Notice of
2024
Annual Meeting and
Proxy Statement
Our Purpose and Beliefs
At EA, our Purpose and Beliefs are the foundations of
our shared culture. Our Purpose and Beliefs motivate
us. Unite us. Inspire us.
CREATIVITY
PIONEERING
PASSION
Striving to bring imagination, original
ideas, and excitement to everything
we do.
Acting with the curiosity and courage
that it takes to experiment, innovate
and lead.
We are at our best when we pursue
what we love, and have fun doing it.
DETERMINATION
LEARNING
TEAMWORK
Bringing focus, drive and conviction
to our actions. Thriving on the
journey and being motivated to
achieve excellence.
Listening, having humility and being
open to new ways of thinking, and
looking with a lens of inclusion.
Challenging ourselves to grow and
change as a company.
Committed to each other, and to the
accountability and integrity it takes
to be a successful diverse team.
Letter from our CEO and Board Chair
Looking over the past year, I am inspired by how our teams continue to create and deliver more innovative content and deeper
experiences than ever. We delivered award-winning games and services to our players that entertained and connected hundreds of
millions of players around the globe. Amidst a changing industry environment, we continue to execute against our core strategies of
entertaining and engaging massive online communities, telling blockbuster stories and harnessing the power of community in and around
our games to capture our biggest opportunities and deliver long-term value. We believe that we are well-positioned for continued growth
and impact in the years ahead.
FISCAL 2024 HIGHLIGHTS
As we’ve demonstrated several times in the past by building some of the world’s largest franchises, when EA rallies behind a shared goal,
we deliver more creativity and cutting-edge experiences for players. The most recent example of this is the incredible launch of EA
SPORTS FC, a multi-platform experience and profound moment for our players, teams and partners. Across our portfolio, we continued to
deliver for our players, launching eleven new releases, including eight EA SPORTS titles, while providing over 600 content updates.
Fiscal year 2024 proved to be a highly dynamic market, where consumer attention and spend increasingly consolidated in top franchises.
For a company that has some of the biggest IP in the world, this trend presents an incredible opportunity to evolve as an industry leader.
Against that backdrop, we refocused our long-term strategy while delivering earnings growth and record operating cash flow.
FOCUS ON IMPACT
We are inspired to pay forward our passion and creativity in service of one another and the communities in which we live, work, and play.
Through conversation, connection, and learning, we work to create an inclusive and healthy culture. We have made great strides in creating
experiences where all people are welcomed, safe and included. Our social impact programs continue to invest in local communities,
including through our FC Futures program which delivered over 12,000 footballs to grassroots clubs, coaches and children. And, we
have advanced our environmental sustainability programs and practices. This year, we announced commitments to be carbon neutral
for operations by 2027 and to become a net zero enterprise in alignment with the historic Paris Agreement. We’ve already made strides
towards these goals, achieving carbon neutrality for our North America operational emissions.
OUR BOARD OF DIRECTORS
The composition of our Board reflects a diversity of expertise, industry experience and backgrounds across competencies that are critical to
the oversight of our long-term strategy, including digital commerce, sports & entertainment, the application of emerging technology and risk
management. We maintain a thoughtful director selection process to build a Board with the right mix of skills and perspectives to guide and
oversee our strategic plan. Our director identification process is ongoing as we continually seek highly qualified candidates, focusing on areas
where additional breadth and depth can support our Board’s current skill-set as we build for the future of interactive entertainment.
OUR NEXT STEPS
This is an exciting time for Electronic Arts. We are leading the future of entertainment in a dynamic industry. There are billions of players
around the world and this number is expected to increase as younger generations are choosing gaming as their number one form of
entertainment – generating incredible opportunities for us to engage and deliver new experiences. With cultural and generational trends
continuing to expand the definition of entertainment, players and fans are increasingly looking to us to deliver the entertainment they
want today and tomorrow: bigger, bolder, more connected experiences where they can play, watch, create, and connect like never before.
Our teams are the best in the business, delivering awesome gameplay, innovation, and unmatched authenticity. We’re proud of our
performance in service of our stockholders, employees, players, and communities. Our business remains strong, and I could not be more
excited about our future as we bring more amazing games and experiences to more people around the world. We thank you for your
investment in Electronic Arts, as we write the next great chapter of our story together.
Sincerely,
ANDREW WILSON
Chief Executive Officer and Board Chair
1
2024 PROXY STATEMENT
Notice of Annual Meeting of Stockholders
Date and Time
August 1, 2024 (Thursday)
2:00 pm (Pacific)
Location
Virtually at www.virtualshareholder
meeting.com/EA2024
Who Can Vote
Stockholders as of June 6, 2024
are entitled to vote.
Voting Items
PROPOSALS
4
To elect the eight nominees
listed in the Proxy Statement
to the Board of Directors
to hold office for a one-
year term.
To conduct an advisory vote
to approve named executive
officer compensation.
To ratify the appointment of
KPMG LLP as our independent
registered public accounting
firm for the fiscal year ending
March 31, 2025.
To approve our Amended
and Restated 2019 Equity
Incentive Plan.
“FOR” each
director
nominee
“FOR”
“FOR”
“FOR”
Page 62
Page 63
Page 64
Page 65
Stockholders will also act on any other matters that may properly come before the meeting. Any action on the items of business described above
may be considered at the 2024 Annual Meeting of Stockholders (the “Annual Meeting”) at the time and on the date specified above or at any time
and date to which the Annual Meeting may be properly adjourned or postponed.
This year, we will hold the Annual Meeting virtually. There will not be a physical location for the Annual Meeting to attend the Annual Meeting in
person. We believe that holding our Annual Meeting virtually allows for a broader audience that ensures an equitable viewing and participation
experience for all stockholders, regardless of geographic location.
For more information on how to attend the Annual Meeting, please see page 72 of this Proxy Statement.
Your vote is important. You do not need to attend the Annual Meeting to vote if you have submitted your proxy in advance of the meeting. Whether
or not you plan to attend the Annual Meeting, we encourage you to read this Proxy Statement and submit your proxy or voting instructions as
soon as possible so that your shares may be represented at the Annual Meeting. In the event of a technical malfunction or situation that makes it
advisable to adjourn the Annual Meeting, the chair will convene the meeting at 2:30 p.m. Pacific Time on August 1, 2024 at the Company’s principal
business address solely for the purpose of adjourning the meeting to reconvene at a date, time and location announced by the meeting chair. If
this happens, more information will be provided at https://ir.ea.com.
By Order of the Board of Directors,
JACOB J. SCHATZ
EVP of Global Affairs, Chief Legal Officer and Corporate Secretary
How to Vote
Online Before the Meeting
Visit www.proxyvote.com
and follow the instructions
provided in the Notice.
Telephone
Follow the instructions
provided on your proxy card
or voting instruction card.
Mail
Submit your proxy by mail
by signing your proxy card,
and mail it in the enclosed,
postage-paid-envelope.
Online at the Meeting
Attend the Annual Meeting virtually at
www.virtualshareholdermeeting.com/
EA2024 and follow the instructions on
the website.
Important Notice Regarding the Availability of Proxy Materials for the Annual Stockholder Meeting to Be Held on August 1, 2024.
Please note that this Proxy Statement, as well as our Annual Report on Form 10-K (the “Annual Report”) for the fiscal year ended March 31,
2024, is available at http://ir.ea.com.
2
1
3
2
Table of Contents
Letter from our CEO and Board Chair
1
Notice of Annual Meeting of Stockholders
2
Proxy Highlights
4
Board of Directors and Corporate Governance
8
Board Nominees and Structure
8
Board’s Role and Responsibilities
17
Board Policies
19
Director Compensation
20
Compensation Discussion & Analysis
23
Executive Summary
23
Stockholder Engagement
26
Process for Determining Our NEOs’ Compensation
27
Fiscal Year 2024 Compensation for Our New CFO
28
Our NEOs’ Fiscal Year 2024 Compensation
29
Other Compensation Practices and Policies
42
Compensation Committee Report on Executive Compensation
43
Executive Compensation Tables
44
Fiscal Year 2024 Summary Compensation Table
44
Fiscal Year 2024 Grants of Plan-Based Awards Table
46
Outstanding Equity Awards at Fiscal Year 2024 Year-End Table
48
Potential Payments Upon Termination or Change in Control
50
Fiscal Year 2024 Pay Ratio
53
Pay Versus Performance Table
54
Equity Compensation Plan Information
56
Audit Matters
57
Selection and Engagement of Independent Registered Public Accounting Firm
57
Fees of Independent Auditors
58
Pre-approval Procedures
58
Report of the Audit Committee of the Board of Directors
59
Stock Ownership Information
60
Security Ownership of Certain Beneficial Owners and Management
60
Stock Ownership Requirements
61
Delinquent Section 16(a) Reports
61
Insider Trading, Anti-Hedging and Anti-Pledging Policies
61
Proposals to be Voted on
62
Proposal 1: Election of Directors
62
Proposal 2: Advisory Vote to Approve Named Executive
Officer Compensation
63
Proposal 3: Ratification of the Appointment of KPMG LLP,
Independent Public Registered Accounting Firm
64
Proposal 4: Approval of Our Amended and Restated 2019
Equity Incentive Plan
65
Other Information
72
Appendix A: Supplemental Information for CD&A
77
In this Proxy Statement, we make
forward-looking statements regarding
future events or the future financial
performance of the Company. We use
words such as “anticipate,” “believe,”
“expect,” “intend,” “estimate,” “plan,”
“predict,” “seek,” “goal,” “will,” “may,”
“likely,” “should,” “could,” “continue,”
“potential” (and the negative of any
of these terms), “future” and similar
expressions to identify forward-
looking statements. In addition, any
statements that refer to projections
of our future financial performance,
trends in our business, projections of
markets relevant to our business, our
corporate responsibility initiatives
(including environmental, social and
impact matters), uncertain events and
assumptions and other characterizations
of future events or circumstances are
forward-looking statements. These
forward-looking statements are
aspirational, are not guarantees of future
performance and reflect management’s
current expectations. Statements
regarding our corporate responsibility
initiatives may also be based on
standards for measuring progress that
are still developing, internal controls
that are evolving, and on assumptions
that are subject to change in the future;
in the context of this disclosure, they
may also not be considered material for
purposes of reporting with the Securities
and Exchange Commission. Our actual
results could differ materially from
those discussed in the forward-looking
statements. Please refer to the Annual
Report for a discussion of important
factors that could cause actual events
or actual results to differ materially from
those discussed in this Proxy Statement.
These forward-looking statements
speak only as of the date of this Proxy
Statement; we assume no obligation to
revise or update any forward-looking
statement for any reason, except as
required by law.
3
2024 PROXY STATEMENT
Proxy Highlights
This summary highlights information contained in this Proxy Statement, and it is qualified in its entirety by the remainder of this Proxy
Statement. You are encouraged to read the entire Proxy Statement carefully before voting. In this Proxy Statement, the terms
“Electronic Arts”, “EA,” “we,” “our” and “the Company” refer to Electronic Arts Inc. This Proxy Statement was first distributed and made
available via the Internet to stockholders on or about June 14, 2024, along with the Electronic Arts Inc. Notice of 2024 Annual Meeting of
Stockholders, Annual Report and form of proxy.
2024 Board Nominees
The following table provides summary information about our director nominees, each of whom is a current director of the Company.
Name
Principal Occupation
Director
Since
Independent
Committee
Memberships
Mr. Kofi A. Bruce
Chief Financial Officer, General Mills, Inc.
2021
A (Chair)
Ms. Rachel A.
Gonzalez
General Counsel, GE Vernova Inc.
2021
NG, C
Mr. Jeffrey T.
Huber
Founder & Managing Partner, Triatomic Capital;
Former CEO & Vice Chairman, GRAIL, Inc.
2009
A
Ms. Talbott Roche
President and Chief Executive Officer, Blackhawk
Network Holdings, Inc.
2016
C (Chair)
Mr. Richard A.
Simonson
Managing Partner, Specie Mesa L.L.C.;
Former Chief Financial Officer, Sabre Corporation
2006
A
Mr. Luis A. Ubiñas
(Lead Independent Director*)
Former President, Ford Foundation,
Former Senior Partner, McKinsey & Company
2010
NG (Chair)
Ms. Heidi J.
Ueberroth
President, Globicon
2017
C
Mr. Andrew Wilson
(Chair)
Chief Executive Officer, Electronic Arts Inc.
2013
*
Elected by independent directors.
A: Audit Committee
C: Compensation Committee
NG: Nominating and Governance Committee
4
Board Diversity and Refreshment
The Board of Directors routinely assesses its composition and believes that complementary and diverse perspectives, through business
experience, tenure, diversity of gender, ethnicity, culture and other factors, contribute to the Board of Directors’ effectiveness as a
whole and drive stockholder value. When assessing potential new directors, the Nominating and Governance Committee considers the
skills, background and experience of each candidate to evaluate the candidate’s ability to contribute diverse perspectives to the Board
of Directors and oversee EA’s long-term strategy. The primary consideration is to identify candidates who will best fulfill the Board of
Directors’ and the Company’s needs at the time of the search. Therefore, the Nominating and Governance Committee does not believe
it is appropriate to either nominate or exclude from nomination an individual solely based on gender, ethnicity, race, age, or similar factors.
The Nominating and Governance Committee and the Board of Directors are committed to actively seeking highly qualified women and
individuals from underrepresented communities to include in the pool of potential new directors.
Director Nominee Age
Director Nominee Tenure
Director Nominee Diversity
Median Age – 56 years old
Average Age – 57 years old
Median Tenure – 9.4 years
Average Tenure – 9.7 years
3 female: Ms. Gonzalez, Ms. Ueberroth, and Ms. Roche
2 Hispanic/Latino: Ms. Gonzalez and Mr. Ubiñas
1 African American: Mr. Bruce
50%
50%
55 or younger - 50%
56 – 65 years old – 50%
66 or older – 0
37.5%
25%
37.5%
5 or fewer years - 37.5%
6 – 10 years - 25%
10+ years – 37.5%
63%
38%
Ethnically Diverse
38% Female
Diverse - 63%
Board Diversity Matrix (As of June 6, 2024)*
Female
Male
Board Size
Total Number of Directors
8
Part I: Gender Identity
Directors
3
5
Part II: Demographic Background*
African American or Black
-
1
Hispanic or Latinx
1
1
White
2
3
* To see our Board Diversity Matrix as of June 23, 2023, please see the proxy statement filed with the SEC on June 23, 2023.
5
2024 PROXY STATEMENT
PROxY HIGHLIGHTS
Corporate Governance Highlights and Report
Board Independence
Independent director nominees
7 of 8
Independent Lead Director
Luis A. Ubiñas
100% Independent Board committees
Yes
Conflict of Interest Policy
Yes
Board Operations
Number of incumbent directors
that attended at least 75% of all
applicable meetings last year
8 of 8
Board evaluations
Annual
Committee evaluations
Annual
Director stock ownership requirement
Yes, 5x annual
retainer
Code of Conduct applies to all
Board members
Yes
Director Elections
Frequency of Board elections
All directors
elected annually
Voting standard for uncontested elections
Majority of
votes cast
Stockholder proxy access
Yes
Stockholder Rights
Voting rights for all shares
One share,
one vote
Voting rights restrictions (e.g., non-voting
shares, golden shares)
None
Poison pill
No
Supermajority voting provisions
None
Right to call special meetings
Yes, 15%
threshold
Stockholder Action by Written Consent
Yes, 25%
threshold
Stockholder access to directors and officers
during annual stockholders’ meeting
Yes
Robust stockholder engagement practices
Yes
6
PROxY HIGHLIGHTS
Engagement with Stockholders
EA maintains a robust, year-round stockholder engagement program that allows us to solicit feedback from our stockholders on
a variety of topics to help inform the Board’s decision-making process. During fiscal year 2024 in advance of our Annual Meeting,
we offered meetings with a total of 28 stockholders, which collectively hold approximately 61% of our outstanding stock. We held
engagement meetings with every stockholder who accepted, totaling 17 meetings, with stockholders representing approximately
50% of our outstanding stock. The Chair of our Compensation Committee participated in select discussions. During these meetings,
we previewed and discussed various topics, including our executive compensation program, governance and ESG issues. These
discussions provide the Board and management with invaluable perspectives, insights and feedback. We look forward to our continued
dialogues with our stockholders.
Leading up to 2024 Annual Meeting
Offered Meetings
Total of 28 Stockholders
representing 61% of our outstanding common stock
Engaged in Discussions
~50%
of our outstanding common stock
What we
discussed
Executive
Compensation
■Feedback on our
Compensation programs,
including Annual Bonus
Program and PRSU
Program, and potential
go-forward changes
under consideration
Governance
■Board refreshment
and skills
■Board oversight
■Cybersecurity and AI
Environmental and
Social Matters
■Our culture and our talent
■Environmental sustainability
progress
Environmental, Social and Governance (“ESG”) Focus
2023
Impact
Report
EA is committed to positive impact in our world, and we continue to make progress on our initiatives
supporting our players, our communities, our planet, and our company. ESG matters are overseen by
our Board of Directors, with specific responsibilities assigned to each of the Board Committees. See
page 17 for more information about Board and Committee oversight of ESG.
In September 2023, we published our fourth annual Impact Report, detailing our commitments and
progress in environmental, social and governance areas that are of interest to our stakeholders.
Our disclosures are created with reference to the Sustainability Accounting Solutions Board
(SASB) Materiality Map and the recommendations of the Task Force on Climate Related Financial
Disclosures (TCFD). We also align our programs and practices with select United Nations Sustainable
Development Goals (SDGs), and initiated reporting of our environmental sustainability efforts to the
Carbon Disclosure Project (CDP).
America’s Best Midsize
Employers
Most Admired Companies
Top 100 Most Sustainable
Companies
Forbes – 2024
Fortune – 2024
Barrons - 2024
7
2024 PROXY STATEMENT
PROxY HIGHLIGHTS
Board of Directors and
Corporate Governance
Board Nominees and Structure
Each of the following director nominees has been nominated for re-election at the Annual Meeting. As set forth below, we believe each of
these director nominees brings a valuable and unique perspective to the Board of Directors and has the necessary experience, skills and
attributes to serve on the Board of Directors and contribute to its overall effectiveness. The Board of Directors has concluded that each
is qualified to serve as a director based on the experiences, qualifications and attributes set forth below.
Kofi A. Bruce 53 Independent
Chief Financial Officer, General Mills, Inc.
Director since: 2021
Board Committees:
Other Public Company
Directorships:
Public Company
Directorships in
Past 5 Years:
Diversity:
Audit (Chair)
None
None
Identifies as
African American
Background and Affiliations:
Education:
■Chief Financial Officer, General Mills, Inc., a global manufacturer
and marketer of branded consumer foods, 2020-present
■Vice President, Finance (2014-2020) and Corporate Controller
(2017-2019), General Mills, Inc.
■B.A. in International Relations, Stanford University
■M.B.A., University of Michigan School of Business (Ross)
Key Qualifications:
Mr. Bruce brings to the Board of Directors skills related to financial strategy, risk management and senior leadership from his experience
as a current public company Chief Financial Officer. Prior to his appointment as Chief Financial Officer, Mr. Bruce had a 20-year career in
finance leadership roles, including Treasury, Accounting and Controllership functions at public companies. In present and prior roles, he
gained significant experience overseeing financial statement preparation, capital allocation strategies, and the relationship with internal
and external audit functions. These experiences provide Mr. Bruce with critical skills and experiences central to his role as Chair of the
Audit Committee. In addition, Mr. Bruce brings to the Board of Directors his skills and experience with operational strategies and risk
management associated with consumer-facing businesses with global operations.
8
Rachel A. Gonzalez 54 Independent
General Counsel of GE Vernova Inc.
Director since: 2021
Board Committees:
Other Public Company
Directorships:
Public Company
Directorships in
Past 5 Years:
Diversity:
Nominating and Governance
Compensation
None
Sabre Corporation
Vacasa, Inc.
Dana Incorporated
Identifies as Female
and Hispanic/Latina
Background and Affiliations:
Education:
■General Counsel of GE Vernova Inc., a global energy company,
April 2023-present
■EVP, General Counsel and Corporate Secretary of Starbucks
Corporation, a global coffeehouse chain, April 2018-April 2022
■EVP, Chief Administrative Officer and Corporate Secretary of Sabre
Corporation, a global travel technology company, May 2017-April 2018
■B.S. degree in Comparative Literature, University of
California, Berkeley
■JD, Boalt Hall School of Law at the University of
California, Berkeley
Key Qualifications:
Ms. Gonzalez’s significant operational, regulatory and management experience as General Counsel and Corporate Secretary at GE
Vernova, Starbucks and Sabre, as well as during her time as a partner in the corporate group of Morgan, Lewis & Bockius, provides
in-depth skills, experience and perspective with respect to public company corporate governance, risk management, compensation
practices, and ESG matters, as well as responding to evolving stockholder and other stakeholder expectations. In addition, Ms. Gonzalez’s
experience at consumer-facing businesses with strong digital marketing and international operations provide valuable insight to the Board
of Directors and management as they execute the Company’s growth strategies.
Jeffrey T. Huber 56 Independent
Founder & Managing Partner, Triatomic Capital
Director since: 2009
Board Committees:
Other Public Company
Directorships:
Public Company
Directorships in
Past 5 Years:
Audit
Upstart, Inc.
Zapata Computing, Inc.
None
Background and Affiliations:
Education:
■Founder and Managing Partner of Triatomic Capital, an investment
and advisory firm, January 2022–present.
■Founding CEO and Vice Chairman of GRAIL, Inc., a life sciences
company, 2016-2021
■Former Senior Vice President, Alphabet Inc., 2003-2016
■Former Vice President of Architecture and Systems
Development, eBay
■B.S. degree in Computer Engineering, University of Illinois
■Master’s degree, Harvard University
Key Qualifications:
Mr. Huber’s experience as the founding CEO and Vice Chairman of GRAIL, Inc., as well as his experiences at Alphabet and eBay, bring
extensive operational and senior leadership skills associated with the application of rapidly changing technology, including with respect
to cybersecurity risk management. In addition, Mr. Huber’s experience at Alphabet and eBay provide relevant background and experience,
including risk management experience, with respect to consumer online companies that deploy large-scale technological infrastructure.
Mr. Huber’s experience in his current role as managing partner role at Triatomic Capital provides the Board with skills associated with
capital allocation and the evaluation of investment opportunities.
9
2024 PROXY STATEMENT
BOArD Of DIrECtOrs AnD COrPOrAtE GOvErnAnCE
Talbott Roche 57 Independent
President and Chief Executive Officer, Blackhawk Network Holdings, Inc.
Director since: 2016
Board Committees:
Other Public Company
Directorships:
Public Company
Directorships in
Past 5 Years:
Diversity:
Compensation (Chair)
None
None
Identifies as Female
Background and Affiliations:
Education:
■President (2010-present) and Chief Executive Officer (2016-present),
Blackhawk Network Holdings, Inc., a leading prepaid payment network
■Former Branding Consultant and Director, New Business Development,
Landor Associates
■Director, Blackhawk Network Holdings, Inc. (currently private)
■B.A. in Economics, Stanford University
Key Qualifications:
Ms. Roche brings to the Board of Directors extensive operational and senior leadership experience as well as significant experience in
corporate governance, risk management, compensation program design, and investor engagement as the Chief Executive Officer of a
global organization, including during Blackhawk Network Holdings’ time as a public company. In addition, Ms. Roche’s understanding and
experience with digital commerce, marketing and consumer trends provide the Board of Directors with valuable perspective. Throughout
Ms. Roche’s career, she has been deeply involved in human capital management and leadership development which provides our Board
with insight into executive succession planning, cultural oversight, and inclusion and diversity programs.
Richard A. Simonson 65 Independent
Managing Partner, Specie Mesa L.L.C.;
Former Chief Financial Officer, Sabre Corporation
Director since: 2006
Board Committees:
Other Public Company
Directorships:
Public Company
Directorships in
Past 5 Years:
Audit
Couchbase, Inc.
Evercommerce, Inc.
None
Background and Affiliations:
Education:
■Managing Partner, Specie Mesa L.L.C., an investment and advisory firm,
2018-present
■Former Chief Financial Officer (2013-2018) and Senior Adviser
(2018-2019), Sabre Corporation, a global travel technology company
■Former Chief Financial Officer, Nokia Corporation
■Former Chief Financial Officer, Rearden Commerce
■B.S. degree, Colorado School of Mines
■M.B.A., Wharton School of Business, University of
Pennsylvania
Key Qualifications:
Mr. Simonson’s experience as a Chief Financial Officer at three public companies provides extensive skills related to financial strategy
and capital allocation, risk management, financial statement preparation, and oversight of tax, treasury and other finance-related
organizations. Mr. Simonson’s CFO experiences also provide the Board with insights related to the strategic and operational challenges
of leading global companies. As an experienced director, and current Audit Committee Chair at two public companies, Mr. Simonson
has extensive experience with corporate governance issues and trends and evolving stakeholder expectations, as well as significant
experience overseeing internal and external audit functions. Mr. Simonson’s current role as managing partner role at Specie Mesa L.L.C.
provides skills associated with capital allocation and the evaluation of investment opportunities.
10
BOArD Of DIrECtOrs AnD COrPOrAtE GOvErnAnCE
Luis A. Ubiñas (Lead Director) 61 Independent
Former President, Ford Foundation, Former Senior Partner, McKinsey & Company
Director since: 2010
Board
Committees:
Other Public Company
Directorships:
Other
trusteeships:
Public Company
Directorships in
Past 5 Years:
Diversity:
Nominating and
Governance (Chair)
AT&T Inc.
Tanger Factory Outlet
Centers Inc.
Mercer Funds
Boston Private
Financial Holdings, Inc.
FirstMark Horizon
Acquisition Corp. (SPAC)
Identifies as
Hispanic/Latino
Background and Affiliations:
Education:
■Former President, Ford Foundation
■Former Senior Partner, McKinsey & Company
■Fellow of the American Academy of Arts and Sciences (non-profit)
■Member of the Council on Foreign Relations
■B.A. degree, Harvard College
■M.B.A., Harvard Business School
Key Qualifications:
Mr. Ubiñas has extensive skills in business management, operations, governance, digital commerce, compensation program design and
board functions from his work as an experienced board member, investor and advisor at companies across sectors. In addition, through his
prior experience as a Senior Partner at McKinsey & Company, he has worked with technology, telecommunications and media companies
in understanding the challenges and opportunities presented by digital distribution platforms and applications. Mr. Ubiñas’ experience as
President of the Ford Foundation provides unique insight, strategic direction and oversight of the Company’s ESG efforts, including the
Company’s inclusion and diversity practices and programs, as well as its social impact efforts.
Heidi J. Ueberroth 58 Independent
President, Globicon
Director since: 2017
Board Committees:
Other Public Company
Directorships:
Public Company
Directorships in
Past 5 Years:
Diversity:
Compensation
None
Stillwater Growth
Corp. (SPAC)
Identifies as Female
Background and Affiliations:
Education:
■President, Globicon, a private investment and advisory firm focused
on the media, sports, entertainment and hospitality industries,
2016–present
■Chair, Pebble Beach Company (private)
■Former President, NBA International
■Former President, Global Marketing Partnerships and International
Business Operations, NBA
■B.A. degree, Vanderbilt University
Key Qualifications:
Ms. Ueberroth has extensive operational and management experience in the sports, media and entertainment industries, including with
respect to developing consumer products and services in international and emerging markets. During her 19-year career with the NBA,
she oversaw the league’s international expansion and brings deep knowledge of television and digital media distribution, marketing and
branding and strategic direction of a global company. Her active role as the chairman of the Pebble Beach Company and her past and
present board service bring skills and experience with respect to consumer trends, the adoption of new technology, compensation
program design, risk management, investor engagement and ESG initiatives.
11
2024 PROXY STATEMENT
BOArD Of DIrECtOrs AnD COrPOrAtE GOvErnAnCE
Andrew Wilson (Chair) 49
Chief Executive Officer, Electronic Arts Inc.
Director since: 2013
Board Committees:
Other Public Company
Directorships:
Public Company
Directorships in
Past 5 Years:
None
None
Intel Corporation
Background and Affiliations:
■Chief Executive Officer, Electronic Arts Inc., 2013-present
■Chair of the Board, World Surf League (private)
■Board of Trustees, Paley Center for Media (non-profit)
Key Qualifications:
Mr. Wilson has served as the Company’s Board Chair since 2021, Chief Executive Officer since September 2013 and has been employed
by EA in several roles since 2000. Mr. Wilson’s career at the Company provides the Board with extensive skills and experiences related to
consumer trends, particularly within the gaming, sports and entertainment industries, the adoption of new technology, digital commerce,
risk management and human capital management. A tenured executive with previous public company board service, Mr. Wilson has
significant skills related to senior leadership, executive succession planning, investor engagement and corporate governance. Mr. Wilson
has extensive experience and knowledge of the Company and the industry, and the Board believes it is crucial to have the perspective of
the Company’s Chief Executive Officer represented on the Board of Directors to provide direct insight into the Company’s day-to-day
operations and strategic vision.
12
BOArD Of DIrECtOrs AnD COrPOrAtE GOvErnAnCE
Consideration of Director Nominees
In evaluating director nominees to recommend to the Board of Directors, the Nominating and Governance Committee considers the
characteristics and the needs of the Board of Directors as a whole at that time and complementary skills that enhance the oversight
of EA’s long-term strategy, including the traits discussion on page 5 of this Proxy Statement under the heading “Board Diversity and
Refreshment”. While the specific needs of the Board of Directors may change from time to time, all nominees for director are considered
on the basis of the following minimum qualifications:
■The highest level of personal and professional ethics and integrity, including a commitment to EA’s purpose and beliefs;
■Practical wisdom and mature judgment;
■Broad training and significant leadership experience in business, entertainment, technology, finance, corporate governance, public
interest, sustainability, digital commerce or other disciplines relevant to EA’s long-term success;
■The ability to gain an in-depth understanding of EA’s business; and
■A willingness to represent the best interests of all EA stockholders and objectively appraise management performance.
The Nominating and Governance Committee will evaluate candidates proposed by our stockholders under similar criteria, except that it
also may consider as one of the factors in its evaluation, the amount of EA voting stock held by the stockholder and the length of time the
stockholder has held such stock. A stockholder who wishes to suggest a candidate for the committee’s consideration should send the
candidate’s name and qualifications to our Corporate Secretary.
The Nominating and Governance Committee evaluates each director’s various time commitments annually, including their primary
occupation, service on other public company boards and board committees, leadership positions on other boards, as well as service with
private company boards and non-profit organizations. Following its review, the Nominating and Governance Committee has determined
that, in its view, no director currently has time commitments that has prevented them or would prevent them from properly discharging
their duties as directors on EA’s Board of Directors.
Director Independence
Our Board of Directors has determined that each of our non-employee directors qualifies as an “independent director” as that term is
used in the Nasdaq Stock Market Rules and that each member of our standing committees is independent in accordance with those
standards. Mr. Wilson, our CEO, does not qualify as independent. The Nasdaq Stock Market Rules have both objective tests and a
subjective test for determining independence. The Board of Directors has not established categorical standards or guidelines to make
these subjective determinations but considers all relevant facts and circumstances.
In addition to the Board-level standards for director independence, the directors who serve on the Nominating and Governance, Audit and
Compensation Committees each satisfy requirements established by the Securities and Exchange Commission (“SEC”) and the Nasdaq
Stock Market to qualify as “independent” for the purposes of membership on those committees.
Board Structure and Operations
Board Meetings
In fiscal year 2024, the Board of Directors met five times. At regularly scheduled meetings, the independent members of the Board of
Directors meet in executive session separately without management present.
DIRECTOR ATTENDANCE AT ANNUAL MEETING
Our directors are expected to make every effort to attend the Annual Meeting. All of the eight directors who were elected at the 2023
annual meeting attended the 2023 annual meeting.
13
2024 PROXY STATEMENT
BOArD Of DIrECtOrs AnD COrPOrAtE GOvErnAnCE
Board of Directors Leadership Structure
The Board of Directors regularly evaluates its leadership structure and discusses Board leadership with stockholders. The Board of
Directors believes that Mr. Wilson serving as Chair and Mr. Ubiñas serving as Lead Independent Director is the appropriate leadership
structure for the Company. A strong and empowered Lead Independent Director provides an essential mechanism for independent
viewpoints and accountability.
Andrew Wilson
Chief Executive Officer and Board Chair
The Board of Directors believes that Mr. Wilson has invaluable knowledge regarding the Company and the interactive entertainment
industry and is uniquely positioned to lead the Board of Directors in its review of management’s strategic plans. In addition,
the Board of Directors believes that Mr. Wilson’s combined role enables decisive leadership, promotes clear accountability and
enhances the Company’s ability to communicate its strategy and message clearly and consistently to stockholders, employees and
other stakeholders.
With Mr. Wilson as Chief Executive Officer and Chair, the Board of Directors is focused on practices and programs that promote
and facilitate independent viewpoints and strengthen effective independent oversight of management. These considerations
include a strong and empowered Lead Independent Director, the current membership of the Board of Directors, which has a
balanced mix of shorter tenured and longer tenured directors and representation of diverse perspectives based on background,
including business experience, gender, race, ethnicity, professional skills and experiences, and other factors. The Board of Directors
also believes that its Lead Independent Director position effectively balances any potential risk of concentration of authority
that may exist with a combined Chair/CEO position. The Board of Directors also maintains strong standing committees, which are
entirely composed of independent directors, and have empowered Chairs.
Luis A. Ubiñas
Lead Independent Director
The Board of Directors understands and values the role of independent leadership. Mr. Ubiñas has served as our Lead Independent
Director since 2015, and his current two-year term ends with our 2025 annual meeting, subject to Mr. Ubiñas’ re-election to the
Board of Directors. Mr. Ubiñas, the Chair of our Nominating and Governance Committee, has extensive experience as a public
company director and deep knowledge and understanding of governance practices and board functions from his work with
companies across sectors; he also has spoken directly with several of the Company’s largest investors. Mr. Ubiñas plays an important
role in providing institutional knowledge and brings the history of having experienced multiple lifecycles of our businesses. Given
Mr. Ubiñas’ strong qualifications and corporate governance expertise including his experience as our Lead Independent Director,
the Board believes that Mr. Ubiñas’ contributions continue to be of great value to the Board of Directors and to stockholders.
The Company maintains Lead Independent Director responsibilities that provide best-in-class mechanisms for independent
viewpoints and accountability. Mr. Ubiñas’ key roles and responsibilities are contained in our Corporate Governance Guidelines which
are available on our Investor Relations website at http://ir.ea.com and include:
■Calling special meetings of the independent directors,
as needed;
■Presiding at meetings of the Board of Directors at which
the Chair is not present, including executive sessions of the
Board of Directors;
■Approving the agenda for Board of Directors meetings;
■Consulting with respect to materials provided to directors
in advance and providing feedback to the Chair about the
quality of those materials;
■Serving as a liaison between the Chair and the other
independent directors;
■Along with the Chair, jointly determining the timing and
length of meetings of the Board of Directors;
■Facilitating discussion among independent directors
and committee chairs and providing feedback and
perspective to the Chair about discussions among
the independent directors;
■Overseeing the process for the Board of Directors’ annual
self-evaluation along with the Nominating and
Governance Committee;
■Leading the Board of Directors’ evaluation of the CEO along
with the Nominating and Governance Committee; and
■Overseeing the Board of Directors’ stockholder
communication policies.
14
Board of directors and corporate Governance
Board Committees
The Board of Directors currently has a standing Audit Committee, Compensation Committee and Nominating and Governance
Committee. Each of these standing committees operates under a written charter adopted by the Board of Directors. These charters are
available in the Investor Relations section of our website at http://ir.ea.com.
All members of these committees are independent directors. During fiscal year 2024, all eight directors attended in 92% or more of the
aggregate of (1) the number of applicable meetings of the Board of Directors and (2) the number of applicable meetings held by each
committee on which such director was a member. The members of our standing committees are set forth below:
Audit Committee
Members
Meetings in
fY 2024:
Kofi a.
BrUce
(chair)
JeffreY t.
HUBer
ricHard a.
siMonson
9
responsibilities of the audit committee
■Assists the Board of Directors in its oversight of the Company’s financial reporting and is directly responsible for the appointment,
compensation and oversight of our independent auditors.
■Establishes and maintains complaint procedures with respect to internal and external concerns regarding accounting or auditing matters.
■Oversees tax and treasury policies and practices as well as the Company’s internal audit function.
■Although the Board of Directors retains ultimate risk management oversight of matters related to privacy and cybersecurity, the Audit
Committee receives quarterly updates from EA’s information security team and reviews the steps taken by management to monitor and
control risks with respect to privacy and cybersecurity issues.
As determined by the Board of Directors, each of the three current Audit Committee members meets the independence requirements
and the financial literacy standards of the Nasdaq Stock Market Rules, as well as the independence requirements of the SEC. The Board
of Directors has determined that each of Mr. Bruce and Mr. Simonson meets the criteria for an “audit committee financial expert” as set
forth in applicable SEC rules. The Audit Committee has the authority to obtain advice and assistance from outside advisors without
seeking approval from the Board of Directors and the Company will provide appropriate funding for payment of compensation to advisors
engaged by the Audit Committee.
Nominating and Governance Committee
Members
Meetings in
fY 2024:
LUis a. UBiÑas
(chair)
racHeL a.
GonZaLeZ
4
responsibilities of the nominating and Governance committee
■Applies the criteria outlined in our Corporate Governance Guidelines to recommend nominees for director and committee memberships
to the Board of Directors.
■Reviews from time to time the appropriate skills, characteristics and experience required of the Board of Directors as a whole, as well as
its individual members.
■Reviews developments in corporate governance and recommends formal governance standards to the Board of Directors.
■Oversees the CEO’s annual performance review.
■Manages the process for emergency succession planning in the event the CEO is unable to fulfill the responsibilities of the role, and also
periodically evaluates internal and external CEO candidates for succession planning purposes.
■Oversees, periodically reviews, and reports to the Board of Directors with respect to ESG performance, disclosures, and engagement
with investors and other key stakeholders.
The Nominating and Governance Committee currently is comprised of two directors, each of whom the Board of Directors determined
meets the independence requirements of the Nasdaq Stock Market Rules.
15
2024 PROXY STATEMENT
Board of directors and corporate Governance
Compensation Committee
Members
Meetings in
fY 2024:
taLBott
rocHe
(chair)
racHeL a.
GonZaLeZ
Heidi J.
UeBerrotH
7
responsibilities of the compensation committee
■Sets the overall compensation strategy for the Company.
■Recommends the compensation of the CEO to the Board of Directors and determines the compensation of our other executive officers.
■Oversees the Company’s bonus and equity incentive plans and other benefit plans.
■Reviews and recommends to the Board of Directors compensation for non-employee directors and reviews and approves compensation
for employees who qualify as a “Related Person” under our Related Person Transaction Policy.
As determined by the Board of Directors, each of the members of the Compensation Committee meets the independence requirements
of the Nasdaq Stock Market Rules and the SEC rules. The Compensation Committee has the authority to engage the services of
outside advisors after first conducting an independence assessment in accordance with applicable laws, regulations and exchange listing
standards. During fiscal year 2024, the Compensation Committee continued to directly engage Semler Brossy Consulting Group, a national
compensation consulting firm, to advise on executive compensation matters. Please refer to the section titled “The Process for Determining
Our NEOs’ Compensation” in the “Compensation Discussion and Analysis” section of this Proxy Statement, for additional information
regarding the role of Semler Brossy in advising the Compensation Committee on our executive compensation program. The Compensation
Committee has reviewed the independence of Semler Brossy and has determined that its engagement does not raise any conflicts of
interest. The Compensation Committee may also delegate any of its authority and duties to subcommittees, individual committee members
or management, as it deems appropriate in accordance with applicable laws, rules and regulations.
For further information about the role of our Compensation Committee and executive officers in recommending the amount or form
of executive compensation, please see “The Process for Determining our NEOs’ Compensation” in the “Compensation Discussion and
Analysis” section of this Proxy Statement.
Compensation Committee Interlocks and Insider Participation
During fiscal year 2024, no member of the Compensation Committee was an employee or current or former officer of EA, nor did any
member of the Compensation Committee have a relationship requiring disclosure by EA under Item 404 of Regulation S-K. No EA officer
serves or has served since the beginning of fiscal year 2024 as a member of the board of directors or the compensation committee of a
company at which a member of EA’s Board of Directors or Compensation Committee is an employee or officer.
Annual Board and Committee Self-Evaluations
Our Board of Directors and each of our committees conducts an annual evaluation, which includes a qualitative assessment by each
director of the performance of the Board of Directors, as a whole, and the committee or committees on which each director serves.
The evaluation is intended to determine whether the Board of Directors and each committee are functioning effectively, and to provide
them with an opportunity to reflect upon and improve processes and effectiveness. Our Lead Independent Director, Mr. Ubiñas, oversees
the process for the Board of Directors’ annual self-evaluation along with the Nominating and Governance Committee. A summary of
the results is presented to the Nominating and Governance Committee and the Board of Directors on an aggregated basis, noting any
themes or common issues.
16
Board of directors and corporate Governance
Board’s Role and Responsibilities
Oversight of Business Strategy
The Board’s industry and management expertise is critical in overseeing our business strategy. In a rapidly evolving industry, our Board is an
important resource for thoughtful and candid insights into strategic planning conversations, including product and service development,
operational considerations, emerging industry trends, acquisitions, financial planning and organizational design.
■The Board oversees our stockholders’ interest in the long-term health and the overall success of our business and financial strength. This
focus is reflected in the agenda for each Board meeting. The Board reviews our long-term strategy at a dedicated meeting at least annually.
■At the beginning of each fiscal year, the Board formally reviews and approves our annual financial plan. The Board monitors performance
throughout the year, including financial progress, the integrity of our financials results and strategic objectives.
■The Board critically reviews how we allocate our capital resources, including acquisition activity, significant capital investments and return
of capital programs. These strategic actions and investments are reviewed and approved by the Board, or a committee, following open and
engaged discussions.
■At each Board meeting, the Board reviews and discusses with management a set of detailed operating reports, including current financial
performance versus plan. Focused discussions of key business issues, strategic developments and financial considerations are held at each
Board meeting.
■At each Board meeting, the independent directors meet in executive session. These meetings are led by our Lead Independent Director.
Oversight of ESG Matters
The Board of Directors oversees ESG matters directly and through its committees.
Human capital Management
The Board reviews material human capital management programs,
practices and strategies, including organizational health and key
indicators, at least annually.
dei, talent and culture
The Nominating and Governance Committee reviews our initiatives
related to diversity, equity and inclusion (DEI) and efforts to
maintain a safe and healthy culture, at least annually.
pay equity
At least annually, the Compensation Committee reviews
our commitments to pay equity.
environmental sustainability
The Nominating and Governance Committee oversees our
commitments to environmental sustainability at least annually.
overall esG performance
The Nominating and Governance Committee reviews topics such as
our overall ESG performance, disclosures and investor engagement
at least twice annually and surfaces our progress to the Board. These
updates include a review of market developments, frameworks, and
stakeholder expectations.
17
2024 PROXY STATEMENT
Board of directors and corporate Governance
Oversight of Risk Issues
Board of Directors
Our Board of Directors oversees our risk management processes and procedures as well as material risks to our business. The
Board of Directors exercises this oversight responsibility directly and through its committees. The oversight responsibility of the
Board of Directors and its committees is informed by reports from our management team that provide visibility into our key areas of
material risk. These include broad strategic, operational and financial discussions, as well as more focused discussions on specific
topics. Material business risks, including succession planning for our CEO and executive officers, are reviewed by the full Board
of Directors. While the Board of Directors has ultimate risk oversight with respect to risks related to privacy and cybersecurity and
receives periodic updates on these risks and mitigation strategies, the Audit Committee also receives quarterly updates from EA’s
information security team that review the steps taken by management to monitor and mitigate these risks.
Audit Committee
■Risks related to financial reporting, internal controls and procedures, investments, tax and treasury matters and legal compliance.
■Oversees our enterprise risk management program, which identifies and prioritizes material risks for the Company.
■Areas of material financial risk, as appropriate.
■Receives quarterly cybersecurity updates from EA’s information security team.
nominating and
Governance committee
■Risks related to director and emergency CEO
succession planning.
■Risks related to our corporate governance policies
and practices.
■Risks related to human capital management and culture.
compensation committee
■Reviews compensation-related risks.
■Risks related to pay equity.
Each of the committees regularly reports to the full Board of Directors on matters relating to the specific areas of risk that each
committee oversees.
Compensation Risk Assessment
As part of their risk oversight efforts, the Compensation Committee evaluates our compensation programs to determine whether the design
and operation of our policies and practices could encourage executives or employees to take excessive or inappropriate risks that would
be reasonably likely to have a material adverse effect on the Company and has concluded that they do not. In making that determination,
the Compensation Committee considered the design, size and scope of our cash and equity incentive programs and program features
that mitigate against potential risks, such as payout caps, clawbacks, the quality and mix of performance-based and “at risk” compensation,
and, with regard to our equity incentive programs, the stock ownership requirements for our executives. The Compensation Committee has
concluded that our compensation policies and practices strike an appropriate balance of risk and reward in relation to our overall business
strategy, and do not create risks that are reasonably likely to have a material adverse effect on the Company. The “Compensation Discussion
and Analysis” section below generally describes the compensation policies and practices applicable to our named executive officers.
18
Board of directors and corporate Governance
Board Policies
Related Persons Transactions Policy
Our Board of Directors has adopted a written Related Person Transactions Policy that describes the procedures used to process,
evaluate, and, if necessary, disclose transactions between the Company and its directors, officers, director nominees, greater than
5% beneficial owners, or an immediate family member of any of the foregoing. We review any transaction or series of transactions which
exceeds $120,000 in a single fiscal year and in which any related person has a direct or indirect interest, as well as any transaction for
which EA’s Global Code of Conduct or Conflict of Interest Policy would require approval of the Board of Directors.
Once a transaction has been identified, the Audit Committee (if the transaction involves an executive officer) or the Nominating
and Governance Committee (if the transaction involves a director) will review the transaction at the next scheduled meeting of such
committee. Transactions involving our CEO will also be reviewed by our Lead Independent Director. Transactions involving employee
compensation will also be submitted to the Compensation Committee for approval. If it is not practicable or desirable to wait until
the next scheduled meeting, the chair of the applicable committee considers the matter and reports back to the relevant committee
at the next scheduled meeting. In determining whether to approve or ratify a transaction, our committees (or the relevant chair of
such committee) consider all of the relevant facts and circumstances available and transactions are approved only if they are in, or
not inconsistent with, the best interests of EA and its stockholders. No member of a committee reviewing a potential related person
transaction may participate in any review, consideration or approval of any transaction if the member or their immediate family member is
the related person.
Related Persons Transactions
Since March 31, 2023, we have not entered into any transactions, nor are there any currently proposed transactions, between us and a
related party where the amount involved exceeds, or would exceed, $120,000, and in which any related person had or will have a direct or
indirect material interest.
Global Code of Conduct and Corporate Governance Guidelines
We have adopted a Global Code of Conduct that applies to our directors, and all employees, including our principal executive officer,
principal financial officer, principal accounting officer, and other senior financial officers, as well as Corporate Governance Guidelines. These
documents, along with our organizational documents and committee charters, form the framework of our corporate governance. Our Global
Code of Conduct, Corporate Governance Guidelines and committee charters are available in the Investor Relations section of our website
at http://ir.ea.com. We post amendments to, or waivers from our Global Code of Conduct in the Investor Relations section of our website.
Stockholder Communications with the Board of Directors
EA stockholders may communicate with the Board of Directors as a whole, with a committee of the Board of Directors, or with an individual
director by sending a letter to EA’s Corporate Secretary at Electronic Arts Inc., 209 Redwood Shores Parkway, Redwood City, CA 94065,
or by sending an email to StockholderCommunications@ea.com. Our Corporate Secretary will forward to the Board of Directors all
communications that are appropriate for the Board of Directors’ consideration. For further information regarding the submission of
stockholder communications, please visit the Investor Relations section of our website at http://ir.ea.com.
19
2024 PROXY STATEMENT
Board of directors and corporate Governance
Director Compensation
Our Compensation Committee is responsible for reviewing and recommending to our Board of Directors the compensation paid to
our non-employee directors. Their review occurs every two years, with the last review occurring in February 2024, in consultation with
our independent compensation consultant Semler Brossy. Non-employee directors are paid a mix of cash and equity compensation
consisting of (1) an annual board retainer, (2) committee, committee chair, and lead director fees, as applicable, and (3) an annual equity
award, as described below.
Fees Earned in Cash
The table below reflects the annualized components of fees earned in cash for non-employee directors for fiscal year 2024. For more
information regarding the specific compensation received by each non-employee director during fiscal year 2024, see the “Fiscal Year
2024 Director Compensation Table” table below.
Annual Board Retainer
Amount ($)
Annual Board Retainer
60,000
Committee Fees
Amount ($)
Service on the Audit Committee
15,000
Service on the Compensation Committee
12,500
Service on the Nominating and Governance Committee
10,000
Lead Director and Committee Chair Fees
Amount ($)
Lead Director
50,000
Chair of the Audit Committee
15,000
Chair of the Compensation Committee
12,500
Chair of the Nominating and Governance Committee
10,000
Under the terms of our equity incentive plan, non-employee directors may elect to receive all or part of their fees in the form of EA
common stock. As an incentive for our non-employee directors to increase their stock ownership in EA, non-employee directors making
such an election receive vested shares of common stock valued at 110% of the cash compensation they otherwise would have received.
These shares are awarded via the grant and immediate exercise of a stock option having an exercise price equal to the fair market value of
our common stock on the grant date, which is the first trading day of each quarter of the Board year. Ms. Gonzalez, Mr. Huber, Ms. Roche,
Mr. Simonson, and Ms. Ueberroth received all or part of their fees in the form of our common stock during fiscal year 2024.
Equity Compensation
In fiscal year 2024, non-employee directors also received an annual equity award of restricted stock units (“RSUs”) with a grant date fair
value of approximately $260,000. These RSUs were granted upon election or re-election to the Board of Directors at our 2023 annual
meeting. RSUs vest in full on the first anniversary of the grant date (or, if earlier, the date of the next annual meeting of stockholders
following the grant date), subject to the non-employee director’s continuous service as a member of the Board of Directors through such
date. For any director who may have previously elected to defer settlement of RSUs, the receipt of shares underlying vested RSUs may be
deferred until the fifth or tenth anniversary of the original vesting date or the date the director terminates service with the Company.
Other Benefits
Non-employee directors who are not employed with any other company may purchase certain EA health, dental and vision insurance while
serving as a director. Participating directors pay 100% of their own insurance premiums. In addition, we offer non-employee directors the
opportunity to receive cybersecurity services to protect their privacy, home networks, and devices, where they may conduct EA business.
The Company is charged an annual fee per participating director, which is currently less than $4,000 per person.
20
Board of directors and corporate Governance
Fiscal Year 2024 Director Compensation Table
The following table shows compensation information for each of our non-employee directors during fiscal year 2024. Mr. Wilson, our CEO,
does not receive any compensation for his service on our Board of Directors.
Name
Fees Earned
or Paid in Cash
($)(1)
Stock
Awards
($)(2)
Option
Awards
($)(3)
Total
($)
Kofi a. Bruce
93,750
259,946
—
353,696
rachel Gonzalez
82,500
259,946
8,171
350,617
Jeffrey t. Huber
75,000
259,946
7,568
342,514
talbott roche
85,000
259,946
8,433
353,379
richard a. simonson
75,000
259,946
7,418
342,364
Luis a. Ubiñas
130,000
259,946
—
389,946
Heidi Ueberroth
72,500
259,946
7,305
339,751
(1) As discussed above, non-employee directors may elect to receive all or part of their fees in the form of EA common stock. See footnote 3 for additional information
regarding the number of shares received in lieu of cash compensation by those non-employee directors who made such an election. Mr. Bruce was compensated as
Chair of the Audit Committee for the quarter in which he was appointed.
(2) Represents the aggregate grant date fair value of the annual RSU award granted to the non-employee directors and is calculated based on a closing price of
$122.27 per share for our common stock on the August 10, 2023 grant date. Grant date fair value is determined for financial statement reporting purposes in
accordance with FASB ASC Topic 718. For additional information regarding the valuation methodology for RSUs, see Note15 “Stock-Based Compensation and
Employee Benefit Plans,” to the Consolidated Financial Statements in our Annual Report. As of March 30, 2024 (the last day of fiscal year 2024), each of our current
non-employee directors held 2,126 unvested RSUs.
(3) Non-employee directors may elect to receive all or part of their fees in the form of EA common stock, and directors making such an election receive common stock
valued at 110% of the cash compensation they would have otherwise received. These shares are awarded via the grant and immediate exercise of a stock option
having an exercise price equal to the fair market value of our common stock on the grant date. The values in this column represent the premium received for shares
in lieu of compensation. These grants are made on a quarterly basis on a predetermined date aligned with the month in which the Board generally holds regular
quarterly meetings.
21
2024 PROXY STATEMENT
Board of directors and corporate Governance
The table below sets forth information on the shares received upon immediate exercise of the option(s) granted to directors who elected
to receive all or part of their fees in the form of EA common stock during fiscal year 2024.
Name
Grant
date
Exercise
Price
($)
Shares Subject
to Immediately
Exercised Stock
Option Grants
Grant Date
Fair Value
($)
rachel Gonzalez
5/1/2023
127.42
178
22,681
8/1/2023
136.12
166
22,596
11/1/2023
123.78
184
22,776
2/1/2024
137.92
164
22,619
90,671
Jeffrey t. Huber
5/1/2023
127.42
162
20,642
8/1/2023
136.12
152
20,690
11/1/2023
123.78
166
20,547
2/1/2024
137.92
150
20,688
82,568
talbott roche
5/1/2023
127.42
183
23,318
8/1/2023
136.12
172
23,413
11/1/2023
123.78
189
23,394
2/1/2024
137.92
169
23,308
93,433
richard a. simonson
5/1/2023
127.42
162
20,642
8/1/2023
136.12
151
20,554
11/1/2023
123.78
167
20,671
2/1/2024
137.92
149
20,550
82,418
Heidi Ueberroth
5/1/2023
127.42
157
20,005
8/1/2023
136.12
146
19,874
11/1/2023
123.78
161
19,929
2/1/2024
137.92
145
19,998
79,805
22
Board of directors and corporate Governance
Compensation Discussion & Analysis
For fiscal year 2024, EA’s named executive officers (“NEOs”) were:
Andrew Wilson, Chief Executive Officer
Stuart Canfield, EVP & Chief Financial Officer (as of June 20, 2023)
Laura Miele, President of EA Entertainment, Technology & Central Development
Mala Singh, EVP & Chief People Officer
Jake Schatz, EVP of Global Affairs & Chief Legal Officer
Chris Suh, former Chief Financial Officer (departed on June 30, 2023)
Executive Summary
Fiscal Year 2024 Financial & Strategic Highlights
During fiscal year 2024, we continued to deliver award-winning games and services to our players and generated strong financial and
operating results. Hundreds of millions of players around the world came together and connected through our games, live services and
content. We continued our efforts to value diverse teams and to create a healthy, inclusive culture that helps our people do their best
work. We again engaged with our top institutional stockholders to understand their views on topics such as executive compensation,
governance and ESG issues.
Fiscal year 2024 also saw further consolidation in our industry and dynamic consumer trends. Against that backdrop, we focused on
our long-term strategy to drive durable growth, strong cash flow and stockholder returns. Among other things, we reorganized into EA
Entertainment, EA SPORTS and EA Experiences. The alignment of our studios into two organizations—EA Entertainment and EA SPORTS—
is intended to empower our studio leaders with more creative ownership and accountability around development and go to market
strategies. We also focused on aligning our portfolio, investments and resources to support our strategic priorities and growth initiatives.
In addition, we reassessed our executive compensation program resulting in changes for fiscal year 2025, previewed further below, that
the Compensation Committee believes will incentivize our leadership team to execute on our multi-year priorities and drive long-term
stockholder value.
23
2024 PROXY STATEMENT
Our executive compensation program is designed to reward our NEOs for the achievement of Company-wide financial, operating and
strategic objectives and the creation of long-term stockholder value. These measures formed the basis of executive compensation
decisions made by the Compensation Committee and Board of Directors in fiscal year 2024. Performance highlights for the
year included:
$7.562B net revenue
$7.430B net bookings
$2.315B operating cash flow
an increase of 49% year-over-year
$4.68
diluted earnings per share
Cash returned to shareholders
$1.505B
through share repurchases
and dividends
Quarterly cash dividend of
$0.19
per share
Live services and other
$5.547B
representing 73% of total net revenue
Launching
11 New Games
and 600+ content updates
EA SPORTS FC
successfully debuted as new franchise
EA SPORTS
FC 24
#1 selling game in Western Europe for
calendar year 2023
Madden NFL 24
#1 selling sports game in North America
for calendar year 2023
ESG Actions and Achievements
Continued to focus on employee engagement and
retention, as well as foster a culture of inclusivity
Continued our commitment to pay equity by
maintaining base pay equity on the basis of gender
globally and race/ethnicity in the U.S.
Continued to make games more inclusive by
open-sourcing a photosensitivity analysis tool and
adding four additional patents to our accessibility
patent pledge
Set our ambition to be carbon neutral by 2027 and
committed to becoming a net zero enterprise in line
with the Paris Agreement
Achieved carbon neutrality for Scope 1 and 2
emissions covering our North American operations
Compensation Philosophy and Objectives
As a global leader in digital interactive entertainment, we believe that the skills, expertise and experience of our employees, including our
NEOs, are the critical factors that contribute to our overall performance and enhance stockholder value. To drive continued successful
operational and financial performance, we must attract, motivate, reward and retain top executive talent. The Board of Directors and
the Compensation Committee strive to make executive compensation decisions that follow a competitive pay-for-performance
compensation philosophy that is in the long-term best interests of our stockholders. Accordingly, our executive compensation program is
designed to:
■Provide highly competitive compensation to attract and retain top executive talent;
■Create direct alignment with our stockholders by providing equity ownership in the Company;
■Align pay and performance by creating incentives tied to our business results;
■Reward and motivate strong individual performance and leadership; and
■Avoid undue compensation-related risk.
24
COMPENSATiON DiSCuSSiON & ANALySiS
Executive Compensation Decision-Making Approach
The Board of Directors and the Compensation Committee believe that executive compensation should be evaluated holistically. They
consider a variety of factors to guide their compensation decision-making process for our NEOs. These include an evaluation of market
trends and the competitive landscape for executive talent, which includes a review of the market practices of our peer group and other
companies with which we compete for talent. Use of such comparative market data from the peer group and broader survey data for
technology companies allows us to assess the appropriateness and reasonableness of compensation levels and mix to determine if our
compensation program aligns pay with performance, fairly rewards our executives and provides adequate retention and incentive value.
In addition, in determining executive compensation, the Board of Directors and Compensation Committee also consider corporate
performance, internal compensation alignment and factors unique to each NEO, such as individual performance, scope and complexity of
the role, experience and tenure.
Compensation and Governance Practices
The Compensation Committee regularly reviews our executive compensation program to ensure that we maintain strong governance
standards in our executive compensation program. Below is a summary of our key compensation and governance practices.
What We Do
What We Don’t Do
% Structure executive compensation to link pay and performance
% Provide a high percentage of variable, at-risk pay; approximately 94.7% of our CEO’s
and 91.6% of our other NEOs’ compensation is variable and at-risk
% Cap performance-based annual bonus and long-term equity incentive payouts for NEOs
% Prohibit arrangements providing cash severance benefits that exceed a capped amount
% Require our executives to satisfy robust stock holding requirements
% Conduct regular stockholder outreach
% Perform an annual risk assessment of our executive compensation program
% Evaluate our compensation peer group at least annually
% Engage an independent compensation consultant to advise the
Compensation Committee
% Conduct formal executive succession planning
% Maintain a clawback policy conforming to Dodd-Frank Act rules
X No “single-trigger” change in
control arrangements
X No excise tax gross-ups upon a
change in control
X No executive employment
contracts (other than as
required by local jurisdictions)
X No repricing of options without
stockholder approval
X No hedging or pledging of
EA stock
X No payment of dividends
or dividend equivalents
on unearned or unvested
equity awards
Overview of Compensation Elements
The primary elements of the executive compensation program for our NEOs for fiscal year 2024 are set forth in the table below. For more
information on the features of these elements, see “Our NEOs’ Fiscal Year 2024 Compensation—Our Elements of Pay” below.
Form
Timeframe
Performance Metrics
Key Purpose
Base Salary
Cash (Fixed)
N/A
N/A
Serves as a fixed cash component
that is market competitive for
the role to attract and retain
high-performing executives.
Annual Performance
Cash Bonus Awards
(or Annual Bonus
Program)
Cash (Variable)
One-year
■Non-GAAP net revenue
■Non-GAAP diluted
earnings per share
■Strategic business and
operating objectives
■Individual achievements
Designed to motivate our NEOs
to achieve challenging annual
performance goals that are
important to our long-term growth.
Long-Term Equity
incentive Awards
Performance-
Based Restricted
Stock Units (PRSUs)
& Time-Based
Restricted Stock
Units (RSUs)
Three-year
performance
period for PRSUs
& 35-month
vesting schedule
on RSUs
For PRSUs:
■Net bookings
■Operating income
■Relative TSR
Designed to reward performance
that creates long-term stockholder
value, promote retention and
provide incentives based on
the attainment of performance
objectives that are key indicators of
our growth and long-term success.
25
2024 PROXY STATEMENT
COMPENSATiON DiSCuSSiON & ANALySiS
Pay Practices Implemented Based on Past Stockholder Feedback
We value the input of our stockholders, and we have implemented the following pay practices in prior years based on feedback received
during stockholder engagements.
No Special
Equity Awards
No granting of any special equity awards to NEOs through at least the end of fiscal year 2026
Annual
Bonus Program
■Increased the financial performance weighting for annual bonuses to 70% for our CEO and 60% for each of
our CFO and our COO at the time (Ms. Miele)
■Implemented an enterprise-level scorecard with weightings for the strategic and operating objectives under
the business performance component of the Company bonus pool
■Included ESG metrics in the enterprise-level scorecard for determining business performance in our annual
bonus program
PRSu Program
■Included both net bookings and operating income financial performance metrics, in addition to the
TSR metric
■Applied three-year cliff vesting on awards
■Increased the threshold on (and adjusted) the relative TSR payout scale, with no vesting for performance
below the 25th percentile and 55th percentile performance required for target payout
■Determined that each of our CEO, CFO and COO at the time (Ms. Miele) would be granted annual equity
awards consisting of 60% PRSUs
■Eliminated the lookback feature from the relative TSR component of legacy PRSUs
Severance/
Termination Pay
Adopted a cash severance policy for our executive officers, prohibiting the company from entering into any
arrangement that provides cash severance benefits exceeding 2.99 times the sum of an executive officer’s
base salary plus target bonus opportunity, without seeking stockholder ratification.
Stock Ownership
Increased stock ownership guidelines, including from 5x to 10x salary for CEO
2023 Say-on-Pay Vote
At our 2023 Annual Meeting, our advisory say-on-pay proposal received the support of 92% of the votes cast. The Board of Directors
and Compensation Committee believe that this favorable result affirms stockholder support for our executive compensation program
and philosophy, which are described in detail below. The Compensation Committee did not make any significant changes to our fiscal year
2024 executive compensation program.
Stockholder Engagement
We have a robust year-round stockholder outreach program, with formal engagement efforts occurring in both the summer and winter.
JUNE - AUGUST
Ahead of our annual meeting, we seek to
engage with investors to answer questions and
understand their views on matters relating to
our annual proxy statement
SEPTEMBER - FEBRUARY
Review stockholder votes at our most recent
annual meeting, identify potential follow-up
areas and evaluate our governance and
executive compensation practices
APRIL - MAY
Review feedback from off-season engagement
and consider any enhancements to our
executive compensation program, governance
structure and ESG programs
MARCH - MAY
Conduct meetings with stockholders and proxy
advisors to consider any issues raised and to
solicit feedback on governance, executive
compensation and other topics of interest
26
COMPENSATiON DiSCuSSiON & ANALySiS
Stockholder Engagement in Fiscal Year 2024
In advance of our 2024 Annual Meeting, we offered meetings with a total of 28 stockholders, which collectively hold approximately 61%
of our outstanding stock. We held engagement meetings with every stockholder who accepted, totaling 17 meetings, with stockholders
representing approximately 50% of our outstanding stock. The Chair of our Compensation Committee participated in select discussions.
During these meetings, we previewed and discussed proposed compensation program changes under consideration for fiscal year 2025,
which related to our efforts to effectively incentivize and retain our executive leadership as we transform our business. Feedback from
our stockholders was provided to the Compensation Committee and taken into consideration in finalizing our programs for fiscal year
2025, which are previewed in the disclosures below. Based on each stockholder’s priorities, we also discussed topics such as human capital
management, governance and environmental sustainability in the meetings.
Process for Determining Our NEOs’ Compensation
Our Compensation Committee, which consists solely of independent directors, is responsible for establishing and reviewing the overall
compensation program for our NEOs. As previously noted, they are advised by their independent compensation consultant, Semler
Brossy. The Compensation Committee may also request input from our CEO or our Chief People Officer (CPO). The roles of the parties
involved in deciding NEO compensation are set forth below.
Participant
Role in the Executive Compensation Determination Process
Board of Directors
Each May, the Board of Directors approves the target total direct compensation for our CEO, in consultation
with the Compensation Committee and Semler Brossy.
Compensation
Committee
■Each May, the Compensation Committee:
■establishes the performance metrics, targets and other terms under our Annual Bonus Program
■establishes the performance metrics, targets and other terms under our PRSU Program
■approves the target total direct compensation for our NEOs (other than our CEO) after receiving input,
at the Compensation Committee’s request, from our CEO, our CPO and Semler Brossy
■reviews, approves and recommends to the Board of Directors, the CEO’s pay
■Once the fiscal year closes, the Compensation Committee (typically in May) will also approve final funding
of the bonus pool under our Annual Bonus Program and will certify performance of applicable metrics for
outstanding awards under our PRSU Program.
■The Compensation Committee meets regularly throughout the year, with management and in closed
session, in order to consider our executive compensation program and ensure its design and components
remain competitive, to review the Company’s performance to date against performance goals under our
incentive programs and to take actions on any compensation plans or policies in its remit. Semler Brossy
generally attends all meetings and attended all of the meetings held in fiscal year 2024.
independent
Compensation
Consultant
■Semler Brossy advises on our executive compensation program and advises on changes to our
compensation program and other executive compensation-related developments and trends, including
by conducting a comprehensive analysis of our executive compensation program using publicly available
information on peer companies to compare each element of our executive compensation program.
■The Compensation Committee has reviewed the independence of Semler Brossy, which provides no
services to the Company other than described above, and determined that Semler Brossy’s engagement
did not raise any conflicts of interest.
Management
■At the beginning of each fiscal year, our CEO and CPO review the performance of our other NEOs for the
prior fiscal year and make recommendations to the Compensation Committee regarding the annual base
salary, bonus targets and annual equity awards for our NEOs (other than with respect to themselves).
■Our CEO and CPO assist the Compensation Committee by providing information on corporate and
individual performance, market compensation data and practices and other executive compensation
matters.
Compensation Peer Group
Each year, the Compensation Committee, with the independent compensation consultant’s advice and input, reviews and selects a group
of peer companies to use as a reference to better understand the competitive market for executive talent in our industry. As part of this
process, the Compensation Committee engages in a quantitative and qualitative assessment to identify companies that are similar to
us, based on a combination of factors including: size; revenue and market capitalization; business fit; whether they are in relevant industry
pillars or are companies with which we compete for executive talent; and other relevant factors, including the number of current peer
companies that identify EA as a peer. Where some companies may not be similar in size to us based on quantitative factors, they still may
be included in our peer group based on the qualitative factors described above.
27
2024 PROXY STATEMENT
COMPENSATiON DiSCuSSiON & ANALySiS
For fiscal year 2024, the Compensation Committee approved a peer group of 17 companies based on the factors listed above, which
remained unchanged from fiscal year 2023, except that Zynga Inc. and Activision Blizzard, Inc. were removed in connection with the
closing of their respective acquisitions, though their compensation data was referenced to the extent available and relevant during fiscal
year 2024.
Gaming
Consumer-Oriented Technology /
Software
Media / Entertainment
Take-Two Interactive Software, Inc.
Airbnb, Inc.
Autodesk, Inc.
Block, Inc.
Booking Holdings Inc.
eBay, Inc.
Expedia Group, Inc.
Intuit Inc.
ServiceNow, Inc.
Synopsys, Inc.
VMware, Inc.
Workday, Inc.
IAC/InteractiveCorp
Netflix, Inc.
Sirius XM Holdings, Inc.
Snap Inc.
Warner Bros. Discovery, Inc.
Looking ahead to fiscal year 2025:
For fiscal year 2025, the Compensation Committee, in consultation with its independent compensation consultant, reviewed the
factors detailed above to validate current peer companies and identify the appropriate peer group for that year.
In connection with such review, the Compensation Committee approved a peer group for fiscal year 2025 consisting of the same
companies as the fiscal year 2024 peer group, except VMware, Inc. will be removed in connection with the closing of its acquisition
by Broadcom Inc. (which occurred on November 22, 2023), though its compensation data, along with that of Activision Blizzard, Inc.,
will be referenced to the extent available and relevant during fiscal year 2025.
Comparative Market Data
As part of its decision-making process, the Board of Directors and the Compensation Committee review peer group data when assessing
the appropriateness and reasonableness of compensation levels and mix. Accordingly, in considering whether to make any changes to our
executive compensation program, peer group data is used to determine if our compensation program aligns pay with performance, fairly
rewards our executives for individual performance and contributions to our corporate performance and provides adequate retention and
incentive value. The independent compensation consultant conducts a comprehensive analysis of our executive compensation program
using publicly available compensation information on our peer group. The analysis includes a comparison of the base salary, target total
cash compensation, target long-term incentives and target total direct compensation of each of our NEOs against executives holding
similar positions in our peer group. The Compensation Committee and the Board of Directors use the peer group data provided by the
independent compensation consultant as a reference rather than as a strict guide for compensation decisions and retain flexibility in
determining NEO compensation.
Fiscal Year 2024 Compensation for Our New CFO
In connection with Mr. Canfield’s appointment as Chief Financial Officer as of June 20, 2023, we entered into an offer letter with him
setting forth the terms of his compensation in this role.
Under the terms of the offer letter, Mr. Canfield’s annual base salary was set at $625,000, and included his eligibility for an annual cash
bonus with a target bonus opportunity equal to 100% of his base salary. Funding for Mr. Canfield’s annual cash bonus is to be based
60% on company financial performance and 40% on company business performance, in each case, based on pre-established goals
approved by the Compensation Committee. Any actual bonus award that is earned is also to be based on achievement against individual
performance objectives.
For fiscal year 2024, the Compensation Committee approved the grant of an equity award consisting of RSUs with a grant date value of
$2,400,000 (representing 40% of the equity award), and PRSUs with a target grant date value of $3,600,000 (representing 60% of the
equity award). The RSUS and PRSUs are subject to the same vesting terms as the respective forms of awards granted to the NEOs and
described below under “Long-Term Equity Incentives—Fiscal year 2024 Awards.”
The offer letter also affirmed Mr. Canfield’s eligibility to participate in the Company’s Amended and Restated Change in Control
Severance Plan.
28
COMPENSATiON DiSCuSSiON & ANALySiS
Our NEOs’ Fiscal Year 2024 Compensation
Target Total Direct Compensation for Fiscal Year 2024
Our executive compensation program is designed to motivate and reward performance against our financial and strategic priorities. More
specifically, this approach rewards the achievement of Company-wide financial and business objectives, individual performance and the
creation of long-term value for stockholders, while also recognizing the dynamic and highly competitive nature of our business and the
market for top executive talent.
For fiscal year 2024, 94.7% of our CEO’s target total direct compensation opportunity and 91.6% of the average of our other NEOs’
target total direct compensation opportunity was at-risk in the form of an annual performance cash bonus opportunity and long-term
equity awards, comprised of PRSUs and RSUs, as set forth below.
CEO
NEOs (Excluding CEO)
94.7%
At-Risk
(Bonus Opportunity,
RSU & PRSU)
10.7%
5.3%
33.6%
50.4%
84% Equity
(RSU & PRSU)
82.6% Equity
(RSU & PRSU)
91.6%
At-Risk
(Bonus Opportunity,
RSU & PRSU)
9%
46.2%
36.4%
8.4%
17.4% Cash
(Base & Bonus Opportunity)
16% Cash
(Base & Bonus Opportunity)
Fixed (Base)
Bonus Opportunity
RSU
PRSU
Our Elements of Pay
The Compensation Committee believes that the target total direct compensation for each NEO should be consistent with market
practices for executive talent, allow us to attract and retain the highest caliber of executive talent in our industry and reflect each NEO’s
individual experience, responsibilities and performance. As indicated above, there are three main elements of NEO compensation:
(1) annual base salary, (2) annual performance cash bonuses and (3) long-term equity incentive awards.
Base Salary
Key features
■The following factors are considered when determining NEO salaries: individual performance; the market for similar positions,
including the pay practices for comparable positions at the companies in our peer group; level of responsibilities; complexity of
role; experience; and internal compensation alignment.
In May 2023, as part of its annual compensation review, the Compensation Committee—or the Board of Directors, in the case of
Mr. Wilson—considered the above factors and approved the fiscal year 2024 base salaries below. The Board of Directors determined
there would be no base salary increase for Mr. Wilson, and the Compensation Committee approved increases for other NEOs after
consideration of their respective contributions, competitive market positioning, internal equity and alignment with company-wide base
salary merit increases.
29
2024 PROXY STATEMENT
Compensation DisCussion & analysis
Base Salary for
Fiscal Year 2024 ($)
% Increase from
Fiscal Year 2023
mr. Wilson
1,300,000
0%
mr. Canfield(1)
625,000
N/A
ms. miele
825,000
3.1%
ms. singh
640,000
2.4%
mr. schatz
640,000
N/A(2)
mr. suh
725,000
3.6%
(1) The base salary shown for Mr. Canfield’s was approved by the Compensation Committee in June 2023, in connection with his appointment as Chief Financial Officer
effective June 20, 2023.
(2) Mr. Schatz was not an NEO for fiscal year 2023.
Annual Performance Cash Bonus Awards
Key features
■Payouts based on:
■Company performance, which is based on both financial and business performance to balance our annual financial
performance with our execution against strategic and operating objectives; and
■Individual performance.
■Financial performance component of Company bonus pool funding is weighted as follows:
■70% for Mr. Wilson;
■60% for each of Mr. Canfield and Ms. Miele; and
■50% for our other NEOs,
with the Company business performance component weighted at 30%, 40% and 50%, respectively.
Our NEOs participate in the Executive Bonus Plan for our Section 16 officers, which operates in conjunction with the EA Bonus Plan, our
Company-wide bonus plan. The formula for calculating each payout under the annual bonus program for our NEOs is as follows:
BASE
SALARY
X
TARGET
BONUS
PERCENTAGE
(% OF BASE
SALARY)
X
COMPANY PERFORMANCE
(COMPANY BONUS POOL FUNDING)
X
INDIVIDUAL
PERFORMANCE
MODIFIER
(IPM)
=
NEO BONUS
PAYOUT
70-50%
Company Financial
Performance
30-50%
Company Business
Performance
Process to Determine Performance Cash Bonus Awards
In May of each fiscal year, the Compensation Committee determines the Executive Bonus Plan participants, performance period and
performance measures. All NEOs at the time were selected to participate in the Executive Bonus Plan for fiscal year 2024.
Approve target bonus
percentages and maximum
award amounts
Set performance goals
Determine Company bonus
pool funding
Conduct individual
performance assessments
and determine individual
performance modifiers
1
2
3
4
30
Compensation DisCussion & analysis
1
Approve Target Bonus Percentages and Maximum Award Amounts
APPROVE TARGET BONUS PERCENTAGES
Each fiscal year, the Compensation Committee—or the Board of Directors, in the case of Mr. Wilson—sets the amount of the target
annual performance cash bonus as a percentage of each NEO’s base salary (“target bonus”) and approved fiscal year 2024 target bonus
opportunities as set forth below. The Board of Directors determined there would be no target bonus opportunity increase for Mr. Wilson,
and the Compensation Committee approved increases for other NEOs based on factors such as individual performance, the market
for similar positions, level of responsibilities, complexity of role, pay practices at our peer group for comparable positions and internal
compensation alignment.
Fiscal Year 2024 Target Bonus Percentages
Bonus Eligible Salary
for Fiscal Year 2024
($)
Target Bonus
Opportunity for
Fiscal Year 2024
% Increase from
Fiscal Year 2023
mr. Wilson
1,300,000
200%
0%
mr. Canfield(1)
625,000
100%
N/A
ms. miele
825,000
125%
15%
ms. singh
640,000
100%
10%
mr. schatz
640,000
100%
N/A(3)
mr. suh(2)
725,000
100%
0%
(1) The target bonus opportunity shown for Mr. Canfield was approved by the Compensation Committee in June 2023, in connection with his appointment as Chief
Financial Officer effective June 20, 2023.
(2) Mr. Suh was ineligible for an annual performance cash bonus award because he departed EA in June 2023.
(3) Mr. Schatz was not an NEO for fiscal year 2023.
MAXIMUM AWARD AMOUNTS
Our Compensation Committee believes that annual bonus awards should be capped to ensure that we maintain strong governance
standards in our executive compensation program and to mitigate incentives for undue risk taking. Under our Executive Bonus Plan,
bonuses for our NEOs are capped at two times the target bonus opportunity for each NEO.
Our CEO receives no bonus payout if our net income is less than 80% of our fiscal year 2024 financial plan.
Looking ahead to fiscal year 2025:
During our discussions with stockholders in fiscal year 2024, we previewed our proposed compensation program changes for
fiscal year 2025, including as it relates to the CEO bonus opportunity. Following a comprehensive review and analysis of Mr. Wilson’s
compensation package by the Compensation Committee in consultation with its independent compensation consultant, our Board
of Directors approved an increase to Mr. Wilson’s target bonus opportunity for fiscal year 2025, from 200% to 250% of base salary.
Mr. Wilson’s target bonus opportunity was last increased in fiscal year 2019.
This change is intended to drive greater company performance and address competitive market dynamics, in the form of variable
at-risk pay to ensure alignment with stockholders.
2
Set Performance Goals
Each NEO’s annual performance cash bonus award is tied to Company financial performance, as described immediately below. These
goals are set forth in our financial and strategic plan for fiscal year 2024 that our Board of Directors and Compensation Committee
reviewed with management in April 2023 and approved in May 2023. The financial performance weighting of the Company bonus pool
funding formula for Mr. Wilson, Mr. Canfield and Ms. Miele are 70%, 60% and 60%, respectively. The Compensation Committee believes
that this mixed funding formula is appropriate because it balances our annual financial performance with our execution against strategic
and operating objectives, which are critical drivers of our long-term success.
COMPANY FINANCIAL PERFORMANCE
For the financial performance component of our fiscal year 2024 Company bonus pool funding, the Compensation Committee
approved the following two equally weighted Company financial performance goals: management reporting non-GAAP net revenue and
non-GAAP diluted earnings per share. The Compensation Committee considered a number of factors in approving these metrics and
31
2024 PROXY STATEMENT
Compensation DisCussion & analysis
related targets, and believed that these objective financial measures serve as clear goals for management to drive top-line growth and
profitability with responsible cost management. A threshold level of performance must be met for each of the relevant metrics in order to
fund that component of the bonus pool.
Fiscal Year 2024 Targets
The fiscal year 2024 management reporting non-GAAP net revenue and non-GAAP diluted earnings per share bonus funding targets
were each set higher than our fiscal year 2023 actual performance, as follows: non-GAAP net revenue of $7.5 billion and non-GAAP
diluted earnings per share of $7.48, weighted equally. Bonus pool funding under our Executive Bonus Plan is tied to our achievement of
threshold, target and maximum levels of performance for the relevant metric, with no funding if the threshold levels of performance are
not achieved.
When making compensation decisions for our NEOs, we use non-GAAP financial measures to evaluate the Company’s financial
performance and the performance of our management team against non-GAAP targets. These measures adjust for certain items that
may not be indicative of the Company’s core business, operating results, or future outlook.
For more information regarding our use of non-GAAP financial measures for our compensation programs, please refer to “About
Non-GAAP Financial Measures” in Appendix A below.
COMPANY BUSINESS PERFORMANCE
For the Company business performance component of our bonus pool funding, the Compensation Committee assesses performance
against the Company’s business and strategic priorities and objectives that were previously established for the fiscal year and approved
by our Board of Directors. We implemented an enterprise-level scorecard for the business and strategic performance objectives that
drive funding of the Company bonus pool. For fiscal year 2024, the scorecard measures our performance against specific goals for seven
weighted key strategic objectives established for the fiscal year. The Compensation Committee reviews Company attainment against
these goals and objectives periodically during the fiscal year. See “Step 3: Determine Company Bonus Pool Funding—Company Business
Performance” below, for more information on these goals and objectives.
3
Determine Company Bonus Pool Funding
In May 2024, the Compensation Committee reviewed the Company’s financial performance and approved funding that component of
the bonus pool at 106.1%, as detailed below under “Company Financial Performance.” Additionally, after reviewing and considering the
Company’s business performance for fiscal year 2024, as highlighted below under “Company Business Performance,” the Compensation
Committee determined to fund the business performance component of the Company bonus pool at the same percentage as the
financial performance component. Accordingly, the overall Company bonus pool was funded at 106.1%.
COMPANY FINANCIAL PERFORMANCE
For purposes of measuring attainment against our fiscal year 2024 financial targets for bonus funding under the Executive Bonus Plan,
our management reporting non-GAAP net revenue was $7.430 billion and our non-GAAP diluted earnings per share was $7.76. Based on
our attainment against these targets, the Compensation Committee approved a combined funding percentage of 106.1 % of target for
the Company financial performance component with respect to our NEOs.
Threshold
Target
Maximum
non-Gaap net Revenue
(in billions)
$6.750
$7.500
$8.625
actual $7.430
non-Gaap Diluted eps
$6.358
$7.48
$9.35
actual $7.76
Funding percentage(1)
50%
100%
200%
actual 106.1%
(1) The funding percentage for achievement between the percentages designated above is interpolated on a straight-line basis.
Appendix A to this Proxy Statement provides a reconciliation between our non-GAAP financial measures and our audited financial statements.
32
Compensation DisCussion & analysis
COMPANY BUSINESS PERFORMANCE
For fiscal year 2024, the Compensation Committee approved a funding percentage of 106.1% for the business performance component,
based on its evaluation of our achievements against the pre-determined strategic and operating objectives highlighted below.
Business Objectives
Key Measures
Key Performance Highlights
Assessment
15%
Business Resilience
Effectively manage the
company’s business
resilience in an unpredictable
external environment
■Successfully navigate
an organizational
transformation to capitalize on
growth opportunities
■Reorganized into EA SPORTS, EA
Entertainment and EA Experience;
right-sized EA’s portfolio to
align with strategic objectives;
continued real estate optimization
to align with working needs
■Achieved
■Manage external challenges to
advance key business objectives
■Underwent CFO and CXO
transitions bolstered by strong
succession planning; navigated
external challenges, including
those impacting our talent
■Achieved
■Company and brand
value associated with
positive sentiment
■Successful EA SPORTS FC launch
and transition while maintaining
positive player sentiment; high
critical reception and rankings
for Star Wars Jedi: Survivor;
recognized as one of Barron’s 100
Most Sustainable Companies (#32)
for the first time and by Fortune as
a World’s Most Admired Company
(#2 in Entertainment Industry)
■Achieved
15%
Reach & engagement
Bring more people into our
games for more time
■Increase cumulative unique
accounts to a designated level
■Reached goal due to strong
performance on certain platforms
■Achieved
■Increase player play time by a
designated percentage
■Increase in new users included
higher than expected growth
in casual players who play for
less time
■Slightly Missed
10%
talent
Attract and retain the talent
we need to power the future
of entertainment
■Employee satisfaction score at
or above designated level
■Surpassed goal by 4 points based
on results of employee survey data
■Exceeded
■Critical talent retention at or
above designated level
■Surpassed goal by 8% through
maintaining efforts to retain top
talent and to lower attrition
■Exceeded
■Metric related to supporting a
diverse workforce
■Achieved certain aspirations and all
others experienced year over year
improvements
■Substantially Achieved
10%
sustainability
Progress our environmental
sustainability efforts
■Set and publish our carbon
neutral goal for Scope 1
and 2 emissions
■Published our baseline Scope 1
and 2 emissions and announced
our goal to be carbon neutral
by 2027
■Achieved
■Drive towards carbon neutrality
by mitigating North American
emissions from fiscal year
2023 levels
■Attained carbon neutrality (Scope 1
and 2 emissions) covering our North
American operations
■Achieved
■Progress towards setting a
net zero goal for Scope 1, 2
and 3 emissions
■Engaged with internal and external
partners on their efforts to
reduce emissions; scaled supplier
engagement practices
■Achieved
33
2024 PROXY STATEMENT
Compensation DisCussion & analysis
Business Objectives
Key Measures
Key Performance Highlights
Assessment
Strategic Objectives
20%
Building games and
experiences that
entertain massive online
communities anchored in
the vectors of play, create,
watch, connect
Execute on our long-term
plan to deliver live services
for our largest franchises
■Metric related to EA SPORTS
FC franchise
■Launched title across all platforms
to commercial success driven by
strong engagement, with double
digit new player growth in the first
four weeks from launch compared
to FIFA 23
■Exceeded
■Metric related to Battlefield
title in development
■All fiscal year milestones were met
■Achieved
■Metric related to Apex
Legends growth in designated
regions and establish franchise
plan for meeting specified
long-term goals
■Franchise plan was established;
commercial plans and related
initiatives established in
certain regions
■Achieved
■Establish SIMS franchise plan, in
order to meet long term goals
■Franchise plan was
established in order to
meet long term objectives
to drive product strategy.
■Achieved
■Metric tied to the enterprise
data strategy for live services
■Core metrics platform was rolled
out for more titles than targeted
and on track to support all defined
EA Core Metrics; data governance
framework complete and in place
for multiple key franchises
■Achieved
20%
Creating blockbuster
interactive storytelling
Execute on our long-term
plan to deliver blockbuster
action releases from FY24
and beyond
■Reach designated ratings
score Star Wars Jedi: Survivor
■Score was achieved based on
average of platform scores
■Achieved
■Meet deliverable milestones for
certain games in development
■Milestones were met except in the
case of one game
■Substantially Achieved
■Establish multi-year plan for
game launches
■Plan established and shared with
the Board of Directors
■Achieved
10%
amplifying the power of
community in and around
our games with social and
creator tools
Execute on our long-term plan
to offer additional services to
consumers outside our core
games and experiences
■Release beta for a
specified project
■Beta was launched, beta-testing
initiated, and commercial launch
plan completed
■Achieved
34
Compensation DisCussion & analysis
4
Conduct Individual Performance Assessments and Determine IPMs
Individual performance is a key factor in determining the amount of each NEO’s annual bonus. Each year, the Board of Directors for
Mr. Wilson—and the Compensation Committee, in consultation with Mr. Wilson and Ms. Singh (our CPO), for all NEOs except Mr. Wilson—
review and approve the individual performance objectives for the NEOs. Mr. Wilson’s individual performance objectives for fiscal year
2024 are based on non-GAAP financial objectives and strategic and operating objectives. For all other NEOs, the individual objectives
are based on strategic and operating objectives tailored to the functions led by each NEO and aligned to the achievement of our overall
fiscal year 2024 plan approved by the Board of Directors, as well as qualitative factors including leadership and talent development.
At the end of each fiscal year, the Board of Directors for Mr. Wilson—and the Compensation Committee, in consultation with Mr. Wilson
and Ms. Singh—assess the individual performance of our NEOs and determine each NEO’s individual performance modifier, or IPM, at a
percentage between 0% and 200% (subject to the overall cap of 2x target bonus for the annual cash bonus award). Consistent with
our pay-for-performance philosophy, a higher individual performance assessment would result in a higher IPM and vice-versa, so that
an executive with a lower assessment could receive less than his or her target bonus. If an executive meets a high level of performance
expectations, he or she would receive an IPM of 100% or greater. To receive an IPM of 200%, the NEO must demonstrate sustained, truly
extraordinary performance, and the Board of Directors and Compensation Committee expect that assigning an IPM at this level would
occur in rare circumstances only.
In determining the actual performance cash bonus awards for our NEOs (other than our CEO), Mr. Wilson and Ms. Singh reviewed each
NEO’s achievements against the individual performance objectives for fiscal year 2024 and provided their recommendations to the
Compensation Committee for review and approval. These assessments were based on each executive’s performance, considering his
or her overall performance for the year; impact on our business and culture; demonstrated results; the executive’s strong leadership;
and execution of key objectives. No single factor was determinative. For our CEO, the Board of Directors considers achievement of the
financial and strategic objectives that were established for Mr. Wilson for the fiscal year, and takes a holistic approach to evaluating his
performance without assigning a specific weighting to any one factor within each of these two categories.
35
2024 PROXY STATEMENT
Compensation DisCussion & analysis
Determination of Fiscal Year 2024 Performance Cash Bonus Awards for our NEOs
The key results that influenced performance determinations for our NEOs are identified below.
Mr. Wilson
Chief Executive Officer
individual performance modifier
After reviewing his achievements for fiscal year 2024, the Board of Directors approved an IPM of 125% for Mr. Wilson.
Key Highlights for Fiscal year 2024
The Board of Directors considered Mr. Wilson’s performance against the financial and strategic and operating objectives for
fiscal year 2024, as highlighted below.
Non-GAAP Financial Objectives 70%:
Target
Actual(1)
Net Revenue (in millions)
$7,500
$ 7,430
Diluted Earnings Per Share(2)
$ 6.63
$
6.92
(1) Appendix A to this Proxy Statement provides a reconciliation between our non-GAAP financial measures and our audited financial statements.
(2) For purposes of measuring achievement of Mr. Wilson’s diluted earnings per share objective, a share count of 277 million was used. Non-GAAP diluted
earnings per share appears in Appendix A to this Proxy Statement. Unlike the metric used for our annual bonus plan (described above), this objective
does not exclude bonus expense.
strategic objectives scorecard 30%:
Under Mr. Wilson’s leadership, the Company executed on key strategic and operating objectives that were established for fiscal
year 2024 under our enterprise-level scorecard, as detailed above in Step 3—Company Business Performance. In addition to
these overarching strategic and operating objectives, the Board of Directors considered the following key achievements under
Mr. Wilson’s leadership when evaluating his performance for fiscal year 2024.
leadership amidst ongoing industry transition
■executed on a reorganization into EA Entertainment, EA SPORTS and EA Experiences that aligned our studios into two
organizations (EA Entertainment and EA SPORTS) to empower our studio leaders with more creative ownership and
accountability around development and go-to-market strategies;
■focused on optimizing our portfolio, investments and resources in support of our strategic priorities and growth initiatives
in the restructuring plan announced in February 2024;
■progressed our long-term strategic plan focused on driving durable growth, strong cash flow and stockholder returns; and
■oversaw a year of continued employee satisfaction scores above industry benchmarks, with record high talent retention
and strong talent attraction.
Deliver against our strategic pillars of: Build Games and experiences that entertain massive online Communities;
Create Blockbuster interactive storytelling; and amplify the power of Community in and around our Games
■successfully transitioned to the new EA SPORTS FC title and brand (from 30 years as EA SPORTS FIFA), launching the
inaugural game EA SPORTS FC 24 and setting new franchise records for retained players at launch;
■continued our position as market leader in HD Sports, and the rebranded EA SPORTS FC remained the number one HD
game in the West;
■developed long-term franchise plans for EA SPORTS FC, Battlefield, Apex and The Sims, established key strategies for
enhancing live services experiences for our players and established strategies for certain platforms;
■launched initiatives prioritizing expanding our services and capabilities, as well as on reaching players through
new platforms;
■expanded the role of the Chief Experiences Officer to capture the player experience with our products and services, and
to deliver new experiences to players; and
■strategically aligned studio leadership to support franchise development and success.
36
Compensation DisCussion & analysis
Mr. Canfield
Executive Vice President & Chief Financial Officer
Mr. Canfield was appointed Executive Vice President & Chief Financial Officer effective June 20, 2023. Mr. Canfield has held
several positions of increasing responsibility within our finance organization since joining the Company in 2003, including leading
financial strategy of our studio organization and, more recently, enterprise financial planning and investor relations functions.
individual performance modifier
After reviewing his achievements for fiscal year 2024, the Compensation Committee approved an IPM of 114.15% for
Mr. Canfield.
Key Highlights for Fiscal year 2024
During fiscal year 2024, Mr. Canfield’s efforts resulted in or included:
■generating net revenue of $7.562 billion;
■achieving cash flow provided by operations of $2.315
billion, a 49% increase over fiscal year 2023;
■growth across EA’s broad portfolio and diverse business
models, including live services, for which we achieved total
net bookings of $7.430 billion for the fiscal year;
■returning over $1.505 billion to stockholders through share
repurchases and quarterly dividends;
■leading the Company through restructuring in order to
prioritize our investments in growth areas and related
opportunities; and
■focusing on Investor Relations and strengthening
relationships with our investor community.
Ms. Miele
President of EA Entertainment, Technology & Central Development
Ms. Miele was appointed President of EA Entertainment, Technology & Central Development effective June 20, 2023. Ms. Miele
oversees the development and production of key games and services in the EA Entertainment portfolio, while continuing to lead
central development services and technology organizations. Before this role, Ms. Miele most recently served as the Company’s
Chief Operating Officer.
individual performance modifier
After reviewing her achievements for fiscal year 2024, the Compensation Committee approved an IPM of 112.42% for Ms. Miele.
Key Highlights for Fiscal year 2024
During fiscal year 2024, Ms. Miele’s efforts resulted in or included:
■assuming leadership of the newly formed EA
Entertainment studios organization and overseeing the
delivery of new games, services and content, including
launching Star Wars Jedi: Survivor, a top 10 best-selling
video game in the U.S. in calendar year 2023 with positive
critical reception and award nominations;
■leading the central development services and technology
organization, and ensuring it functions efficiently to
advance the Company’s operational priorities;
■developing a multi-year plan for EA Entertainment
products and services that align with the Company’s
strategic priorities;
■recruiting new senior leadership into EA Studios to
strengthen our talent pipeline;
■overseeing the Company’s technology organization
plans to deliver AI-driven business and development
efficiencies; and
■refining mobile strategy and investments including
rightsizing costs and streamlining the portfolio to drive
profitable growth.
37
2024 PROXY STATEMENT
Compensation DisCussion & analysis
Ms. Singh
Executive Vice President & Chief People Officer
Ms. Singh serves as Executive Vice President & Chief People Officer, leading our People Experience Team and overseeing areas
such as People Operations, Talent Acquisition, Succession Planning, Learning and Development, Total Rewards and Diversity
Equity and Inclusion. She is also responsible for teams in Real Estate, Physical Security and Workplace Experience.
individual performance modifier
After reviewing her achievements for fiscal year 2024, the Compensation Committee approved an IPM of 120.24% for Ms. Singh.
Key Highlights for Fiscal year 2024
During fiscal year 2024, Ms. Singh’s efforts resulted in or included:
■increasing the retention level of specialized-skill and
other critical employees on a year-over-year basis;
■refreshing the talent strategy to ensure its ability to
recruit and retain the talent needed to support the
Company’s business strategy and priorities;
■assuming leadership over the real estate function and
driving rationalization of the Company’s office footprint
in order to reduce costs;
■building a positive and inclusive company culture,
resulting in various Company and/or studio honors for
calendar year 2023, including multiple awards for best
places to work, among other accolades; and
■leading our stockholder governance outreach, engaging
with our stockholders on discussions regarding
executive compensation, human capital management
and other ESG topics.
Mr. Schatz
Executive Vice President of Global Affairs & Chief Legal Officer
Mr. Schatz serves as Executive Vice President of Global Affairs & Chief Legal Officer, leading the teams responsible for Legal
Affairs, Business Development, Corporate Development, Executive Operations, Government Affairs & Public Policy, Player Safety
& Inclusion and Sustainability & Enterprise ESG.
individual performance modifier
After reviewing his achievements for fiscal year 2024, the Compensation Committee approved an IPM of 112.73% for Mr. Schatz.
Key Highlights for Fiscal year 2024
During fiscal year 2024, Mr. Schatz’s efforts resulted in or included:
■assuming leadership of the newly formed Global
Affairs organization, integrating key functions such as
Legal Affairs, Business Development and Corporate
Development, and ensuring that the teams operate in a
complementary way to accelerate Company growth and
meet strategic priorities;
■overseeing the Company’s environmental sustainability
efforts, including leadership of EA’s ambition to be carbon
neutral by 2027 and a net zero enterprise in line with the
Paris Agreement;
■leading the Company’s Player Safety & Inclusion initiatives
to ensure our players feel welcome, safe and included in
our games and experiences;
■supporting our key franchises, including overseeing the
extensive licensor partnerships critical to EA SPORTS FC’s
success and establishing the licensing framework for the
College Football title in development;
■continuing to oversee regulatory and policy matters for
the Company, as well as compliance and risk management
efforts; and
■supporting our Board of Directors on legal, governance
and other issues, as well as serving as the Company’s
corporate secretary.
38
Compensation DisCussion & analysis
Fiscal Year 2024 Performance Cash Bonus Awards
The Board of Directors for Mr. Wilson—and the Compensation Committee, in consultation with Mr. Wilson and Ms. Singh, for all other
NEOs—approved actual performance cash bonus payouts for the NEOs for fiscal year 2024, as set forth below.
Target
Annual
Bonus(1)
($)
Executive
Bonus Pool
Funding
Percentage
Individual
Performance
Modifier
Actual Bonus for Fiscal
Year 2024 ($)
mr. Wilson
2,600,000
106.1%
125%
3,448,250
mr. Canfield(1)
536,695
106.1%
114.15%
650,000
ms. miele
1,006,042
106.1%
112.42%
1,200,000
ms. singh
627,083
106.1%
120.24%
800,000
mr. schatz
627,083
106.1%
112.73%
750,000
mr. suh(2)
725,000
N/A
N/A
N/A
(1) Based on respective base salaries and target bonus percentages (discussed above) for each of the NEO’s during fiscal year 2024, pro-rated on a monthly basis.
(2) Mr. Suh was ineligible for an annual performance cash bonus award because he departed EA in June 2023.
Long-Term Equity Incentives—Fiscal Year 2024 Awards
Key features
■PRSUs are subject to a three-year performance period, with metrics that incentivize our NEOs to drive top-line and bottom-line
growth:
■Net bookings performance and operating income performance each measured annually over the three-year period
■Three-year relative TSR performance
■The PRSU composition of each long-term equity incentive award is as follows:
■60% PRSUs for each of Mr. Wilson, Mr. Canfield and Ms. Miele
■50% PRSUs for our other NEOs (with RSUs comprising the balance)
■RSUs vest over a 35-month time-based vesting schedule, subject to continued service with the Company
In May 2023, the Compensation Committee—and the Board of Directors for Mr. Wilson—approved fiscal year 2024 annual equity awards
for our NEOs at the time based on their evaluation of Company performance; each NEO’s role and responsibilities; individual performance;
retention considerations; competitive market practices, including comparative market data; and internal compensation alignment among
our executive officers.
The following table shows the target value of the annual equity awards granted to our NEOs on June 16, 2023, as approved by the
Compensation Committee on May 15, 2023, and the Board of Directors on May 16, 2023, for Mr. Wilson. The values set forth below were
converted into a number of PRSUs or RSUs, as applicable, based on the June 16, 2023 closing price of our common stock of $128.66,
rounded down to the nearest whole unit. The award mix serves to align the interests of our NEOs and our stockholders and to promote
long-term retention of a strong leadership team in an industry and geographic area that is highly competitive for executive talent.
Target PRSUs
($)
RSUs
($)
mr. Wilson
12,300,000
8,200,000
mr. Canfield(1)
3,600,000
2,400,000
ms. miele
6,000,000
4,000,000
ms. singh
2,750,000
2,750,000
mr. schatz
2,750,000
2,750,000
(1) Mr. Canfield’s equity incentive award was approved by the Compensation Committee in June 2023, in connection with his appointment as Chief Financial Officer
effective June 20, 2023.
39
2024 PROXY STATEMENT
Compensation DisCussion & analysis
Performance-Based Restricted Stock Units
Each tranche of the fiscal year 2024 PRSU award is eligible to vest based on the achievement of the following equally-weighted measures
during the three-year performance period covering fiscal years 2024 through 2026:
(1) Net Bookings PRSUs (1/3): annual net bookings performance for each fiscal year during the three-year performance period, with
targets established each fiscal year;
(2) Operating Income PRSUs (1/3): annual operating income performance for each fiscal year during the three-year performance period,
with targets established each fiscal year; and
(3) Relative TSR PRSUs (1/3): relative TSR performance compared to the Nasdaq-100 Index over the three-year performance period.
Any PRSUs that are earned in accordance with the above are subject to three-year cliff vesting on May 20, 2026.
Looking ahead to fiscal year 2025:
During our discussions with stockholders in fiscal year 2024, we previewed our proposed compensation program changes for fiscal
year 2025, including as it relates to our PRSU award structure. The Compensation Committee retained the core components of our
PRSU award structure and added an absolute TSR component for fiscal year 2025, as described below:
■Absolute TSR will be measured over a full three-year performance period, with performance goals requiring meaningful stock
price growth over such period.
■Any payout under this component will be subject to the achievement of pre-established goals requiring increased absolute
TSR performance, with the maximum number of units capped at 75% of the original target PRSU award. No awards under this
component will be earned if threshold absolute TSR performance is not achieved.
■Together with the existing relative TSR component in our PRSU award structure, we believe this adds a meaningful incentive
focused on driving stockholder return, aligned with the multi-year objectives of our long-term growth strategy.
Net Bookings PRSUs and Operating Income PRSUs:
We use net bookings and operating income metrics in our PRSU program as they are key indicators of our top-line and bottom-line
performance and balance growth and investment spending to deliver long-term results and generate stockholder return. These measures
provide our NEOs and management team with increased control over performance as compared to relative TSR, and align our long-term
incentive program with our broader business strategy, while maintaining strong alignment to results for our stockholders.
The number of Net Bookings PRSUs and Operating Income PRSUs that are earned and eligible to vest will range from 0% to 200% of the
target number of PRSUs for the applicable sub-tranche, in accordance with the payout scale below.
Below Threshold
Threshold
Target
Maximum
net Bookings (as a % of Financial Plan(1))
< 90%
≥ 90%
≥ 100%
≥ 110%
operating income (as a % of Financial Plan(1))
< 88%
≥ 88%
≥ 100%
≥ 112%
payout percentage(2) (as a % of Target)
0%
50%
100%
200%
(1) Financial Plan is the Company’s Board-approved financial plan for each relevant fiscal year.
(2) The payout percentage is expressed as a % of target for each sub-tranche; the payout percentage for achievement between the percentages designated above
will be interpolated on a straight-line basis.
Performance of Fiscal Year 2024 Net Bookings PRSUs and Operating
Income PRSUs
Based on achievement of the fiscal year 2024 net bookings and operating income performance goals relative to target, the payout
percentage for these PRSUs will be 95.3% and 98.9%, respectively. For the number of PRSUs earned based on fiscal year 2024
performance, see “Executive Compensation Tables—Outstanding Equity Awards at Fiscal Year 2024 Year-End Table.” These earned PRSUs
will vest on May 20, 2026, subject to the NEO’s continued employment on this date, and upon vesting, will be further reflected in the
applicable compensation tables included in our fiscal year 2027 proxy statement.
Threshold
Target
Maximum
Actual Results
net Bookings (in billions)
$ 6.750
$ 7.500
$ 8.250
$7.430
operating income (in billions)
$ 1.987
$ 2.258
$ 2.529
$ 2.252
payout percentage (as % of target)
50%
100%
200%
97.1%
Appendix A to this Proxy Statement provides a reconciliation between our non-GAAP financial measures and our audited
financial statements.
40
Compensation DisCussion & analysis
pRioR pRsu aWaRDs. Each of the net bookings performance goal, the operating income performance goal and the actual results
indicated above for fiscal year 2024 also apply to the second tranche of PRSU awards granted in fiscal year 2023 (“2023 awards”) and the
third tranche of PRSU awards granted in fiscal year 2022 (“2022 awards”). The number of earned PRSUs under those awards are reflected
in the applicable compensation tables included in this proxy statement. The 2022 awards vested in May 2024, and the related values of
those vested PRSUs will be reflected in the applicable compensation tables included in our fiscal year 2025 proxy statement.
Relative TSR PRSUs
The number of Relative TSR PRSUs that are earned and eligible to vest on May 20, 2026, will range from 0% to 200% of target. Target
vesting of Relative TSR PRSUs is tied to above-median performance compared to the Nasdaq-100 Index. No Relative TSR PRSUs will be
earned if our Relative TSR percentile is below the 25th percentile and Relative TSR PRSU payouts are capped at 200% of target, subject to
the negative TSR cap described below.
Performance
Payout(1) (as % of
Target PRSUs)
Below Threshold
< 25th percentile
0%
Threshold
25th percentile
30%
Target
55th percentile
100%
Maximum
90th percentile
200%
(1) The payout percentage for performance between the 25th and 90th percentiles will be interpolated on a straight-line basis.
If our TSR is negative on an absolute basis at the end of the three-year performance period, the number of Relative TSR PRSUs that
can be earned is capped at 100% of target, regardless of whether the Company’s Relative TSR percentile is ranked at or above the 55th
percentile at the end of the three-year performance period.
Looking ahead to fiscal year 2025:
During our discussions with stockholders in fiscal year 2024, we previewed our proposed compensation program changes for
fiscal year 2025, including as it relates to the Relative TSR PRSUs. For fiscal year 2025, the Relative TSR peer group under our
PRSU program will transition from the Nasdaq-100 to the S&P 500. In light of recent industry consolidation (including Activision’s
acquisition by Microsoft and Zynga’s acquisition by Take-Two), there are limited public gaming companies of our size. Accordingly,
our Compensation Committee believes that the S&P 500 is a better index to reference for interactive entertainment.
pRioR pRsu aWaRDs. The TSR component of the 2023 awards will be measured at the end of the three-year performance period
covering fiscal years 2023 through 2025. The TSR component of the 2022 awards was measured following the end of the three-year
performance period covering fiscal years 2022 through 2024. The graphic below illustrates the Relative TSR PRSUs that were earned
under the 2022 awards and reflected in the applicable compensation tables in this proxy statement. The 2022 awards vested in May 2024,
and the related values of those vested PRSUs will be reflected in the applicable compensation tables included in our fiscal year 2025
proxy statement.
Measurement
Period
Beginning
Average Stock
Price (90 Day
Average)
Ending
Average Stock
Price (90 Day
Average)
EA TSR
Relative TSR
Percentile
Vest Date
% of Target
rTSR PRSUs
that vested in
May 2024
Fy 2022
Relative tsR
pRsus
Granted June 2021
36-month
period ending
March 30, 2024
$138.58
$139.65
0.77%
34th
May 2024
51%
As described in last year’s proxy statement, the third tranche of our fiscal year 2021 PRSU awards vested in May 2023, and their related
values are reflected in the applicable compensation tables included in this proxy statement.
Time-Based Restricted Stock Units
RSUs reward absolute long-term stock price appreciation, promote retention, facilitate stock ownership and align our NEOs’ interests with
those of our stockholders.
■RSU awards granted to our NEOs as part of their fiscal year 2024 annual equity awards cliff vest as to one-third of the award eleven months
following the grant date, with two-thirds of the award vesting in equal installments every six months thereafter until the award is fully vested.
■40% of the total target value of the annual equity award for each of Mr. Wilson, Mr. Canfield and Ms. Miele was made in the form of RSUs,
and 50% of the total target value of each of our other NEOs’ annual equity awards was made in the form of RSUs.
41
2024 PROXY STATEMENT
Compensation DisCussion & analysis
Benefits and Retirement Plans
We provide a wide array of employee benefit programs to our regular employees, including our NEOs, based upon their country of
employment. In the United States, our employee benefit programs for eligible employees include medical, dental, prescription drug, vision
care, disability insurance, life insurance, accidental death and dismemberment (“AD&D”) insurance, flexible spending accounts, business
travel accident insurance, an educational reimbursement program, an adoption assistance program, an employee assistance program, an
employee stock purchase plan, paid time off and relocation assistance.
We offer retirement plans to our employees based upon their country of employment. In the United States, our employees, including our
NEOs, are eligible to participate in a tax-qualified 401(k) plan, with a Company discretionary matching contribution of up to 6% of eligible
compensation. The amount of the total matching contribution is determined based on the Company’s fiscal year performance. We also
maintain a nonqualified deferred compensation plan in which executive-level employees, including our NEOs and our directors, are eligible
to participate. None of our NEOs participated in the deferred compensation plan during fiscal year 2024.
Perquisites and Other Personal Benefits
While our NEOs generally receive the same benefits that are available to our other regular employees, they also receive certain additional
benefits, including access to a Company-paid physical examination program and greater maximum benefit levels for life insurance, AD&D
and long-term disability coverage. We consider these benefits to be standard components of a competitive executive compensation
package. Our executives with a ranking of vice president and above and certain worldwide studio organization employees are also eligible
to participate in the EA Executive and Studio Leadership Digital Game Benefit program. Executives with a ranking of vice president and
above also receive unlimited paid-time off days. Company reimbursed/provided air and ground transportation generally is limited to
business travel. We also offer our NEOs the opportunity to receive cybersecurity services to protect their privacy, home networks and
devices, where they may conduct EA business. Mr. Wilson receives certain security services intended to promote the ability to perform
his job duties by ensuring his personal safety and that of his family. Because these arrangements may be viewed as distinct from business
expenses, the aggregate incremental cost of these services is reflected in the totals in the “All Other Compensation” column of the
Fiscal Year 2024 Summary Compensation Table below. The Compensation Committee will periodically review the nature and cost of this
program in relation to Mr. Wilson’s security risk profile.
Other Compensation Practices and Policies
Cash Severance Policy
We maintain the Executive Officer Cash Severance Policy, which restricts the Company from entering into any new employment
agreement, severance agreement, or separation agreement with any executive officer—or establish any new severance plan or policy
covering any executive officer—that provides for cash severance benefits exceeding 2.99 times the sum of the executive officer’s base
salary plus target annual bonus opportunity, without stockholder ratification of such arrangement.
Change in Control Arrangements and Severance
Our executives with a ranking of senior vice president and above are eligible to participate in the Electronic Arts Inc. Amended and
Restated Change in Control Severance Plan (the “CIC Plan”). The CIC Plan provides “double-trigger” severance benefits if participants
incur a qualifying termination of employment in connection with a change in control. As part of the plan review, the Compensation
Committee’s independent consultant undertook a market check of the severance benefits and noted that they were in line with the
practices of our peer group. For more information on the CIC Plan, please refer to “Executive Compensation Tables—Potential Payments
Upon Termination or Change in Control” below.
We also maintain a severance plan (the “Severance Plan”) that applies generally to our regular full-time U.S.-based employees. Under the
Severance Plan, eligible employees (including our executive officers) whose employment is involuntarily terminated in connection with
a reduction in force may receive a cash severance payment and premiums for continued health benefits, if such benefits are continued
pursuant to COBRA. Any severance arrangements with our NEOs, whether paid pursuant to the Severance Plan or otherwise, require the
prior approval of the Compensation Committee. In the event of a change in control of the Company, any cash severance payable under
the Severance Plan may be reduced, in whole or in part, by any amount paid under the CIC Plan.
We do not maintain any other severance arrangements with our NEOs. We did not enter into any severance arrangements with Mr. Suh in
connection with his departure from the Company.
Stock Ownership Holding Requirements for Section 16 Officers
Section 16 officers must maintain stock ownership equal to the minimum ownership requirements in our stock ownership guidelines. Please see
“Stock Ownership Information—Stock Ownership Requirements—Section 16 Officers” below for additional information on these requirements.
42
Compensation DisCussion & analysis
Compensation Recovery (Clawbacks)
Our Board of Directors adopted an updated Clawback Policy in accordance with the Dodd-Frank Wall Street Reform and Consumer
Protection Act and related rules issued by the SEC and the Nasdaq Stock Market. The policy mandates the recovery of erroneously
awarded incentive-based compensation if the Company is required to prepare an accounting restatement due to material noncompliance
with financial reporting requirements. The policy applies to incentive compensation paid during the three completed fiscal years before
the restatement and requires that the full amount of any erroneously awarded incentive compensation be recovered.
In addition, both of our time-based and performance-based equity award agreements provide that if an employee engages in fraud or
other misconduct that contributes to an obligation to restate the Company’s financial statements, the Compensation Committee may
terminate the equity award and recapture any equity award proceeds received by the employee within the 12-month period following the
public issuance or filing of the financial statements required to be restated.
Risk Considerations
The Compensation Committee considers on an annual basis, in establishing and reviewing our compensation programs, whether the programs
encourage unnecessary or excessive risk taking. The Compensation Committee has concluded that they do not and that any related risks
are not reasonably likely to have a material adverse effect on the Company. See the section of this Proxy Statement entitled “Board’s Role and
Responsibilities–Oversight of Risk Issues—Compensation Risk Assessment” above for an additional discussion of risk considerations.
Impact of Tax Treatment
Section 162(m) of the Internal Revenue Code limits our ability to take tax deductions for compensation above $1 million paid to certain
executive officers. However, the Compensation Committee retains discretion to structure our executive compensation program to be
competitive and effective in order to promote the Company’s business goals and stockholder interests, despite such tax considerations.
Section 409A of the Internal Revenue Code imposes additional significant taxes and penalties on the individual if an executive officer,
director, or other service provider is entitled to “deferred compensation” that does not comply with the requirements of Section 409A of
the Internal Revenue Code. We have structured deferred compensation in a manner intended to comply with or be exempt from Section
409A of the Code and the regulations and other guidance promulgated thereunder. We do not provide any executive officer, including
any NEO, with any excise tax “gross-up” or other reimbursement payment for any tax liability that he or she might owe as a result of the
application of Sections 280G or 4999 of the Internal Revenue Code.
Compensation Committee Report on
Executive Compensation
The following Compensation Committee Report on Executive Compensation shall not be deemed to be “soliciting material” or to be “filed”
with the SEC nor shall this information be incorporated by reference into any future filing under the Securities Act of 1933, as amended
(the “Securities Act”), or the Securities Exchange Act of 1934, as amended (the “Exchange Act”) except to the extent that EA specifically
incorporates it by reference into a filing.
The Compensation Committee has reviewed and discussed with management the Compensation Discussion & Analysis. Based on its
review and discussions with management, the Compensation Committee recommended to the Board of Directors that the Compensation
Discussion & Analysis be included in this Proxy Statement.
Compensation Committee memBeRs
talbott Roche (Chair)
Rachel Gonzalez
Heidi ueberroth
43
2024 PROXY STATEMENT
Compensation DisCussion & analysis
Executive Compensation Tables
Fiscal Year 2024 Summary Compensation Table
The following table shows information concerning the compensation earned by or awarded to our “Named Executive Officers” or “NEOs”
for fiscal year 2024, and, where applicable, fiscal years 2023 and 2022.
Name and Principal Position
for fiscal Year 2024
Fiscal
Year
Salary
($)
Bonus
($)
Stock
Awards
($)(1)
Non-Equity
Incentive Plan
Compensation
($)(2)
All Other
Compensation
($)(3)
Total
($)
Andrew Wilson
Chief Executive Officer
2024 1,300,000
— 20,391,283
3,448,250
503,560
25,643,093
2023
1,300,000
—
16,724,254
2,454,790
179,958
20,659,002
2022
1,292,923
—
13,973,702
4,571,933
19,981
19,858,539
Stuart Canfield
Chief Financial Officer
2024
589,694
—
5,218,824
650,000
18,259
6,476,777
Laura Miele
President of EA Entertainment,
Technology & Central Development
2024
820,385
— 10,056,580
1,200,000
18,152 12,095,117
2023
800,000
—
9,091,870
900,000
12,025
10,803,895
2022
793,808
—
8,135,896
1,433,769
20,264
10,383,737
Mala Singh
Chief People Officer
2024
637,231
—
5,511,786
800,000
17,702
6,966,719
2023
625,000
—
4,704,675
600,000
11,927
5,941,602
Jacob Schatz
Executive Vice President of Global
Affairs & Chief Legal Officer
2024
637,231
—
5,511,786
750,000
17,607
6,916,624
Chris Suh
Former Chief Financial Officer
2024
190,577
—
1,765,215
—
6,849
1,962,641
2023
700,000
—
7,164,745
651,420
112,708(4)
8,628,873
2022
51,154
2,657,534(4)
4,153,236
—
2,587
6,864,511
(1) Represents the aggregate grant date fair value of RSUs and PRSUs calculated according to the assumptions set forth in the Fiscal Year 2024 Grants of Plan-Based
Awards Table. Grant date fair value is determined for financial statement reporting purposes in accordance with FASB ASC Topic 718 and the amounts shown may
not reflect the actual value realized by the recipient. PRSU/PSU values are included in this column to the extent that the PRSUs/PSUs have a grant date under FASB
ASC Topic 718 in the fiscal year. For purposes of the PRSUs/PSU, the grant date occurs when the applicable performance targets are set. For additional information
on the PRSU/PSU values presented in this column, see footnote 3 to the “Fiscal Year 2024 Grants of Plan-Based Award Table”.
For RSUs, grant date fair value is calculated using the closing price of our common stock on the grant date. For the portion of fiscal year 2024 PRSUs that vest
based on the achievement of operating metrics, the grant date fair value reported is based upon the closing price of our common stock and the assessed
probability of achievement of the operating metrics, on the grant date. For the 3-year relative TSR portion of fiscal year 2024 PRSUs, the grant date fair value
reported is based upon the probable outcome of such conditions using a Monte-Carlo simulation model. For additional information regarding the valuation
methodology for RSUs and PRSUs, see Note 15, “Stock-Based Compensation and Employee Benefit Plans,” to the Consolidated Financial Statements in our Annual
Report. The PRSUs granted to our NEOs in fiscal year 2024 that vest based on our 3-year relative TSR performance are referred to as “Market-Based Restricted
Stock Units” in Note 15, “Stock-Based Compensation and Employee Benefit Plans,” to the Consolidated Financial Statements in our Annual Report.
The actual vesting of the PRSUs will be between 0% and 200% of the target number of PRSUs granted. The grant date fair value of the PRSUs granted in fiscal year
2024, assuming the highest level of performance conditions will be achieved, is $24,382,791 for Mr. Wilson, $5,637,681 for Mr. Canfield, $12,113,338 for Ms. Miele,
$5,523,614 for Ms. Singh, $5,523,614 for Mr. Schatz, and $3,530,430 for Mr. Suh. For additional information regarding the specific terms of the PRSUs granted to our
NEOs in fiscal year 2024, see the “Fiscal Year 2024 Grants of Plan-Based Awards Table” below.
All unvested equity awards held by Mr. Suh were forfeited upon his departure on June 30, 2023. Mr. Suh’s fiscal year 2023 PRSUs continue to be reflected in this table
only because the performance metrics applicable to those tranches were established in fiscal year 2024, though all such PRSUs were forfeited on June 30, 2023.
Due to his pending departure, Mr. Suh did not receive any equity awards for fiscal year 2024.
(2) Represents amounts awarded to each NEO under the Executive Bonus Plan. For additional information about the annual performance cash bonuses paid
to our NEOs in fiscal year 2024 see “Our NEOs’ Fiscal Year 2024 Compensation—Annual Performance Cash Bonus Awards” in the “Compensation Discussion
and Analysis” above.
44
(3) Details about the amounts in the “All Other Compensation” column for fiscal year 2024 are set forth below. For additional information, see “Benefits and Retirement
Plans” and “Perquisites and Other Personal Benefits” in the “Compensation Discussion and Analysis” above.
Name
Insurance
Premiums
($)(a)
401(K) Matching
Contributions ($)
Other
($)
Total
($)
Andrew Wilson
1,270
16,350
485,940(b)
503,560
Stuart Canfield
1,270
15,790
1,199(c)
18,259
Laura Miele
1,270
14,994
1,888(c)
18,152
Mala Singh
1,270
14,937
1,495(c)
17,702
Jacob Schatz
1,270
14,954
1,383(c)
17,607
Chris Suh
318
6,063
468(d)
6,849
(a) Includes premiums paid on behalf of each NEO under Company sponsored group life insurance, AD&D, and long-term disability programs.
(b) Includes $482,560 in personal security benefits pursuant to a framework approved by the Board, following an assessment conducted by an outside security
consultant. Also includes leadership digital games and in-kind gifts, and $1,473 in tax reimbursements with respect to perquisites or other personal benefits
consistent with the policy applicable to all employees receiving in-kind gifts.
(c) Represents tax reimbursements with respect to perquisites or other personal benefits consistent with the policy applicable to all employees receiving in-kind gifts.
(d) Adjusted for the amounts repaid by Mr. Suh in connection with his departure pursuant to the terms of the offer letter between the Company and Mr. Suh dated
January 14, 2022—Mr. Suh repaid $1,342,466 of his sign-on bonus and $500,000 in relocation benefits.
45
2024 PROXY STATEMENT
ExECutivE CoMpEnSAtion tAbLES
ExECutivE CoMpEnSAtion tAbLES
Fiscal Year 2024 Grants of Plan-Based Awards Table
The following table shows information regarding non-equity incentive and equity incentive plan-based awards granted to our NEOs during
fiscal year 2024.
Estimated Possible Payouts Under
Non-Equity Incentive Plan Awards(2)
Estimated Future Payouts Under
Equity Incentive Plan Awards(3)
All Other
Stock
Awards:
Number of
Shares of
Stock or
Units(4) (#)
Grant Date
Fair Value
of Stock
and Option
Awards
($)(5)
Name
Grant
Date(1)
Approval
Date(1)
Target
($)
Maximum
($)
Threshold
(#)
Target
(#)
Maximum
(#)
Andrew Wilson
Annual Bonus
Opportunity
—
—
2,600,000
5,200,000
—
—
—
—
—
FY24 PRSUs-rTSR
6/16/2023
5/16/2023
—
—
9,579
31,930
63,860
—
4,882,736
FY24 PRSUs-OM
6/16/2023
5/16/2023
—
—
5,305
21,223
42,446
—
2,730,551
FY23 PRSUs-OM
6/16/2023
5/16/2023
—
—
4,688
18,753
37,506
—
2,412,761
FY22 PRSUs-OM
6/16/2023
5/16/2023
—
—
4,207
16,830
33,660
—
2,165,348
RSUs
6/16/2023
5/16/2023
—
—
—
—
—
63,733
8,199,888
Stuart Canfield
Annual Bonus
Opportunity
—
—
625,000
1,250,000
—
—
—
—
—
FY24 PRSUs-rTSR
6/22/2023
6/13/2023
—
—
2,875
9,584
19,168
—
1,465,585
FY24 PRSUs-OM
6/22/2023
6/13/2023
—
—
1,592
6,370
12,740
—
799,117
FY23 PSUs
6/16/2023
5/15/2023
—
—
586
2,344
4,688
—
301,579
FY22 PSUs
6/16/2023
5/15/2023
—
—
490
1,963
3,926
252,560
RSUs
6/22/2023
6/13/2023
—
—
—
—
—
19,131
2,399,984
Laura Miele
Annual Bonus
Opportunity
—
—
1,031,250
2,062,500
—
—
—
—
—
FY24 PRSUs-rTSR
6/16/2023
5/15/2023
—
—
4,672
15,576
31,152
—
2,381,882
FY24 PRSUs-OM
6/16/2023
5/15/2023
—
—
2,588
10,352
20,704
—
1,331,888
FY23 PRSUs-OM
6/16/2023
5/15/2023
—
—
2,604
10,418
20,836
—
1,340,380
FY22 PRSUs-OM
6/16/2023
5/15/2023
—
—
1,948
7,792
15,584
1,002,519
RSUs
6/16/2023
5/15/2023
—
—
—
—
—
31,089
3,999,911
Mala Singh
Annual Bonus
Opportunity
—
—
640,000
1,280,000
—
—
—
—
—
FY24 PRSUs-rTSR
6/16/2023
5/15/2023
—
—
2,141
7,138
14,276
—
1,091,543
FY24 PRSUs-OM
6/16/2023
5/15/2023
—
—
1,186
4,745
9,490
—
610,492
FY23 PRSUs-OM
6/16/2023
5/15/2023
—
—
1,085
4,341
8,682
558,513
FY22 PRSUs-OM
6/16/2023
5/15/2023
—
—
974
3,896
7,792
—
501,259
RSUs
6/16/2023
5/15/2023
—
—
—
—
—
21,374
2,749,979
Jacob Schatz
Annual Bonus
Opportunity
—
—
640,000
1,280,000
—
—
—
—
—
FY24 PRSUs-rTSR
6/16/2023
5/15/2023
—
—
2,141
7,138
14,276
—
1,091,543
FY24 PRSUs-OM
6/16/2023
5/15/2023
—
—
1,186
4,745
9,490
—
610,492
FY23 PRSUs-OM
6/16/2023
5/15/2023
—
—
1,085
4,341
8,682
—
558,513
FY22 PRSUs-OM
6/16/2023
5/15/2023
—
—
974
3,896
7,792
—
501,259
RSUs
6/16/2023
5/15/2023
—
—
—
—
—
21,374
2,749,979
46
Chris Suh(4)
Annual Bonus
Opportunity
—
—
725,000
1,450,000
—
—
—
—
—
FY23 PRSUs-OM
6/16/2023
5/15/2023
—
—
2,083
8,335
16,670
—
1,072,381
FY23 New Hire
PRSUs-OM
6/16/2023
5/15/2023
—
—
1,346
5,385
10,770
—
692,834
(1) In accordance with FASB ASC Topic 718, represents the date on which the grant date fair value was established. Each grant was approved by our Compensation
Committee, or the Board of Directors for our CEO, on the corresponding Approval Date next to each Grant Date.
(2) The amounts shown represent the target and maximum amount of cash bonus awards provided for under the Executive Bonus Plan for the NEOs. Mr. Suh was
ineligible to receive an annual performance cash bonus award because he departed EA in June 2023. The target amounts are pre-established as a percentage of
salary and the maximum amounts represent 2x the target amounts, the maximum amount that could be paid to the NEO under the Executive Bonus Plan. For more
information regarding our NEOs’ bonus targets and the actual cash bonus earned by each NEO for fiscal year 2024, see the section titled “Our NEOs’ Fiscal Year
2024 Compensation” in the “Compensation Discussion and Analysis” above.
(3) Represents the threshold, target, and maximum units for PRSUs/PSUs with a grant date established under FASB ASC Topic 718 in fiscal year 2024. Because the
grant date under FASB ASC Topic 718 occurs when the performance targets are approved, the target number of PRSUs/PSUs is calculated based on that portion
of an award for which performance targets were set in fiscal 2024 as follows:
Award and Performance Metric
Tranche
Portion of Total Award
with Performance
Targets Set in FY24
FY24 – rTSR (NEOs except Mr. Suh)
First
3/9ths
FY24 – OM (NEOs except Mr. Suh)
First
2/9ths
FY23 – OM (NEOs except Mr. Canfield)
Second
2/9ths
FY23 – New Hire OM (Mr. Suh)
Second
2/9ths
FY23 – PSUs (Mr. Canfield)
Second
2/6ths
FY22 – OM (NEOs except Mr. Suh and Mr. Canfield)
Third
2/9ths
FY22 – PSUs (Mr. Canfield)
Third
2/6ths
For the PRSUs/PSUs that vest based on annual net bookings and operating income performance, the threshold is calculated assuming threshold performance was
achieved for one of the metrics only. For all PRSUs/PSUs, the maximum is calculated assuming maximum performance was met for all metrics.
For purposes of this table, PRSUs-rTSR represent PRSUs that vest based on EA’s Relative TSR Percentile measured over a three-year performance period. PRSUs-
OM represent PRSUs that vest based on the attainment of annual operating metric targets during each year of a three-year performance period. If any PRSUs
become eligible to vest, they will cliff vest after the end of the applicable three-year performance period (May 20, 2026 for fiscal year 2024 PRSUs, May 20, 2025
for fiscal year 2023 PRSUs and May 16, 2024 for fiscal year 2022 PRSUs).
PSUs were granted to Mr. Canfield in his role before he was appointed to the Chief Financial Officer position. PSUs represent performance-based units that vest
based on the attainment of annual operating metrics during a one-year performance period. If any PSUs become eligible to vest, they will vest at the end of the
applicable one-year performance period (May 20, 2024 for fiscal year 2023 PSUs, and May 16, 2024 for fiscal year 2022 PSUs).
Vesting of all performance awards is subject to the NEO’s continuous employment on the applicable vesting date.
All unvested PRSUs held by Mr. Suh were forfeited upon his departure on June 30, 2023. Mr. Suh’s fiscal year 2023 PRSUs continue to be reflected in this table only
because the performance metrics applicable to those tranches were established in fiscal year 2024, though all such PRSUs were forfeited on June 30, 2023. Due to
his pending departure, Mr. Suh did not receive any equity awards for fiscal year 2024.
For additional information regarding the specific terms of the PRSUs granted in fiscal year 2024, see the sections titled “Our NEOs’ Fiscal Year 2024 Compensation—
Long-Term Equity Incentives” in the “Compensation Discussion and Analysis” above.
(4) Represents awards of RSUs. The RSUs granted to our NEOs (except Mr. Canfield) vested as to 33% of the units on May 16, 2024, and the remainder of the award
will vest in approximately equal increments every six months thereafter until the award is fully vested on May 16, 2026, subject to the NEO’s continued employment
through each applicable vesting date. The RSUs granted to Mr. Canfield vest as to 33% of the units on June 22, 2024, and the remainder of the units will vest in
approximately equal increments every six months thereafter until the award is fully vested on June 22, 2026, subject to the Mr. Canfield’s continued employment
through each applicable vesting date.
All unvested RSUs held by Mr. Suh were forfeited upon his departure on June 30, 2023. Due to his pending departure, Mr. Suh did not receive any equity awards for
fiscal year 2024.
For additional information regarding the specific terms of the RSUs granted to our NEOs in fiscal year 2024, see the section titled “Our NEOs’ Fiscal Year 2024
Compensation—Long-Term Equity Incentives” in the “Compensation Discussion and Analysis” above.
(5) Amounts determined pursuant to FASB ASC Topic 718. For grants of RSUs, represents the aggregate grant date fair value of RSUs calculated using the closing price
of our common stock on the grant date. For grants of PRSUs/PSUs that vest based on the achievement of operating metrics, the grant date fair value reported is
based upon the closing price of our common stock and the assessed probability of achievement of the operating metrics, on the grant date. For grants of PRSUs
that are subject to market conditions related to total stockholder return, the grant date fair value reported is based upon the probable outcome of such conditions
using a Monte-Carlo simulation method. For a more detailed discussion of the valuation methodology and assumptions used to calculate grant date fair value, see
Note 15 “Stock-Based Compensation and Employee Benefit Plans,” to the Consolidated Financial Statements in our Annual Report. The Relative TSR PRSUs granted
to our NEOs in fiscal year 2024 are referred to as “Market-Based Restricted Stock Units” in Note 15 to the Consolidated Financial Statements in our Annual Report.
47
2024 PROXY STATEMENT
ExECutivE CoMpEnSAtion tAbLES
ExECutivE CoMpEnSAtion tAbLES
Outstanding Equity Awards at Fiscal Year 2024
Year-End Table
The following tables show information regarding outstanding stock options, RSUs, and PRSUs held by our NEOs as of the end of fiscal
year 2024.
All outstanding equity awards were granted pursuant to our 2019 Equity Incentive Plan (the “2019 EIP”). The market value of the unvested
RSUs and PRSUs is determined by multiplying the number of unvested units by $132.67, the per share closing price of the Company’s
common stock on March 28, 2024, the last trading day of fiscal year 2024.
Stock Awards
Name
Grant
Date
Number of
Shares or
Units of
Stock that
have not
Vested
(#)
Market Value
of Shares or
Units of Stock
that have
not Vested
($)
Equity Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other Rights
that have not
Vested
(#)
Equity Incentive
Plan Awards:
Market or Payout
Value of Unearned
Shares, Units or
other Rights
that have not
Vested
($)
Andrew Wilson
6/16/2023
—
—
31,930(1)
4,236,153
6/16/2023
20,607(2)
2,733,931
—
—
6/16/2023
63,733(3)
8,455,457
—
—
6/16/2022
—
—
28,130(4)
3,732,007
6/16/2022
22,934(5)
3,042,654
—
—
6/16/2022
21,097(6)
2,798,939
—
—
6/16/2021
12,875(7)
1,708,126
—
—
6/16/2021
45,322(8)
6,012,870
—
—
6/16/2021
6,311(6)
837,280
—
—
Stuart Canfield
6/22/2023
—
—
9,584(1)
1,271,509
6/22/2023
6,185(2)
820,564
—
—
6/22/2023
19,131(3)
2,538,110
—
—
6/16/2022
2,276(9)
301,957
—
—
6/16/2022
3,516(3)
466,468
—
—
2/16/2022
5,001(3)
663,483
—
—
6/16/2021
1,906(9)
252,869
—
—
6/16/2021
982(3)
130,282
—
—
Laura Miele
6/16/2023
—
—
15,576(1)
2,066,468
6/16/2023
10,051(2)
1,333,466
—
—
6/16/2023
31,089(3)
4,124,578
—
—
6/16/2022
—
—
15,628(4)
2,073,367
6/16/2022
12,740(5)
1,690,216
—
—
6/16/2022
11,720(6)
1,554,892
—
—
6/16/2021
5,960(7)
790,713
—
—
6/16/2021
20,983(8)
2,783,815
—
—
6/16/2021
4,383(6)
581,493
—
—
Mala Singh
6/16/2023
—
—
7,138(1)
946,998
6/16/2023
4,607(2)
611,211
—
—
6/16/2023
21,374(3)
2,835,689
—
—
6/16/2022
—
—
6,512(4)
863,947
6/16/2022
5,308(5)
704,212
—
—
6/16/2022
7,325(6)
971,808
—
—
6/16/2021
2,979(7)
395,224
—
—
6/16/2021
10,491(8)
1,391,841
—
—
6/16/2021
2,191(6)
290,680
—
—
Jacob Schatz
6/16/2023
—
—
7,138(1)
946,998
48
6/16/2023
4,607(2)
611,211
—
—
6/16/2023
21,374(3)
2,835,689
—
—
6/16/2022
—
—
6,512(4)
863,947
6/16/2022
5,308(5)
704,212
—
—
6/16/2022
7,325(6)
971,808
—
—
6/16/2021
2,979(7)
395,224
—
—
6/16/2021
10,491(8)
1,391,841
—
—
6/16/2021
2,191(6)
290,680
—
—
Chris Suh(10)
—
—
—
—
—
(1) Represents the PRSUs, assuming target achievement, that vest based on our Relative TSR performance over the three-year performance period covering fiscal
years 2024 through 2026. Any earned PRSUs are eligible to vest on May 20, 2026. For additional information regarding the specific terms of these PRSUs, see
the discussion under the section titled “Our NEOs’ Fiscal Year 2024 Compensation—Long-Term Equity Incentives—Fiscal Year 2024 Awards—Performance-Based
Restricted Stock Units” in the “Compensation Discussion and Analysis” above.
(2) For the PRSUs that vest based on performance against annual operational metrics, the amount includes only PRSUs relating to the portion of the award for which
the fiscal year 2024 performance targets were approved and reflects the number of PRSUs earned based on performance against the fiscal year 2024 goals. Any
earned PRSUs are eligible to vest on May 20, 2026. The portion of the PRSUs that vest based on net bookings and operating income targets for fiscal years 2025
and 2026 will be disclosed in the compensation tables for the fiscal year in which the related performance targets are approved. For additional information regarding
the specific terms of these PRSUs, see the discussion under the section titled “Our NEOs’ Fiscal Year 2024 Compensation—Long-Term Equity Incentives—Fiscal Year
2024 Awards—Performance-Based Restricted Stock Units” in the “Compensation Discussion and Analysis” above.
(3) Represents an award of RSUs that vested or will vest as to 1/3 of the units one month prior to the first anniversary of the grant date, with 1/6th of the award vesting
every six months thereafter until the award is fully vested.
(4) Represents the PRSUs, assuming target achievement, that vest based on our Relative TSR performance over the three-year performance period covering fiscal
years 2023 through 2025. Any earned PRSUs are eligible to vest on May 20, 2025.
(5) For the PRSUs that vest based on performance against annual operational metrics, the amount includes only PRSUs relating to the portion of the award for which
the fiscal year 2023 and fiscal year 2024 performance targets were approved and reflects the number of PRSUs earned based on performance against fiscal year
2023 and fiscal year 2024 goals. Any earned PRSUs are eligible to vest on May 20, 2025. The portion of the PRSUs that vest based on net bookings and operating
income targets for fiscal year 2025 will be disclosed in the compensation tables in next year’s proxy statement. For additional information regarding the specific
terms of these PRSUs, see the discussion under the section titled “Our NEOs’ Fiscal Year 2024 Compensation—Long-Term Equity Incentives—Prior PRSU Awards” in
the “Compensation Discussion and Analysis” above.
(6) Represents an award of RSUs that vested or will vest as to 1/2 of the units one month prior to the first anniversary of the grant date, with 1/8th of the award vesting
every six months thereafter until the award is fully vested.
(7) Represents the PRSUs granted in June 2021 that were earned based on EA’s Relative Nasdaq-100 TSR Percentile for the 36-month measurement period ending
March 30, 2024. The earned PRSUs vested on May 16, 2024. For additional information regarding the specific terms of the PRSUs granted to our NEOs, including the
actual percentage attainment for the PRSUs that were earned at the end of fiscal year 2024 and vested in May 2024, see the discussion under the section titled “Our
NEOs’ Fiscal Year 2024 Compensation—Long-Term Equity Incentives—Prior PRSU Awards” in the “Compensation Discussion and Analysis” above.
(8) For the PRSUs that vest based on performance against annual operational metrics, the amount includes PRSUs relating to the portion of the award for which the fiscal year
2022, fiscal year 2023, and fiscal year 2024 performance targets were approved and reflects the number of PRSUs earned based on performance against fiscal 2022, fiscal
year 2023, and fiscal year 2024 goals. The earned PRSUs vested on May 16, 2024. For additional information regarding the specific terms of these PRSUs, see the discussion
under the section titled “Our NEOs’ Fiscal Year 2024 Compensation—Long-Term Equity Incentives—Prior PRSU Awards” in the “Compensation Discussion and Analysis” above.
(9) PSUs were granted to Mr. Canfield in his role before he was appointed to the Chief Financial Officer position. PSUs represent performance-based units that vest
based on the attainment of annual operating metrics during a one-year performance period. This entry includes only PSUs relating to the portion of the award for
which the fiscal year 2024 performance targets were approved and reflects the number of PSUs earned based on performance against fiscal year 2024 goals. Any
earned PRSUs are eligible to vest on May 20, 2024 for PSUs granted on June 16, 2022, and on May 16, 2024 for PSUs granted on June 16, 2021.
(10) Mr. Suh forfeited his outstanding equity awards upon his departure from the Company on June 30, 2023, and as a result did not have any outstanding equity awards
as of the end of fiscal year 2024.
Fiscal Year 2024 Option Exercises and Stock Vested Table
The following table shows all RSUs and performance-based units that vested and the value realized upon vesting, by our NEOs during
fiscal year 2024.
Option Awards
Stock Awards
Name
Number of
Shares
Acquired
on Exercise
(#)
Value
Realized
on Exercise
($)(1)
Number of
Shares
Acquired
on Vesting
(#)(2)
Value
Realized
on Vesting
($)(3)
Andrew Wilson
—
—
71,326
9,032,297
Stuart Canfield
—
—
18,269
2,376,989
Laura Miele
—
—
54,704
7,080,686
Mala Singh
—
—
20,091
2,552,601
Jacob Schatz
—
—
20,091
2,552,601
Chris Suh
—
—
8,334
1,040,417
(1) There was no stock option activity during fiscal year 2024.
(2) Represents shares of EA common stock released upon vesting of RSUs and/or performance-based restricted stock units during fiscal year 2024.
(3) The value realized upon vesting is calculated by multiplying the number of units vested by the closing price of EA common stock on the trading day prior to the
vesting date.
49
2024 PROXY STATEMENT
ExECutivE CoMpEnSAtion tAbLES
ExECutivE CoMpEnSAtion tAbLES
Potential Payments Upon Termination or Change
in Control
Termination of Employment
Our NEOs have not entered into employment agreements with the Company. In connection with a termination of employment, all outstanding
equity awards held by our NEOs will be forfeited unless the applicable NEO’s employment is terminated for reasons due to death, disability, or
in connection with a change in control of the Company.
Treatment of Equity Awards Upon Death or Disability
tiME-bASED RSus. Our equity award agreements for all award recipients, including our NEOs, provide that any unvested RSUs will vest in
full on the date of a participant’s death, as long as the participant has been employed by us for at least 12 months prior to the date of death.
In addition, our award agreements for all award recipients provide that if a participant’s employment terminates due to disability, a pro-rata
portion of the RSUs will vest, which calculation will be based on the number of RSUs scheduled to vest on the next anniversary of the grant
date multiplied by the number of months worked during the 12 months preceding such anniversary date, divided by 12.
pERFoRMAnCE-bASED RSus. The equity award agreements for our PRSUs provide that in the event of an NEO’s death, any unvested
PRSUs as of the date of death will remain eligible to vest on the regularly scheduled vest dates for the applicable award, based on
actual performance, as long as the NEO has been employed by us for at least 12 months prior to the date of death. The same treatment
applies if an NEO terminates employment due to disability, except that the number of unvested PRSUs that remain eligible to vest on
the regularly scheduled vest dates for the applicable award is determined on a pro-rata basis, based on the number of months worked
by the NEO from the beginning of the performance period through the date of termination, divided by the number of months in the
applicable measurement period.
Termination of Employment in Connection with a Change in Control
Electronic Arts Change in Control Severance Plan
Our NEOs participate in the Electronic Arts Inc. Amended and Restated Change in Control Severance Plan (the “CIC Plan”). The CIC Plan
is a “double-trigger” plan, which provides Senior Vice Presidents and above with payments and benefits if their employment is terminated
without “cause” or if they resign for “good reason” (each, as defined in the CIC Plan) during the three-month period preceding or 18-month
period following a change in control of the Company (and the Compensation Committee determines the termination of employment was
made in connection with the change in control) (a “Qualifying Termination”). The CIC Plan payments and benefits include a lump sum cash
severance payment, consisting of 1.5 times (or 2 times for the CEO) the sum of the NEO’s annual base salary, as in effect immediately prior to
the date of termination, and the NEO’s target annual cash bonus opportunity for the year of termination, a payment equal to the applicable
monthly COBRA premium for continued health benefits for 18 months (or 24 months for our CEO), and full vesting of all outstanding and
unvested equity awards, other than performance-based equity awards, the vesting of which is governed by the terms of the applicable
equity award agreements, as described below. As a condition to our NEOs’ right to receive the payments and benefits provided under
the CIC Plan, the NEO is required to execute a release of claims against the Company (unless the requirement is waived) that includes a
non-defamation provision.
The CIC Plan does not provide for any additional payments or benefits (for example, tax gross-ups or reimbursements) in the event that the
payments under the CIC Plan and other arrangements offered by the Company or its affiliates cause an executive officer to owe an excise
tax under Sections 280G and 4999 of the Code (“Section 280G”). However, the CIC Plan provides that if an executive officer would receive
a greater net after-tax benefit by having his or her CIC Plan payments reduced to an amount that would avoid the imposition of the Section
280G excise tax, then his or her payment will be reduced accordingly.
50
Performance-Based RSUs
Pursuant to the terms of PRSU awards, if a change in control of the Company occurs prior to the expiration of the performance period and the
NEO remains employed by the Company or the Company’s successor entity, the PRSUs may vest on their scheduled vesting date(s) following
the change in control of the Company. The number of outstanding and unvested PRSUs that remain eligible to vest on the applicable vest
dates (or vesting opportunities), which we refer to as “Eligible Units,” will be determined based on actual or target performance, as follows.
Relative tSR pRSus
■If the change in control occurs during the first measurement period of the performance period, the
number of Eligible Units will be based on target performance.
■If the change in control occurs on or after completion of the first measurement period of the
performance period, the number of Eligible Units will be based on actual performance through the last
business day preceding the change in control.
net bookings and
operating income
pRSus
■If the change in control occurs during the first measurement period of the performance period, the
number of Eligible Units will be based on target performance.
■If the change in control occurs on or after completion of the first measurement period of the
performance period, the number of Eligible Units will be equal to (a) actual performance for each
completed measurement period and (b) the greater of the target and actual level of performance for
each remaining measurement period (or in the case of the FY22 grants, at target for each remaining
measurement period).
If the employment of the NEO is terminated due to a Qualifying Termination (i.e., a termination without “cause” or a resignation for
“good reason” during the three-month period preceding or 18-month period following a change in control of the Company, and the
Compensation Committee determines the termination of employment was made in connection with the change in control), the Eligible
Units will vest in full upon the date of such Qualifying Termination, subject to the timely execution of a severance agreement and release
of claims against the Company. Any reduction of the recipient’s awards in respect of Section 280G would be applied in the same manner
with respect to the PRSUs as under the CIC Plan.
51
2024 PROXY STATEMENT
ExECutivE CoMpEnSAtion tAbLES
ExECutivE CoMpEnSAtion tAbLES
Estimated Potential Payments Upon Termination
The following table sets forth an estimate of the potential payments and benefits under the terms of our equity award agreements and
the CIC Plan that would be payable to our NEOs assuming they incurred a qualifying termination of employment due to death, disability
or in connection with a change in control, in each case, on March 30, 2024, the last day of fiscal year 2024, other than for Mr. Suh who
departed EA in June 2023 without any severance benefits. For purposes of the estimates below, we used the closing price of our common
stock on March 28, 2024 (the last trading day of fiscal year 2024) of $132.67 per share.
Name
Cash Severance
($)(1)
RSUs
($)(2)
PRSUs
($)(3)
Other
($)(4)
Total
($)
Andrew Wilson
Termination due to Death
—
12,091,676
—
—
12,091,676
Termination due to Disability
—
4,206,170
—
—
4,206,170
Qualifying Termination
7,800,000
12,091,676
27,491,473
69,264
47,452,413
Stuart Canfield
Termination due to Death
—
3,798,342
—
—
3,798,342
Termination due to Disability
—
1,037,424
—
—
1,037,424
Qualifying Termination
1,875,000
3,798,342
4,317,815
17,171
10,008,328
Laura Miele
Termination due to Death
—
6,260,963
—
—
6,260,963
Termination due to Disability
—
2,268,259
—
—
2,268,259
Qualifying Termination
2,784,375
6,260,963
13,781,000
47,301
22,873,639
Mala Singh
Termination due to Death
—
4,098,176
—
—
4,098,176
Termination due to Disability
—
1,429,652
—
—
1,429,652
Qualifying Termination
1,920,000
4,098,176
6,272,914
47,301
12,338,391
Jake Schatz
Termination due to Death
—
4,098,176
—
—
4,098,176
Termination due to Disability
—
1,429,652
—
—
1,429,652
Qualifying Termination
1,920,000
4,098,176
6,272,914
51,948
12,343,038
(1) Represents the sum of each NEO’s annual base salary as of March 30, 2024, and target cash bonus opportunity for fiscal year 2024, respectively, multiplied by 2 for
Mr. Wilson and by 1.5 for our other NEOs.
(2) Termination due to Death: Represents the value of unvested RSUs that would accelerate and vest in full assuming a termination date of March 30, 2024. Accelerated
vesting in the event of death is consistent with the treatment applicable to all employees with RSUs.
Termination due to Disability: Represents the value of unvested RSUs that would accelerate on a pro-rata basis assuming a termination date March 30, 2024, based
on the number of RSUs scheduled to vest on the next anniversary of the grant date multiplied by the number of months worked during the 12 months preceding such
anniversary date, divided by 12.
Qualifying Termination: Represents the value of unvested RSUs that would become vested assuming a Qualifying Termination occurred on March 30, 2024:
(3) Termination due to Death: Upon a termination due to death, PRSUs remain eligible to vest on their regularly scheduled vest dates, based on actual performance for
the applicable metric at the end of the applicable measurement periods. For purposes of this table, no value is attributed to outstanding PRSUs which would have
remained eligible to vest based on actual performance at the end of the applicable measurement periods because neither the level of performance that will be
achieved nor the market price of our common stock at the time of vesting could be determined as of March 30, 2024.
Termination due to Disability: Upon a termination due to disability, PRSUs remain eligible to vest on their regularly scheduled vest dates on a pro-rata basis, based
on actual performance at the end of the applicable measurement periods. For purposes of this table, no value is attributed to outstanding PRSUs which would have
remained eligible to vest based on actual performance at the end of the applicable measurement periods because neither the level of performance that will be
achieved nor the market price of our common stock at the time of vesting could be determined as of March 30, 2024.
Qualifying Termination: Represents the estimated value of unvested PRSUs that would accelerate and vest assuming a Qualifying Termination occurred on
March 30, 2024, calculated based on the following:
Award Month & Year
Net Bookings and Operating Income PRSUs
Relative TSR PRSUs
June 2023
■actual performance for the first tranche
■target performance for the second and third tranches
actual performance based on how relative
TSR was tracking for each of these grants
as of March 30, 2024
June 2022
■actual performance for first and second tranches
■target performance for the third tranche
June 2021
■actual performance for all three tranches
actual performance over FY22-FY24
(4) Represents a payment equal to the estimated monthly COBRA premiums for 18 months (or 24 months for our CEO).
52
Fiscal Year 2024 Pay Ratio
For fiscal year 2024, the annual total compensation of our median employee was $148,704, and the annual total compensation of
Mr. Wilson, was $25,643,093. The ratio of these amounts is 172 to 1. This ratio is a reasonable estimate calculated in a manner consistent
with Item 402(u) of Regulation S-K under the Exchange Act.
To identify our median employee, we used a consistently applied compensation measure (“CACM”) for all employees on our worldwide
payroll as of March 15, 2024, including full time, part-time, regular, and temporary employees.
Our CACM consisted of the following elements of compensation, as obtained from our internal payroll systems:
■base salary as of March 15, 2024 (annualized for permanent employees on leave of absence or not employed for the full year);
■discretionary bonuses (performance or other one-time payments) paid to employees in fiscal year 2024;
■the grant date fair market value of equity awards granted to employees in fiscal year 2024; and
■exchange rates were applied as of the determination date to convert all non-U.S. currencies into U.S. dollars.
Other than annualizing base salary for permanent employees, we did not make any compensation adjustments whether for cost of living
or otherwise in the identification process.
The median employee’s annual total compensation for fiscal year 2024 was calculated in USD and determined using the same
methodology used to determine Mr. Wilson’s annual total compensation set forth in the “Fiscal Year 2024 Summary Compensation Table.”
As permitted under SEC rules, we are using the same median employee identified for purposes of calculating the CEO pay ratio in fiscal
year 2023. We believe there has been no change in fiscal year 2024 to our employee population, employee compensation arrangements,
or the circumstances of that median employee since he or she was first identified that would result in a significant change to our pay ratio.
SEC regulations permit companies to adopt a variety of methodologies, apply certain exclusions and to make reasonable estimates
and assumptions that reflect their compensation practices and other factors unique to their workforce and business operations when
calculating their pay ratio. Therefore, the pay ratio reported by other companies may not be comparable to the pay ratio reported above.
53
2024 PROXY STATEMENT
ExECutivE CoMpEnSAtion tAbLES
ExECutivE CoMpEnSAtion tAbLES
Pay Versus Performance Table
The following table provides information regarding the compensation paid to our principal executive officer (or PEO) and non-PEO NEOs
for the fiscal years ended March 31, 2024, 2023, 2022, and 2021, and certain measures of Company performance for such periods. We
are using management reporting non-GAAP net revenue as the Company Selected Measure.
Year
Summary
Compensation
Table Total
for PEO(1)
($)
Compensation
Actually Paid
to PEO(2)
($)
Average
Summary
Compensation
Table Total
for Non-PEO
NEOs(1)
($)
Average
Compensation
Actually Paid
to Non-PEO
NEOs(2)
($)
Value of Initial Fixed $100
Investment Based on:
Net
Income
(In Millions)
($)
Non-
GAAP Net
Revenue
(In Millions)(5)
($)
Total
Shareholder
Return(3)
($)
Peer Group
Total
Shareholder
Return(4)
($)
(A)
(B)
(C)
(D)
(E)
(F)
(G)
(H)
(I)
2024
25,643,093
24,758,368
6,883,584
8,222,584
135
206
1,273
7,430
2023
20,659,002
9,942,539
8,383,839
3,432,972
122
166
802
7,341
2022
19,858,539
9,862,702
9,279,183
5,423,948
127
183
789
7,515
2021
39,165,820
43,921,635
10,591,829
13,798,185
135
170
837
6,190
(1) The named executive officers for each applicable year are:
Year
PEO
Non-PEO NEOs
2024
Andrew Wilson
Laura Miele, Stuart Canfield, Mala Singh, Jake Schatz, Chris Suh.
2023
Andrew Wilson
Laura Miele, Chris Suh, Chris Bruzzo, Mala Singh, Kenneth Moss.
2022
Andrew Wilson
Laura Miele, Chris Suh, Kenneth Moss, Chris Bruzzo, Blake Jorgensen.
2021
Andrew Wilson
Laura Miele, Kenneth Moss, Chris Bruzzo, Blake Jorgensen.
(2) The amounts reported in this column represent “compensation actually paid” to our PEO and other NEOs (on average), as calculated in accordance with Item 402(v)
of Regulation S-K. To determine “compensation actually paid,” the amounts reported in the “Total” column of the Summary Compensation Table for the applicable
year were adjusted as follows:
Year
Executives
Summary
Compensation
Table Total
($)
Deduct Summary
Compensation
Table Stock
Awards
($)
Add Year-End
Value of Unvested
Equity Granted in
Year
($)
Add Change
in Value of
Unvested
Awards
Granted in
Prior Years
($)
Add Change
in Value of
Vested Equity
Granted in
Prior Years
($)
Compensation
Actually Paid
($)
2024
PEO
25,643,093
20,391,283
19,767,621
(702,100)
441,037
24,758,368
Non-PEO NEOs*
6,883,584
5,612,847
5,022,439
934,044
995,364
8,222,584
* Presented on an averaged basis
(3) The amounts reported in this column reflect the Company’s cumulative TSR as of March 31 of each year presented, assuming an initial fixed $100 investment on
March 31, 2020.
(4) The peer group used for relative TSR is the RDG Technology Composite Index which is the same peer group the Company uses for its Item 201(e) of Regulation S-K
disclosure, assuming an initial fixed $100 investment on March 31, 2020.
(5) We identified Non-GAAP Net Revenue as our Company-Selected Measure. Additional information regarding use of non-GAAP measures and reconciliations to the
most direct comparable GAAP measures can be found on Appendix A in the proxy statement for the fiscal year to which the non-GAAP measure relates.
54
Relationship between “Compensation Actually Paid” and TSR
Total Shareholder Return
(Growth of $100 invested)
CAP ($ millions)
PEO CAP
Non-PEO Avg CAP
EA TSR
RDG Technology Composite index
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
FY 2023
FY 2024
FY 2022
FY 2021
$0
$25
$50
$75
$100
$125
$150
$175
$200
$183
$127
$166
$206
$122
$170
$135
$135
$13.8
$43.9
$9.9
$5.4
$9.9
$8.2
$24.1
$3.4
Relationship between “Compensation Actually Paid” and Net Income
Net income
(in millions)
CAP ($ millions)
PEO CAP
Non-PEO Avg CAP
Net income
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
FY 2023
FY 2024
FY 2022
FY 2021
$0
$175
$350
$525
$700
$875
$1,050
$1,225
$1,400
$789
$837
$802
$1,273
$13.8
$43.9
$9.9
$5.4
$9.9
$8.2
$24.1
$3.4
Relationship between “Compensation Actually Paid” and Non-GAAP Net Revenue
Non-GAAP Net Revenue
(in millions)
CAP ($ millions)
PEO CAP
Non-PEO Avg CAP
Non-GAAP Net Revenue
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
FY 2023
FY 2024
FY 2022
FY 2021
$0
$1,500
$3,000
$4,500
$6,000
$7,500
$9,000
$10,500
$12,000
$6,190
$7,515
$7,341
$7,430
$13.8
$43.9
$9.9
$5.4
$9.9
$8.2
$24.1
$3.4
Most Important Performance Measures
The performance measures identified below represent the measures the Company considers the most important in its executive
compensation program linking pay to performance for fiscal year 2024. The use of each measure is discussed in the Compensation
Discussion and Analysis—Our NEOs’ Fiscal Year 2024 Compensation.
Most Important Performance Measures
Non-GAAP Net Revenue*
Non-GAAP Earnings Per Share*
Non-GAAP Operating Income*
*
Appendix A to this Proxy Statement provides a reconciliation between our non-GAAP financial measures and our audited financial statements.
55
2024 PROXY STATEMENT
ExECutivE CoMpEnSAtion tAbLES
ExECutivE CoMpEnSAtion tAbLES
Equity Compensation Plan Information
The following table shows information, as of March 30, 2024, regarding shares of our common stock authorized for issuance under our
2019 EIP, our 2000 Equity Incentive Plan (which terminated on August 8, 2019) (“2000 EIP”), and our 2000 Employee Stock Purchase Plan,
as amended (“ESPP”).
Plan Category
Number Of
Securities
to be Issued
Upon Exercise
of Outstanding
Options,
Warrants, and
Rights
(A)
Weighted-
Average
Exercise Price
of Outstanding
Options,
Warrants,
and Rights
(B)(2)
Number of Securities
Remaining Available
for Future Issuance
Under Equity
Compensation
Plans (Excluding
Securities Reflected
in Column (A))
(C)
Equity compensation plans approved by security holders
8,427,844(1)
—
18,725,150(3)
Equity compensation plans not approved by security holders
—
—
—
Total(4)
8,427,844
18,725,150
(1) Includes (a) 76,298 unvested time-based and performance-based restricted stock unit awards outstanding under the 2000 EIP; and (b) 8,351,546 unvested
time-based and performance-based restricted stock unit awards outstanding under the 2019 EIP.
(2) There were no outstanding options, warrants, or rights subject to exercise under the 2000 EIP or 2019 EIP as of March 30, 2024.
(3) Each full value award granted under the 2019 EIP reduced the number of shares available for issuance under our 2019 EIP by 1.43 shares and each stock option
granted reduced the number of shares available for issuance by 1 share. Thus, if future awards under the 2019 EIP consisted exclusively of full value awards (such
as time-based and performance-based restricted stock units), awards covering a maximum of 15,940,347 shares (or 11,147,096 shares based on the 1.43 reduction
for full-value awards) are available for issuance under the 2019 EIP. Please see Proposal 4 of this Proxy Statement for information on eliminating this fungible share
counting ratio under the 2019 EIP. There are 2,784,803 shares available for purchase by our employees under the ESPP.
(4) The table does not include information with respect to shares subject to outstanding awards assumed by us in connection with the acquisition of Glu Mobile Inc.
As of March 30, 2024, 41,699 shares of our common stock were issuable upon exercise of outstanding options and the release of restricted stock units assumed
in connection with this acquisition. The weighted average exercise price of such outstanding options was $64.00 per share. Other than the awards we assumed in
connection with this acquisition, no additional equity awards may be granted under any assumed arrangement related to the acquisition.
56
Audit Matters
Selection and Engagement of Independent
Registered Public Accounting Firm
KPMG LLP has audited the financial statements of the Company and its consolidated subsidiaries since fiscal year 1987. The Audit
Committee and the Board of Directors believe that KPMG LLP’s long-term knowledge of EA and its subsidiaries is valuable to the
Company as set forth in more detail below. Representatives from KPMG LLP have direct access to the members of the Audit Committee
and Board of Directors. We expect one or more representatives of KPMG LLP to attend the Annual Meeting in order to respond to
appropriate questions from stockholders and make a statement if they desire to do so.
Services Provided by the Independent Auditor
KPMG LLP audits our consolidated operations and provides statutory audits for legal entities within our international corporate structure.
Having one audit firm with a strong global presence responsible for these audits supports a coordinated approach to address issues
that may impact our businesses across multiple geographies and legal entities. Few audit firms have the knowledge of our sector and
the capability of servicing our global audit requirements. KPMG LLP has the geographical scope that our operations require and the
accounting expertise in the matters relevant to our sector. In addition, KPMG LLP’s experience working with the Company gives them
the institutional knowledge to understand our operations and processes, which we believe helps them address the relevant issues and
improves the quality of the audit.
In appointing KPMG LLP as our independent auditors for fiscal year 2025, the Audit Committee and the Board of Directors have
considered the performance of KPMG LLP in fiscal year 2024, as well as in prior years, and have taken into account the alternative
options available to the Company. The Audit Committee and the Board of Directors have determined that it is in the best interests of the
Company and its stockholders to continue KPMG LLP’s engagement.
We believe the experience and expertise held by the members of the Audit Committee give them the necessary skills to evaluate the
relationship between the Company and its independent auditors and to oversee auditor independence. The Audit Committee periodically
considers whether there should be rotation of our independent external audit firm. The Audit Committee is empowered under its charter
to obtain advice and assistance from outside legal, accounting and other advisors as it deems appropriate.
At each meeting of the Audit Committee, Company management is provided the opportunity to meet in private session with the Audit
Committee to discuss any issues relating to KPMG LLP’s engagement. Similarly, KPMG LLP regularly meets in private session with the
Audit Committee with no members of Company management present.
Audit Partner Rotation
The Company’s KPMG LLP lead audit partner has been working on the Company’s audit since the first quarter of fiscal year 2021, and the
Company’s KPMG LLP concurring audit partner has been working on the Company’s audit since the first quarter of fiscal 2024. Each audit
partner may serve a maximum of five years on the Company’s audit. Candidates are proposed by KPMG LLP based on their expertise and
experience and are vetted by Company management and a recommendation is made to the Audit Committee. The Audit Committee has
final determination and oversight of the lead audit partner and the concurring audit partner.
57
2024 PROXY STATEMENT
Fees of Independent Auditors
The aggregate fees billed for the last two fiscal years for each of the following categories of services are set forth below:
Description of Fees
Year Ended
March 31, 2024
Year Ended
March 31, 2023
Audit Fees(1)
$5,126,000
$4,908,000
Audit-related Fees(2)
35,000
29,000
Tax Fees(3)
48,000
139,000
All Other Fees
—
—
Total
$5,209,000
$5,076,000
(1) Audit Fees: This category includes the annual audit of the Company’s financial statements and internal controls over financial reporting (including quarterly reviews
of financial statements included in the Company’s quarterly reports on Form 10-Q), and services normally provided by the independent auditors in connection with
regulatory filings. This category also includes consultation on matters that arose during, or as a result of the audit or review of financial statements, statutory audits
required for our non-US subsidiaries, and other documents filed with the SEC, as well as Sarbanes-Oxley Section 404 compliance consultation.
(2) Audit-Related Fees: This category consists of fees for assurance and related services that are reasonably related to the performance of the audit or review of the
Company’s financial statements and are not reported under “Audit Fees.” In fiscal 2024, these fees were for accounting consultations and services in connection
with regulatory filings in our international jurisdictions.
(3) Tax Fees: This category includes compliance services rendered for U.S. and foreign tax compliance and returns.
Pre-approval Procedures
The Audit Committee is required to pre-approve the engagement of, and fees incurred by, KPMG LLP to perform audit and other
services for the Company and its subsidiaries. The Company’s procedures for the pre-approval by the Audit Committee of all services
provided by KPMG LLP and the related fees comply with SEC regulations regarding pre-approval of services. Services subject to these
SEC requirements include audit services, audit-related services, tax services and other services. In some cases, pre-approval for a
particular category or group of services and the related fees are provided by the Audit Committee for up to a year, subject to a specific
budget and to regular management reporting. In other cases, the Chair of the Audit Committee has the delegated authority from the
Audit Committee to pre-approve additional services and the related fees up to a specified dollar limit, and such pre-approvals are then
communicated to the full Audit Committee. The Audit Committee reviews quarterly the status of all pre-approved services and the
related fees to date and approves any new services and the related fees to be provided.
In determining whether to grant a pre-approval, the Audit Committee considers the level of non-audit fees incurred to date as a
percentage of the total annual fees paid to KPMG LLP. In addition, the Audit Committee considers additional factors to assess the
potential impact on auditor independence of KPMG LLP performing such services, including whether the services are permitted
under the rules and recommendations of the Public Company Accounting Oversight Board, the American Institute of Certified Public
Accountants, the Nasdaq Stock Market, whether the proposed services are permitted under EA’s policies, and whether the proposed
services are consistent with the principles of the SEC’s auditor independence rules. The Company also annually confirms with each of
its directors and executive officers whether there are any relationships that they are aware of with KPMG LLP that may impact the auditor
independence evaluation. The Audit Committee considered and determined that fees for services other than audit and audit-related
services paid to KPMG LLP during fiscal year 2024 are compatible with maintaining KPMG LLP’s independence.
58
Audit MAtters
Report of the Audit Committee of the Board
of Directors
The following Report of the Audit Committee shall not be deemed to be “soliciting material” or to be “filed” with the SEC nor shall this
information be incorporated by reference into any future filing under the Securities Act or the Exchange Act, except to the extent that
EA specifically incorporates it by reference into a filing.
The Audit Committee of the Board of Directors operates under a written charter, which was most recently amended in May 2018. The
Audit Committee is currently comprised of three non-employee directors, each of whom in the opinion of the Board of Directors meets
the current independence requirements and financial literacy standards of the Nasdaq Stock Market Rules, as well as the independence
requirements of the SEC. During fiscal year 2024, the Audit Committee consisted of Kofi A. Bruce, Jeffrey T. Huber, and Richard A.
Simonson. The Board of Directors has determined that each of Mr. Bruce and Mr. Simonson meets the criteria for an “audit committee
financial expert” as set forth in applicable SEC rules.
The Company’s management is primarily responsible for the preparation, presentation and integrity of the Company’s financial
statements. EA’s independent registered public accounting firm, KPMG LLP (the “independent auditors”), is responsible for performing an
independent audit of the Company’s (1) financial statements and expressing an opinion as to the conformity of the financial statements
with U.S. generally accepted accounting principles, and (2) internal control over financial reporting in accordance with the auditing
standards of the Public Company Accounting Oversight Board (the “PCAOB”) and issuing an opinion thereon.
The Audit Committee assists the Board of Directors in its oversight responsibility with respect to the integrity of EA’s accounting policies,
internal control function and financial reporting processes. The Audit Committee reviews EA’s quarterly and annual financial statements
prior to public earnings releases and submission to the SEC; oversees EA’s internal audit function; consults with the independent auditors
and EA’s internal audit function regarding internal controls and the integrity of the Company’s financial statements; oversees tax and
treasury matters; oversees EA’s enterprise risk management program; assesses the independence of the independent auditors; and is
directly responsible for the appointment, retention, compensation and oversight of the independent auditors. In this context, the Audit
Committee has met and held discussions with members of management, EA’s internal audit function and the independent auditors.
Company management has represented to the Audit Committee that the Company’s consolidated financial statements for the most
recently completed fiscal year were prepared in accordance with accounting principles generally accepted in the United States, and the
Audit Committee has reviewed and discussed the consolidated financial statements with Company management and the independent
auditors. Company management has represented to the Audit Committee that the Company’s internal control over financial reporting
was effective as of the end of the Company’s most recently completed fiscal year, and the Audit Committee has reviewed and discussed
the Company’s internal control over financial reporting with management and the independent auditors. The Audit Committee discussed
with the independent auditors matters required to be discussed by the applicable requirements of the PCAOB and SEC, including the
quality and acceptability of the Company’s financial reporting and internal control processes. The Audit Committee also has discussed
with the Company’s independent auditors the scope and plans for their annual audit and reviewed the results of that audit with
management and the independent auditors.
In addition, the Audit Committee received and reviewed the written disclosures and the letter from the independent auditors required
by the applicable requirements of the PCAOB regarding their communications with the Audit Committee concerning independence and
has discussed with the independent auditors the auditors’ independence from the Company and its management. The Audit Committee
also has considered whether the provision of any non-audit services (as described above under the heading “Audit Matters” — “Fees
of Independent Auditors”) and the employment of former KPMG LLP employees by the Company are compatible with maintaining the
independence of KPMG LLP.
The members of the Audit Committee are not engaged in the practice of auditing or accounting. In performing its functions, the Audit
Committee necessarily relies on the work and assurances of the Company’s management and the independent auditors.
In reliance on the reviews and discussions referred to in this report, and in light of its role and responsibilities, the Audit Committee
recommended to the Board of Directors that the Company’s audited financial statements for fiscal year 2024 be included for filing
with the SEC in the Company’s Annual Report. The Audit Committee also has approved the selection of KPMG LLP as the Company’s
independent auditors for fiscal year 2025.
Audit COMMittee
Kofi A. Bruce (Chair)
richard A. simonson
Jeffrey t. Huber
59
2024 PROXY STATEMENT
Audit MAtters
Stock Ownership Information
Security Ownership of Certain Beneficial
Owners and Management
The following table shows, as of June 6, 2024, the number of shares of our common stock owned by our directors, NEOs, our current
directors and executive officers as a group, and beneficial owners known to us holding more than 5% of our common stock. From time to
time we engage in ordinary course business transactions with other companies in which one or more of our greater-than-5% beneficial
owners may have an investment. As of June 6, 2024, there were 265,735,423 shares of our common stock outstanding. Except as
otherwise indicated, the address for each of our directors and executive officers is c/o Electronic Arts Inc., 209 Redwood Shores Parkway,
Redwood City, CA 94065.
Stockholder Name
Shares
Owned(1)
Right to
Acquire(2)
Percent of
Outstanding
Shares(3)
the Vanguard Group inc.(4)
29,159,500
—
10.97%
Blackrock, inc.(5)
25,645,920
—
9.65%
the Public investment Fund(6)
24,807,932
—
9.34%
state street Corporation(7)
14,996,539
—
5.64%
Andrew Wilson(8)
146,337
—
*
stuart Canfield
8,838
6,377
*
Laura Miele
54,933
—
*
Mala singh(9)
39,374
—
*
Jacob schatz
31,317
—
*
Christopher suh
—
—
*
Kofi A. Bruce
3,874
2,126
*
rachel A. Gonzalez
5,338
2,126
*
Jeffrey t. Huber(10)
93,458
2,126
*
talbott roche
22,306
2,126
*
richard A. simonson
61,355
25,160
*
Luis A. ubiñas
—
52,660
*
Heidi J. ueberroth
8,410
8,495
*
All current executive officers and directors as a group (13) persons(11)
482,998
101,196
0.22%
* Less than 1%
(1) Unless otherwise indicated in the footnotes, includes shares of common stock for which the named person has sole or shared voting and investment power. This
column excludes shares of common stock that may be acquired through stock option exercises, which are included in the column “Right to Acquire.”
(2) Includes (a) shares of common stock that may be acquired through stock option exercises and releases of RSUs within 60 days of June 6, 2024, (b) in the case of
Mr. Simonson, reflects 23,034 RSUs that have vested but have been deferred, (c) in the case of Mr. Ubiñas, reflects 50,534 RSUs that have vested but have been
deferred and (d) in the case of Ms. Ueberroth, reflects 6,369 RSUs that have vested but have been deferred.
(3) Calculated based on the total number of shares owned plus the number of shares that may be acquired through stock option exercises and the release of vested
RSUs within 60 days of June 6, 2024.
(4) As of March 28, 2024, based on information contained in a report on Schedule 13G/A filed with the SEC on April 10, 2024 by The Vanguard Group, reporting shared
voting power over 312,028 shares of common stock, sole dispositive power over 28,077,176 shares of common stock, shared dispositive power over 1,082,324 and
sole voting power over no shares of common stock. The address for The Vanguard Group is 100 Vanguard Blvd., Malvern, PA 19355.
(5) As of December 31, 2023, based on information contained in a report on Schedule 13G/A filed with the SEC on January 24, 2024 by Blackrock, Inc., reporting sole
voting power over 23,224,501 shares of common stock, sole dispositive power over 25,645,920 shares of common stock, and shared voting and dispositive power
over no shares. The address for BlackRock, Inc. is 50 Hudson Yards, New York, NY 10001.
(6) As of December 31, 2023, based on information contained in a report on Schedule 13G/A filed with the SEC on February 14, 2024, by The Public Investment Fund,
reporting sole voting and dispositive power over 24,807,932 shares of common stock, and shared voting and dispositive power over no shares. The address for The
Public Investment Fund is The Public Investment Fund Tower, King Abdullah Financial District (KAFD), Al Aqiq District, Riyadh, Kingdom of Saudi Arabia.
(7) As of December 31, 2023, based on information contained in a report on Schedule 13G/A filed with the SEC on January 25, 2024 by State Street Corporation,
reporting shared voting power over 10,466,791 shares of common stock, shared dispositive power over 14,954,343 shares of common stock, and sole voting and
dispositive power over no shares of common stock. The address for State Street Corporation is 1 Congress Street, Suite 1, Boston, A 02114-2016.
(8) Includes 64,247 shares of common stock held by Mr. Wilson’s family trust and 82,090 shares of common stock held in trust for the benefit of Mr. Wilson’s
descendants. Mr. Wilson has investment control over, and pecuniary interest in, shares held in his family trust. Mr. Wilson has investment control over shares held in
trusts for his descendants.
(9) Includes 39,374 shares of common stock held by Ms. Singh’s family trust. Ms. Singh has investment control over, and pecuniary interest in, shares held in her
family trust.
(10) Includes 304 shares of common stock held directly by Mr. Huber, 67,412 shares of common stock held by Mr. Huber’s family trust and 25,742 shares of common stock
held by trusts over which Mr. Huber maintains investment control and pecuniary interest.
(11) Includes all executive officers and directors of EA as of the date of this filing.
60
Stock Ownership Requirements
Directors
Each non-employee director is required, within five years of becoming a director, to own a number of shares of EA common stock
having a value of at least five years’ annual retainer for service on our Board of Directors. Mr. Huber is eligible to satisfy his ownership
requirements through holdings of EA common stock through certain trusts over which Mr. Huber maintains investment control and
pecuniary interest.
Non-employee directors are permitted to include the value of vested, but deferred, RSUs toward their ownership requirement. As of the
end of fiscal year 2024, each of our directors had fulfilled his or her ownership requirements.
Section 16 Officers
In accordance with our stock ownership guidelines, Section 16 officers must maintain stock ownership equal to the minimum ownership
requirements listed in the table below. Our CEO is required to own stock with a value equal to ten times his base salary. Each of our NEOs
(other than the CEO) is an Executive Vice President and therefore is required to own stock with a value equal to three times his or her
base salary.
Position
Stock Ownership Value as a Multiple of Base Salary
CeO
10x
executive Vice President
3x
senior Vice President
1x
We test the stock ownership holding requirement on an annual basis, and any Section 16 officer not in compliance with these guidelines
must hold 50% of any net after-tax shares vesting from equity awards until the applicable requirement is met. The Compensation
Committee last reviewed the stock ownership requirements in May 2024. As of that date, each of our executive officers had either met his
or her then-applicable stock ownership holding requirement or had not yet reached the date on which he or she is required to meet his or
her ownership requirements, which is generally 50 months from the date of hire, appointment, or promotion. For promotions, executives
must maintain their prior-level minimum holding requirements during any applicable transition period.
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires our executive officers, directors and persons who beneficially own more than ten percent of
our ordinary shares to file reports of their beneficial ownership and changes in ownership (Forms 3, 4 and 5, and any amendment thereto)
with the SEC. Based solely on a review of forms filed in the SEC’s EDGAR database and written representations from executive officers
and directors, we believe that during the fiscal year ended March 31, 2024, all required reports were filed on a timely basis.
Insider Trading, Anti-Hedging and
Anti-Pledging Policies
We maintain an insider trading policy governing the purchase, sale, and other dispositions of our securities by directors, officers,
employees, the Company, and other covered persons. The insider trading policy is designed to promote compliance by our employees
and directors with both federal and state insider trading laws, rules and regulations. In addition, our insider trading policy prohibits
our directors, executive officers, employees, those living in their respective households, and family members whose transactions are
influenced or controlled by such director, executive officer or employee from engaging in any hedging transaction with the Company’s
securities, buying the Company’s securities on margin, or otherwise trading in any derivative of the Company’s securities (including put
and/or call options, swaps, forwards or futures contracts, short sales or collars). Our directors and Section 16 officers also are prohibited
from pledging our stock as collateral for any loan.
61
2024 PROXY STATEMENT
stOCK OWnersHiP inFOrMAtiOn
Proposals to be Voted on
PROPOSAL 1
Election of Directors
At the Annual Meeting, stockholders will elect eight directors to hold office for a one-year term until the next annual meeting (or
until their respective successors are appointed). All nominees have consented to serve a one-year term, if elected. For additional
information regarding the nominees and our corporate governance practices, including our director resignation policies and
refreshment practices, please see the sections of this Proxy Statement entitled “Proxy Highlights,” and “Board of Directors and
Corporate Governance.”
The 2024 election of directors will be uncontested. Accordingly, EA’s Amended and Restated Bylaws provide that in an
uncontested election of directors each nominee must receive more votes cast “for” than “against” his or her re-election in order
to be elected or re-elected to the Board of Directors.
The Board of Directors has nominated the following directors to stand for re-election. Each of our director nominees currently
serves on the Board of Directors and was elected to a one-year term at the 2023 annual meeting.
■Kofi A. Bruce
■Rachel A. Gonzalez
■Jeffrey T. Huber
■Talbott Roche
■Richard A. Simonson
■Luis A. Ubiñas
■Heidi J. Ueberroth
■Andrew Wilson
The Board of Directors recommends a vote FOR each of the nominees.
62
PROPOSAL 2
Advisory Vote to Approve Named Executive
Officer Compensation
In accordance with the SEC’s proxy rules, we seek an advisory, non-binding stockholder vote with respect to the compensation of our
named executive officers for fiscal year 2024. This vote, which is undertaken by us annually, is not intended to address any specific
item of compensation, but rather the overall compensation of our named executive officers and the compensation philosophy,
policies, and practices, as disclosed in this Proxy Statement. Approval of this proposal, commonly known as a “say-on-pay” proposal,
requires the affirmative vote of a majority of the voting shares present at the Annual Meeting in person or by proxy and voting for or
against the proposal. We are asking our stockholders to vote on the following resolution at the Annual Meeting:
“RESOLVED, that the Company’s stockholders approve, on a non-binding, advisory basis, the compensation of
the named executive officers for fiscal year 2024, as disclosed in the Compensation Discussion and Analysis,
the compensation tables, and the related narrative disclosures in this Proxy Statement.”
Our Board of Directors recommends a vote “FOR” this resolution. Our Board of Directors, Compensation Committee and EA
management are committed to maintaining pay-for-performance alignment in our executive compensation program. Our pay-
for-performance approach is designed to reward the achievement of Company-wide financial and business objectives, individual
performance, and the creation of long-term value for stockholders, while also recognizing the dynamic and highly competitive
nature of our business and the market for top executive talent.
At last year’s Annual Meeting, our say-on-pay proposal received the support of 92% of the votes cast. We encourage you to
review carefully the “Compensation Discussion and Analysis” and accompanying compensation tables and narrative discussion for
a more detailed description of our executive compensation program and decisions.
Although the vote is advisory and non-binding, our Board of Directors and Compensation Committee value the opinions of our
stockholders and will consider the outcome of the vote, along with other relevant factors, in evaluating the future compensation
of our named executive officers. We currently intend to hold the next non-binding advisory vote to approve the compensation of
our named executive officers at our 2025 annual meeting.
The Board of Directors recommends a vote FOR the approval of the foregoing resolution.
63
2024 PROXY STATEMENT
PROPOSALS tO bE VOtED On
PROPOSAL 3
Ratification of the Appointment of KPMG LLP,
Independent Public Registered Accounting Firm
The Audit Committee has appointed KPMG LLP as the Company’s independent auditors for the fiscal year ending March 31, 2025.
Ratification of the appointment of KPMG LLP as our independent auditors is not required by our Amended and Restated Bylaws
or otherwise. The Board of Directors has determined to submit this proposal to the stockholders as a matter of good corporate
practice. Approval of this proposal requires the affirmative vote of a majority of the voting shares present at the meeting in
person or by proxy and voting for or against the proposal. If the stockholders do not ratify the appointment, the Audit Committee
will review its future selection of auditors. Even if the appointment is ratified, the Audit Committee may, in its discretion, direct the
appointment of different independent auditors at any time during the year if it determines that such a change would be in the
best interests of the Company and the stockholders.
The Board of Directors recommends a vote FOR the ratification of KPMG LLP as our independent
auditors for the fiscal year ending March 31, 2025.
64
PROPOSALS tO bE VOtED On
PROPOSAL 4
Approval of Our Amended and Restated 2019
Equity Incentive Plan
We are asking our stockholders to approve an amendment and restatement of the Electronic Arts Inc. 2019 Equity Incentive Plan,
as amended (the “2019 EIP”). This amended and restated version of our 2019 EIP (the “Amended 2019 EIP”) was adopted, subject
to stockholder approval, by our Board of Directors on May 15, 2024. The purpose of this amendment and restatement is to:
■increase the number of shares of common stock, par value $0.01 per share, available for issuance under the 2019 EIP by
2,100,000 shares; and
■eliminate the fungible share counting ratio for new awards.
These changes, together with the shares currently available for future grants, are intended to cover grants for approximately
three years based on our current grant practices and certain other assumptions and outcomes.
We believe that equity compensation is a critical tool for employee motivation and retention and are proposing the share increase
to enable us to continue offering equity incentive awards to a broad base of our employees without interruption.
If approved by our stockholders, the Amended 2019 EIP will become effective on the date it is approved by our stockholders
at the 2024 Annual Meeting (the “Effective Date”). If the Amended 2019 EIP is not approved by our stockholders, then it will
not become effective, and the current version of the 2019 EIP will continue in full force and effect, without giving effect to the
proposed amendments, including to increase the number of shares available for grant under the plan.
Why Stockholders Should Approve the Amended 2019 EIP
We are asking stockholders to approve an increase in the shares available for issuance under the Amended 2019 EIP in order to maintain
an adequate reserve of common stock to attract, motivate, and retain talent in a highly competitive market and industry. In addition, given
that our equity awards in recent years have been granted primarily as restricted stock units and performance-based restricted stock units
(i.e., full value awards) rather than stock options and stock appreciation rights, we do not believe that continuing to include a fungible share
counting ratio is warranted. Furthermore, we are mindful in managing share usage and maintain prudent equity compensation practices.
Our Broad-Based Equity Program Is Critical to Attract and Retain Talent
■The digital interactive entertainment industry continues to undergo dynamic change and transformation, creating an intensely
competitive market for workers from an active and mobile talent pool. Attracting, motivating, and retaining skilled talent in this
landscape and evolving market is key to achieving our long-term business goals.
■For our broad-based employee population, equity awards remain an integral component of compensation in our industry and at
the Company. Approximately 93% of equity incentive awards over the last three fiscal years were granted to employees below the
NEO level.
■Equity awards, and particularly performance-based awards, are key to incentivizing our executive officers to drive stockholder
value. In fiscal year 2024, all NEOs received at least 50% of the target value of their respective annual equity awards in the form of
performance-based restricted stock units, with our CEO, CFO, and President of EA Entertainment, Technology & Central Development
receiving 60% of the target value of each of their annual equity awards in the form of performance-based restricted stock units.
We Thoughtfully Manage Share Usage
While equity is a strategic tool for recruitment and retention, we also carefully manage the number of equity incentives we grant and strive
to keep the dilutive impact of the equity incentives we offer within a competitive range.
■Our Compensation Committee monitors share usage to manage the dilutive impact of awards granted under the plan.
■Our stock repurchase program has offset the dilutive effect of our equity award practices, which has been one goal, among others, of
this program.
■Our three-year average gross burn rate was 2.0% for fiscal years 2022 through 2024. Please refer to the chart below for detailed
calculations of our burn rates.
■We are mindful of and analyze our stock-based compensation expense.
The fungible share counting ratio in the 2019 EIP required that each share granted under a full value award (such as restricted stock
units and performance-based restricted stock units) reduce the share reserve by 1.43 shares and each share granted under a stock
option or stock appreciation right reduce the share reserve by 1 share. In recent years, we have primarily issued restricted stock units and
performance-based restricted stock units and intend to continue doing so. At this time, stock options are only issued to non-employee
directors who elect to receive their cash fees in the form of common stock, as these options are immediately exercised upon grant.
Accordingly, the fungible share counting ratio has become unnecessary, and eliminating it would allow us to request a smaller increase to
the shares available for issuance under the Amended 2019 EIP.
65
2024 PROXY STATEMENT
PROPOSALS tO bE VOtED On
Our Equity Compensation Program Includes Relevant Best-Practice Safeguards
The Amended 2019 EIP includes provisions designed to protect our stockholders’ interests and reflect corporate governance best
practices, as highlighted below. The summary below is qualified in its entirety by the full text of the Amended 2019 EIP, which is included as
Appendix B to the Company’s Definitive Proxy Statement filed with the SEC on June 14, 2024.
■No Liberal Share Recycling: Prohibits the following shares from being added back to the share pool: (1) shares not issued as a
result of the net settlement of an option or SAR; (2) shares tendered or withheld by the Company in payment of the exercise price of
an option or SAR; (3) shares tendered or withheld to satisfy any tax or similar withholding obligation with respect to an award; and (4)
shares repurchased by the Company on the open market with the proceeds of the exercise price from an option.
■Plan Administration: Administered by the Compensation Committee, which is comprised entirely of “nonemployee directors” under
the SEC rules and “independent directors” within the meaning of the Nasdaq independence requirements.
■Director Award Limits: Limits the aggregate amount of equity compensation a non-employee director may receive in a fiscal year.
■No Repricing or Cash Buyout of Stock Options or SARs: Does not permit repricing of stock options and SARs without stockholder
approval, other than an equitable adjustment in connection with a capitalization event or change in control.
■No Single-Trigger Vesting: Does not provide for automatic vesting of awards upon a change in control.
■Dividends and Dividend Equivalents Not Payable on Awards until Vesting: Does not permit dividend or dividend equivalent
payments on unvested awards.
■No Evergreen Share Replenishment Feature: Does not have an evergreen share pool provision.
■No 280G Excise Tax Gross-Ups: Does not provide for 280G tax gross-ups to officers, non-employee directors or other plan participants.
■No In-the-Money Stock Options or SARs: Does not permit option or SAR exercise prices to be less than 100% of the fair market
value on the date of grant.
■Clawback: Awards under the Amended 2019 EIP are subject to recovery in accordance with our clawback policy, as well as subject to
termination in certain cases of employee misconduct under the terms of the equity incentive award agreements.
Amendment to Our 2019 Equity Incentive Plan
The only material changes contemplated by the Amended 2019 EIP is to authorize an increase in the overall limit on the number of
shares of common stock that may be issued under the plan by an additional 2,100,000 shares and to eliminate the fungible share
counting ratio for new awards. In addition, we made certain clarifying and other housekeeping changes to the plan that do not require
stockholder approval.
Under the 2019 EIP, each full value award granted reduced the number of shares available for issuance under the plan by 1.43 shares and
each stock option and SAR granted reduced the number of shares available for issuance by 1 share. However, the Amended 2019 EIP does
not include this fungible share counting ratio so that all awards granted after August 1, 2024, will reduce the number of shares available
for issuance by 1 share for every 1 share issued. This change, along with the additional 2,100,000 shares we are requesting and the shares
currently available under the 2019 EIP for future grants, is intended to meet our equity grant needs for approximately three years based
on our current grant practices and certain other assumptions and outcomes. The shares reserved may, however, last for a greater or fewer
number of years depending on currently unknown factors, such as the number of grant recipients, future grant practices, M&A activity,
and our stock price.
If approved, these shares will be added to the 15,940,347 shares (or 11,147,096 shares based on the 1.43 reduction for full value awards)
remaining available for issuance under the current 2019 EIP as of March 30, 2024, meaning that a total of 18,040,347 shares would be
available for issuance under the Amended 2019 EIP, plus any shares subject to outstanding awards under the 2000 Equity Incentive Plan
(the “2000 EIP”), which terminated in August 2019 upon stockholder approval of the current 2019 EIP, that are not issued or delivered
for any reason. Our request for an additional 2,100,000 shares is based on an analysis of various factors, including historical burn rate,
potential dilution, industry plan cost standards, and anticipated equity compensation needs.
Historical Award Information
As of May 24, 2024, 15,907,604 shares remained available for future grant under the current 2019 EIP, which based on the 1.43 reduction
would permit us to grant 11,124,199 full value awards and enable us to meet our equity grant needs for less than one year. The closing
price of our common stock on the Nasdaq Stock Market was $136.06 per share on such date.
The following table provides detailed information regarding historical awards granted and earned performance-based awards under the
current 2019 EIP and gross burn rate for each fiscal year.
Fiscal Year
Granted
Appreciation
Awards
(Options And
SARs)(1)
Granted
Timed-Based
Restricted
Stock
Units(2)
Granted
Performance-
Based
Restricted
Stock Units(3)
Earned
Performance-
Based
Restricted
Stock Units(4)
Weighted
Average
Common
Shares
Outstanding(5)
Gross Burn
Rate(6)
2024
3,000
4,798,000
825,000
123,000
270,000,000
2.1%
2023
4,000
5,391,000
687,000
168,000
277,000,000
2.2%
2022
3,000
4,598,000
475,000
537,000
284,000,000
1.8%
(1) Reflects number of shares used. Does not reflect subsequent forfeitures or cancellations.
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Proposals to be Voted on
(2) Reflects number of shares used based on the awards granted without applying fungible share counting provisions. Does not reflect subsequent forfeitures
or cancellations.
(3) Reflects performance-based restricted stock units (PRSUs) granted at the maximum number of shares that could potentially vest for each fiscal year.
(4) Reflects PRSUs earned and vested for each fiscal year.
(5) As reported in our Annual Report on Form 10-K for the respective fiscal year.
(6) Burn rate is calculated as the total number of shares granted as appreciation awards, time-based RSUs and PRSUs throughout the year divided by the basic
weighted-average common shares outstanding at fiscal year-end. The burn rate is not adjusted for forfeitures and expirations of awards, which would reduce the
burn rate if taken into account. The burn rates in the table do not take into account the 1.43 fungible ratio applicable to those full-value awards. Burn rates after
applying the fungible ratio to full-value awards is 2.6% for fiscal year 2024, 2.9% for fiscal year 2023 and 2.6% for fiscal year 2022. We are seeking to eliminate the
fungible ratio in this proposal.
The potential dilution (or “overhang”) from the Amended 2019 EIP would be 9.95% (or 9.05% on a diluted basis) and assumes that the
2,100,000 new shares were available to grant as of March 30, 2024, and is calculated as follows:
Shares Available And Outstanding Under Equity Plans
Weighted-Average
Exercise Price
Shares
New shares available under the Amended 2019 EIP
2,100,000
Shares remaining available under the current 2019 EIP
15,940,347
(A) Total Shares Available for Issuance
18,040,347
Shares underlying previously granted outstanding stock options under the 2000 EIP
$
—
0
Shares underlying previously granted outstanding full-value awards the 2000 EIP
76,298
Shares underlying previously granted outstanding full-value awards under the current 2019 EIP
8,351,546
Shares underlying previously granted and outstanding options and full-value awards under the
acquired company’s equity plans
$
64.00
41,699
(B) Total Outstanding full-value awards and stock options
8,469,543
(C) Common Shares Outstanding
266,414,162
Overhang (A+B) / C
9.95(1)%
Diluted overhang (A+B) / (A+B+C)
9.05%
(1) Overhang is calculated as counting all awards on a 1-to-1 basis. Each full value award granted under the 2019 EIP reduced the number of shares available for
issuance under the 2019 EIP by 1.43 shares and each stock option granted reduced the number of shares available for issuance by 1 share. We are seeking to
eliminate the fungible ratio in this proposal.
For more information regarding our equity compensation plans, please refer to the full text of the Amended 2019 EIP, which is included
as Appendix B to the Company’s Definitive Proxy Statement filed with the SEC on June 14, 2024, and the “Equity Compensation Plan
Information” table above.
Eligibility
Awards under the Amended 2019 EIP may be granted to employees, consultants, and directors of the Company or any of its subsidiaries
(“eligible individuals”). Incentive stock options may be granted only to eligible individuals who are employees of EA or any of our
subsidiaries. As of March 30, 2024, we had approximately 13,700 employees (including five NEOs), seven non-employee directors, and
approximately 242 consultants, each of whom would be eligible to be granted awards under the Amended 2019 EIP. In principle, any
consultant to the Company or any of its subsidiaries would be eligible to participate in the Amended 2019 EIP, subject to certain SEC
limitations. However, historically we have not granted equity awards to consultants and that remains our current practice.
Prior Grants under the 2019 EIP
Pursuant to the terms of the Amended 2019 EIP, the amount and timing of awards under the Amended 2019 EIP will generally be
determined by the Compensation Committee, as administrator, and cannot be determined in advance. However, the Board of Directors
will make determinations with respect to awards granted to our CEO. Accordingly, future awards under the Amended 2019 EIP are not
determinable at this time.
Registration of Shares Under the Amended 2019 EIP
If the Amended 2019 EIP is approved by our stockholders, the Board of Directors intends to cause the shares of common stock that will
become available for issuance under the Amended 2019 EIP to be registered on a Form S-8 Registration Statement to be filed with the
SEC at the Company’s expense prior to the issuance of any such shares.
Approval of this Proposal 4 requires the affirmative vote of a majority of the voting shares present at the 2024 Annual Meeting in person
or by proxy and voting for or against the proposal.
The Board of Directors recommends a vote FOR the approval of our Amended 2019 EIP.
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GENERAL DESCRIPTION OF THE AMENDED AND RESTATED 2019 EQUITY INCENTIVE PLAN
As Proposed to be Approved by Our Stockholders on August 1, 2024
General
The current 2019 EIP was originally adopted by our Board of Directors on May 16, 2019, and approved by our stockholders on August 8,
2019. It was first amended and restated and approved by our Board of Directors on May 19, 2022, and by our stockholders on August 11,
2022. It was most recently amended and restated and approved by our Board of Directors on May 15, 2024. The principal terms of the
2019 EIP, as proposed to be amended and restated, are summarized below.
As described in this Proposal 4, stockholders will vote to increase the number of shares of common stock available for issuance under the
plan by an additional 2,100,000 shares and to remove the fungible share counting ratio. The Amended 2019 EIP is otherwise substantially
the same as our current 2019 EIP. The following summary is qualified in its entirety by reference to the text of the Amended 2019 EIP, which
is included as Appendix B to the Company’s Definitive Proxy Statement filed with the SEC on June 14, 2024.
Material Terms of the Amended 2019 EIP
Purpose
The purpose of the Amended 2019 EIP is to provide incentives to attract, retain and motivate eligible individuals whose
present and potential contributions are important to the success of the Company and its subsidiaries by offering them
an opportunity to participate in the Company’s future performance through the grant of equity-based awards.
Duration/Term
Unless earlier terminated in accordance with its terms, the Amended 2019 EIP will continue in effect until August 8, 2039.
Governing Law
The Amended 2019 EIP and all award agreements under the plan are governed by the laws of the State of Delaware.
Administration
The Amended 2019 EIP is administered by the Compensation Committee (or if no such committee is appointed, by the
Board of Directors). All the members of the Compensation Committee are “non-employee directors” and “independent
directors” under applicable federal securities laws and NASDAQ listing requirements, and “outside directors” as defined
under applicable federal tax laws.
The Compensation Committee’s authority includes, but is not limited to, the authority to: construe and interpret the
Amended 2019 EIP, any award agreement or any other document related to the Amended 2019 EIP; prescribe, amend
and rescind rules and regulations related to the Amended 2019 EIP; select eligible individuals to receive awards;
determine the terms and conditions of any award; determine the number of shares or other consideration subject to
awards; establish, adopt or revise any rules and regulations, including adopting sub-plans, for the Amended 2019 EIP;
correct any defect, supply any omission or reconcile any inconsistency in the Amended 2019 EIP, any award or any award
agreement; and make all other determinations necessary or advisable for the administration of the Amended 2019 EIP.
The Compensation Committee may delegate to a committee of one or more members of the Board of Directors, or
to one or more officers of the Company, the authority to construe and interpret the Amended 2019 EIP, any award
agreement and any other agreement or document executed pursuant to the 2019 EIP, and grant an award under the
2019 EIP to eligible individuals other than to employees who are subject to Section 16 of the Exchange Act and to
certain other officers of the Company.
Eligibility
Incentive stock options may only be granted to employees of the Company or its subsidiaries. All other awards may be
granted to employees, consultants, and directors of the Company or any of its subsidiaries (“eligible individuals”). As
of March 30, 2024, there were approximately 13,700 employees (including five NEOs), seven non-employee directors,
and approximately 242 consultants, each of whom would be eligible to be granted awards under the Amended 2019
EIP. In principle, any consultant to EA or any of its subsidiaries would be eligible to participate in the Amended 2019 EIP,
subject to certain SEC limitations. However, our current practice is generally not to grant equity awards to consultants.
Awards
Awards granted under the Amended 2019 EIP may be options, restricted stock, restricted stock units, stock appreciation
rights (“SARs”) or other share-based awards. Awards may be granted singly or in combination with other awards.
Shares
Shares of Company common stock issuable under the Amended 2019 EIP may come from authorized but unissued
shares, treasury shares, shares purchased on the open market or any combination of the foregoing.
Share Limits
The maximum number of shares available to be granted under the Amended 2019 EIP will be 18,040,347, which includes
the 2,100,000 additional shares being requested under this Proposal 4, plus any shares authorized for grants or subject
to awards under the 2000 EIP that are not issued or delivered for any reason. To the extent that an award terminates,
expires, or lapses for any reason, or is settled in cash, any shares subject to the award will again be available for the grant
of an award. The following shares will not be added back into the share pool: (i) shares not issued as a result of the net
settlement of an option or SAR; (ii) shares tendered or withheld by the Company in payment of the exercise price of an
option or a SAR; (iii) shares tendered or withheld to satisfy any tax or similar withholding obligation with respect to an
award; and (iv) shares repurchased by the Company on the open market with the proceeds of the exercise price from
an option.
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Proposals to be Voted on
Adjustment
In the event of any increase, decrease, or change in the number or characteristic of outstanding shares of the Company
effected without receipt of consideration by the Company or by reason of a share split, reverse share split, spin-off,
share or extraordinary cash dividend or other distribution, share combination or reclassification, recapitalization or
merger, change in control, or similar event, the Compensation Committee may substitute or adjust proportionately, as
the Compensation Committee in its sole discretion deems equitable (a) the aggregate number and kind of shares that
may be issued under the Amended 2019 EIP; (b) the number and kind of securities subject to outstanding awards; (c)
the terms and conditions of any outstanding awards (including, without limitation, any applicable performance goals or
criteria with respect thereto); and (d) the exercise price or purchase price per share for any outstanding awards under
the Amended 2019 EIP; provided, however, that in the case of any “equity restructuring” (within the meaning of the
Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor pronouncement
thereto)), the Compensation Committee shall make an equitable or proportionate adjustment to outstanding awards to
reflect such equity restructuring.
Award types:
Options
Options granted under the Amended 2019 EIP may be either incentive stock options, which are tax qualified under the
U.S. Internal Revenue Code of 1986, as amended (the “Code”), or nonqualified options, which are not tax-qualified for
purposes of the Code. The exercise period of an option is determined by the Compensation Committee but, in no
event, may an option be exercisable more than ten years from the date it is granted.
The Compensation Committee determines the exercise price of each option granted under the Amended 2019 EIP.
The exercise price for each incentive stock option and nonqualified stock option must not be less than 100% of the fair
market value of a share at the time the option is granted.
Restricted Stock
A restricted stock award is an award of shares that are subject to time-based or performance-based restrictions
established by the Compensation Committee. The purchase price, if any, for a restricted stock award is determined by
the Compensation Committee at the time of grant.
Restricted Stock Units
Restricted stock units are unfunded, unsecured rights to receive Company shares upon the satisfaction of time-based
or performance-based vesting criteria. Restricted stock units are generally granted for no consideration, however the
purchase price, if any for the restricted stock units will be determined by the Compensation Committee at the time
of grant. Each restricted stock unit represents one share of common stock. Participants in the Amended 2019 EIP
(“participants”) have no rights to the shares underlying the restricted stock units unless and until the restrictions on the
restricted stock units have lapsed and the shares have been released.
SARs
The Compensation Committee determines the terms and conditions of a SAR, including whether the SAR will be settled
in shares or cash. A SAR may not be exercisable more than ten years from the date it is granted and the exercise price
for a SAR may not be less than 100% of the fair market value of a share at the time the SAR is granted.
Other Share -
Based Awards
Other share-based awards consist of awards that involve (or may involve) the issuance of shares, are denominated,
payable or valued in, or otherwise relate to shares. The Compensation Committee determines the terms and conditions
of other share-based awards consistent with the terms of the Amended 2019 EIP, provided any exercise price for any
other share-based award may not be less than 100% of the fair market value of a share at the time the award is granted.
Payment for
Share Purchases
Where expressly approved by the Compensation Committee and as permitted by law, payment methods for shares
underlying an award granted under the Amended 2019 EIP (if applicable to the award type) will be set forth in the
award agreement.
no Repricings
or Exchange
of Options or
SARs Without
Stockholder
Approval
The Compensation Committee may authorize the Company, with the consent of the affected participants, to issue new
awards in exchange for the surrender and cancellation of any or all outstanding awards; provided that no such exchange
program may, without the approval of the Company’s stockholders, allow for the cancellation of an outstanding option or
SAR in exchange for a new option or SAR having a lower exercise price. The Compensation Committee may also, subject
to approval by the Company’s stockholders, buy a previously granted award with payment in cash, shares (including
restricted stock) or other consideration, based on such terms and conditions as the Compensation Committee and the
participant may agree.
Grants to non-
Employee Directors
Non-employee directors are eligible to receive any award granted under the Amended 2019 EIP except for incentive
stock options, in the sole discretion of the Board of Directors. The terms and conditions of these awards, including
vesting, exercisability and settlement will be determined by the Board of Directors. In the event of the Company’s
dissolution or liquidation, or a “change of control” transaction, awards granted to the Company’s non-employee
directors will become 100% vested and exercisable in full immediately prior to the consummation of the
applicable transaction.
In addition, the Company’s non-employee directors may elect to receive all or a portion of their cash compensation
from the Company in shares. Directors making this election are eligible to receive shares having a value equal to 110%
of the amount of the cash compensation foregone.
Under the Amended 2019 EIP, in any fiscal year of the Company, no non-employee director may be granted awards with
a grant date value of more than $1,200,000 in total whereby (1) shares-in-lieu of cash compensation may not have a
grant date fair value of more than $600,000; and (2) an annual equity award may not have a grant date fair value of
more than $600,000.
Performance-
based Awards
Awards may be performance-based awards with vesting or exercisability conditioned on one or more performance
factors and may be granted individually or in tandem with other awards. The awards will be subject to a specific
performance period that may be as short as a quarter or as long as five (5) years.
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Performance
Factors
Performance factors are any of the factors selected by the Compensation Committee in its sole discretion and
specified in the award agreement, and may include the following measures, or any other measures the Compensation
Committee may deem appropriate, either individually, alternatively or in any combination, applied to the Company as a
whole or any business unit or subsidiary, either individually, alternatively or in any combination on a GAAP or non-GAAP
basis to be measured to the extent applicable on an absolute basis or relative to a pre-established target to determine
whether the performance goals established by the Compensation Committee have been satisfied: (a) profit before
tax; (b) revenue (on an absolute basis or adjusted for currency effects); (c) net revenue; (d) earnings (which may
include earnings before interest and taxes, earnings before taxes, and net earnings); (e) operating income; (f) operating
margin; (g) operating profit; (h) controllable operating profit, or net operating profit; (i) net profit; (j) gross margin; (k)
operating expenses or operating expenses as a percentage of revenue; (l) net income; (m) earnings per share; (n) total
stockholder return; (o) market share; (p) return on assets or net assets; (q) the Company’s stock price; (r) growth in
stockholder value relative to a pre-determined index; (s) return on equity; (t) return on invested capital; (u) cash flow
(including free cash flow or operating cash flows); (v) cash conversion cycle; (w) economic value added; (x) individual
confidential business objectives; (y) contract awards or backlog; (z) overhead or other expense reduction; (aa) credit
rating; (bb) strategic plan development and implementation; (cc) succession plan development and implementation;
(dd) improvement in workforce diversity; (ee) customer indicators; (ff) new product invention or innovation; (gg)
attainment of research and development milestones; (hh) improvements in productivity; (ii) attainment of objective
operating goals and employee metrics; or (jj) criteria relating to human capital management.
In addition, the Compensation Committee may, in its sole discretion and in recognition of unusual or non-recurring
items such as acquisition-related activities or changes in applicable accounting rules, provide for one or more
adjustments to the performance factors to preserve the Compensation Committee’s original intent regarding the
performance factors at the time of the initial grant.
Dividend
Equivalents;
Dividends
The Compensation Committee may grant a participant dividend equivalent rights based on any dividends, if any,
declared during the period between the date the award is granted and the date the award is vests or is settled.
The Amended 2019 EIP prohibits the current payment of dividend equivalent rights or dividends on unvested awards,
and also prohibits the payment of dividend equivalents rights or dividends on options and SARs generally.
Forfeiture or
Clawback of
Awards
Subject to applicable law or the company’s clawback policy, an award agreement may provide that the award will
be forfeited or canceled if a participant engages in activity that is in conflict with or adverse to the interest of the
Company or its subsidiaries (including conduct contributing to financial restatements, material noncompliance in the
financial reports requirements or similar financial or accounting irregularities), as determined by the Compensation
Committee. The Compensation Committee may provide in an award agreement that, if within the time period specified
in the award agreement, a participant engages in an activity referred to in the preceding sentence, a participant will
forfeit any gain realized with respect to the award and must repay such gain to the Company.
transferability
Awards granted under the Amended 2019 EIP are generally not transferable other than by will or the laws of descent
or distribution.
Change in Control
In the event of a merger, consolidation, dissolution or liquidation of the Company, the sale of substantially all of its
assets or any other similar corporate transaction, the successor corporation may assume, replace, or substitute
equivalent awards in exchange for those granted under the Amended 2019 EIP or provide substantially similar
consideration, shares, or other property as was provided to our stockholders (after taking into account the provisions of
the awards). In the event that the successor corporation does not assume, replace, or substitute awards and provided
the applicable award agreement does not preclude the following, awards based solely on continued service will become
fully vested and/or exercisable in full prior to the consummation of the transaction at the time and upon the conditions
as the Compensation Committee determines. Any awards not exercised or vested prior to the consummation of
the transaction will terminate. Performance-based awards will be subject to the provisions of the award agreement
governing the impact of a change in control.
Amendment/
termination of the
Amended 2019 EIP
The Board of Directors or the Compensation Committee may at any time terminate or amend the Amended 2019 EIP
in any respect, including any form of award agreement, provided the Board of Directors may not, without stockholder
approval, amend the Amended 2019 EIP in any manner which would require such approval.
Certain U.S. Federal Income tax Consequences
The following discussion is a brief summary of the principal United States federal income tax consequences of awards granted under
the Amended 2019 EIP pursuant to the provisions of the Code as currently in effect. The Code and its regulations are subject to change.
This summary is not intended to be exhaustive and does not describe, among other things, state, local, or foreign income and other tax
consequences. The specific tax consequences to a participant will depend upon that participant’s individual circumstances.
Options and Stock Appreciation Rights
Under existing law and regulations, the grant of nonqualified stock options and SARs will not result in income taxable to a participant in the
Amended 2019 EIP. However, at the time of the exercise of a nonqualified stock option, the participant will be taxed at ordinary income tax
rates on the excess of the fair market value of the shares purchased over the option’s exercise price. At the time of the exercise of a SAR,
the participant will be taxed at ordinary income tax rates on the amount of the cash, or the fair market value of the shares, received by
the employee upon exercise. Upon disposition of the shares received upon exercise of the non-qualified stock option, the participant will
recognize long-term or short-term capital gain or loss, depending upon the length of time he or she held such shares.
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The grant of an incentive stock option will not result in income taxable to the participant. The participant will not recognize income when
the incentive stock option is exercised but the participant must treat the excess of the fair market value of the underlying shares on the
date of exercise over the exercise price as an item of adjustment for purposes of the alternative minimum tax. If the participant disposes
of the underlying shares after he or she has held the shares for at least two years after the incentive stock option was granted and one
year after the incentive stock option was exercised, the amount the participant receives upon the disposition over the exercise price
is treated as long-term capital gain for the participant. If the participant makes a “disqualifying disposition” of the underlying shares by
disposing of the shares before they have been held for at least two years after the date the incentive stock option was granted and one
year after the date the incentive stock option was exercised, the participant will recognize compensation income equal to the excess
of (i) the fair market value of the underlying shares on the date the incentive stock option was exercised or, if less, the amount received
on the disposition over (ii) the exercise price. The gain (if any) in excess of the amount recognized as ordinary income on a disqualifying
disposition will be long-term or short-term capital gain, depending upon the length of time the participant held the shares.
Restricted Stock Awards
A participant in the Amended 2019 EIP who is granted a restricted stock award will not be taxed upon the acquisition of such shares so
long as the interest in such shares is subject to a “substantial risk of forfeiture” within the meaning of Section 83 of the Code and provided
the participant does not make an election with the Internal Revenue Service pursuant to Section 83(b) of the Code as discussed below.
Upon lapse or release of the restrictions, the participant will generally be taxed at ordinary income tax rates on an amount equal to the
then-current fair market value of the shares. Any such awards that are not subject to a substantial risk of forfeiture will be taxed at the
time of grant.
Pursuant to Section 83(b) of the Code, a participant may elect within 30 days of receipt of an award of restricted shares to be taxed
at ordinary income tax rates on the fair market value of the shares comprising such award at the time of award (determined without
regard to any restrictions which may lapse) less any amount paid for the shares. In that case, a deduction corresponding to the amount
of income recognized will be allowable to the Company (subject to Section 162(m) of the Code). In addition, the participant will acquire
a tax basis in the shares equal to the ordinary income that the participant recognizes at the time of grant. No tax will be payable upon the
lapse or release of the restrictions or at the time the shares first become transferable, and any gain or loss upon subsequent disposition
will be a capital gain or loss. In the event of a forfeiture of shares of common stock with respect to which a participant previously made a
Section 83(b) election, the participant will not be entitled to a loss deduction.
Restricted Stock Units
A participant in the Amended 2019 EIP who is granted restricted stock units will not be taxed upon the grant of the award. Upon receipt of
payment of cash or common stock pursuant to restricted stock units, the participant will realize ordinary income in an amount equal to any
cash received and the fair market value of any shares received. The participant’s tax basis in the shares will equal the amount recognized
as ordinary income, and on subsequent disposition the participant will realize long-term or short-term capital gain or loss, depending on
how long the participant holds the shares before disposing of them.
Dividend Equivalents
A participant in the Amended 2019 EIP who is granted dividend equivalents generally will realize ordinary income at the time the underlying
shares relating to the dividend equivalent vest.
Deductibility
The Company is generally entitled to a deduction equal to the compensation realized by the holders of the nonqualified stock options,
incentive stock options with a disqualifying disposition, stock appreciation rights, restricted stock, restricted stock units, performance
awards/incentive awards and dividend equivalents. However, the Company’s deduction will be limited by Section 162(m) of the Code for
certain covered executive officers to the extent that their total compensation in any one year exceeds $1 million.
Section 409A
Section 409A of the Code (“Section 409A”) imposes certain requirements on nonqualified deferred compensation arrangements. These
include requirements on an individual’s election to defer compensation and the individual’s selection of the timing and form of distribution
of the deferred compensation. For certain individuals who are officers, Section 409A requires that such individual’s distribution
commence no earlier than six months after such officer’s separation from service. Certain awards under the Amended 2019 EIP may be
designed to be subject to the requirements of Section 409A in form and in operation. For example, restricted stock units that provide for
a settlement date following the vesting date may be subject to Section 409A. If an award under the Amended 2019 EIP is subject to and
fails to satisfy the requirements of Section 409A, the recipient of that award may recognize ordinary income on the amounts deferred
under the award, to the extent vested, which may be prior to when the compensation is actually or constructively received. Also, if an
award that is subject to Section 409A fails to comply with the requirements of Section 409A, Section 409A imposes an additional 20%
federal penalty tax on compensation recognized as ordinary income, as well as interest on that compensation.
ERISA
The Amended 2019 EIP is not subject to any of the provisions of the Employee Retirement Income Security Act of 1974, as amended, and
is not qualified under Section 401(a) of the Code.
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Other Information
Commonly Asked Questions and Answers
1. Why am I receiving these materials and how do I attend the virtual meeting?
You are receiving these materials in connection with the Company’s solicitation of proxies for use at our Annual Meeting, which will take
place virtually at www.virtualshareholdermeeting.com/EA2024 on Thursday, August 1, 2024 at 2:00 p.m. local time. In structuring the
virtual meeting, our goal is to provide stockholders the same opportunity to participate as they would have at an in-person meeting.
This Proxy Statement describes proposals on which you, as a stockholder, are being asked to vote. It also gives you information on the
proposals that will be considered at the Annual Meeting, as well as other information so that you can make an informed decision. As a
stockholder, you are invited to attend the Annual Meeting online and are requested to vote on the items of business described in this
Proxy Statement.
2. How do I attend the virtual meeting?
This year’s Annual Meeting will be accessible only through the Internet. You can participate in the Annual Meeting if you were a stockholder
as of the close of business on the record date, June 6, 2024. To participate in the Annual Meeting, including to vote and ask questions, go
to www.virtualshareholdermeeting.com/EA2024 and log-in using the 16-digit control number on your Notice or proxy card next to the
label “Control Number” for postal mail recipients or within the email for electronic delivery recipients, and follow the instructions on the
website. If your shares are held in street name and your voting instruction form or Notice indicates that you may attend and vote those
shares through the http://www.proxyvote.com website, then you may vote at the Annual Meeting with the 16-digit access code indicated
on that voting instruction form or Notice. Otherwise, stockholders who hold their shares in street name should contact their bank, broker or
other nominee and obtain a “legal proxy” in order to attend and vote at the Annual Meeting.
We encourage you to join 15 minutes before the start time. Stockholders may submit questions online during the Annual Meeting at
www.virtualshareholdermeeting.com/EA2024. A copy of the Annual Meeting rules of conduct will be available online at the Annual
Meeting. The list of registered stockholders as of June 6, 2024 will be available for inspection by stockholders during the meeting
at www.virtualshareholdermeeting.com/EA2024. There will not be a physical location for the Annual Meeting, and you will not be able
to attend the Annual Meeting in person. If you have difficulty accessing or participating in the virtual Annual Meeting, please call the
technical support number that will be posted on the Annual Meeting website log-in page. We will have technicians available to assist you.
3. Why did I receive a Notice in the mail regarding the Internet availability of proxy materials instead of a full set of
proxy materials?
In accordance with rules adopted by the SEC, we may furnish proxy materials, including this Proxy Statement and our Annual Report, to
our stockholders by providing access on the Internet instead of mailing printed copies. Stockholders will receive printed copies of the
proxy materials only if they request them. Instead, the Notice, which was mailed to our stockholders, provides instructions on how to
access and review all the proxy materials on the Internet. The Notice also describes how you may submit your proxy on the Internet. If
you would like to receive a paper or email copy of our proxy materials, you should follow the instructions for requesting those materials
in the Notice or you may contact the Company directly. The Company will provide you without charge, upon request, a paper or
email copy of our proxy materials, including the Company’s Annual Report on Form 10-K (paper copies will be sent by first
class mail). Any such request should be directed as follows: Corporate Secretary, Electronic Arts Inc., 209 Redwood Shores Parkway,
Redwood City, CA 94065 or call (650) 628-1500.
4. How can I get electronic access to the proxy materials?
The Notice or proxy card provides instructions on how to inform us to send future proxy materials to you electronically by email. If
you choose to receive future proxy materials by email, you will receive an email next year with instructions containing a link to those
materials and a link to our proxy website. Your election to receive proxy materials by email will remain in effect until you terminate it. We
encourage you to receive future proxy materials by email. Doing so will allow us to provide you with the information you
need in a timelier manner, will save us the cost of printing and mailing documents to you, and will help reduce paper use.
5. Can I vote my shares by filling out and returning the Notice?
No. However, the Notice provides instructions on how to vote on the Internet or by attending the Annual Meeting virtually at
www.virtualshareholdermeeting.com/EA2024 and following the instructions on the website.
72
6. Who can vote at the Annual Meeting?
Stockholders who owned common stock as of the close of business on June 6, 2024 may attend and vote at the Annual Meeting. If
your shares are registered directly in your name with our transfer agent, Computershare, you are considered, with respect to those
shares, the stockholder of record. As the stockholder of record, you have the right to vote at the Annual Meeting. If your shares are
held in a brokerage account or by another nominee or trustee, you are considered the beneficial owner of shares held in “street name.”
As the beneficial owner, you are also invited to attend the Annual Meeting. As a beneficial owner, you are not the stockholder of record
and, as described in Question 2, may not in certain cases be able to vote these shares at the Annual Meeting unless you obtain a
“legal proxy” from your broker, nominee, or trustee that holds your shares, giving you the right to vote the shares at the meeting. Each
share of common stock is entitled to one vote. There were 265,735,423 shares of common stock outstanding on the record date,
June 6, 2024.
A quorum is required to conduct business at the Annual Meeting. A quorum exists if a majority of EA’s outstanding voting shares, or at
least 132,867,712 shares, as of June 6, 2024 is present or represented by proxies at the Annual Meeting. On June 6, 2024, a total of
265,735,423 shares of common stock were outstanding and entitled to vote.
Shares are counted as present or represented at the Annual Meeting if:
■They are entitled to vote at the Annual Meeting and are present at the Annual Meeting, or
■The stockholder has voted on the Internet, by telephone or a properly submitted proxy card prior to 11:59 p.m. Eastern Time on
July 31, 2024.
If a quorum is not present, we may propose to adjourn the Annual Meeting to solicit additional proxies and reconvene the Annual
Meeting at a later date.
7. What am I voting on?
We are asking you to:
■Elect Kofi A. Bruce, Rachel A. Gonzalez, Jeffrey T. Huber, Talbott Roche, Richard A. Simonson, Luis A. Ubiñas, Heidi J. Ueberroth and
Andrew Wilson to the Board of Directors to hold office for a one-year term (Proposal 1);
■Cast an advisory vote to approve named executive officer compensation (Proposal 2);
■Ratify the appointment of KPMG LLP as the Company’s independent public registered accounting firm for the fiscal year ending
March 31, 2025 (Proposal 3); and
■Approve our Amended and Restated 2019 Equity Incentive Plan (Proposal 4).
8. How do I vote my shares if I won’t be able to attend the Annual Meeting?
You do not need to attend the Annual Meeting in order to vote. You may, instead, vote on the Internet or by telephone or mail (if you
have received printed proxy materials) prior to 11:59 p.m. Eastern Time on July 31, 2024. By doing so, you are giving a proxy appointing
Andrew Wilson (the Company’s Chief Executive Officer), Stuart Canfield (the Company’s Chief Financial Officer), and Jacob Schatz
(the Company’s EVP of Global Affairs, Chief Legal Officer and Corporate Secretary) or any of them, each with power of substitution,
to vote your shares at the Annual Meeting, or any adjournment thereof, as you have instructed. If a proposal comes up for a vote at the
Annual Meeting for which you have not indicated an instruction, Mr. Wilson, Mr. Canfield and Mr. Schatz, or any one of them, will vote
your shares in the manner recommended by the Board of Directors and according to their best judgment. Even if you currently plan
to attend the Annual Meeting, it is a good idea to vote on the Internet or, if you received printed proxy materials, by telephone or by
completing and returning your proxy card before the meeting date, in case your plans change.
On the Internet or by Telephone
If you have Internet access, you may submit your proxy online by
following the instructions provided in the Notice or, if you receive
printed proxy materials, the proxy card. You may also vote by
telephone by following the instructions provided on your proxy
card or voting instruction card.
By Mail
If you receive printed proxy materials, you may submit your
proxy by mail by signing your proxy card or, for shares held in
street name, by following the voting instructions included by
your broker, trustee or nominee, and mailing it in the enclosed,
postage-paid envelope. If you provide specific voting
instructions, your shares will be voted as you have instructed.
9. What does it mean if I receive more than one Notice or proxy card?
It means that you have multiple accounts at the transfer agent or with brokers. Please complete and return all proxy cards or follow the
instructions on each proxy card to vote on the Internet or by telephone, to ensure that all your shares are voted.
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2024 PROXY STATEMENT
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10. I share an address with another stockholder, and we received only one paper copy of the proxy materials. How can I
obtain an additional copy of the proxy materials?
The Company has adopted an SEC-approved procedure called “householding.” Under this procedure, the Company may deliver a
single copy of the Notice or the Annual Report and this Proxy Statement to multiple stockholders who share the same last name and
address and who have consented to householding, unless the Company has received contrary instructions from one or more of those
stockholders. This procedure reduces the environmental impact of the Company’s annual meetings and reduces the Company’s
printing and mailing costs. Stockholders who participate in householding will continue to receive separate proxy cards. Upon written
or oral request, the Company will deliver promptly a separate copy of the Notice, Annual Report and this Proxy Statement to any
stockholder at a shared address to which the Company delivered a single copy of any of these documents.
To receive free of charge a separate copy of the Notice or Annual Report and this Proxy Statement, or separate copies of these
documents in the future, stockholders may write to our Corporate Secretary at 209 Redwood Shores Parkway, Redwood City, CA
94065 or call (650) 628-1500.
If you are receiving more than one copy of the proxy materials at a single address and would like to participate in householding, please
contact the Company using the mailing address or phone number above. Stockholders who hold shares in street name may contact
their brokerage firm, bank, broker-dealer or other similar organization to request information about householding.
11. What if I change my mind after I give my proxy?
You may revoke your proxy and change your vote at any time before the polls close at the Annual Meeting. You may do this by:
■Sending a signed statement to the Company that the proxy is revoked (you may send such a statement to the Corporate Secretary
at our corporate headquarters address listed above);
■Signing and returning another proxy with a later date;
■Voting on the Internet or by telephone at any time prior to 11:59 p.m. Eastern Time on July 31, 2024 (your latest vote is counted); or
■Voting at the Annual Meeting.
If your shares are held by a broker, bank or other nominee or trustee, you may contact the record holder of your shares directly.
Your proxy will not be revoked if you attend the Annual Meeting but do not vote.
12. Who will count the votes?
A representative of Broadridge Financial Solutions will tabulate the votes and act as the inspector of elections for our Annual Meeting.
13. How are votes counted?
You may vote “for,” “against” or “abstain” with respect to each of the nominees to the Board of Directors and on each of the proposals.
A share voted “abstain” with respect to any proposal is considered present at the Annual Meeting for purposes of establishing a
quorum and entitled to vote with respect to that proposal but is not considered a vote cast with respect to that proposal. Thus,
abstentions will not affect the outcome of Proposals 1, 2, 3, or 4. If you are a registered stockholder and you sign and return your proxy
without voting instructions, your shares will be voted as recommended by the Board of Directors and according to the best judgment
of Mr. Wilson, Mr. Canfield and Mr. Schatz, or any one of them.
14. What is the effect of a “broker non-vote” on the proposals to be voted on at the Annual Meeting?
If your shares are held by a broker, bank or other nominee or trustee and you do not provide your broker, bank or other nominee or
trustee with voting instructions, your shares may constitute “broker non-votes.” Broker non-votes occur on a matter when a broker is
not permitted to vote on that matter (or even when a broker is permitted to vote on that matter but chooses not to do so) without
instructions from the beneficial owners and instructions are not given. Shares that constitute broker non-votes are considered
present for purposes of establishing a quorum and entitled to vote with respect to that proposal but are not considered votes cast on
that proposal. Broker non-votes, if any, will not affect the outcome of Proposals 1, 2, 3, or 4. Even with respect to routine matters, some
brokers are choosing not to exercise discretionary voting authority. As a result, if your shares are held of record by a bank, broker, or
other nominee, we urge you to give instructions to your bank, broker or other nominee as to how you wish your shares to be voted.
15. How many votes must the nominees receive to be elected as directors?
In an uncontested election, our Amended and Restated Bylaws require each nominee to receive more votes cast “for” than “against”
his or her re-election in order to be re-elected to the Board of Directors. Since we are not aware of any intention by any stockholder to
nominate one or more candidates to compete with the Board of Directors’ nominees for re-election at the Annual Meeting, the 2024
election will be uncontested.
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OTHer INfOrMATION
In accordance with our Corporate Governance Guidelines, the Board of Directors expects an incumbent director to tender his or
her resignation if he or she fails to receive the required number of votes for re-election in an uncontested election. In such an event,
the Nominating and Governance Committee will act on an expedited basis to determine whether to accept the director’s resignation
and will submit such recommendation for prompt consideration by the Board of Directors. The director whose resignation is under
consideration will abstain from participating in any decision regarding his or her resignation. The Nominating and Governance
Committee and the Board of Directors may consider any factors they deem relevant in deciding whether to recommend and accept, as
applicable, a director’s resignation. The Board of Directors will act on the Nominating and Governance Committee’s recommendation
within 90 days from the date of the certification of election results and will publicly disclose its decision promptly thereafter.
Shares represented by your proxy will be voted by EA’s management “for” the election or re-election of the eight nominees recommended
by EA’s Board of Directors unless you vote against any or all of such nominees or you mark your proxy to “abstain” from so voting.
16. What happens if one or more of the nominees is unable to serve or for good cause will not serve?
If, prior to the Annual Meeting, one or more of the nominees notifies us that he or she is unable to serve, or for good cause will not
serve, as a member of the Board of Directors, the Board of Directors may reduce the number of directors or select a substitute
nominee or substitute nominees, as the case may be. In the latter case, if you have completed and returned your proxy card, Mr. Wilson,
Mr. Canfield and Mr. Schatz, or any of them, may vote for any nominee designated by the incumbent Board of Directors to fill the
vacancy. They cannot vote for more than eight nominees.
17. How many votes are required to approve each of the other proposals?
The advisory vote to approve named executive officer compensation (Proposal 2), the ratification of KPMG LLP as our independent
auditor (Proposal 3), and the approval of our Amended and Restated 2019 Equity Incentive Plan (Proposal 4) must receive a “for” vote
from a majority of the voting shares present at the Annual Meeting in person or by proxy and voting for or against these proposals.
As an advisory vote, the results of voting on Proposal 2 are non-binding. Although non-binding, the Board of Directors and the
Compensation Committee value the opinions of our stockholders and will consider the outcome of this vote, along with other relevant
factors, in evaluating the compensation program for our named executive officers.
Shares represented by your proxy will be voted by EA’s management in accordance with the Board of Directors’ recommendation
unless you vote otherwise on your proxy or you mark your proxy to “abstain” from voting. Abstentions and broker non-votes will have no
effect on the outcome of Proposals 2, 3, or 4.
18. What is the deadline to propose matters for consideration at the 2025 annual meeting of stockholders?
Proposals to be considered for inclusion in our proxy materials: No later than the close of business (6:00 p.m. Pacific Time) on
February 14, 2025. All proposals must comply with Rule 14a-8 under the Exchange Act.
Other proposals to be brought at our 2025 annual meeting: No earlier than April 3, 2025 and no later than the close of business
(6:00 p.m. Pacific Time) on May 5, 2025. The submission must include certain information concerning the stockholder and the
proposal, as specified in the Company’s Amended and Restated Bylaws.
19. What is the deadline to nominate individuals for election as directors at the 2025 annual meeting of stockholders?
Director nominations for inclusion in our proxy materials (proxy access nominees): No earlier than March 4, 2025 and no
later than the close of business (6:00 p.m. Pacific Time) on April 3, 2025. The nomination must include certain information concerning
the stockholder or stockholder group and the nominee, as specified in Section 1.6 of the Company’s Amended and Restated Bylaws.
Director brought pursuant to our advance notice bylaws: No earlier than April 3, 2025 and no later than the close of business
(6:00 p.m.) on May 5, 2025. The nomination must include certain information concerning the stockholder and the nominee, as
specified in Section 1.5 of the Company’s Amended and Restated Bylaws. In addition, shareholders who intend to solicit proxies in
support of director nominees other than the Company’s nominees must comply with the additional requirements of Rule 14a-19(b).
20. Where should I send proposals and director nominations for the 2025 annual meeting of stockholders?
Stockholder proposals and director nominations should be sent in writing to Jacob Schatz, Corporate Secretary at Electronic Arts
Inc., 209 Redwood Shores Parkway, Redwood City, CA 94065.
21. How can I obtain a copy of the Company’s Amended and restated Bylaws?
Our Amended and Restated Bylaws as of the date of this Proxy Statement are included as an exhibit to a Current Report on Form 8-K we
filed with the SEC on August 15, 2022, which you may access through the SEC’s electronic data system called EDGAR at www.sec.gov. You
may also request a copy of our Amended and Restated Bylaws by contacting our Corporate Secretary at the address above.
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2024 PROXY STATEMENT
OTHer INfOrMATION
22. How can I listen to the live audio webcast of the Annual Meeting?
You can listen to the live audio webcast of the Annual Meeting by going to the Investor Relations section of our website at
http://ir.ea.com. An archived copy of the webcast will also be available on our website for one year following the Annual Meeting.
Please note that participation in the question and answer portion of the Annual Meeting will be limited to those stockholders attending.
23. Where do I find the voting results of the meeting?
We may announce preliminary voting results at the Annual Meeting. We will also publish the final results on Form 8-K, which we will file
with the SEC within four business days after the Annual Meeting. Once filed, you can request a copy of the Form 8-K by contacting
our Investor Relations department at (650) 628-0406. You can also get a copy on the Internet at http://ir.ea.com or through the SEC’s
electronic data system called EDGAR at www.sec.gov.
24. Who will pay for this proxy solicitation?
We will bear the costs of soliciting proxies from our stockholders. These costs include preparing, assembling, printing, mailing and
distributing the notices, proxy statements, proxy cards and annual reports. In addition, some of our officers, directors, employees
and other agents may also solicit proxies personally, by telephone and by electronic and regular mail, and we will pay these costs. EA
will also reimburse brokerage houses and other custodians for their reasonable out-of-pocket expenses for forwarding proxy and
solicitation materials to the beneficial owners of the Company’s common stock.
25. How is the Company’s fiscal year calculated?
The Company’s fiscal year is reported on a 52- or 53-week period that ends on the Saturday nearest March 31. Our results of operations
for fiscal year 2023 contained 52 weeks and ended on March 30, 2024. For simplicity of disclosure, fiscal year periods are referred to as
ending on a calendar month end, even if the technical end of a fiscal year period was not the last day of a calendar month.
26. Who can I call with any questions about my shares?
If you hold shares in street name, you may contact your broker. If you are a stockholder of record, you may call our transfer agent,
Computershare, at (800) 736-3001 or (781) 575-3100 for international callers or visit their website at www.computershare.com/investor.
Other Business
The Board of Directors does not know of any other matter that will be presented for consideration at the Annual Meeting except as
specified in the notice of the Annual Meeting. If any other matter does properly come before the Annual Meeting, or at any adjournment
or postponement of the Annual Meeting, it is intended that the proxies will be voted in respect thereof in accordance with the judgment
of the persons voting the proxies.
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OTHer INfOrMATION
Appendix A:
Supplemental Information for CD&A
The “Compensation Discussion and Analysis” above contains certain non-GAAP financial measures, which are used internally by our
management and Board of Directors in our compensation programs. The table below reconciles these non-GAAP financial measures to
the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles (“GAAP”).
Calculation of Non-GAAP Financial Measures for FY24 Results
(In Millions, Except Earnings Per Share)
Fiscal
Year Ended
March 31,
2024
GAAP net revenue
$ 7,562
Change in deferred net revenue (online-enabled games)
(132)
Non-GAAP net revenue
$7,430
GAAP gross profit
$ 5,852
Acquisition-related expenses
76
Change in deferred net revenue (online-enabled games)
(132)
Stock-based compensation
8
Non-GAAP gross profit
$5,804
GAAP operating expenses
$4,334
Acquisition-related expenses
(142)
Stock-based compensation
(576)
Restructuring and related charges
(64)
Non-GAAP operating expenses
$ 3,552
GAAP net income
$ 1,273
Acquisition-related expenses
218
Change in deferred net revenue (online-enabled games)
(132)
Stock-based compensation
584
Income tax rate adjustments
(125)
Restructuring and related charges
64
Non-GAAP net income
$ 1,882
GAAP diluted earnings per share
$ 4.68
Non-GAAP diluted earnings per share
$ 6.92
GAAP diluted shares
272
Non-GAAP diluted shares
272
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2024 PROXY STATEMENT
Calculation of Non-GAAP Financial Measures for Company Bonus Funding and PRSU Attainment
(In Millions, Except Earnings Per Share)
Fiscal
Year Ended
March 31,
2024
GAAP net revenue
$ 7,562
Change in deferred net revenue (online-enabled games)
(132)
Non-GAAP net revenue
$7,430
GAAP gross profit
$ 5,852
Acquisition-related expenses
76
Change in deferred net revenue (online-enabled games)
(132)
Stock-based compensation
8
Non-GAAP gross profit
$5,804
GAAP operating expenses
$4,334
Acquisition-related expenses
(142)
Stock-based compensation
(576)
Restructuring and related charges
(64)
Non-GAAP operating expenses
$ 3,552
Non-GAAP operating income
$ 2,252
GAAP net income
$ 1,273
Acquisition-related expenses
218
Change in deferred net revenue (online-enabled games)
(132)
Stock-based compensation
584
Restructuring and related charges
64
Income tax rate adjustments
(125)
Bonus expense, net of tax
229
Non-GAAP net income
$ 2,111
GAAP diluted earnings per share
$ 4.68
Non-GAAP diluted earnings per share
$ 7.76
GAAP diluted shares
272
Non-GAAP diluted shares
272
About Non-GAAP Financial Measures
As a supplement to the Company’s financial measures presented in accordance with U.S. Generally Accepted Accounting Principles
(“GAAP”), the Company presents certain non-GAAP measures of financial performance. These non-GAAP financial measures should
not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. In addition,
these non-GAAP measures have limitations in that they do not reflect all of the items associated with the Company’s results of
operations as determined in accordance with GAAP. These non-GAAP financial measures do not reflect a comprehensive system of
accounting and differ from GAAP measures with the same names and may differ from non-GAAP financial measures with the same or
similar names that are used by other companies. The Company’s target and actual non-GAAP financial measures are calculated with
reference to adjustments to GAAP financial measures, which currently include change in deferred net revenue (online-enabled games)
acquisition-related expenses, stock-based compensation, restructuring and related charges, income tax rate adjustments, and Bonus
expense as applicable in any given reporting period. The Company may consider whether other significant items that arise in the future
should be excluded from our non-GAAP financial measures. Management believes that these non-GAAP financial measures provide
investors with additional useful information to better understand and evaluate the Company’s operating results and future prospects
because they exclude certain items that may not be indicative of the Company’s core business, operating results, or future outlook.
These non-GAAP financial measures are used by management to understand ongoing financial and business performance. When making
compensation decisions for our executives, we utilize non-GAAP financial measures to evaluate the Company’s financial performance and
the performance of our management team.
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APPeNDIx A: SuPPleMeNTAl INfOrMATION fOr CD&A
We believe it is appropriate to exclude these items for the following reasons:
Change in Deferred Net Revenue (Online-enabled Games)
The majority of our games, and related extra-content and services have online connectivity whereby a consumer may be able to download
updates on a when-and-if-available basis (“future update rights”) for use with the offline core game content (“software license”). In
addition, we may also offer a hosted connection for online playability (“online hosting”), that permits consumers to play against each other
without a separate fee. Because the majority of our sales of our online-enabled games include future update rights and/or online hosting
performance obligations, GAAP requires us to allocate a portion or all of the transaction price to these performance obligations which
are recognized ratably over an estimated offering period. Our deferred net revenue balance is increased by the revenue being deferred
for current sales and is reduced by the recognition of revenue from prior sales (this is referred to as the “change in the deferred revenue”
balance). Our management excludes the impact of the net change in deferred net revenue related to online-enabled games in its
non-GAAP financial measures for the reasons stated above and also to facilitate an understanding of our operations because all related
costs of revenue are expensed as incurred.
Acquisition-Related Expenses
GAAP requires expenses to be recognized for various types of events associated with a business acquisition. These events include
amortization of acquired intangible assets, post-closing adjustments associated with changes in the estimated amount of contingent
consideration to be paid in an acquisition, and the impairment of accounting goodwill created as a result of an acquisition and/or
acquired intangible assets when future events indicate there has been a decline in its value. Offsetting these expenses are certain
cost exclusions related to impacts from current year acquisitions activity. When analyzing the operating performance of an acquired
entity, our management focuses on the total return provided by the investment (i.e., operating profit generated from the acquired
entity as compared to the purchase price paid including the final amounts paid for contingent consideration, if any) without taking into
consideration any allocations made for accounting purposes. When analyzing the operating performance of an acquisition in subsequent
periods, our management excludes the GAAP impact of any adjustments to the fair value of these acquisition-related balances to its
financial results.
Stock-Based Compensation
When evaluating the performance of its individual business units, the Company does not consider stock-based compensation charges.
Likewise, the Company’s management teams exclude stock-based compensation expense from their short and long-term operating
plans. In contrast, the Company’s management teams are held accountable for cash-based compensation and such amounts are included
in their operating plans. Further, when considering the impact of equity award grants, we place a greater emphasis on overall stockholder
dilution rather than the accounting charges associated with such grants.
Income Tax Rate Adjustments
The Company uses a fixed, long-term projected tax rate internally to evaluate its operating performance, to forecast, plan and analyze
future periods, and to assess the performance of its management team. Accordingly, the Company applies the same tax rate to its
non-GAAP financial results and generally does not include one-time tax benefits. During fiscal year 2024, the Company applied a tax
rate of 19% to determine the non-GAAP income tax expense.
Bonus Expense
The Company determines the funding for its bonus pool under the EA Bonus Plan based in part on financial performance, which includes a
non-GAAP diluted earnings per share component. The Company excludes bonus expense under the EA Bonus Plan when establishing the
non-GAAP diluted earnings per share target, and measuring performance against that target because its effect on non-GAAP earnings
per share is not indicative of the Company’s financial performance.
Restructuring and Related Charges
Restructuring and related charges are primarily incurred as the Company aligns its structure with growth opportunities. These costs may
include employee-related costs such as severance, asset impairment charges, office space reduction and exit costs including additional
depreciation and amortization when the expected useful life of certain assets have been shortened due to changes in anticipated usage,
and other charges, including contract cancellations. The company excludes these costs as management believes they do not have a
direct correlation to our ongoing or future business operations.
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2024 PROXY STATEMENT
APPeNDIx A: SuPPleMeNTAl INfOrMATION fOr CD&A
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
☑
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2024
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the transition period from to
Commission File No. 000-17948
ELECTRONIC ARTS INC.
(Exact name of registrant as specified in its charter)
Delaware
94-2838567
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
209 Redwood Shores Parkway
94065
Redwood City California
(Zip Code)
(Address of principal executive offices)
Registrant’s telephone number, including area code:
(650) 628-1500
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Trading Symbol
Name of Each Exchange on Which Registered
Common Stock, $0.01 par value
EA
Nasdaq Global Select Market
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes þ No ¨
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No þ
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes þ No ¨
Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to
Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was
required to submit such files). Yes þ No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,”
and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer
þ
Accelerated filer
¨
Non-accelerated filer
¨
Smaller reporting company
¨
Emerging growth company
¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the Registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its
internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public
accounting firm that prepared or issued its audit report. þ
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. ¨
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based
compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ¨
The aggregate market value of the registrant’s common stock, $0.01 par value, held by non-affiliates of the registrant as of September 29, 2023,
the last business day of our second fiscal quarter, was $32,551 million.
As of May 20, 2024, there were 266,378,719 shares of the registrant’s common stock, $0.01 par value, outstanding.
Documents Incorporated by Reference
Portions of the registrant’s definitive proxy statement for its 2024 Annual Meeting of Stockholders (the “2024 Proxy”) are incorporated by
reference into Part III hereof. The 2024 Proxy is expected to be filed not later than 120 days after the registrant’s fiscal year end. Except with
respect to information specifically incorporated by reference into this Form 10-K, the 2024 Proxy is not deemed to be filed as part hereof.
ELECTRONIC ARTS INC.
2024 FORM 10-K ANNUAL REPORT
Table of Contents
Page
PART I
Item 1
Business
3
Item 1A Risk Factors
8
Item 1B Unresolved Staff Comments
17
Item 1C Cybersecurity
17
Item 2
Properties
17
Item 3
Legal Proceedings
17
Item 4
Mine Safety Disclosures
17
PART II
Item 5
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
18
Item 6
[Reserved]
19
Item 7
Management’s Discussion and Analysis of Financial Condition and Results of Operations
20
Item 7A Quantitative and Qualitative Disclosures About Market Risk
31
Item 8
Financial Statements and Supplementary Data
33
Item 9
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
79
Item 9A Controls and Procedures
79
Item 9B Other Information
80
PART III
Item 10
Directors, Executive Officers and Corporate Governance
81
Item 11
Executive Compensation
81
Item 12
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
81
Item 13
Certain Relationships and Related Transactions, and Director Independence
81
Item 14
Principal Accounting Fees and Services
81
PART IV
Item 15
Exhibits and Financial Statements
81
Exhibit Index
82
Signatures
85
2
CAUTIONARY NOTE ABOUT FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K contains forward-looking statements. We use words such as “anticipate”, “believe”,
“expect”, “intend”, “estimate”, “plan”, “predict”, “seek”, “goal”, “will”, “may”, “likely”, “should”, “could”,
“continue”, “potential” (and the negative of any of these terms), “future” and similar expressions to identify forward-
looking statements. In addition, any statements that refer to projections of our future financial performance, trends in
our business, projections of markets relevant to our business, uncertain events and assumptions and other
characterizations of future events or circumstances are forward-looking statements. Forward-looking statements consist
of, among other things, statements related to our business, operations and financial results, industry prospects, our
future financial performance, and our business plans and objectives, and may include certain assumptions that underlie
the forward-looking statements. These forward-looking statements are not guarantees of future performance and reflect
management’s current expectations. Our actual results could differ materially from those discussed in the forward-
looking statements. Factors that might cause or contribute to such differences include those discussed in Part I, Item 1A
of this Annual Report under the heading “Risk Factors” beginning on Page 8. We assume no obligation to revise or
update any forward-looking statement for any reason, except as required by law.
PART I
Item 1:
Business
Overview
Electronic Arts is a global leader in digital interactive entertainment. We develop, market, publish and deliver games, content
and services that can be experienced on game consoles, PCs, mobile phones and tablets.
What We Offer
At our core is a portfolio of intellectual property from which we create innovative games and experiences that deliver high-
quality interactive entertainment and drive engagement across our global network of hundreds of millions of unique active
accounts. Our portfolio includes Intellectual Property (IP) that we either wholly own (such as Apex Legends, Battlefield, and
The Sims) or license from others (such as the licenses within EA SPORTS FC and EA SPORTS Madden NFL). We are
focusing on building games and experiences that grow the global online communities around our key franchises; deepening
engagement through connecting interactive storytelling to key intellectual property; and building re-occurring revenue from
scaling our live services and growth in our annualized sports franchises, our console, PC and mobile catalog titles. We develop
and publish games and services across diverse genres, such as sports, racing, first-person shooter, action, role-playing and
simulation. We believe that our portfolio of IP, talented teams and culture of innovation, technological foundation, and live
service offerings, coupled with our network of hundreds of millions of unique active accounts, provide us with strategic
advantages.
Revenue from our global football franchise, which is consistently one of the top franchises in the marketplace and includes the
annualized console, PC and mobile games, as well as FC Ultimate Team, is material to our business and will continue to be so.
During fiscal year 2024, we successfully launched EA SPORTS FC, with players connecting, competing and celebrating global
football through our multi-experience ecosystem. We expect to continue to create and innovate across platforms, geographies,
and business models to expand our global football experiences and entertain even more fans around the world.
Live services net revenue, particularly extra content net revenue, has been material to our business, and we expect it to continue
to be so. Through our live services offerings, we offer our players high-quality experiences designed to provide value to players
and extend and enhance gameplay. These live services include extra content, subscription offerings and other revenue generated
outside of the sale of our full game sales. Our digital live services and other net revenue represented 73 percent of our total net
revenue during fiscal year 2024. Our most popular live services are the extra content purchased for the Ultimate Team mode
associated with our sports franchises and extra content purchased for our Apex Legends franchise. Ultimate Team allows players
to collect current and former professional players in order to build and compete as a personalized team. Live services net
revenue generated from extra content purchased within Ultimate Team, a substantial portion of which was derived from FC
Ultimate Team, and for our Apex Legends franchise, is material to our business.
We believe that we can add value to our network by making it easier for players to connect by offering choices of business
model, distribution channel and device. Our games and services can be experienced on consoles, PCs, mobile phones, and
tablets, and reach our players through both digital distribution channels and retail channels. Players can access our games and
services through traditional single-game purchase or through subscription offerings; and certain of our games and services are
available through a “free-to-play” model whereby players download the game for free and engage with services provided on an
3
ongoing basis. For example, we develop products and services within the EA SPORTS FC franchise that allow players to
engage through multiple business models, distribution channels and devices, including: (1) our annualized console and PC
games and associated services, which can be purchased through both digital distribution and retail channels and also are
available through subscription services; (2) a mobile free-to-play offering; and (3) a PC free-to-play game available in certain
countries.
Digitally, our console games and live services can be purchased through third-party storefronts, such as the digital stores of our
console partners. Our direct sales to Sony and Microsoft represented approximately 37 percent and 16 percent of total net
revenue, respectively, in fiscal year 2024. Our mobile and tablet games and services are available through third-party
application storefronts such as the Apple App Store and Google Play. Our PC games and services can be downloaded directly
through the EA app, EA’s digital storefront, as well as through third-party online download stores, such as Steam. We also
partner with third parties to publish our mobile and PC games and services in certain Asian territories, such as our partnerships
with Tencent Holdings Limited for FC Online 4 in China and Nexon Co. Ltd. for FC Online 4 in Korea. From time to time,
third parties will publish games and services under a license to certain of our intellectual property assets.
We also offer our EA Play subscription service on consoles and PC. EA Play allows players access to a selection of our console
and PC games and services for a monthly or annual fee. Our packaged goods games are sold directly to mass market retailers,
specialty stores and through distribution arrangements. New distribution methods and business models are expected to continue
to emerge in the future, and we intend to evaluate these opportunities on a case-by-case basis.
We believe that the future of entertainment is interactive and that the consumption of entertainment and sports is deeply social.
We are investing towards a future of accelerated content generation and increased player engagement - with players across our
network using games to stay connected to friends, and to express themselves. While we continue to anchor our business on
delivering amazing content and services to more players, our goal is to build from our core and invest in new areas of
opportunity.
Significant Relationships
Sony & Microsoft. Under the terms of publishing agreements we have entered into with Sony Interactive Entertainment LLC
and its affiliates and with Microsoft Corporation and its affiliates, we are authorized to develop, market, publish, and distribute
disc-based products and services, and we authorize Sony and Microsoft to distribute our digital products and services,
compatible with PlayStation and Xbox consoles, respectively. Under these agreements with Sony and Microsoft, we have the
non-exclusive right to use, for a fixed term and in a designated territory, technology that is owned or licensed by them to
publish our games on their respective consoles. With respect to our digitally-delivered products and services, the console
manufacturers pay us either a wholesale price or a royalty percentage on the revenue they derive from their sales of our
products and services. Our transactions for packaged goods products are made pursuant to individual purchase orders, which
are accepted on a case-by case basis by Sony or Microsoft (or their designated replicators), as the case may be. For packaged
goods products, we pay the console manufacturers a per-unit royalty for each unit manufactured. Many key commercial terms
of our relationships with Sony and Microsoft — such as manufacturing terms, delivery times, policies and approval conditions
— are determined unilaterally, and are subject to change by the console manufacturers.
The publishing agreements also require us to indemnify the console manufacturers for any loss, liability and expense resulting
from any claim against the console manufacturer regarding our games and services, including any claims for patent, copyright
or trademark infringement brought against the console manufacturer. Each agreement may be terminated by the console
manufacturer if a breach or default by us is not cured after we receive written notice from the console manufacturer, or if we
become insolvent. The console manufacturers are not obligated to enter into license agreements with us for any future consoles,
products or services.
Apple, Google and Other App Stores. We have agreements to distribute our mobile applications and additional content through
distributors such as Apple and Google. Our applications are downloaded for mobile devices from third party application
storefronts. The distributor collects payment from consumers for content purchased within the application or charges consumers
a one-time fee to download the application. Our distribution agreements establish the amounts that are retained by the
distributor and the amounts passed through to us. These arrangements are typically terminable on short notice. The agreements
generally do not obligate the distributors to market or distribute any of our applications. Application storefront policies are
determined unilaterally by the distributors and are subject to change.
Publishing Partners in Asia. We have entered into agreements whereby we partner with certain companies, including Tencent
Holdings Limited, Nexon Co., Ltd and Garena Online Private Limited. or their respective affiliates, pursuant to which these
4
companies publish our mobile and PC free-to-play games in certain countries, including China, Korea, Japan and certain
countries in Southeast Asia. Our players access games from the publishers’ online storefronts and are charged for additional
content purchased within our game environment. The agreements generally establish the amounts that are retained by the
publisher, and the amounts passed through to us.
Competition
The market for interactive entertainment is intensely competitive and changes rapidly as new products, business models and
distribution channels are introduced. We also face competition for the right to license certain intellectual property included in
our products. In order to remain successful, we are required to anticipate and commit, sometimes years in advance, the ways in
which our products and services will compete in the market. We face significant competition from companies that focus on
developing games and services available on consoles, PCs and/or mobile devices. In addition, the gaming, technology/internet,
and entertainment industries are converging, and we compete with large, diversified companies in those industries. These
companies have strengthened their interactive entertainment capabilities, and we expect them to continue to do so. Their greater
financial and other resources may provide larger budgets to develop and market tools, technologies, products and services that
gain consumer success and shift player time and engagement away from our products and services. We also continue to expect
new entrants to emerge.
More broadly, we compete against providers of different sources of entertainment, such as movies, television, online casual
entertainment and music that our players could enjoy in their free time. Important competitive factors in our industry include
the ability to attract creative and technical talent, game quality and ease of use, innovation, compatibility of products with
certain consoles and other distribution channels, brand recognition, reputation, reliability, security, creativity, price, marketing,
and quality of customer service.
Risks related to competitive factors affecting our business are described in Part I, Item 1A, Risk Factors.
Research and Development
Because the industries in which we compete are characterized by rapid technological advances, our ability to compete
successfully is linked to our ability to deliver a flow of competitive products, services and technologies to the marketplace. We
have teams focused on developing new technologies to enhance existing products and services and to expand the range of our
offerings.
Intellectual Property and Technology
To establish and protect our intellectual property, we rely on a combination of copyrights, trademarks, patents, patent
applications, trade secrets, know-how, license agreements, confidentiality provisions and procedures and other contractual
provisions. We actively engage in enforcement and other activities to protect our intellectual property, but the laws of some
countries in which we operate, particularly in Asia, either do not protect our intellectual property to the same extent as the laws
of the United States or are poorly enforced. As our digital business has grown, our games and services increasingly depend on
the reliability, availability and security of our technological infrastructure. In addition, we engage in activities designed to limit
the impact of abuse of our digital products and services, including monitoring our games for evidence of exploitation and re-
balancing our game environments in the event that such abuse is discovered.
Governmental Regulation
We are a global company subject to various and complex laws and regulations domestically and internationally, including laws
and regulations related to gaming, user privacy, data collection and retention, consumer protection, protection of minors, online
safety, content, advertising, localization, information security, intellectual property, competition, sanctions, addressing climate
change, taxation, and employment, among others. Many of these laws and regulations are continuously evolving and
developing, and the application to, and impact on, us is uncertain. Certain of our business models are subject to new laws or
regulations or evolving interpretations and application of existing laws and regulations. The growth and development of
electronic commerce, virtual items and virtual currency has prompted calls for new laws and regulations and resulted in the
application of existing laws or regulations that have limited or restricted the sale of our products and services in certain
territories.
Seasonality
5
We have historically experienced the highest percentage of our net bookings in our third fiscal quarter due to seasonal holiday
demand and the launch timing of our games. While we expect this trend to continue in fiscal year 2025, there is no assurance
that it will.
Human Capital
Our ability to attract and retain qualified employees is a critical factor in the successful development of our products and
services. As of March 31, 2024, we employed approximately 13,700 people globally, with 66 percent located internationally.
Our Board and its committees oversee our human capital management programs, practices and strategies and additional
information on how they oversee these matters can be found in our annual Proxy Statement. We’re committed to (1) embedding
inclusion in our people practices to enable our people to thrive and do their best work, (2) a healthy and supportive culture that
prioritizes engagement, listening and action, and (3) supporting the development of our people and the growth of our business.
Our most recently published Company-wide gender and racial/ethnic representation, as well as our EEO-1 report (U.S.
government reporting), are available on our website. Our programs and practices are designed to compensate our employees
fairly based on the work that they perform. We consider our pay equity philosophy at each stage at which compensation
decisions are made, including when hiring and promoting employees and through our annual review cycle. In addition, we
annually partner with an independent outside firm to review employees’ pay and promote fairness in our compensation
philosophy and practices.
We aim to create a work environment and culture in which our people can do their best work. We aim to build a reciprocal
relationship in which we engage, listen, respond, and work together to create a culture that supports our people and helps us
deliver our business goals. All regular, full-time employees are asked to complete an Engagement Survey twice per year. 78
percent of employees participated in our most recent Engagement Survey, conducted in December 2023. We also conduct
regular manager surveys. Results of all employee surveys are evaluated and inform opportunities for further improvement in
our people practices.
We invest in developing and retaining employees through access to professional growth resources, skills learning, and other
job-specific and general training. We also build technical onboarding and job-specific programs to help our employees onboard
to technical roles and grow in their specific domains. We maintain resources, programs and services to support employees'
physical, mental, familial and financial health. We offer a wide range of benefits, such as comprehensive health insurance and
time-off and leave programs.
We also design ways to collaborate across work models, whether working virtually, on-site, or using a hybrid approach. We
empower leadership to determine the most appropriate workplace strategy for their teams, intended to facilitate productivity and
engagement and to deliver on business priorities.
Investor Information
Our website address is www.ea.com. Our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on
Form 8-K, and any amendments to those reports filed pursuant to Section 13(a) or 15(d) of the Securities Exchange Act, as
amended, are available free of charge on the Investor Relations section of our website at http://ir.ea.com as soon as reasonably
practicable after they are electronically filed with or furnished to the Securities and Exchange Commission (“SEC”). The SEC
maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding
issuers that file electronically with the SEC. We announce material financial information and business updates through our SEC
filings, press releases, public conference calls and webcasts, the Investor Relations section of our website at http://ir.ea.com, our
blog at https://www.ea.com/news and through our X profile @EA. Except as expressly set forth in this Form 10-K annual
report, the contents of our website, 2023 Impact Report and/or social media accounts are not incorporated into, or otherwise to
be regarded as part of this Form 10-K.
Company Information
We were incorporated originally in California in 1982. In September 1991, we were reincorporated under the laws of Delaware.
Our principal executive offices are located at 209 Redwood Shores Parkway, Redwood City, California 94065 and our
telephone number is (650) 628-1500.
6
Information About Our Executive Officers
The following table sets forth information regarding our executive officers as of May 22, 2024:
Name
Age
Position
Andrew Wilson
49
Chief Executive Officer, Chair of the Board
Stuart Canfield
45
EVP & Chief Financial Officer
Laura Miele
54
President of EA Entertainment, Technology & Central Development
Mala Singh
53
Chief People Officer
Jacob Schatz
55
EVP of Global Affairs, Chief Legal Officer and Corporate Secretary
Eric Kelly
52
Senior Vice President, Chief Accounting Officer
Mr. Wilson has served as EA’s Chief Executive Officer and as a director of EA since September 2013 and was appointed Chair
of the Board of Directors in August 2021. Prior to his appointment as our Chief Executive Officer, Mr. Wilson held several
positions within the Company since joining EA in May 2000, including Executive Vice President, EA SPORTS from August
2011 to September 2013. Mr. Wilson also serves as chairman of the board of the privately-held World Surf League and is a
member of the Board of Trustees of the Paley Center for Media. Mr. Wilson has served on the board of directors of Intel
Corporation within the last five years.
Mr. Canfield has served as EA’s Chief Financial Officer since June 2023. Mr. Canfield joined EA in 2003 and has over 20
years of experience across a variety of senior leadership positions in global finance, investor relations and operations, including
SVP of Enterprise Finance & Investor Relations, SVP Finance (Strategic and Financial Planning) and SVP Finance (Corporate
& Global EA Studios). Mr. Canfield received his undergraduate degree from the University of London.
Ms. Miele has served as EA’s President of EA Entertainment, Technology & Central Development since June 2023. Ms. Miele
joined the Company in March 1996 and has held several positions at the Company, including Chief Operating Officer from
October 2021 to June 2023, Chief Studios Officer from April 2018 to October 2021, Executive Vice President, Global
Publishing from April 2016 to April 2018, and several senior roles in the Company's marketing organization.
Ms. Singh has served as EA's Chief People Officer since October 2016. Ms. Singh was previously employed by EA from 2009
to 2013, service as Vice President, Human Resources, EA Labels from 2011 to 2013. Prior to rejoining EA, Ms. Singh served
as the Chief People Officer of Minted, LLC from January 2014 to October 2016. Ms. Singh earned both her undergraduate and
graduate degrees from Rutgers University - New Brunswick.
Mr. Schatz has served as EA’s Executive Vice President of Global Affairs and Chief Legal Officer since June 2023 and leads
the teams responsible for Legal Affairs, Business Development, Corporate Development, and other disciplines. Mr. Schatz
joined EA in 1999, holding several roles within EA's legal department and was appointed General Counsel and Corporate
Secretary in 2014. Mr. Schatz earned his J.D. from Georgetown University Law Center and received his undergraduate degree
from Pomona College. Mr. Schatz is a member of the Bar of the State of California and is admitted to practice in the United
States Supreme Court, the Ninth Circuit Court of Appeals and several United States District Courts.
Mr. Kelly has served as EA's Chief Accounting Officer since August 2021. Since joining EA in 2003, Mr. Kelly has held
several positions within EA's finance organization, including Vice President and Worldwide Controller from January 2014 to
August 2021 and finance leadership roles such as CFO of Asia and European Financial Controller. Mr. Kelly holds a B.S. in
Accounting from Villanova University and is a licensed Certified Public Accountant.
7
Item 1A:
Risk Factors
Our business is subject to many risks and uncertainties, which may affect our future financial performance. In the past, we have
experienced certain of the events and circumstances described below, which adversely impacted our business and financial
performance. If any of the events or circumstances described below occur, our business or financial performance could be
harmed, our actual results could differ materially from our expectations and the market value of our stock could decline. The
risks and uncertainties discussed below are not the only ones we face. There may be additional risks and uncertainties not
currently known to us or that we currently do not believe could be material that may harm our business or financial
performance.
STRATEGIC RISKS
Our business is intensely competitive. We may not deliver successful and engaging products and services, or consumers
may prefer our competitors’ products or services over our own.
Competition in our business is intense. Many new products and services are regularly introduced, but only a relatively small
number of products and associated services drive significant engagement and account for a significant portion of total revenue.
Our competitors range from established interactive entertainment companies to emerging start-ups. In addition, the gaming,
technology/internet, and entertainment industries are converging, and we compete with large, diversified companies in those
industries. We expect them to continue to pursue and strengthen these businesses. Their greater financial and other resources
may provide larger budgets to recruit our key creative and technical talent, develop and market products and services that gain
consumer success and shift player time and engagement away from our products and services, or otherwise disrupt our
operations. We also expect new competitors to continue to emerge throughout the world. If our competitors develop more
successful and engaging products or services, offer competitive products or services at lower price points, or if we do not
continue to develop consistently high-quality, well-received and engaging products and services, or if our marketing strategies
are not innovative or fail to resonate with players, particularly during key selling periods, our revenue, margins, and
profitability will decline.
We strive to create innovative and high-quality products and services that allow us to grow the global online communities
around our key franchises and reach more players. However, innovative and high-quality titles, even if highly-reviewed, may
not meet our expectations or the expectations of our players. Many financially successful products and services within our
industry are iterations of prior titles with large established consumer bases and significant brand recognition, which makes
competing in certain categories challenging. In addition, products or services of our direct competitors or other entertainment
companies may shift consumer spending or engagement from our products and services, which could cause our products and
services to underperform. A significant portion of our revenue historically has been derived from products and services based
on a few popular franchises, and the underperformance of a single major title has had, and could in the future have, a material
adverse impact on our financial results. For example, we have historically derived a significant portion of our net revenue from
sales related to our EA SPORTS FC franchise, annualized versions of which are consistently one of the best-selling games in
the marketplace. Any events or circumstances that negatively impact our EA SPORTS FC franchise, including Ultimate Team,
such as product or service quality, other products that take a portion of consumer spending and time, the delay or cancellation
of a product or service launch, increased competition for key licenses, or real or perceived security or regulatory risks, could
negatively impact our financial results to a disproportionate extent.
We may not meet our product and live service development schedules.
Our ability to meet product and live service development schedules is affected by a number of factors both within and outside
our control, including feedback from our players, the creative processes involved, the coordination of large and sometimes
geographically dispersed development teams, evolving work models, the complexity of our products and the platforms for
which they are developed, the need to fine-tune our products prior to their release, and, in certain cases, approvals from third
parties. We have experienced development delays for our products and services in the past which caused us to delay or cancel
release dates. Any failure to meet anticipated production or release schedules likely would result in a delay of revenue and/or
possibly a significant shortfall in our revenue, increase our development and/or marketing expenses, harm our profitability, and
cause our operating results to be materially different than anticipated. If we miss key selling periods for products or services,
including product delays or product cancellations our sales likely will suffer significantly.
Our industry changes rapidly and we may fail to anticipate or successfully implement new or evolving technologies, or
adopt successful business strategies, distribution methods or services.
8
Rapid changes in our industry require us to anticipate, sometimes years in advance, the ways in which our business can remain
competitive in the market. We have invested, and in the future may invest, in new business and marketing strategies, tools and
technologies, distribution methods, products, and services. There can be no assurance that these strategic investments will
achieve expected returns. No assurance can be given that the tools and technology we choose to implement, the business and
marketing strategies we choose to adopt and the products, services and platform strategies that we pursue will achieve financial
results that meet or exceed our expectations. We also may miss opportunities or fail to respond quickly enough to industry
change, including the adoption of tools and technology or distribution methods or develop products, services or new ways to
engage with our games that become popular with consumers, which could adversely affect our financial results.
Stakeholders have high expectations for the quality and integrity of our business, culture, products and services and we
may be unsuccessful in meeting these expectations.
Expectations regarding the quality, performance and integrity of our business, brand, reputation, culture, products and services
are high. Players and other stakeholders have sometimes been critical of our industry, brands, products, services, online
communities, business models and/or practices for a wide variety of reasons, including perceptions about gameplay fun,
fairness, game content, features or services, or objections to certain of our practices. These negative responses may not be
foreseeable. We also may not effectively manage our responses because of reasons within or outside of our control. In addition,
we have taken actions, including delaying the release of our games and delaying or discontinuing content, features and services
for our games, after taking into consideration, among other things, feedback from our community or geopolitical events even if
those decisions negatively impacted our operating results in the short term. These actions have had a negative impact on our
financial results and may impact our future development processes. We expect to continue to take actions as appropriate,
including actions that may result in additional expenditures and the loss of revenue.
Certain of our games and features on our platforms support online features that allow players and viewers to communicate with
one another and post content, in real time, that is visible to other players and viewers. From time to time, this “user generated
content” may contain objectionable and offensive content that is distributed and disseminated by third parties and our brands
may be negatively affected by such actions. If we fail to appropriately respond to the dissemination of such content, we may be
subject to lawsuits and governmental regulation, our players may not engage with our products and services and/or may lose
confidence in our brands and our financial results may be adversely affected.
Additionally, our products and services are extremely complex software programs and are difficult to develop and distribute.
We have quality controls in place to detect defects, bugs or other errors in our products and services before they are released.
Nonetheless, these quality controls are subject to human error, overriding, and resource or technical constraints. If these quality
controls and preventative measures are not effective in detecting all defects, bugs or errors in our products and services before
they have been released into the marketplace, then our products and services could be below our standards and the standards of
our players and our reputation, brand and sales could be adversely affected. In addition, we could be required to, or may find it
necessary to, offer a refund for the product or service, suspend the availability or sale of the product or service or expend
significant resources to cure the defect, bug or error each of which could significantly harm our business and operating results.
External game developers may not meet product development schedules or otherwise honor their obligations.
We contract with external game developers to develop our games or to publish or distribute their games. While we maintain
contractual protections, we have less control over the product development schedules of games developed by external
developers. We depend on their ability to meet product development schedules. If we have disputes with external developers or
they cannot meet product development schedules, acquire certain approvals or are otherwise unable or unwilling to honor their
obligations to us, we may delay or cancel previously announced games, alter our launch schedule or experience increased costs
and expenses, which could result in a delay or significant shortfall in anticipated revenue, harm our profitability and reputation,
and cause our financial results to be materially affected.
Our business depends on the success and availability of consoles, platforms and devices developed by third parties and
our ability to develop commercially successful products and services for those consoles, platforms and devices.
The success of our business is driven in part by the commercial success and adequate supply of third-party consoles, platforms
and devices for which we develop our products and services or through which our products and services are distributed. Our
success depends in part on accurately predicting which consoles, platforms and devices will be successful in the marketplace
and providing engaging and commercially successful games and services for those consoles, platforms and devices. We must
make product development decisions and commit significant resources well in advance of the commercial availability of new
consoles, platforms and devices, and we may incur significant expense to adjust our product portfolio and development efforts
9
in response to changing consumer preferences. We may enter into certain exclusive licensing arrangements that affect our
ability to deliver or market products or services on certain consoles, platforms or devices. A console, platform or device for
which we are developing products and services may not succeed as expected and we may be unable to fully recover the
investments we have made in developing our products and services; or new consoles, platforms or devices may take market
share away from those for which we have devoted significant resources, causing us to not reach our intended audience and take
advantage of meaningful revenue opportunities.
We may experience declines or fluctuations in the re-occurring portion of our business.
Our business model includes revenue that we deem re-occurring in nature, such as revenue from our live services, annualized
sports franchises (e.g., EA SPORTS FC, EA SPORTS Madden NFL), and our console, PC and mobile catalog titles (i.e., titles
that did not launch in the current fiscal year). While we have been able to forecast the revenue from these areas of our business
with greater relative confidence than for new games, services and business models, we cannot provide assurances that consumer
demand will remain consistent, including in connection with circumstances outside of our control. Furthermore, we may cease
to offer games and services that we previously had deemed to be re-occurring in nature. Any decline or fluctuation in the re-
occurring portion of our business may have a negative impact on our financial and operating results.
We could fail to successfully adopt new business models.
From time to time we seek to establish and implement new business models. Forecasting the success of any new business
model is inherently uncertain and depends on a number of factors both within and outside of our control. Our actual revenue
and profit for these businesses may be significantly greater or less than our forecasts. In addition, these new business models
could fail, resulting in the loss of our investment in the development and infrastructure needed to support these new business
models, as well as the opportunity cost of diverting management and financial resources away from more successful and
established businesses. Any failure to successfully implement new business models could materially impact our financial and
operating results.
Acquisitions, investments, divestitures and other strategic transactions could result in operating difficulties and other
negative consequences.
We have made and may continue to make acquisitions or enter into other strategic transactions including (1) acquisitions of
companies, businesses, intellectual properties, and other assets, (2) investments in, or transactions with, strategic partners, and
(3) investments in new businesses as part of our long-term business strategy. These acquisitions and other transactions involve
significant challenges and risks including that the transaction does not advance our business strategy or strategic goals, that we
do not realize a satisfactory return on our investment, cannot realize anticipated tax benefits or incur tax costs, that we acquire
liabilities and/or litigation from acquired companies or liabilities and/or litigation results from the transactions, that our due
diligence process does not identify significant issues, liabilities or other challenges, diversion of management’s attention from
our other businesses, and the incurrence of debt, contingent liabilities or amortization expenses, write-offs of goodwill,
intangibles, or acquired in-process technology, or other increased cash and non-cash expenses. In addition, we may not
integrate these businesses successfully or achieve expected synergies.
We may fund strategic transactions with (1) cash, which would reduce cash available for other corporate purposes, (2) debt,
which would increase our interest expense and leverage and/or (3) equity which would dilute current shareholders’ percentage
ownership and also dilute our earnings per share.
Additionally, we have divested and may in the future divest certain products and services that no longer fit our long-term
strategies. Divestitures may adversely impact our business, operating results and financial condition if we are unable to achieve
the anticipated benefits or cost savings from such divestitures, or if we are unable to offset impacts from the loss of revenue
associated with the divested product lines or technologies.
We may be unable to maintain or acquire licenses to include intellectual property owned by others in our games, or to
maintain or acquire the rights to publish or distribute games developed by others.
Many of our products and services are based on or incorporate intellectual property owned by others. For example, our EA
SPORTS products include rights licensed from major sports leagues, teams and players’ associations and our Star Wars
products include rights licensed from Disney. Competition for these licenses and rights is intense. If we are unable to maintain
these licenses and rights or obtain additional licenses or rights with significant commercial value, our ability to develop
successful and engaging products and services may be adversely affected and our revenue, profitability and cash flows may
10
decline significantly. Other competitors may assume certain licenses and create competing products, impacting our sales.
Competition for these licenses has increased, and may continue to increase, the amounts that we must pay to licensors and
developers, through higher minimum guarantees or royalty rates, which could significantly increase our costs and reduce our
profitability.
Our business partners may not honor their obligations to us or their actions may put us at risk.
We rely on various business partners, including platform partners, third-party service providers, vendors, licensing partners,
development partners and licensees. Their actions may put our business and our reputation and brand at risk. In many cases, our
business partners may be given access to sensitive and proprietary information in order to provide services and support, and
they may misappropriate our information and engage in unauthorized use of it. In addition, the failure of these third parties to
provide adequate services and technologies, or the failure of the third parties to adequately maintain or update their services and
technologies, could result in a disruption to our business operations. Further, disruptions in the financial markets, economic
downturns, poor business decisions, or reputational harm may adversely affect our business partners and they may not be able
to continue honoring their obligations to us or we may cease our arrangements with them. Alternative arrangements and
services may not be available to us on commercially reasonable terms or we may experience business interruptions upon a
transition to an alternative partner or vendor.
OPERATIONAL RISKS
Catastrophic events may disrupt our business.
Catastrophic events, including natural disasters, cyber-incidents, power disruptions, pandemics, acts of terrorism or other events
have caused, and in the future could cause, outages, disruptions and/or degradations of our infrastructure (including our or our
partners’ information technology and network systems), a failure in our ability to conduct normal business operations, or the
closure of public spaces in which players engage with our games and services all of which could materially impact our
reputation and brand, financial condition and operating results. The health and safety of our employees, players, third-party
organizations with whom we partner, or regulatory agencies on which we rely could be also affected, any of which may prevent
us from executing against our business strategies and/or cause a decrease in consumer demand for our products and services.
We recognize the inherent physical risks associated with climate change. Our business relies on the reliable transmission of
energy worldwide and is susceptible to weather-related events that could stress the power grid. System redundancy may be
ineffective, and our disaster recovery and business continuity planning may not be sufficient for all eventualities. In addition,
our corporate headquarters and several of our key studios also are located in seismically active regions and areas that are
vulnerable to other natural disasters and weather events such as wildfires and hurricanes. These catastrophic events could
disrupt our business and operations, and/or the businesses and operations of our partners and may cause us to incur additional
costs to maintain or resume operations.
We have and may continue to experience security breaches and cyber threats.
The integrity of our and our partners’ information technology networks and systems is critical to our ongoing operations,
products, and services. Our industry is prone to, and our systems and networks are subject to actions by malfeasant actors,
which may include individuals or groups, including state-sponsored attackers. These actions include cyber-attacks, including
ransomware, and other information security incidents that seek to exploit, disable, damage, and/or disrupt our networks,
business operations, products and services and supporting technological infrastructure, or gain access to consumer and
employee personal information, our intellectual property and other assets. Additionally, as artificial intelligence capabilities
develop rapidly, individuals or groups of hackers and sophisticated organizations, may use these technologies to create new
sophisticated attack methods that are increasingly automated, targeted and coordinated and more difficult to defend against. In
addition, our systems and networks could be harmed or improperly accessed due to errors by employees or third parties that are
authorized to access these networks and systems. We also rely on technological infrastructure provided by third-party business
partners to support the online functionality of our products and services, who are also subject to these same cyber risks. Both
our partners and we have expended, and expect to continue to expend, financial and operational resources to guard against
cyber risks and to help protect our data and systems. However, the techniques used by malfeasant actors change frequently,
continue to evolve in sophistication and volume, and often are not detected for long periods of time.
Remote access to our networks and systems, and the networks and systems of our partners is substantial. While we and our
partners have taken steps to secure our networks and systems, these networks and systems may be more vulnerable to a
successful cyber-attack or information security incident in a hybrid working model. The costs to respond to, mitigate, and/or
notify affected parties of cyber-attacks and other security vulnerabilities are significant. It may also be necessary for us to take
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additional extraordinary measures and make additional expenditures to take appropriate responsive and preventative steps.
Consequences of such events, responsive measures and preventative measures have included, and could in the future include,
the loss of proprietary and personal data and interruptions or delays in our business operations, exploitation of our data, as well
as loss of player confidence and damage to our brand and reputation, financial expenses and financial loss. In addition, such
events could cause us to be non-compliant with applicable regulations, and subject us to legal claims or penalties under laws
protecting the privacy or security of personal information or proprietary material information. We have experienced such events
in the past and expect future events to occur.
In addition, the virtual economies that we have established in many of our games are subject to abuse, exploitation and other
forms of fraudulent activity that can negatively impact our business. Virtual economies involve the use of virtual currency and/
or virtual assets that can be used or redeemed by a player within a particular game or service. The abuse or exploitation of our
virtual economies have included the illegitimate or unauthorized generation and sale of virtual items, including in black
markets. Our online services have been impacted by in-game exploits and the use of automated or other fraudulent processes
designed to generate virtual items or currency illegitimately or to execute account takeover attacks against our players. We
anticipate such activity to continue. These abuses and exploits, and the steps that we take to address these abuses and exploits
may result in a loss of anticipated revenue, increased costs to protect against or remediate these issues, interfere with players’
enjoyment of a balanced game environment or cause harm to our reputation and brand.
We may experience outages, disruptions or degradations in our services, products and/or technological infrastructure.
The reliable performance of our products and services depends on the continuing operation and availability of our information
technology systems and those of our external service providers, including third-party “cloud” computing services. Our games
and services are complex software products and maintaining the sophisticated internal and external technological infrastructure
required to reliably deliver these games and services is expensive and complicated. The reliable delivery and stability of our
products and services has been, and could in the future be, adversely impacted by outages, disruptions, failures or degradations
in our network and related infrastructure, as well as in the online platforms or services of key business partners that offer,
support or host our products and services. The reliability and stability of our products and services has been affected by events
outside of our control as well as by events within our control, such as the migration of data among data centers and to third-
party hosted environments, the performance of upgrades and maintenance on our systems, and effectively scaling our
technological infrastructure to accommodate online demand for our products and services.
If we or our external business partners were to experience an event that caused a significant system outage, disruption or
degradation or if a transition among data centers or service providers or an upgrade or maintenance session encountered
unexpected interruptions, unforeseen complexity or unplanned disruptions, our products and services may not be available to
consumers or may not be delivered reliably and stably. As a result, our reputation and brand may be harmed, consumer
engagement with our products and services may be reduced, and our revenue and profitability could be negatively impacted.
We do not have redundancy for all our systems, many of our critical applications reside in only one of our data centers, and our
disaster recovery planning may not account for all eventualities.
Attracting, managing and retaining our talent is critical to our success.
Our business depends on our ability to attract, train, motivate and retain executive, technical, creative, marketing and other
personnel that are essential to the development, marketing and support of our products and services. The market for highly-
skilled workers and leaders in our industry is extremely competitive, particularly in the geographic locations in which many of
our key personnel are located. We also engage with talent through contracted services. In addition, our leading position within
the interactive entertainment industry makes us a prime target for recruiting our executives, as well as key creative and
technical talent. If we cannot successfully recruit, train, motivate, attract and retain qualified employees, develop and maintain a
healthy culture, or replace key employees following their departure, our reputation, brand and culture may be negatively
impacted and our business will be impaired. Our global workforce is primarily non-unionized, but we have unions and works
councils outside of the United States. In the United States, there has been an increase in prominence in certain sectors of
workers exercising their right to form or join a union. If significant employee populations were to unionize or if we experience
labor disruptions, we could experience operational changes that may materially impact our business.
We rely on the consoles, systems and devices of partners who have significant influence over the products and services
that we offer in the marketplace.
A significant percentage of our digital net revenue is attributable to sales of products and services through our significant
partners, including Sony, Microsoft, Apple and Google. The concentration of a material portion of our digital sales in these
partners exposes us to risks associated with these businesses. Any deterioration in the businesses of our significant partners
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could disrupt and harm our business, including by limiting the methods through which our digital products and services are
offered and exposing us to collection risks.
In addition, our license agreements typically provide these partners with significant control over the approval and distribution of
the products and services that we develop for their consoles, systems and devices. For products and services delivered via
digital channels, each respective partner has policies and guidelines that control the promotion and distribution of these titles
and the features and functionalities that we are permitted to offer through the channel. Our partners could choose to exclude our
products and services from, or de-emphasize the promotion of our products and services within, some or all of their distribution
channels in order to promote their own products and services or those of our competitors. In addition, we are dependent on
these partners to invest in, and upgrade, the capabilities of their systems in a manner that corresponds to the preferences of
consumers. Failure by these partners to keep pace with consumer preferences could have an adverse impact on the engagement
with our products and services and our ability to merchandise and commercialize our products and services which could harm
our business and/or financial results.
Moreover, certain significant partners can determine and change unilaterally certain key terms and conditions, including the
ability to change their user and developer policies and guidelines and can also set the rates that we must pay to provide our
games and services through their online channels, and retain flexibility to change their fee structures or adopt different fee
structures for their online channels. These partners also control the information technology systems through which online sales
of our products and service channels are captured. If our partners establish terms that restrict our offerings, significantly impact
the financial terms on which these products or services are offered to our customers, or their information technology systems
experience outages that impact our players’ ability to access our games or purchase extra content or cause an unanticipated
delay in reporting, our business and/or financial results could be materially affected.
LEGAL AND COMPLIANCE RISKS
Our business is subject to complex and prescriptive regulations regarding consumer protection and data privacy
practices, and could be adversely affected if our consumer protection, data privacy and security practices are not
adequate, or perceived as being inadequate.
We are subject to global data privacy, data protection, security and consumer-protection laws and regulations worldwide. These
laws and regulations are emerging and evolving and the interpretation, application and enforcement of these laws and
regulations often are uncertain, contradictory and changing. The failure to maintain data practices that are compliant with
applicable laws and regulations, or evolving interpretations of applicable laws and regulations, could result in inquiries from
enforcement agencies or direct consumer complaints, resulting in civil or criminal penalties, and could adversely impact our
reputation and brand. In addition, the operational costs of compliance with these regulations is high and will likely continue to
increase. Even if we remain in compliance with applicable laws and regulations, consumer sensitivity to the collection and
processing of their personal information continues to increase. Any real or perceived failures in maintaining acceptable data
privacy practices, including allowing improper or unauthorized access, acquisition or misuse and/or uninformed disclosure of
consumer, employee and other information, or a perception that we do not adequately secure this information or provide
consumers with adequate notice about the information that they authorize us to collect and disclose could result in brand,
reputational, or other harms to the business, result in costly remedial measures, deter current and potential customers from using
our products and services and cause our financial results to be materially affected.
Third party vendors and business partners receive access to certain information that we collect. These vendors and business
partners may not prevent data security breaches with respect to the information we provide them or fully enforce our policies,
contractual obligations and disclosures regarding the collection, use, storage, transfer and retention of personal data. A data
security breach of one of our vendors or business partners could cause reputational and financial harm to them and us,
negatively impact our ability to offer our products and services, and could result in legal liability, costly remedial measures,
governmental and regulatory investigations, harm our profitability, reputation and brand, and/or cause our financial results to be
materially affected.
Government regulations applicable to us may negatively impact our business.
We are a global company subject to various and complex laws and regulations domestically and internationally, including laws
and regulations related to consumer protection, protection of minors, online safety, content, advertising, information security,
intellectual property, competition, sanctions, taxation, and employment, among others. Many of these laws and regulations are
continuously evolving and developing, and the application to, and impact on, us is uncertain. Enforcement of these laws could
harm our business by limiting the products and services we can offer consumers or the manner in which we offer them. The
costs of compliance with these laws may increase in the future as a result of changes in applicable laws or changes to
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interpretation. Any failure on our part to comply with these laws or the application of these laws in an unanticipated manner
may harm our business and result in penalties or significant legal liability.
Certain of our business models and features within our games and services are subject to new laws or regulations or evolving
interpretations and application of existing laws and regulations. The growth and development of electronic commerce, virtual
items and virtual currency has prompted calls for new laws and regulations and resulted in the application of existing laws or
regulations that have limited or restricted the sale of our products and services in certain territories. Additionally, in our current
phase of innovation, artificial intelligence capabilities are rapidly advancing, and it is possible that we could become subject to
new regulations, or the interpretation of existing regulations, aimed at how we incorporate artificial intelligence into our games
and development processes, that could negatively impact our operation and results. Our games and services allow players to
connect with each other and create and share user-generated content. Such interactions and content may be objectionable or
offensive and decrease engagement with our products and services, cause a loss of confidence in our brands and expose us to
liability and regulatory oversight, particularly as applicable global laws and regulations are introduced and evolve. New laws
related to these business models and features or the interpretation or application of current laws could subject us to additional
regulation and oversight, cause us to further limit or restrict the sale of our products and services or otherwise impact our
products and services, lessen the engagement with, and growth of, profitable business models, and expose us to increased
compliance costs, significant liability, fines, penalties and harm to our reputation and brand.
We are subject to laws in certain foreign countries, and adhere to industry standards in the United States, that mandate rating
requirements or set other restrictions on the advertisement, publication or distribution of interactive entertainment software
based on content. In addition, certain foreign countries allow government censorship of interactive entertainment software
products or require pre-approval processes of uncertain length before our games and services can be offered. Adoption and
enforcement of ratings systems, censorship, restrictions on publication or distribution, and changes to approval processes or the
status of any approvals could harm our business by limiting the products we are able to offer to our consumers. In addition,
compliance with new and possibly inconsistent regulations for different territories could be costly, delay or prevent the release
of our products in those territories.
We may be subject to claims of infringement of third-party intellectual property rights.
From time to time, third parties may claim that we have infringed their intellectual property rights. Although we take steps to
avoid knowingly violating the intellectual property rights of others, it is possible that third parties still may claim infringement.
Existing or future infringement claims against us may be expensive to defend and divert the attention of our employees from
business operations. Such claims or litigation could require us to pay damages and other costs. We also could be required to
stop selling, distributing or supporting products, features or services which incorporate the affected intellectual property rights,
redesign products, features or services to avoid infringement, or obtain a license, all of which could be costly and harm our
business.
In addition, many patents have been issued that may apply to potential new modes of delivering, playing or monetizing
products and services such as those that we produce or would like to offer in the future. We may discover that future
opportunities to provide new and innovative modes of game play and game delivery may be precluded by existing patents that
we are unable to acquire or license on reasonable terms.
From time to time we may become involved in other legal proceedings.
We are currently, and from time to time in the future may become, subject to legal proceedings, claims, litigation and
government investigations or inquiries, which could be expensive, lengthy, disruptive to normal business operations and occupy
a significant amount of our employees’ time and attention. In addition, the outcome of any legal proceedings, claims, litigation,
investigations or inquiries may be difficult to predict and could have a material adverse effect on our business, reputation,
operating results, or financial condition.
Our products and brands are subject to intellectual property infringement, including in jurisdictions that do not
adequately protect our products and intellectual property rights.
We regard our products, brands and intellectual property as proprietary and take measures to protect our assets from
infringement. We are aware that some unauthorized copying of our products and brands occurs, and if a significantly greater
amount were to occur, it could negatively impact our business. Further, our products and services are available worldwide and
the laws of some countries, particularly in Asia, either do not protect our products, brands and intellectual property to the same
extent as the laws of the United States or are poorly enforced. Legal protection of our rights may be ineffective in countries with
weaker intellectual property enforcement mechanisms. In addition, certain third parties have registered our intellectual property
14
rights without authorization in foreign countries. Successfully registering such intellectual property rights could limit or restrict
our ability to offer products and services based on such rights in those countries. Although we take steps to enforce and police
our rights, our practices and methodologies may not be effective against all eventualities.
FINANCIAL RISKS
Our financial results are subject to currency and interest rate fluctuations.
International sales are a fundamental part of our business. For our fiscal year ended March 31, 2024, international net revenue
comprised 60 percent of our total net revenue, and we expect our international business to continue to account for a significant
portion of our total net revenue. As a result of our international sales, and also the denomination of our foreign investments and
our cash and cash equivalents in foreign currencies, we are exposed to the effects of fluctuations in foreign currency exchange
rates, and volatility in foreign currency exchange rates remains elevated as compared to historic levels. We use foreign currency
hedging contracts to mitigate some foreign currency risk. However, these activities are limited in the protection they provide us
from foreign currency fluctuations and can themselves result in losses. In addition, interest rate volatility can decrease the
amount of interest earned on our cash, cash equivalents and short-term investment portfolio.
We utilize debt financing and such indebtedness could adversely impact our business and financial condition.
We have senior unsecured notes outstanding, as well as an unsecured revolving credit facility. While the facility is currently
undrawn, we may use the proceeds of any future borrowings for general corporate purposes. We may also enter into other
financial instruments in the future. This indebtedness and any indebtedness that we may incur in the future could affect our
financial condition and future financial results by, among other things, requiring the dedication of a substantial portion of any
cash flow from operations to the repayment of indebtedness and increasing our vulnerability to downturns in our business or
adverse changes in general economic and industry conditions.
The agreements governing our indebtedness impose restrictions on us and require us to maintain compliance with specified
covenants. In particular, the revolving credit facility requires us to maintain compliance with a debt to EBITDA ratio. Our
ability to comply with these covenants may be affected by events beyond our control. If we breach any of these covenants and
do not obtain a waiver from the lenders or noteholders, then, subject to applicable cure periods, our outstanding indebtedness
may be declared immediately due and payable. There can be no assurance that any refinancing or additional financing would be
available on terms that are favorable or acceptable to us, if at all. In addition, changes by any rating agency to our credit rating
may negatively impact the value and liquidity of both our debt and equity securities, as well as the potential costs associated
with new issuances or any potential refinancing of existing issuances. Downgrades in our credit rating could also restrict our
ability to obtain additional financing in the future and could affect the terms of any such financing.
Changes in our tax rates or exposure to additional tax liabilities, and changes to tax laws and interpretations of tax laws
could adversely affect our earnings and financial condition.
We are subject to taxes in the United States and in various foreign jurisdictions. Significant judgment is required in determining
our worldwide income tax provision, tax assets, and accruals for other taxes, and the ultimate tax determination is uncertain for
many transactions. Our effective income tax rate is based in part on our corporate operating structure and how we operate our
business and develop, value, and use our intellectual property. Taxing authorities in jurisdictions in which we operate have
challenged and audited, and may continue to, challenge and audit our methodologies for calculating our income taxes, which
could increase our effective income tax rate. In addition, our provision for income taxes is materially affected by our profit
levels, changes in our business, changes in our geographic mix of earnings, changes in the elections we make, changes in our
corporate structure, or changes in applicable accounting rules, as well as other factors.
Changes to enacted U.S. federal, state or international tax laws, as well as changes to interpretations of existing tax laws,
particularly in Switzerland, where our international business is headquartered, and actions we have taken in our business with
respect to such laws, have affected, and could continue to affect, our effective tax rates and cash taxes, and could cause us to
change the way in which we structure our business and result in other costs. For example, the European Union and other
countries, including Switzerland, have enacted or have committed to enact global minimum taxes which could impact our
provision for income taxes and cash taxes. Our effective tax rate also could be adversely affected by changes in the
measurement of our deferred income taxes, including the need for valuation allowances against deferred tax assets. Our
valuation allowances, in turn, are impacted by several factors with respect to our business, industry, and the macroeconomic
environments, including changing interest rates and tax laws. Significant judgment is involved in determining the amount of
15
valuation allowances, and actual financial results also may differ materially from our current estimates and could have a
material impact on our assessments.
We are required to pay taxes other than income taxes, such as payroll, sales, use, value-added, net worth, property, transfer, and
goods and services taxes, in both the United States and foreign jurisdictions. Several foreign jurisdictions have introduced new
digital services taxes on revenue of companies that provide certain digital services or expanded their interpretation of existing
tax laws with regard to other non-income taxes. There is limited guidance about the applicability of these new taxes or changing
interpretations to our business and significant uncertainty as to what will be deemed in scope. If these foreign taxes are applied
to us, it could have an adverse and material impact on our business and financial performance.
GENERAL RISKS
Our business is subject to economic, market, public health and geopolitical conditions.
Our business is subject to economic, market, public health and geopolitical conditions, which are beyond our control. The
United States and other international economies have experienced cyclical downturns from time to time. Worsening economic
conditions, political instability, and adverse political developments in or around any of the countries in which we do business,
particularly conditions that negatively impact discretionary consumer spending and consumer demand or increase our operating
costs, including conflicts, inflation, slower growth, recession and other macroeconomic conditions have had, and could continue
to have, a material adverse impact on our business and operating results. In addition, relations between the United States and
countries in which we have operations and sales have been impacted by events such as the adoption or expansion of trade
restrictions, including economic sanctions, that have had a negative impact on our financial results and development processes.
We are particularly susceptible to market conditions and risks associated with the entertainment industry, which, in addition to
general macroeconomic downturns, also include the popularity, price and timing of our games, changes in consumer
demographics, the availability and popularity of other forms of entertainment, and critical reviews and public tastes and
preferences, among other factors which may change rapidly and cannot necessarily be predicted.
Our stock price has been volatile and may continue to fluctuate significantly.
The market price of our common stock historically has been, and we expect will continue to be, subject to significant
fluctuations. These fluctuations may be due to our operating results or factors specific to our operating results (including those
discussed in the risk factors above), changes in securities analysts’ estimates of our future financial performance, ratings or
recommendations, our results or future financial guidance falling below our expectations and analysts’ and investors’
expectations, the failure of our capital return programs to meet analysts’ and investors’ expectations, the announcement and
integration of any acquisitions we may make, departure of key personnel, cyberattacks, or factors largely outside of our control
including, those affecting interactive gaming, entertainment, and/or technology companies generally, national or international
economic conditions, investor sentiment or other factors related or unrelated to our operating performance. In particular,
economic downturns may contribute to the public stock markets experiencing extreme price and trading volume volatility.
These fluctuations could adversely affect the price of our common stock.
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Item 1B: Unresolved Staff Comments
None.
Item 1C: Cybersecurity
In the ordinary course of our business, we collect, use, store, and digitally transmit confidential and personal information. The
secure maintenance of this information and our information technology systems is important to our operations, business
strategy, and maintaining the trust of our players, employees, and partners. To this end, we have implemented policies, practices
and programs designed to assess, identify, and manage risks from potential unauthorized occurrences on or through our
information technology systems that may result in adverse effects on the confidentiality, integrity, and availability of these
systems and the data residing therein. These processes are managed and monitored by dedicated information technology
security teams, which are led by our Chief Information Security Officer. They include mechanisms, controls, technologies,
systems, and other processes designed to maintain a stable information technology environment and protect against
unauthorized access, use, destruction, modification or disclosure of confidential and personal information, and other
information security incidents affecting our operations or the availability of our products and services. For example, we invest
in tools to detect suspicious activity in accounts, give players the ability to use two-factor authentication and work to prevent
the creation of mass user accounts.
We also regularly test our defenses through penetration and vulnerability testing. We implement controls and procedures
designed to mitigate risk with third-party vendors and business partners who have access to confidential and personal
information, including by conducting a formalized security risk assessment. Security risks identified in security risk
assessments are remediated, and/or formally documented, and in some cases the business relationship may be ended or not
pursued. Our employees and certain contractors are required to complete mandatory annual security training. These trainings
raise awareness of security practices and educates employees to protect information assets and infrastructure. We consult with
outside advisors and experts when appropriate to assist in assessing, identifying and managing cybersecurity risks, including
providing an independent analysis of our preparedness, assessing and managing the current risk environment and assisting us in
preparing for future threats and trends.
Our Chief Information Security Officer, who reports directly to our Chief Technology Officer, Enterprise & Platform Services,
has extensive experience managing information technology and cybersecurity matters and is responsible for assessing and
managing cybersecurity risks. Risks associated with cybersecurity are integrated into our overall enterprise-wise enterprise risk
assessment and more closely monitored by our information technology security teams. We face ongoing cybersecurity risks
that, if realized, could materially impact our business, operations and financial results. During the reporting period, we did not
experience any cybersecurity incident that has had, or is reasonably likely to have, a material impact on our operations or
financial results. Additional information on cybersecurity risks we face is discussed in Part I, Item 1A, “Risk Factors,” under
the heading “We have and may continue to experience security breaches and cyber threats.”
Our Board of Directors maintains ultimate oversight over risks associated with cybersecurity and receives updates at least
annually from our Chief Information Security Officer. In addition, our Audit Committee, which is composed solely of
independent directors, receives updates from our Chief Information Security Officer on a quarterly basis, and more frequently
as appropriate, that provide additional detail about the steps we take to monitor and mitigate these risks.
Item 2:
Properties
Not applicable.
Item 3:
Legal Proceedings
Refer to Note 14 of the Notes to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K
for disclosures regarding our legal proceedings.
Item 4:
Mine Safety Disclosures
Not applicable.
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PART II
Item 5:
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Holders
There were approximately 616 holders of record of our common stock as of May 20, 2024. In addition, a significant number of
beneficial owners of our common stock hold their shares in street name. Our common stock is traded on the Nasdaq Global
Select Market under the symbol “EA”.
Dividends
Our quarterly cash dividend was $0.19 per share of common stock in fiscal year 2024. We paid aggregate cash dividends of
$205 million during the fiscal year ended March 31, 2024. We currently expect to continue to pay comparable cash dividends
on a quarterly basis in the future; however, future declarations of dividends and the establishment of future record dates and
payment dates are subject to the final determination of our Board of Directors or a designated Committee of our Board of
Directors.
Issuer Purchases of Equity Securities
In August 2022, our Board of Directors authorized a program to repurchase up to $2.6 billion of our common stock. We
repurchased approximately 10.0 million shares of our common stock for approximately $1,300 million under this program
during the fiscal year ended March 31, 2024. This program was terminated on May 8, 2024 and was superseded and replaced by
a new stock repurchase program approved in May 2024.
In May 2024, the Company’s Audit Committee, upon delegation from the Company’s Board of Directors, authorized a new
program to repurchase up to $5.0 billion of our common stock. This program supersedes and replaces the August 2022 program
and expires on May 9, 2027. Under this program, we may purchase stock in the open market or through privately negotiated
transactions in accordance with applicable securities laws, including pursuant to pre-arranged stock trading plans. The timing
and actual amount of the stock repurchases will depend on several factors including price, capital availability, regulatory
requirements, alternative investment opportunities and other market conditions. We are not obligated to repurchase a specific
number of shares of our common stock under this program and it may be modified, suspended or discontinued at any time. We
are actively repurchasing shares under this program.
The following table summarizes the number of shares repurchased in the fourth quarter of the fiscal year ended March 31,
2024:
Fiscal Month
Total Number of
Shares Purchased
Average Price
Paid per Share
Total Number of
Shares Purchased as
part of Publicly
Announced Programs
Maximum Dollar
Value that May
Still Be Purchased
Under the
Programs
(in millions)
December 31, 2023 - January 27, 2024
699,335 $
137.14
699,335 $
884
January 28, 2024 - February 24, 2024
729,048 $
138.86
729,048 $
783
February 25, 2024 - March 30, 2024
937,619 $
136.39
937,619 $
655
2,366,002 $
137.37
2,366,002
Stock Performance Graph
The following information shall not be deemed to be “filed” with the SEC nor shall this information be incorporated by
reference into any future filing under the Securities Act of 1933, as amended, or the Exchange Act, as amended, except to the
extent that we specifically incorporate it by reference into a filing.
The following graph shows a five-year comparison of cumulative total returns during the period from March 31, 2019 through
March 31, 2024, for our common stock, the S&P 500 Index (to which EA was added in July 2002), the Nasdaq Composite
Index, and the RDG Technology Composite Index, each of which assumes an initial value of $100. Each measurement point is
as of the end of each fiscal year. The performance of our stock depicted in the following graph is not necessarily indicative of
the future performance of our stock.
18
*
Based on $100 invested on March 31, 2019 in stock or index, including reinvestment of dividends.
March 31,
2019
2020
2021
2022
2023
2024
Electronic Arts Inc.
$
100 $
99 $
134 $
125 $
120 $
133
S&P 500 Index
100
93
145
168
155
202
Nasdaq Composite Index
100
101
175
189
164
221
RDG Technology Composite Index
100
110
187
201
182
226
Item 6:
[Reserved]
19
Item 7:
Management’s Discussion and Analysis of Financial Condition and Results of Operations
OVERVIEW
The following overview is a high-level discussion of our operating results, as well as some of the trends and drivers that affect
our business. Management believes that an understanding of these trends and drivers provides important context for our results
for the fiscal year ended March 31, 2024, as well as our future prospects. This summary is not intended to be exhaustive, nor is
it intended to be a substitute for the detailed discussion and analysis provided elsewhere in this Form 10-K, including in the
“Business” section and the “Risk Factors” above, the remainder of “Management’s Discussion and Analysis of Financial
Condition and Results of Operations (“MD&A”)” or the Consolidated Financial Statements and related Notes.
About Electronic Arts
Electronic Arts is a global leader in digital interactive entertainment. We develop, market, publish and deliver games, content
and services that can be experienced on game consoles, PCs, mobile phones and tablets. At our core is a portfolio of intellectual
property from which we create innovative games and experiences that deliver high-quality entertainment and drive engagement
across our network of hundreds of millions of unique active accounts. Our portfolio includes brands that we either wholly own
(such as Apex Legends, Battlefield, and The Sims) or license from others (such as the licenses within EA SPORTS FC and EA
SPORTS Madden NFL). Through our live services offerings, we offer high-quality experiences designed to provide value to
players, and extend and enhance gameplay. These live services include extra content, subscription offerings and other revenue
generated in addition to the sale of our full games. We are focusing on building games and experiences that grow the global
online communities around our key franchises; deepening engagement through connecting interactive storytelling to key
intellectual property; and building re-occurring revenue from scaling our live services and growth in our annualized sports
franchises, our console, PC and mobile catalog titles.
Financial Results
Our key financial results for our fiscal year ended March 31, 2024 were as follows:
•
Total net revenue was $7,562 million, up 2 percent year-over-year.
•
Live services and other net revenue was $5,547 million, up 1 percent year-over-year.
•
Gross margin was 77.4 percent, up 2 percentage points year-over-year.
•
Operating expenses were $4,334 million, up 1 percent year-over-year.
•
Operating income was $1,518 million, up 14 percent year-over-year.
•
Net income was $1,273 million with diluted earnings per share of $4.68.
•
Net cash provided by operating activities was $2,315 million, up 49 percent year-over-year.
•
Total cash, cash equivalents and short-term investments were $3,262 million.
•
We repurchased 10.0 million shares of our common stock for $1,300 million.
•
We paid cash dividends of $205 million during the fiscal year ended March 31, 2024.
Trends in Our Business
Live Services Business. We offer our players high-quality experiences designed to provide value to players and to extend and
enhance gameplay. These live services include extra content, subscription offerings and other revenue generated in addition to
the sale of our full games and free-to-play games. Our net revenue attributable to live services and other was $5,547 million,
$5,489 million, and $4,998 million for fiscal years 2024, 2023, and 2022, respectively, and we expect that live services net
revenue will continue to be material to our business. Within live services and other, net revenue attributable to extra content
was $4,463 million, $4,277 million, and $3,910 million for fiscal years 2024, 2023, and 2022, respectively. Extra content net
revenue has increased as more players engage with our games and services, and purchase additional content designed to provide
value to players and extend and enhance gameplay. Our most popular live services are the extra content purchased for the
Ultimate Team mode associated with our sports franchises, that allows players to collect current and former professional players
in order to build and compete as a personalized team, and extra content purchased for our Apex Legends franchise. Live services
net revenue generated from extra content purchased within the Ultimate Team mode associated with our sports franchises, a
substantial portion of which is derived from Ultimate Team within our global football franchise and from our Apex Legends
franchise, is material to our business.
20
Digital Delivery of Games. In our industry, players increasingly purchase games digitally as opposed to purchasing physical
discs. While this trend, as applied to our business, may not be linear due to a mix of products during a fiscal year, consumer
buying patterns and other factors, over time we expect players to purchase an increasingly higher proportion of our games
digitally. As a result, we expect net revenue attributable to digital full game downloads to increase over time and net revenue
attributable to sales of packaged goods to decrease.
Our net revenue attributable to digital full game downloads was $1,343 million, $1,262 million, and $1,282 million during
fiscal years 2024, 2023, and 2022, respectively; while our net revenue attributable to packaged goods sales was $672 million,
$675 million, and $711 million in fiscal years 2024, 2023, and 2022, respectively. In addition, as measured based on total units
sold on Microsoft’s Xbox One and Xbox Series X and Sony’s PlayStation 4 and 5 rather than by net revenue, we estimate that
73 percent, 68 percent, and 65 percent of our total units sold during fiscal years 2024, 2023, and 2022, were sold digitally.
Digital full game units are based on sales information provided by Microsoft and Sony; packaged goods units sold through are
estimated by obtaining data from significant retail and distribution partners in North America, Europe and Asia, and applying
internal sales estimates with respect to retail partners from which we do not obtain data. We believe that these percentages are
reasonable estimates of the proportion of our games that are digitally downloaded in relation to our total number of units sold
for the applicable period of measurement.
Increases in consumer adoption of digital purchase of games combined with increases in our live services revenue generally
results in expansion of our gross margin, as costs associated with selling a game digitally is generally less than selling the same
game through traditional retail and distribution channels.
Increased Competition. Competition in our business is intense. Our competitors range from established interactive
entertainment companies to emerging start-ups. In addition, the gaming, technology/internet, and entertainment industries are
converging, and we compete with large, diversified technology companies in those industries. Their greater financial or other
resources may provide larger budgets to develop and market tools, technologies, products and services that gain consumer
success and shift player time and engagement away from our products and services. In addition, our leading position within the
interactive entertainment industry makes us a prime target for recruiting our executives, as well as key creative and technical
talent, resulting in retention challenges and increased cost to retain and incentivize our key people.
Concentration of Sales Among the Most Popular Games. In our industry, we see a large portion of games sales concentrated on
the most popular titles. Similarly, a significant portion of our revenue historically has been derived from games based on a few
popular franchises, such as EA SPORTS FC, EA SPORTS Madden NFL, Apex Legends, Battlefield, and The Sims. In
particular, we have historically derived a significant portion of our net revenue from our global football franchise, the
annualized version of which is consistently one of the best-selling games in the marketplace. We transitioned our global football
franchise to a new EA SPORTS FC brand in the second quarter of fiscal 2024. Our continued vision for the future of EA
SPORTS FC is to create and innovate across platforms, geographies, and business models to expand our global football
experiences and entertain even more fans around the world.
Re-occurring Revenue Sources. Our business model includes revenue that we deem re-occurring in nature, such as revenue
from our live services, annualized sports franchises (e.g., EA SPORTS FC, EA SPORTS Madden NFL), and our console, PC
and mobile catalog titles (i.e., titles that did not launch in the current fiscal year). We have been able to forecast revenue from
these areas of our business with greater relative confidence than for new games, services and business models. As we continue
to incorporate new business models and modalities of play into our games, our goal is to continue to look for opportunities to
expand the re-occurring portion of our business.
Free-to-Play and Free-to-Enter Games. We offer games in some of our largest franchises, including Apex Legends, The Sims 4,
and the PC and mobile version of our EA SPORTS FC franchise, through a business model that allows consumers to access
games with no-upfront cost. These games are then monetized through a live service associated with the game, particularly extra
content sales. These business models are dominant in the mobile gaming industry and are becoming increasingly accepted in the
online PC and console market. We expect to continue offering games through these business models across console, PC and
mobile and expect extra content revenue generated through these business models to continue to be an important part of our
business.
Restructuring. In February 2024, our Board of Directors approved a restructuring plan (the “2024 Restructuring Plan”) focused
on aligning our portfolio, investments, and resources in support of our strategic priorities and growth initiatives. This plan
reflects actions driven by portfolio rationalization, including costs associated with licensor commitments, as well as reductions
in real estate and headcount. The actions associated with this plan are expected to be substantially completed by December 31,
2024.
21
Net Bookings. In order to improve transparency into our business, we disclose an operating performance metric, net bookings.
Net bookings is defined as the net amount of products and services sold digitally or sold-in physically in the period. Net
bookings is calculated by adding total net revenue to the change in deferred net revenue for online-enabled games.
The following is a calculation of our total net bookings for the periods presented:
Year Ended March 31,
(In millions)
2024
2023
Total net revenue
$
7,562 $
7,426
Change in deferred net revenue (online-enabled games)
(132)
(85)
Net bookings
$
7,430 $
7,341
Net bookings were $7,430 million for fiscal year 2024 primarily driven by sales related to EA SPORTS FC 24, FIFA 23, Apex
Legends, EA SPORTS Madden NFL 24, and The Sims 4. Net bookings increased $89 million or 1 percent as compared to fiscal
year 2023 primarily due to a year-over-year increase in sales related to our global football franchise, driven by EA SPORTS FC
24, partially offset by decreased sales of extra content for Apex Legends, and fluctuations in foreign exchange rates, net of
hedging activities. Live services and other net bookings were $5,425 million for fiscal year 2024, and decreased $105 million or
2 percent as compared to fiscal year 2023. The decrease in live services and other net bookings was due primarily to decreased
sales of extra content for Apex Legends, and fluctuations in foreign exchange rates, net of hedging activities, partially offset by
a year-over-year increase in extra content sales for Ultimate Team within our global football franchise, driven by EA SPORTS
FC 24. Full game net bookings were $2,005 million for fiscal year 2024, and increased $194 million or 11 percent as compared
to fiscal year 2023 primarily due to the releases of Star Wars Jedi: Survivor, and UFC 5, partially offset by the prior year
releases of Dead Space Remake and Need for Speed Unbound.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Our Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the
United States (“U.S. GAAP”). The preparation of these Consolidated Financial Statements requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities, contingent assets and liabilities, and revenue
and expenses during the reporting periods. The policies discussed below are considered by management to be critical because
they are not only important to the portrayal of our financial condition and results of operations, but also because application and
interpretation of these policies requires both management judgment and estimates of matters that are inherently uncertain and
unknown. As a result, actual results may differ materially from our estimates.
Revenue Recognition
We derive revenue principally from sales of our games, and related extra content and services that can be experienced on game
consoles, PCs, mobile phones and tablets. Our product and service offerings include, but are not limited to, the following:
•
full games with both online and offline functionality (“Games with Services”), which generally includes (1) the initial
game delivered digitally or via physical disc at the time of sale and typically provide access to offline core game
content (“software license”); (2) updates on a when-and-if-available basis, such as software patches or updates, and/or
additional free content to be delivered in the future (“future update rights”); and (3) a hosted connection for online
playability (“online hosting”);
•
full games with online-only functionality which require an Internet connection to access all gameplay and functionality
(“Online-Hosted Service Games”);
•
extra content related to Games with Services and Online-Hosted Service Games which provides access to additional
in-game content;
•
subscriptions, such as EA Play and EA Play Pro, that generally offer access to a selection of full games, in-game
content, online services and other benefits typically for a recurring monthly or annual fee; and
•
licensing to third parties to distribute and host our games and content.
We evaluate and recognize revenue by:
•
identifying the contract(s) with the customer;
•
identifying the performance obligations in the contract;
•
determining the transaction price;
22
•
allocating the transaction price to performance obligations in the contract; and
•
recognizing revenue as each performance obligation is satisfied through the transfer of a promised good or service to a
customer (i.e., “transfer of control”).
Certain of our full game and/or extra content are sold to resellers with a contingency that the full game and/or extra content
cannot be resold prior to a specific date (“Street Date Contingency”). We recognize revenue for transactions that have a Street
Date Contingency when the Street Date Contingency is removed and the full game and/or extra content can be resold by the
reseller. For digital full game and/or extra content downloads sold to customers, we recognize revenue when the full game and/
or extra content is made available for download to the customer.
Online-Enabled Games
Games with Services. Our sales of Games with Services are evaluated to determine whether the software license, future update
rights and the online hosting are distinct and separable. Sales of Games with Services are generally determined to have three
distinct performance obligations: software license, future update rights, and the online hosting.
Since we do not sell the performance obligations on a stand-alone basis, we consider market conditions and other observable
inputs to estimate the stand-alone selling price for each performance obligation. For Games with Services, generally 75 percent
of the sales price is allocated to the software license performance obligation and recognized at a point in time when control of
the license has been transferred to the customer. The remaining 25 percent is allocated to the future update rights and the online
hosting performance obligations and recognized ratably as the service is provided (over the Estimated Offering Period).
Online-Hosted Service Games. Sales of our Online-Hosted Service Games are determined to have one distinct performance
obligation: the online hosting. We recognize revenue from these arrangements ratably as the service is provided (over the
Estimated Offering Period).
Extra Content. Revenue received from sales of downloadable content are derived primarily from the sale of virtual currencies
and digital in-game content that are designed to extend and enhance players’ game experience. Sales of extra content are
accounted for in a manner consistent with the treatment for our Games with Services and Online-Hosted Service Games as
discussed above, depending upon whether or not the extra content has offline functionality. That is, if the extra content has
offline functionality, then the extra content is accounted for similarly to Games with Services (generally determined to have
three distinct performance obligations: software license, future update rights, and the online hosting). If the extra content does
not have offline functionality, then the extra content is determined to have one distinct performance obligation: the online-
hosted service.
Subscriptions
Sales of our subscriptions are determined to have one performance obligation: the online hosting. We recognize revenue from
these arrangements ratably over the subscription term as the performance obligation is satisfied.
Licensing Revenue
We utilize third-party licensees to distribute and host our games and content in accordance with license agreements, for which
the licensees typically pay us a fixed minimum guarantee and/or sales-based royalties. These arrangements typically include
multiple performance obligations, such as a time-based license of software and future update rights. We recognize as revenue a
portion of the minimum guarantee when we transfer control of the license of software (generally upon commercial launch) and
the remaining portion ratably over the contractual term in which we provide the licensee with future update rights. Any sales-
based royalties are generally recognized as the related sales occur by the licensee.
Significant Judgments around Revenue Arrangements
Identifying performance obligations. Performance obligations promised in a contract are identified based on the goods and
services that will be transferred to the customer that are both capable of being distinct, (i.e., the customer can benefit from the
goods or services either on its own or together with other resources that are readily available), and are distinct in the context of
the contract (i.e., it is separately identifiable from other goods or services in the contract). To the extent a contract includes
multiple promises, we must apply judgment to determine whether those promises are separate and distinct performance
obligations. If these criteria are not met, the promises are accounted for as a combined performance obligation.
23
Determining the transaction price. The transaction price is determined based on the consideration that we will be entitled to
receive in exchange for transferring our goods and services to the customer. Determining the transaction price often requires
judgment, based on an assessment of contractual terms and business practices. It further includes review of variable
consideration such as discounts, sales returns, price protection, and rebates, which is estimated at the time of the transaction. In
addition, the transaction price does not include an estimate of the variable consideration related to sales-based royalties. Sales-
based royalties are recognized as the sales occur.
Allocating the transaction price. Allocating the transaction price requires that we determine an estimate of the relative stand-
alone selling price for each distinct performance obligation. Determining the relative stand-alone selling price is inherently
subjective, especially in situations where we do not sell the performance obligation on a stand-alone basis (which occurs in the
majority of our transactions). In those situations, we determine the relative stand-alone selling price based on various
observable inputs using all information that is reasonably available. Examples of observable inputs and information include:
historical internal pricing data, cost plus margin analysis, pre-release versus post-release costs, and pricing data from
competitors to the extent the data is available. The results of our analysis resulted in a specific percentage of the transaction
price being allocated to each performance obligation.
Determining the Estimated Offering Period. The offering period is the period in which we offer to provide the future update
rights and/or online hosting for the game and related extra content sold. Because the offering period is not an explicitly defined
period, we must make an estimate of the offering period for the service-related performance obligations (i.e., future update
rights and online hosting). Determining the Estimated Offering Period is inherently subjective and is subject to regular revision.
Generally, we consider the average period of time customers are online when estimating the offering period. We also consider
the estimated period of time between the date a game unit is sold to a reseller and the date the reseller sells the game unit to the
customer (i.e., time in channel). Based on these two factors, we then consider the method of distribution. For example, games
and extra content sold at retail would have a composite offering period equal to the online gameplay period plus time in channel
as opposed to digitally-distributed games and extra content which are delivered immediately via digital download and therefore,
the offering period is estimated to be only the online gameplay period.
Additionally, we consider results from prior analyses, known and expected online gameplay trends, as well as disclosed service
periods for competitors’ games in determining the Estimated Offering Period for future sales. We believe this provides a
reasonable depiction of the transfer of future update rights and online hosting to our customers, as it is the best representation of
the time period during which our games and extra content are experienced. We recognize revenue for future update rights and
online hosting performance obligations ratably on a straight-line basis over this period as there is a consistent pattern of
delivery for these performance obligations. Revenue for service-related performance obligations for digitally-distributed games
and extra content is recognized over an estimated eight-month period beginning in the month of sale, revenue for service-related
performance obligations for games and extra content sold through retail is recognized over an estimated ten-month period
beginning in the month of sale, and revenue for service related performance obligations related to our PC and console free-to-
play games is recognized generally over a twelve-month period beginning in the month of sale.
Principal Agent Considerations
We evaluate sales to end customers of our full games and related content via third-party storefronts, including digital storefronts
such as Microsoft’s Xbox Store, Sony’s PlayStation Store, Apple App Store, and Google Play Store, in order to determine
whether or not we are acting as the principal in the sale to the end customer, which we consider in determining if revenue
should be reported gross or net of fees retained by the third-party storefront. An entity is the principal if it controls a good or
service before it is transferred to the end customer. Key indicators that we evaluate in determining gross versus net treatment
include but are not limited to the following:
•
the underlying contract terms and conditions between the various parties to the transaction;
•
which party is primarily responsible for fulfilling the promise to provide the specified good or service to the end
customer;
•
which party has discretion in establishing the price for the specified good or service; and
•
which party has title risk before the specified good or service has been transferred to the end customer.
Based on an evaluation of the above indicators, except as discussed below, we have determined that generally the third party is
considered the principal to end customers for the sale of our full games and related content. We therefore report revenue related
to these arrangements net of the fees retained by the storefront. However, for sales arrangements via Apple App Store and
Google Play Store, EA is considered the principal to the end customer and thus, we report revenue on a gross basis and mobile
platform fees are reported within cost of revenue.
24
Income Taxes
We recognize deferred tax assets and liabilities for both (1) the expected impact of differences between the financial statement
amount and the tax basis of assets and liabilities and (2) the expected future tax benefit to be derived from tax losses and tax
credit carryforwards. We do not recognize any deferred taxes related to the U.S. taxes on foreign earnings as we recognize these
taxes as a period cost.
We record a valuation allowance against deferred tax assets when it is considered more likely than not that all or a portion of
our deferred tax assets will not be realized. In making this determination, we are required to give significant weight to evidence
that can be objectively verified. It is generally difficult to conclude that a valuation allowance is not needed when there is
significant negative evidence, such as cumulative losses in recent years. Forecasts of future taxable income are considered to be
less objective than past results. Therefore, cumulative losses weigh heavily in the overall assessment.
In addition to considering forecasts of future taxable income, we are also required to evaluate and quantify other possible
sources of taxable income in order to assess the realization of our deferred tax assets, namely the reversal of existing deferred
tax liabilities, the carryback of losses and credits as allowed under current tax law, and the implementation of tax planning
strategies. Evaluating and quantifying these amounts involves significant judgments. Each source of income must be evaluated
based on all positive and negative evidence and this evaluation may involve assumptions about future activity. Certain taxable
temporary differences that are not expected to reverse during the carry forward periods permitted by tax law cannot be
considered as a source of future taxable income that may be available to realize the benefit of deferred tax assets.
Every quarter, we perform a realizability analysis to evaluate whether it is more likely than not that all or a portion of our
deferred tax assets will not be realized. Our Swiss deferred tax asset realizability analysis relies upon future Swiss taxable
income as the primary source of taxable income but considers all available sources of Swiss income based on the positive and
negative evidence. We give more weight to evidence that can be objectively verified. However, estimating future Swiss taxable
income requires judgment, specifically related to assumptions about expected growth rates of future Swiss taxable income,
which are based primarily on third party market and industry growth data. Actual results that differ materially from those
estimates could have a material impact on our valuation allowance assessment. Swiss interest rates have an impact on the
valuation allowance and are based on published Swiss guidance, which generally occurs in the fourth quarter of our fiscal year.
Any significant changes to such interest rates could result in a material impact to the valuation allowance and to our
Consolidated Financial Statements. We have adjusted our valuation allowance for changes in the published interest rates in the
past and we may do so again in the future. Switzerland has a seven-year carryforward period and does not permit the carry back
of losses. Actions we take in connection with acquisitions could also impact the utilization of our Swiss deferred tax asset.
As part of the process of preparing our Consolidated Financial Statements, we are required to estimate our income taxes in each
jurisdiction in which we operate prior to the completion and filing of tax returns for such periods. This process requires
estimating both our geographic mix of income and our uncertain tax positions in each jurisdiction where we operate. These
estimates require us to make judgments about the likely application of the tax law to our situation, as well as with respect to
other matters, such as anticipating the positions that we will take on tax returns prior to preparing the returns and the outcomes
of disputes with tax authorities. The ultimate resolution of these issues may take extended periods of time due to examinations
by tax authorities and statutes of limitations. In addition, changes in our business, including acquisitions, changes in our
international corporate structure, changes in the geographic location of business functions or assets, changes in the geographic
mix and amount of income, as well as changes in our agreements with tax authorities, valuation allowances, applicable
accounting rules, applicable tax laws and regulations, rulings and interpretations thereof, developments in tax audit and other
matters, and variations in the estimated and actual level of annual pre-tax income can affect the overall effective tax rate.
IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
The information under the subheading “Impact of Recently Issued Accounting Standards” in Note 1 — Description of Business
and Basis of Presentation to the Consolidated Financial Statements in this Form 10-K is incorporated by reference into this
Item 7.
25
RESULTS OF OPERATIONS
Our fiscal year is reported on a 52- or 53-week period that ends on the Saturday nearest March 31. Our results of operations for
the fiscal year ended March 31, 2024 contained 52 weeks and ended on March 30, 2024. Our results of operations for the fiscal
year ended March 31, 2023 contained 52 weeks and ended on April 1, 2023. For simplicity of disclosure, all fiscal periods are
referred to as ending on a calendar month end.
Net Revenue
Net revenue consists of sales generated from (1) full games sold as digital downloads or as packaged goods and designed for
play on game consoles and PCs, (2) live services which primarily includes sales of extra content for console, PC, and mobile
games, (3) subscriptions that generally offer access to a selection of full games, in-game content, online services and other
benefits, and (4) licensing our games to third parties to distribute and host our games.
Comparison of Fiscal Year 2024 to Fiscal Year 2023
Net Revenue
Net revenue for fiscal year 2024 was $7,562 million, primarily driven by sales related to FIFA 23, EA SPORTS FC 24, Apex
Legends, EA SPORTS Madden NFL 24, and The Sims 4. Net revenue for fiscal year 2024 increased $136 million, as compared
to fiscal year 2023. This increase was driven by a $2,105 million increase in net revenue primarily driven by EA SPORTS FC
24 and Star Wars Jedi: Survivor, partially offset by a $1,969 million decrease in net revenue primarily due to our legacy FIFA
franchise, Apex Legends, and Battlefield 2042.
Net Revenue by Composition
Our net revenue by composition for fiscal years 2024 and 2023 was as follows (in millions):
Year Ended March 31,
2024
2023
$ Change
% Change
Net revenue:
Full game downloads
$
1,343 $
1,262 $
81
6 %
Packaged goods
672
675
(3)
— %
Full game
$
2,015 $
1,937 $
78
4 %
Live services and other
$
5,547 $
5,489 $
58
1 %
Total net revenue
$
7,562 $
7,426 $
136
2 %
Full Game Net Revenue
Full game net revenue includes full game downloads and packaged goods. Full game downloads primarily includes revenue
from digital sales of full games on console, PC, and certain licensing revenue. Packaged goods primarily includes revenue from
software that is sold physically through traditional channels such as brick and mortar retailers.
Full game net revenue for fiscal year 2024 was $2,015 million, primarily driven by EA SPORTS FC 24, Star Wars Jedi:
Survivor, EA SPORTS Madden NFL 24, and FIFA 23. Full game net revenue for fiscal year 2024 increased $78 million, or 4
percent, as compared to fiscal year 2023. This increase was primarily driven by the release of Star Wars Jedi: Survivor,
partially offset by Battlefield 2042.
Live Services and Other Net Revenue
Live services and other net revenue primarily includes revenue from sales of extra content for console, PC, and mobile games,
certain licensing revenue, subscriptions, and advertising.
Live services and other net revenue for fiscal year 2024 was $5,547 million, primarily driven by sales of extra content for FIFA
23, EA SPORTS FC 24, Apex Legends, The Sims 4, and our global football mobile business. Live services and other net revenue
for fiscal year 2024 increased $58 million, or 1 percent, as compared to fiscal year 2023. This increase was primarily driven by
26
sales of extra content for Ultimate Team within our global football franchise, partially offset by a decrease in net revenue
primarily due to decreased sales of extra content for Apex Legends, and within our casual mobile catalog portfolio.
Cost of Revenue
Cost of revenue consists of (1) certain royalty expenses for celebrities, professional sports leagues, movie studios and other
organizations, and independent software developers, (2) mobile platform fees associated with our mobile revenue (for
transactions in which we are acting as the principal in the sale to the end customer), (3) data center, bandwidth and server costs
associated with hosting our online games and websites, (4) inventory costs, including manufacturing royalties, (5) payment
processing fees, (6) amortization and impairments of certain intangible assets, and (7) personnel-related costs.
Cost of revenue for fiscal years 2024 and 2023 was as follows (in millions):
March 31,
2024
% of Net
Revenue
March 31,
2023
% of Net
Revenue
% Change
Change as a % of Net
Revenue
$
1,710
23 % $
1,792
24 %
(5) %
(1) %
Cost of revenue decreased by $82 million during fiscal year 2024, as compared to fiscal year 2023. The decrease was primarily
due to a net decrease in royalty and other product related costs associated with EA SPORTS FC 24, a decrease in acquisition-
related intangible asset amortization and impairments, and a decrease in platform and hosting fees, partially offset by an
increase in inventory costs from the release of Star Wars Jedi: Survivor.
