Electronic Arts Inc. (NASDAQ:EA) Q3 2023 Earnings Call Transcript

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And we’re already starting to see a resurgence of engagement in the franchise, which is again typical of Apex, and we’re coming up to a four year anniversary, and we’ve got a season launch update coming, and we feel very, very good about where the franchise is going. I believe the franchise will continue to grow. We’ve got a lot of new things that we can do. While mobile isn’t going to be the growth vector today, it will be a growth vector in the future. There’s new geographic expansion that we will go to. There will be modalities of play, that the team will €“ you know additional modalities of play that the team will investigate over the course of time. As we’ve always said, we think about this as at least a 10 year franchise. We’re just coming up to the fourth anniversary.

It’s an incredibly successful franchise. Our community is very dedicated to it, very highly engaged. Our expectation is that we’ll have a strong quarter, but we’re also being very deliberate around how we planned for the quarter, given what we’ve just seen in Q3 around the macro.

Benjamin Soff : Thanks, guys.

Operator: Your next question comes from the line of Eric Handler with MKM Partners. Please go ahead.

Eric Handler: Good afternoon, and thanks for the question. So you still have a very deep development pipeline going on. So I’m curious, with the cost cuts that you’ve made, are these temporary cost cuts, are they permanent cost cuts. And as I think about what you said about an early read for next year, sort of mid-single digit revenue and bottom line growth. Does that mean with these cost cuts, maybe you can get to a flat operating margin year-over-year.

Chris Suh: Hey Eric! This is Chris. I’ll sort of take your questions I think together in €“ I think it sort of thematically hits on similar things. So let me just talk about sort of our approach to what we’ve talked about on the call, which is really focusing our investments into our best long term growth opportunities. I think what you see, that we did in Q3 and Q4, as well as the inferences of what we’re going to continue to do in ’24 is a reflection of us continuing to be very disciplined about how we view and really prioritize how we view our growth opportunities. And so they don’t €“ you know we’ve been very deliberate and very careful to continue and invest in those things that will bring long term growth and really being very disciplined about the pace of hiring and some of the variable spend that applied to our €“ you know given the business that we see in the second half of the year.

As we look forward into ’24, I think again, just doing the math on the early guide that I gave, if we’re able to achieve the guidance or the preliminary direction that I gave to a mid-single digit top line with a better than that improvement on operating line, it would be margin improvement year-on-year in ’24 versus ’23 for sure.

Eric Handler: Thank you.

Operator: Your next question will come from the line of Mike Hickey with The Benchmark Company. Please go ahead.

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