Operating Details of EAEA’s GAAP gross profit decreased 0.4% from the year-ago quarter’s levels to $1.39 billion. Gross margin contracted 90 basis points (bps) on a year-over-year basis to 83.3%.Operating expenses increased 8.5% year over year to $1.12 billion. As a percentage of revenues, operating expenses expanded from 62.2% in the year-ago quarter to 67.1%.Operating income on a GAAP basis decreased 25.5% year over year to $271 million. The operating margin contracted from 21.9% in the year-ago quarter to 16.2% in the reported quarter.Electronic Arts’ Balance Sheet and Cash FlowAs of June 30, 2025, EA had $1.63 billion in cash and short-term investments compared with $2.25 billion as of March 31, 2025.Net cash provided by operating activities was $17 million for the quarter and $1.98 billion for the trailing 12 months.EA repurchased 3 million shares for $375 million during the quarter under the stock repurchase program, bringing the total for the trailing 12 months to 17.8 million shares for $2.5 billion.The company has declared a quarterly cash dividend of 19 cents per share of the company’s common stock. The dividend is payable on Sept. 17, 2025, to stockholders of record as of the close of business on Aug. 27, 2025.Electronic Arts Provides Guidance for Q2 & FY26For second-quarter fiscal 2026, EA expects GAAP revenues between approximately $1.75 billion and $1.85 billion and earnings per share in the range of 29 cents to 46 cents. Net bookings are expected between $1.8 billion and $1.9 billion.For fiscal 2026, EA expects revenues in the range of $7.1-$7.5 billion and earnings in the band of $3.09-$3.79 per share.The company expects net bookings for fiscal 2026 between $7.6 billion and $8 billion. Operating cash flow is estimated in the band of $2.2-$2.4 billion.How Have Estimates Been Moving Since Then?It turns out, estimates revision have trended downward during the past month.The consensus estimate has shifted -52.25% due to these changes.VGM ScoresAt this time, Electronic Arts has a average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock has a score of D on the value side, putting it in the bottom 40% for value investors.Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Electronic Arts has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.Performance of an Industry PlayerElectronic Arts is part of the Zacks Gaming industry. Over the past month, Boyd Gaming (BYD), a stock from the same industry, has gained 0.6%. The company reported its results for the quarter ended June 2025 more than a month ago.Boyd reported revenues of $1.03 billion in the last reported quarter, representing a year-over-year change of +6.9%. EPS of $1.87 for the same period compares with $1.58 a year ago.Boyd is expected to post earnings of $1.53 per share for the current quarter, representing a year-over-year change of +0.7%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.Boyd has a Zacks Rank #1 (Strong Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.Quantum Computing Stocks Set To SoarArtificial intelligence has already reshaped the investment landscape, and its convergence with quantum computing could lead to the most significant wealth-building opportunities of our time.Today, you have a chance to position your portfolio at the forefront of this technological revolution. In our urgent special report, Beyond AI: The Quantum Leap in Computing Power, you'll discover the little-known stocks we believe will win the quantum computing race and deliver massive gains to early investors.Access the Report Free Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Electronic Arts Inc. (EA): Free Stock Analysis Report Boyd Gaming Corporation (BYD): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks