Electronic Arts' FIFA 2017 game

Image source: Electronic Arts.

Electronic Arts (NASDAQ:EA) reported fiscal 2017 third-quarter financial results on Jan. 31. The video game maker saw its sales boosted by strong recent game releases, while improving margins helped to shrink losses.

Electronic Arts results: The raw numbers

Metric Q3 2017 Q3 2016 Year-Over-Year Change
Revenue $1.149 billion $1.070 billion 7%
Net loss ($1 million) ($45 million) N/A
Net loss per share ($0.00) ($0.14) N/A

Data source: Electronic Arts Q3 2017 earnings press release.

What happened with Electronic Arts this quarter?

Revenue rose 7% year over year to $1.15 billion, driven by strong sales of Electronic Arts' FIFA, Battlefield, and Star Wars franchises.

Impressively, Electronic Arts said that its FIFA 17 soccer game was the best-selling console title in the world in 2016. Battlefield 1 is also off to a strong start, with a player base that's more than 50% larger than that of a previous version of the game in its comparable launch quarter. And Star Wars: Galaxy of Heroes is enjoying solid user engagement, with average gameplay time per player reaching a new high of 155 minutes per day in the third quarter.

Electronic Arts continues to transition toward higher-margin digital distribution of its games, with 60% of its third-quarter total net revenue coming from digital sales, compared to 53% in Q3 2016. That helped gross margin increase to 55.1%, up from 49% in the year-ago quarter.

All told, net loss narrowed to $1 million from $45 million in the prior-year quarter.

Moreover, Electronic Arts strengthened its cash generation, with net cash provided by operating activities coming in at a record $1.115 billion. 

"For the first time ever, we generated over $1 billion in operating cash flow in a quarter," said CFO Blake Jorgensen in a press release. "This is a true testament to the innovation we built into Battlefield 1 and FIFA 17 and the continued strength of our digital live services."

Looking forward

Electronic Arts expects revenue of approximately $1.482 billion in the fourth quarter, with net income of $513 million, or $1.64 per share.

"With the top console games and most-downloaded mobile portfolio in the industry for Q3, Electronic Arts is growing, engaging and exciting a global community of players," said CEO Andrew Wilson. "We will continue to push the boundaries of play, with stunning new titles like Mass Effect: Andromeda, global competitive gaming tournaments and more amazing experiences coming in the year ahead."

Joe Tenebruso has no position in any stocks mentioned. The Motley Fool recommends Electronic Arts. The Motley Fool has a disclosure policy.