Research and Development
Research and development expenses consist of expenses incurred by our production studios for personnel-related costs, related
overhead costs, external third-party development costs, contracted services, and depreciation. Research and development
expenses for our online products include expenses incurred by our studios consisting of direct development and related
overhead costs in connection with the development and production of our online games. Research and development expenses
also include expenses associated with our digital platform, software licenses and maintenance, and management overhead.
Research and development expenses for fiscal years 2024 and 2023 were as follows (in millions):
March 31,
2024
% of Net
Revenue
March 31,
2023
% of Net
Revenue
$ Change
% Change
$
2,420
32 % $
2,328
31 % $
92
4 %
Research and development expenses increased by $92 million, or 4 percent, in fiscal year 2024, as compared to fiscal year
2023. This increase was primarily due to a $51 million increase in stock-based compensation, a $45 million increase in
personnel-related costs primarily due to an increase in variable compensation and related expenses, offset by a $12 million
decrease in studio related contracted services.
Marketing and Sales
Marketing and sales expenses consist of advertising, marketing and promotional expenses, personnel-related costs, and related
overhead costs, net of qualified advertising cost reimbursements from third parties.
Marketing and sales expenses for fiscal years 2024 and 2023 were as follows (in millions):
March 31,
2024
% of Net
Revenue
March 31,
2023
% of Net
Revenue
$ Change
% Change
$
1,019
13 % $
978
13 % $
41
4 %
Marketing and sales expenses increased by $41 million, or 4 percent, in fiscal year 2024, as compared to fiscal year 2023. This
increase was primarily due to a $82 million increase largely related to rebranding investments associated with the launch of EA
SPORTS FC 24, offset by a $40 million decrease in advertising and promotional spending related to the prior year release of
Apex Legends Mobile.
General and Administrative
27
General and administrative expenses consist of personnel and related expenses of executive and administrative staff, corporate
functions such as finance, legal, human resources, and information technology (“IT”), related overhead costs, fees for
professional services such as legal and accounting, and allowances for doubtful accounts.
General and administrative expenses for fiscal years 2024 and 2023 were as follows (in millions):
March 31,
2024
% of Net
Revenue
March 31,
2023
% of Net
Revenue
$ Change
% Change
$
691
9 % $
727
10 % $
(36)
(5) %
General and administrative expenses decreased by $36 million, or 5 percent, in fiscal year 2024, as compared to fiscal year
2023. This decrease was primarily due to $44 million of accelerated amortization and depreciation associated with office space
reductions related to our fiscal 2023 Restructuring Plan.
Restructuring
Restructuring expenses for fiscal years 2024 and 2023 were as follows (in millions):
March 31,
2024
% of Net
Revenue
March 31,
2023
% of Net
Revenue
$ Change
% Change
$
62
1 % $
111
1 % $
(49)
(44) %
Restructuring expenses decreased by $49 million, or 44 percent, in fiscal year 2024, as compared to fiscal year 2023. This
decrease was primarily due to lower charges associated with our fiscal 2024 Restructuring Plan in comparison to our fiscal
2023 Restructuring Plan, driven by a $68 million decrease related to impairment charges associated with acquisition-related
intangible assets and other charges, and an $11 million decrease related to employee severance and employee-related costs,
offset by a $30 million increase in costs associated with licensor commitments.
Income Taxes
Provision for income taxes for fiscal years 2024 and 2023 was as follows (in millions):
March 31, 2024
Effective Tax Rate
March 31, 2023
Effective Tax Rate
$
316
19.9 % $
524
39.5 %
Our effective tax rate for the fiscal year ended March 31, 2024 was 19.9 percent as compared to 39.5 percent for the same
period in fiscal year 2023.
During the fiscal year ended March 31, 2024, we recognized a $92 million tax benefit to remeasure our Swiss deferred tax
assets as a result of an increase in the Swiss statutory tax rate. In addition, we recognized a lower period cost for U.S. tax on our
non-U.S. earnings, including a cumulative one-time benefit, due to R&D capitalization guidance issued by the U.S. Treasury
during the fiscal year. Excluding the effects of these items, the effective tax rate for fiscal year 2024 would have been 29.5%.
During the fiscal year ended March 31, 2023, we recognized a $118 million tax charge to increase the valuation allowance on
Swiss deferred tax assets, primarily as a result of an increase in Swiss interest rates. The change in valuation allowance had the
effect of increasing our effective tax rate for the fiscal year ended March 31, 2023 by 8.9 percentage points.
Our effective tax rates for future periods will continue to depend on a variety of factors, including changes in our business, such
as acquisitions and intercompany transactions, our corporate structure, the geographic location of business functions or assets,
the geographic mix of income, our agreements with tax authorities, applicable accounting rules, applicable tax laws and
regulations, rulings and interpretations thereof, developments in tax audit and other matters, and variations in our annual pre-tax
income or loss. We anticipate that the impact of excess tax benefits, tax deficiencies, and changes in valuation allowances may
result in significant fluctuations to our effective tax rate in the future.
Comparison of Fiscal Year 2023 to Fiscal Year 2022
28
For the comparison of fiscal year 2023 to fiscal year 2022, refer to Part II, Item 7 “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” of our Annual Report on Form 10-K for our fiscal year ended March 31, 2023,
filed with the SEC on May 24, 2023 under the subheading “Comparison of Fiscal Year 2023 to Fiscal Year 2022.”
LIQUIDITY AND CAPITAL RESOURCES
As of March 31,
(In millions)
2024
2023
Increase/(Decrease)
Cash and cash equivalents
$
2,900
$
2,424
$
476
Short-term investments
362
343
19
Total
$
3,262
$
2,767
$
495
Percentage of total assets
24 %
21 %
Year Ended March 31,
(In millions)
2024
2023
Increase/(Decrease)
Net cash provided by operating activities
$
2,315
$
1,550
$
765
Net cash used in investing activities
(207)
(217)
10
Net cash used in financing activities
(1,624)
(1,600)
(24)
Effect of foreign exchange on cash and cash equivalents
(8)
(41)
33
Net increase (decrease) in cash and cash equivalents
$
476
$
(308)
$
784
For the comparison of fiscal year 2023 to fiscal year 2022, refer to Part II, Item 7 “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” of our Annual Report on Form 10-K for our fiscal year ended March 31, 2023,
filed with the SEC on May 24, 2023 under the subheading “Liquidity and Capital Resources.”
Changes in Cash Flow
Operating Activities. Net cash provided by operating activities increased by $765 million during fiscal year 2024, as compared
to fiscal year 2023, primarily driven by higher cash collections due to timing and year-over-year growth in our business, and
lower cash payments for income taxes, partially offset by cash outflows from hedging activities.
Investing Activities. Net cash used in investing activities decreased by $10 million during fiscal year 2024, as compared to fiscal
year 2023, primarily driven by a $237 million increase in proceeds from maturities and sales of short-term investments, and a
$8 million decrease in capital expenditures, partially offset by a $235 million increase in the purchase of short-term
investments.
Financing Activities. Net cash used in financing activities increased by $24 million during fiscal year 2024, as compared to
fiscal year 2023, primarily due to a $21 million increase in cash paid to taxing authorities in connection with withholding taxes
for stock-based compensation.
Short-term Investments
Due to our mix of fixed and variable rate securities, our short-term investment portfolio is susceptible to changes in short-term
interest rates. As of March 31, 2024, our short-term investments had net unrealized gains of less than $1 million or less than 1
percent of total short-term investments. From time to time, we may liquidate some or all of our short-term investments to fund
operational needs or other activities, such as capital expenditures, business acquisitions or stock repurchase programs.
Senior Notes
In February 2021, we issued $750 million aggregate principal amount of the 2031 Notes and $750 million aggregate principal
amount of the 2051 Notes. The effective interest rate is 1.98% for the 2031 Notes and 3.04% for the 2051 Notes. Interest is
payable semiannually in arrears, on February 15 and August 15 of each year.
In February 2016, we issued $400 million aggregate principal amount of the 2026 Notes. The effective interest rate is 4.97% for
the 2026 Notes. Interest is payable semiannually in arrears, on March 1 and September 1 of each year.
29
See Note 12 — Financing Arrangements to the Consolidated Financial Statements in this Form 10-K as it relates to our Senior
Notes, which is incorporated by reference into this Item 7.
Credit Facility
On March 22, 2023, we entered into a $500 million unsecured revolving credit facility (the "Credit Facility") with a syndicate
of banks. The Credit Facility terminates on March 22, 2028 unless the maturity is extended in accordance with its terms. As of
March 31, 2024, no amounts were outstanding. The Credit Facility contains an option to arrange with existing lenders and/or
new lenders to provide up to an aggregate of $500 million in additional commitments for revolving loans. Proceeds of loans
made under the Credit Facility may be used for general corporate purposes. See Note 12 — Financing Arrangements to the
Consolidated Financial Statements in this Form 10-K as it relates to our Credit Facility, which is incorporated by reference into
this Item 7.
Financial Condition
Our material cash requirements, including commitments for capital expenditure, as of March 31, 2024 are set forth in our Note
14 — Commitments and Contingencies to the Consolidated Financial Statements in this Form 10-K, which is incorporated by
reference into this Item 7. We expect capital expenditures to be approximately $200 million in fiscal year 2025 primarily due to
investments in hardware, software, and real estate and facilities. We believe that our cash, cash equivalents, short-term
investments, cash generated from operations and available financing facilities will be sufficient to meet these material cash
requirements, which include licensing intellectual property from professional sports organizations and players associations used
in our EA SPORTS titles (e.g., EA SPORTS FC, NFL Properties LLC, NFL Players Association and NFL Players Inc.) and
third-party content and celebrities (e.g., Disney Interactive), debt repayment obligations of $1.9 billion, and to fund our
operating requirements for the next 12 months and beyond. Our operating requirements include working capital requirements,
capital expenditures, our stock repurchase program, quarterly cash dividend, which is currently $0.19 per share, subject to
declaration by our Board of Directors or a designated Committee of the Board of Directors, and potentially, future acquisitions
or strategic investments. We may choose at any time to raise additional capital to repay debt, strengthen our financial position,
facilitate expansion, repurchase our stock, pursue strategic acquisitions and investments, and/or to take advantage of business
opportunities as they arise. There can be no assurance, however, that such additional capital will be available to us on favorable
terms, if at all, or that it will not result in substantial dilution to our existing stockholders.
During fiscal year 2024, we returned $1,505 million to stockholders through our capital return programs, repurchasing 10.0
million shares for approximately $1,300 million and returning $205 million through our quarterly cash dividend program.
Our foreign subsidiaries are generally subject to U.S. tax, and to the extent earnings from these subsidiaries can be repatriated
without a material tax cost, such earnings will not be indefinitely reinvested. As of March 31, 2024, approximately $1,121
million of our cash and cash equivalents were domiciled in foreign tax jurisdictions. All of our foreign cash is available for
repatriation without a material tax cost.
We have a “shelf” registration statement on Form S-3 on file with the SEC. This shelf registration statement, which includes a
base prospectus, allows us at any time to offer any combination of securities described in the prospectus in one or more
offerings. Unless otherwise specified in a prospectus supplement accompanying the base prospectus, we would use the net
proceeds from the sale of any securities offered pursuant to the shelf registration statement for general corporate purposes,
which may include funding for working capital, financing capital expenditures, research and development, marketing and
distribution efforts, and if opportunities arise, for acquisitions or strategic alliances. Pending such uses, we may invest the net
proceeds in interest bearing securities. In addition, we may conduct concurrent or other financings at any time.
Our ability to maintain sufficient liquidity could be affected by various risks and uncertainties including, but not limited to,
customer demand and acceptance of our products, our ability to collect our accounts receivable as they become due,
successfully achieving our product release schedules and attaining our forecasted sales objectives, economic conditions in the
United States and abroad, the impact of acquisitions and other strategic transactions in which we may engage, the impact of
competition, the seasonal and cyclical nature of our business and operating results, and the other risks described in the “Risk
Factors” section, included in Part I, Item 1A of this report.
As of March 31, 2024, we did not have any off-balance sheet arrangements.
30
Item 7A: Quantitative and Qualitative Disclosures About Market Risk
MARKET RISK
We are exposed to various market risks, including changes in foreign currency exchange rates, interest rates and market prices,
which have experienced significant volatility. Market risk is the potential loss arising from changes in market rates and market
prices. We employ established policies and practices to manage these risks. Foreign currency forward contracts are used to
hedge anticipated exposures or mitigate some existing exposures subject to foreign exchange risk as discussed below. While we
do not hedge our short-term investment portfolio, we protect our short-term investment portfolio against different market risks,
including interest rate risk as discussed below. Our cash and cash equivalents portfolio consists of highly liquid investments
with insignificant interest rate risk and original or remaining maturities of three months or less at the time of purchase. We do
not enter into derivatives or other financial instruments for speculative trading purposes and do not hedge our market price risk
relating to marketable equity securities, if any.
Foreign Currency Exchange Risk
Foreign Currency Exchange Rates. International sales are a fundamental part of our business, and the strengthening of the U.S.
dollar (particularly relative to the Euro, British pound sterling, Australian dollar, Japanese yen, Chinese yuan, South Korean
won and Polish zloty) has a negative impact on our reported international net revenue, but a positive impact on our reported
international operating expenses (particularly the Swedish krona and the Canadian dollar) because these amounts are translated
at lower rates as compared to periods in which the U.S. dollar is weaker. While we use foreign currency hedging contracts to
mitigate some foreign currency exchange risk, these activities are limited in the protection that they provide us and can
themselves result in losses.
Cash Flow Hedging Activities. We hedge a portion of our foreign currency risk related to forecasted foreign currency-
denominated sales and expense transactions by purchasing foreign currency forward contracts that generally have maturities of
18 months or less. These transactions are designated and qualify as cash flow hedges. Our hedging programs are designed to
reduce, but do not entirely eliminate, the impact of currency exchange rate movements in net revenue and research and
development expenses.
Balance Sheet Hedging Activities. We use foreign currency forward contracts to mitigate foreign currency exchange risk
associated with foreign currency-denominated monetary assets and liabilities, primarily intercompany receivables and payables.
These foreign currency forward contracts generally have a contractual term of three months or less and are transacted near
month-end.
We believe the counterparties to our foreign currency forward contracts are creditworthy multinational commercial banks.
While we believe the risk of counterparty nonperformance is not material, a sustained decline in the financial stability of
financial institutions as a result of disruption in the financial markets could affect our ability to secure creditworthy
counterparties for our foreign currency hedging programs.
Notwithstanding our efforts to mitigate some foreign currency exchange risks, there can be no assurance that our hedging
activities will adequately protect us against the risks associated with foreign currency fluctuations. As of March 31, 2024, a
hypothetical adverse foreign currency exchange rate movement of 10 percent or 20 percent would have resulted in potential
declines in the fair value on our foreign currency forward contracts used in cash flow hedging of $271 million or $542 million,
respectively. As of March 31, 2024, a hypothetical adverse foreign currency exchange rate movement of 10 percent or 20
percent would have resulted in potential losses in the Consolidated Statements of Operations on our foreign currency forward
contracts used in balance sheet hedging of $85 million or $169 million, respectively. This sensitivity analysis assumes an
adverse shift of all foreign currency exchange rates; however, all foreign currency exchange rates do not always move in the
same manner and actual results may differ materially. See Note 5 — Derivative Financial Instruments to the Consolidated
Financial Statements in this Form 10-K as it relates to our derivative financial instruments, which is incorporated by reference
into this Item 7A.
31
Interest Rate Risk
Our exposure to market risk for changes in interest rates relates primarily to our short-term investment portfolio. We manage
our interest rate risk by maintaining an investment portfolio generally consisting of debt instruments of high credit quality and
relatively short maturities. However, because short-term investments mature relatively quickly and, if reinvested, are invested at
the then-current market rates, interest income on a portfolio consisting of short-term investments is subject to market
fluctuations to a greater extent than a portfolio of longer term investments. Additionally, the contractual terms of the
investments do not permit the issuer to call, prepay or otherwise settle the investments at prices less than the stated par value.
Our investments are held for purposes other than trading. We do not use derivative financial instruments in our short-term
investment portfolio.
As of March 31, 2024, our short-term investments were classified as available-for-sale securities and, consequently, were
recorded at fair value with changes in fair value, including unrealized gains and unrealized losses not related to credit losses,
reported as a separate component of accumulated other comprehensive income (loss), net of tax, in stockholders’ equity.
Notwithstanding our efforts to manage interest rate risks, there can be no assurance that we will be adequately protected against
risks associated with interest rate fluctuations. Changes in interest rates affect the fair value of our short-term investment
portfolio. To provide a meaningful assessment of the interest rate risk associated with our short-term investment portfolio, we
performed a sensitivity analysis to determine the impact a change in interest rates would have on the value of the portfolio
assuming a 150 basis point parallel shift in the yield curve. As of March 31, 2024, a hypothetical 150 basis point increase in
interest rates would have resulted in a $4 million, or 1% decrease in the fair market value of our short-term investments.
32
Item 8:
Financial Statements and Supplementary Data
Index to Consolidated Financial Statements
Page
Consolidated Financial Statements of Electronic Arts Inc. and Subsidiaries:
Consolidated Balance Sheets as of March 31, 2024 and 2023
34
Consolidated Statements of Operations for the Years Ended March 31, 2024, 2023, and 2022
35
Consolidated Statements of Comprehensive Income for the Years Ended March 31, 2024, 2023, and 2022
36
Consolidated Statements of Stockholders’ Equity for the Years Ended March 31, 2024, 2023, and 2022
37
Consolidated Statements of Cash Flows for the Years Ended March 31, 2024, 2023, and 2022
38
Notes to Consolidated Financial Statements
39
Report of Independent Registered Public Accounting Firm (KPMG LLP, Santa Clara, CA, Auditor Firm ID: 185)
77
33
ELECTRONIC ARTS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In millions, except par value data)
March 31, 2024
March 31, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
2,900 $
2,424
Short-term investments
362
343
Receivables, net
565
684
Other current assets
420
518
Total current assets
4,247
3,969
Property and equipment, net
578
549
Goodwill
5,379
5,380
Acquisition-related intangibles, net
400
618
Deferred income taxes, net
2,380
2,462
Other assets
436
481
TOTAL ASSETS
$
13,420 $
13,459
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable
$
110 $
99
Accrued and other current liabilities
1,166
1,285
Deferred net revenue (online-enabled games)
1,814
1,901
Total current liabilities
3,090
3,285
Senior notes, net
1,882
1,880
Income tax obligations
497
607
Deferred income taxes, net
1
1
Other liabilities
437
393
Total liabilities
5,907
6,166
Commitments and contingencies (See Note 14)
Stockholders’ equity:
Preferred stock, $0.01 par value. 10 shares authorized
—
—
Common stock, $0.01 par value. 1,000 shares authorized; 266 and 273 shares
issued and outstanding, respectively
3
3
Additional paid-in capital
—
—
Retained earnings
7,582
7,357
Accumulated other comprehensive income (loss)
(72)
(67)
Total stockholders’ equity
7,513
7,293
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$
13,420 $
13,459
See accompanying Notes to Consolidated Financial Statements.
34
ELECTRONIC ARTS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended March 31,
(In millions, except per share data)
2024
2023
2022
Net revenue
$
7,562 $
7,426 $
6,991
Cost of revenue
1,710
1,792
1,859
Gross profit
5,852
5,634
5,132
Operating expenses:
Research and development
2,420
2,328
2,186
Marketing and sales
1,019
978
961
General and administrative
691
727
673
Amortization and impairment of intangibles
142
158
183
Restructuring (See Note 8)
62
111
—
Total operating expenses
4,334
4,302
4,003
Operating income
1,518
1,332
1,129
Interest and other income (expense), net
71
(6)
(48)
Income before provision for income taxes
1,589
1,326
1,081
Provision for income taxes
316
524
292
Net income
$
1,273 $
802 $
789
Earnings per share:
Basic
$
4.71 $
2.90 $
2.78
Diluted
$
4.68 $
2.88 $
2.76
Number of shares used in computation:
Basic
270
277
284
Diluted
272
278
286
See accompanying Notes to Consolidated Financial Statements.
35
ELECTRONIC ARTS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Year Ended March 31,
(In millions)
2024
2023
2022
Net income
$
1,273 $
802 $
789
Other comprehensive income (loss), net of tax:
Net gains (losses) on available-for-sale securities
1
2
(3)
Net gains (losses) on derivative instruments
(3)
(34)
76
Foreign currency translation adjustments
(3)
(50)
(8)
Total other comprehensive income (loss), net of tax
(5)
(82)
65
Total comprehensive income
$
1,268 $
720 $
854
See accompanying Notes to Consolidated Financial Statements.
36
ELECTRONIC ARTS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In millions, except share data in thousands)
Common Stock
Additional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Total
Stockholders’
Equity
Shares
Amount
Balances as of March 31, 2021
286,465
$
3
$
—
$
7,887
$
(50) $
7,840
Total comprehensive income (loss)
—
—
—
789
65
854
Stock-based compensation
—
—
528
—
—
528
Awards assumed upon acquisition
—
—
23
—
—
23
Issuance of common stock
3,108
—
(127)
—
—
(127)
Common stock repurchases
(9,522)
—
(424)
(876)
—
(1,300)
Cash dividends declared ($0.68 per
common share)
—
—
—
(193)
—
(193)
Balances as of March 31, 2022
280,051
$
3
$
—
$
7,607
$
15
$
7,625
Total comprehensive income (loss)
—
—
—
802
(82)
720
Stock-based compensation
—
—
548
—
—
548
Issuance of common stock
3,311
—
(95)
—
—
(95)
Common stock repurchases
(10,448)
—
(453)
(842)
—
(1,295)
Cash dividends declared ($0.76 per
common share)
—
—
—
(210)
—
(210)
Balances as of March 31, 2023
272,914
$
3
$
—
$
7,357
$
(67) $
7,293
Total comprehensive income (loss)
—
—
—
1,273
(5)
1,268
Stock-based compensation
—
—
584
—
—
584
Issuance of common stock
3,496
—
(119)
—
—
(119)
Common stock repurchases and excise
tax
(9,995)
—
(465)
(843)
—
(1,308)
Cash dividends declared ($0.76 per
common share)
—
—
—
(205)
—
(205)
Balances as of March 31, 2024
266,415
$
3
$
—
$
7,582
$
(72) $
7,513
See accompanying Notes to Consolidated Financial Statements.
37
ELECTRONIC ARTS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended March 31,
(In millions)
2024
2023
2022
OPERATING ACTIVITIES
Net income
$
1,273 $
802 $
789
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation, amortization, accretion and impairment
404
536
486
Stock-based compensation
584
548
528
Change in assets and liabilities:
Receivables, net
119
(34)
(77)
Other assets
148
(103)
(157)
Accounts payable
(6)
10
(7)
Accrued and other liabilities
(202)
134
169
Deferred income taxes, net
82
(221)
(329)
Deferred net revenue (online-enabled games)
(87)
(122)
497
Net cash provided by operating activities
2,315
1,550
1,899
INVESTING ACTIVITIES
Capital expenditures
(199)
(207)
(188)
Proceeds from maturities and sales of short-term investments
632
395
1,329
Purchase of short-term investments
(640)
(405)
(554)
Acquisitions, net of cash acquired
—
—
(3,391)
Net cash used in investing activities
(207)
(217)
(2,804)
FINANCING ACTIVITIES
Proceeds from issuance of common stock
77
80
77
Cash dividends paid
(205)
(210)
(193)
Cash paid to taxing authorities for shares withheld from employees
(196)
(175)
(204)
Common stock repurchases
(1,300)
(1,295)
(1,300)
Net cash used in financing activities
(1,624)
(1,600)
(1,620)
Effect of foreign exchange on cash and cash equivalents
(8)
(41)
(3)
Increase (decrease) in cash and cash equivalents
476
(308)
(2,528)
Beginning cash and cash equivalents
2,424
2,732
5,260
Ending cash and cash equivalents
$
2,900 $
2,424 $
2,732
Supplemental cash flow information:
Cash paid during the year for income taxes, net
$
300 $
583 $
629
Cash paid during the year for interest
56
56
56
Non-cash investing activities:
Change in accrued capital expenditures
$
25 $
(3) $
19
See accompanying Notes to Consolidated Financial Statements.
38
ELECTRONIC ARTS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Electronic Arts is a global leader in digital interactive entertainment. We develop, market, publish and deliver games, content
and services that can be experienced on game consoles, PCs, mobile phones and tablets. At our core is a portfolio of intellectual
property from which we create innovative games and experiences that deliver high-quality entertainment and drive engagement
across our network of hundreds of millions of unique active accounts. Our portfolio includes brands that we either wholly own
(such as Apex Legends, Battlefield, and The Sims) or license from others (such as the licenses within EA SPORTS FC and EA
SPORTS Madden NFL). Through our live services offerings, we offer high-quality experiences designed to provide value to
players, and extend and enhance gameplay. These live services include extra content, subscription offerings and other revenue
generated in addition to the sale of our full games. We are focusing on building games and experiences that grow the global
online communities around our key franchises; deepening engagement through connecting interactive storytelling to key
intellectual property; and building re-occurring revenue from scaling our live services and growth in our annualized sports
franchises, our console, PC and mobile catalog titles.
Consolidation
The accompanying Consolidated Financial Statements include the accounts of Electronic Arts Inc. and its wholly-owned
subsidiaries. Intercompany balances and transactions have been eliminated in consolidation.
Fiscal Year
Our fiscal year is reported on a 52- or 53-week period that ends on the Saturday nearest March 31. Our results of operations for
the fiscal year ended March 31, 2024 contained 52 weeks and ended on March 30, 2024. Our results of operations for the fiscal
years ended March 31, 2023 and 2022, each contained 52 weeks and ended on April 1, 2023 and April 2, 2022, respectively.
For simplicity of disclosure, all fiscal periods are referred to as ending on a calendar month end.
Use of Estimates
The preparation of Consolidated Financial Statements in conformity with accounting principles generally accepted in the United
States (“U.S. GAAP”) requires us to make estimates and assumptions that affect the amounts reported in our Consolidated
Financial Statements and the accompanying notes. Such estimates include offering periods for deferred net revenue, sales
returns and allowances, provisions for doubtful accounts, accrued liabilities, relative stand-alone selling price for identified
performance obligations in our revenue transactions, losses on royalty commitments, estimates regarding the recoverability of
prepaid royalties, long-lived assets, discount rates used in the measurement and recognition of lease liabilities, assets acquired
and liabilities assumed in business combinations, certain estimates related to the measurement and recognition of costs resulting
from our stock-based payment awards, unrecognized tax benefits, deferred income tax assets and associated valuation
allowances, as well as estimates used in our goodwill, intangibles and short-term investment impairment tests. These estimates
require us to make judgments, involve analysis of historical and future trends, can require extended periods of time to resolve,
and are subject to change from period to period. In all cases, actual results could differ materially from our estimates.
Recently Issued Accounting Standards
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment
Disclosures. The amendments in this update expand annual and interim disclosure requirements for reportable segments,
primarily through enhanced disclosures about significant segment expenses. This update is effective for our annual report for
fiscal year 2025, and interim periods thereafter, with early adoption permitted, and will be applied retrospectively to all prior
periods presented in the financial statements. We are currently evaluating the timing of adoption and impact of this ASU on our
Consolidated Financial Statements and related disclosures.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures. The
amendments further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation
categories and income taxes paid by jurisdiction. This ASU is effective for our annual report for fiscal year 2026, with early
adoption permitted, and should be applied either prospectively or retrospectively. We are currently evaluating the timing of
adoption and impact of this ASU on our Consolidated Financial Statements and related disclosures.
39
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash, Cash Equivalents, and Short-Term Investments
Cash equivalents consist of highly liquid investments with insignificant interest rate risk and original or remaining maturities of
three months or less at the time of purchase.
Short-term investments consist of debt securities with original or remaining maturities of greater than three months at the time
of purchase and less than a year, and are accounted for as available-for-sale securities and are recorded at fair value. Cash, cash
equivalents and short-term investments are available for use in current operations or other activities such as capital
expenditures, business combinations and stock repurchases.
Unrealized gains and losses on our short-term investments are recorded as a component of accumulated other comprehensive
income (loss) in stockholders’ equity, net of tax, until either (1) the security is sold, (2) the security has matured, (3) we
determine that the fair value of the security has declined below its adjusted cost basis and the decline is due to an expected
credit loss, or (4) we intend to, or more likely than not would be required to, sell a security in an unrealized loss position before
the recovery of its amortized cost basis. Realized gains and losses on our short-term investments are calculated based on the
specific identification method and are reclassified from accumulated other comprehensive income (loss) to interest and other
income (expense), net. Determining whether a decline in fair value is due to an expected credit loss requires management
judgment based on the specific facts and circumstances of each security. The ultimate value realized on these securities is
subject to market price volatility until they are sold.
Our short-term investments are evaluated for allowances and impairment quarterly. For investments in an unrealized loss
position, we consider various factors in determining whether we should recognize an allowance for expected credit losses or an
impairment charge, including the credit quality of the issuer, changes to the rating of the security by rating agencies, the extent
to which fair value is less than amortized cost, reason for the decline in value and potential recovery period, the financial
condition and near-term prospects of the investees, our intent to sell and ability to hold the investment for a period of time
sufficient to allow for any anticipated recovery in market value, and any contractual terms impacting the prepayment or
settlement process, among other factors. We recognize an allowance for credit losses, up to the amount of unrealized loss when
appropriate, and write down the amortized cost basis of the investment if we intend to, or it is more likely than not we will be
required to, sell the investment before the recovery of its amortized cost basis. Allowances for credit losses and write-downs are
recognized in our Consolidated Statements of Operations, and unrealized losses not related to credit losses are recognized in
other comprehensive income (loss). Based on our evaluation, we did not recognize an allowance for credit losses, nor did we
recognize any impairments, as of March 31, 2024 and 2023.
Property and Equipment, Net
Property and equipment, net, are stated at cost. Depreciation is calculated using the straight-line method over the following
useful lives:
Buildings
20 to 25 years
Computer equipment and software
2 to 6 years
Equipment, furniture and fixtures, and other
3 to 5 years
Leasehold improvements
Lesser of the lease term or the estimated useful lives of the
improvements, ranging from 1 to 15 years
We capitalize costs associated with internal-use software development once a project has reached the application development
stage. Such capitalized costs include external direct costs utilized in developing or obtaining the software, and payroll and
payroll-related expenses for employees who are directly associated with the development of the software. Capitalization of such
costs begins when the preliminary project stage is complete and ceases at the point in which the project is substantially
complete and is ready for its intended purpose. Once internal-use software is ready for its intended use, the assets are
depreciated on a straight-line basis over each asset’s estimated useful life, which is generally three years. We also capitalize
costs associated with the purchase of possessable internal-use software licenses. The net book value of capitalized costs
associated with internal-use software was $93 million and $90 million as of March 31, 2024 and 2023, respectively.
40
Acquisition-Related Intangibles and Other Long-Lived Assets
We recognize acquisition-related intangible assets, such as acquired developed and core technology, in connection with
business combinations. We amortize the cost of acquisition-related intangible assets that have finite useful lives generally on a
straight-line basis over the lesser of their estimated useful lives or the agreement terms, currently from two to seven years. We
evaluate acquisition-related intangibles and other long-lived assets for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets is measured by a comparison of
the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset group. This includes
assumptions about future prospects for the business that the asset relates to and typically involves computations of the estimated
future cash flows to be generated by these businesses. Based on these judgments and assumptions, we determine whether we
need to take an impairment charge to reduce the value of the asset stated on our Consolidated Balance Sheets to reflect its
estimated fair value. When we consider such assets to be impaired, the amount of impairment we recognize is measured by the
amount by which the carrying amount of the asset exceeds its fair value.
Goodwill Impairment
In assessing impairment on our goodwill, we first analyze qualitative factors to determine whether it is more likely than not that
the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform a
goodwill impairment test. The qualitative factors we assess include long-term prospects of our performance, share price trends
and market capitalization, and Company specific events. If we conclude it is more likely than not that the fair value of a
reporting unit exceeds its carrying amount, we do not need to perform an impairment test. If based on that assessment, we
believe it is more likely than not that the fair value of the reporting unit is less than its carrying value we will measure goodwill
for impairment by applying fair value-based tests at the reporting unit level. Reporting units are determined by the components
of operating segments that constitute a business for which (1) discrete financial information is available, (2) segment
management regularly reviews the operating results of that component, and (3) whether the component has dissimilar economic
characteristics to other components. As of March 31, 2024, we have only one reportable segment, which represents our only
operating segment.
Revenue Recognition
We derive revenue principally from sales of our games, and related extra content and services that can be experienced on game
consoles, PCs, mobile phones and tablets. Our product and service offerings include, but are not limited to, the following:
•
full games with both online and offline functionality (“Games with Services”), which generally includes (1) the initial
game delivered digitally or via physical disc at the time of sale and typically provide access to offline core game
content (“software license”); (2) updates on a when-and-if-available basis, such as software patches or updates, and/or
additional free content to be delivered in the future (“future update rights”); and (3) a hosted connection for online
playability (“online hosting”);
•
full games with online-only functionality which require an Internet connection to access all gameplay and functionality
(“Online-Hosted Service Games”);
•
extra content related to Games with Services and Online-Hosted Service Games which provides access to additional
in-game content;
•
subscriptions, such as EA Play and EA Play Pro, that generally offer access to a selection of full games, in-game
content, online services and other benefits typically for a recurring monthly or annual fee; and
•
licensing to third parties to distribute and host our games and content.
We evaluate and recognize revenue by:
•
identifying the contract(s) with the customer;
•
identifying the performance obligations in the contract;
•
determining the transaction price;
•
allocating the transaction price to performance obligations in the contract; and
•
recognizing revenue as each performance obligation is satisfied through the transfer of a promised good or service to a
customer (i.e., “transfer of control”).
41
Certain of our full game and/or extra content are sold to resellers with a contingency that the full game and/or extra content
cannot be resold prior to a specific date (“Street Date Contingency”). We recognize revenue for transactions that have a Street
Date Contingency when the Street Date Contingency is removed and the full game and/or extra content can be resold by the
reseller. For digital full game and/or extra content downloads sold to customers, we recognize revenue when the full game and/
or extra content is made available for download to the customer.
Online-Enabled Games
Games with Services. Our sales of Games with Services are evaluated to determine whether the software license, future update
rights and the online hosting are distinct and separable. Sales of Games with Services are generally determined to have three
distinct performance obligations: software license, future update rights, and the online hosting.
Since we do not sell the performance obligations on a stand-alone basis, we consider market conditions and other observable
inputs to estimate the stand-alone selling price for each performance obligation. For Games with Services, generally 75 percent
of the sales price is allocated to the software license performance obligation and recognized at a point in time when control of
the license has been transferred to the customer. The remaining 25 percent is allocated to the future update rights and the online
hosting performance obligations and recognized ratably as the service is provided (over the Estimated Offering Period).
Online-Hosted Service Games. Sales of our Online-Hosted Service Games are determined to have one distinct performance
obligation: the online hosting. We recognize revenue from these arrangements ratably as the service is provided (over the
Estimated Offering Period).
Extra Content. Revenue received from sales of downloadable content are derived primarily from the sale of virtual currencies
and digital in-game content that are designed to extend and enhance players’ game experience. Sales of extra content are
accounted for in a manner consistent with the treatment for our Games with Services and Online-Hosted Service Games as
discussed above, depending upon whether or not the extra content has offline functionality. That is, if the extra content has
offline functionality, then the extra content is accounted for similarly to Games with Services (generally determined to have
three distinct performance obligations: software license, future update rights, and the online hosting). If the extra content does
not have offline functionality, then the extra content is determined to have one distinct performance obligation: the online-
hosted service.
Subscriptions
Sales of our subscriptions are deemed to be one performance obligation, the online hosting, and we recognize revenue from
these arrangements ratably over the subscription term as the performance obligation is satisfied.
Licensing Revenue
We utilize third-party licensees to distribute and host our games and content in accordance with license agreements, for which
the licensees typically pay us a fixed minimum guarantee and/or sales-based royalties. These arrangements typically include
multiple performance obligations, such as a time-based license of software and future update rights. We recognize as revenue a
portion of the minimum guarantee when we transfer control of the license of software (generally upon commercial launch) and
the remaining portion ratably over the contractual term in which we provide the licensee with future update rights. Any sales-
based royalties are generally recognized as the related sales occur by the licensee.
Significant Judgments around Revenue Arrangements
Identifying performance obligations. Performance obligations promised in a contract are identified based on the goods and
services that will be transferred to the customer that are both capable of being distinct, (i.e., the customer can benefit from the
goods or services either on its own or together with other resources that are readily available), and are distinct in the context of
the contract (i.e., it is separately identifiable from other goods or services in the contract). To the extent a contract includes
multiple promises, we must apply judgment to determine whether those promises are separate and distinct performance
obligations. If these criteria are not met, the promises are accounted for as a combined performance obligation.
42
Determining the transaction price. The transaction price is determined based on the consideration that we will be entitled to
receive in exchange for transferring our goods and services to the customer. Determining the transaction price often requires
judgment, based on an assessment of contractual terms and business practices. It further includes review of variable
consideration such as discounts, sales returns, price protection, and rebates, which is estimated at the time of the transaction. In
addition, the transaction price does not include an estimate of the variable consideration related to sales-based royalties. Sales-
based royalties are recognized as the sales occur.
Allocating the transaction price. Allocating the transaction price requires that we determine an estimate of the relative stand-
alone selling price for each distinct performance obligation. Determining the relative stand-alone selling price is inherently
subjective, especially in situations where we do not sell the performance obligation on a stand-alone basis (which occurs in the
majority of our transactions). In those situations, we determine the relative stand-alone selling price based on various
observable inputs using all information that is reasonably available. Examples of observable inputs and information include:
historical internal pricing data, cost plus margin analysis, pre-release versus post-release costs, and pricing data from
competitors to the extent the data is available. The results of our analysis resulted in a specific percentage of the transaction
price being allocated to each performance obligation.
Determining the Estimated Offering Period. The offering period is the period in which we offer to provide the future update
rights and/or online hosting for the game and related extra content sold. Because the offering period is not an explicitly defined
period, we must make an estimate of the offering period for the service-related performance obligations (i.e., future update
rights and online hosting). Determining the Estimated Offering Period is inherently subjective and is subject to regular revision.
Generally, we consider the average period of time customers are online when estimating the offering period. We also consider
the estimated period of time between the date a game unit is sold to a reseller and the date the reseller sells the game unit to the
customer (i.e., time in channel). Based on these two factors, we then consider the method of distribution. For example, games
and extra content sold at retail would have a composite offering period equal to the online gameplay period plus time in channel
as opposed to digitally-distributed games and extra content which are delivered immediately via digital download and therefore,
the offering period is estimated to be only the online gameplay period.
Additionally, we consider results from prior analyses, known and expected online gameplay trends, as well as disclosed service
periods for competitors’ games in determining the Estimated Offering Period for future sales. We believe this provides a
reasonable depiction of the transfer of future update rights and online hosting to our customers, as it is the best representation of
the time period during which our games and extra content are experienced. We recognize revenue for future update rights and
online hosting performance obligations ratably on a straight-line basis over this period as there is a consistent pattern of
delivery for these performance obligations. Revenue for service-related performance obligations for digitally-distributed games
and extra content is recognized over an estimated eight-month period beginning in the month of sale, revenue for service-related
performance obligations for games and extra content sold through retail is recognized over an estimated ten-month period
beginning in the month of sale, and revenue for service related performance obligations related to our PC and console free-to-
play games is recognized generally over a twelve-month period beginning in the month of sale.
Principal Agent Considerations
We evaluate sales to end customers of our full games and related content via third-party storefronts, including digital storefronts
such as Microsoft’s Xbox Store, Sony’s PlayStation Store, Apple App Store, and Google Play Store, in order to determine
whether or not we are acting as the principal in the sale to the end customer, which we consider in determining if revenue
should be reported gross or net of fees retained by the third-party storefront. An entity is the principal if it controls a good or
service before it is transferred to the end customer. Key indicators that we evaluate in determining gross versus net treatment
include but are not limited to the following:
•
the underlying contract terms and conditions between the various parties to the transaction;
•
which party is primarily responsible for fulfilling the promise to provide the specified good or service to the end
customer;
•
which party has discretion in establishing the price for the specified good or service; and
•
which party has title risk before the specified good or service has been transferred to the end customer.
Based on an evaluation of the above indicators, except as discussed below, we have determined that generally the third party is
considered the principal to end customers for the sale of our full games and related content. We therefore report revenue related
to these arrangements net of the fees retained by the storefront. However, for sales arrangements via Apple App Store and
Google Play Store, EA is considered the principal to the end customer and thus, we report revenue on a gross basis and mobile
platform fees are reported within cost of revenue.
43
Payment Terms
Substantially all of our transactions have payment terms, whether customary or on an extended basis, of less than one year;
therefore, we generally do not adjust the transaction price for the effects of any potential financing components that may exist.
Sales and Value-Added Taxes
Revenue is recorded net of taxes assessed by governmental authorities that are imposed at the time of the specific revenue-
producing transaction between us and our customer, such as sales and value-added taxes.
Sales Returns and Price Protection Reserves
Sales returns and price protection are considered variable consideration under ASC 606. We reduce revenue for estimated
future returns and price protection which may occur with our distributors and retailers (“channel partners”). Price protection
represents our practice to provide our channel partners with a credit allowance to lower their wholesale price on a particular
game unit that they have not resold to customers. The amount of the price protection for permanent markdowns is the difference
between the old wholesale price and the new reduced wholesale price. Credits are also given for short-term promotions that
temporarily reduce the wholesale price. In certain countries we also have a practice for allowing channel partners to return older
products in the channel in exchange for a credit allowance.
When evaluating the adequacy of sales returns and price protection reserves, we analyze the following: historical credit
allowances, current sell-through of our channel partners’ inventory of our products, current trends in retail and the video game
industry, changes in customer demand, acceptance of our products, and other related factors. In addition, we monitor the
volume of sales to our channel partners and their inventories, as substantial overstocking in the distribution channel could result
in high returns or higher price protection in subsequent periods.
Taxes Collected from Customers and Remitted to Governmental Authorities
Taxes assessed by a government authority that are both imposed on and concurrent with specific revenue transactions between
us and our customers are presented on a net basis in our Consolidated Statements of Operations.
Concentration of Credit Risk and Significant Customers
We extend credit to various customers. Collection of trade receivables may be affected by changes in economic or other
industry conditions and may, accordingly, impact our overall credit risk. Although we generally do not require collateral, we
perform ongoing credit evaluations of our customers and maintain reserves for potential credit losses. Invoices are aged based
on contractual terms with our customers. The provision for doubtful accounts is recorded as a charge to general and
administrative expense when a potential loss is identified. Losses are written off against the allowance when the receivable is
determined to be uncollectible. At March 31, 2024, we had two customers who accounted for approximately 32 percent and 27
percent of our consolidated gross receivables, respectively. At March 31, 2023, we had two customers who accounted for
approximately 32 percent and 30 percent of our consolidated gross receivables, respectively.
A majority of our sales are made via digital resellers, channel and platform partners. During the fiscal years 2024, 2023, and
2022, approximately 80 percent, 81 percent, and 77 percent, respectively, of our net revenue was derived from our top ten
customers and/or platform partners.
Currently, a majority of our revenue is derived through sales of products and services playable on hardware consoles from Sony
and Microsoft. For the fiscal years ended March 31, 2024, 2023, and 2022, our net revenue for products and services on Sony’s
PlayStation 4 and 5, and Microsoft’s Xbox One and Series X consoles (combined across all four platforms) was approximately
59 percent, 58 percent, and 60 percent, respectively. These platform partners have significant influence over the products and
services that we offer on their platforms.
Short-term investments are placed with high quality financial institutions or in short-duration, investment-grade securities. We
limit the amount of credit exposure in any one financial institution or type of investment instrument.
44
Royalties and Licenses
Royalty-based obligations with content licensors and distribution affiliates are either paid in advance and capitalized as prepaid
royalties or are accrued as incurred and subsequently paid. These royalty-based obligations are generally expensed to cost of
revenue at the greater of the contractual rate or an effective royalty rate based on the total projected net revenue for contracts
with guaranteed minimums. Prepayments made to thinly capitalized independent software developers and co-publishing
affiliates are generally made in connection with the development of a particular product, and therefore, we are subject to
development risk prior to the release of the product. Accordingly, payments that are due prior to completion of a product are
generally expensed to research and development over the development period as the services are incurred. Payments due after
completion of the product (primarily royalty-based in nature) are generally expensed as cost of revenue.
Our contracts with some licensors include minimum guaranteed royalty payments, which are initially recorded as an asset and
as a liability at the contractual amount when no performance remains with the licensor. When performance remains with the
licensor, we record guarantee payments as an asset when actually paid and as a liability when incurred, rather than recording the
asset and liability upon execution of the contract.
Each quarter, we also evaluate the expected future realization of our royalty-based assets, as well as any unrecognized
minimum commitments not yet paid to determine amounts we deem unlikely to be realized through future revenue. Any
impairments or losses determined before the launch of a product are generally charged to research and development expense.
Impairments or losses determined post-launch are charged to cost of revenue. We evaluate long-lived royalty-based assets for
impairment using undiscounted cash flows when impairment indicators exist. If an impairment exists, then the related assets are
written down to fair value. Unrecognized minimum royalty-based commitments are recognized when the underlying intellectual
property is abandoned (i.e., the date EA commits to cease use of the IP) or the contractual rights to use the intellectual property
are terminated.
Advertising Costs
We generally expense advertising costs as incurred, except for production costs associated with media campaigns, which are
recognized as prepaid assets (to the extent paid in advance) and expensed at the first run of the advertisement. We are
reimbursed by our vendors for certain advertising costs incurred by us that benefit our vendors. Such amounts are recognized as
a reduction of marketing and sales expense if the advertising (1) is specific to the vendor, (2) represents an identifiable benefit
to us, and (3) represents an incremental cost to us. Vendor reimbursements of advertising costs of $12 million, $37 million, and
$37 million reduced marketing and sales expense for the fiscal years ended March 31, 2024, 2023, and 2022, respectively. For
the fiscal years ended March 31, 2024, 2023, and 2022, advertising expense, net of vendor reimbursements, totaled
approximately $375 million, $348 million, and $396 million, respectively.
Software Development Costs
Research and development costs, which consist primarily of software development costs, are expensed as incurred. We are
required to capitalize software development costs incurred for computer software to be sold, leased or otherwise marketed after
technological feasibility of the software is established or for development costs that have alternative future uses. Under our
current practice of developing new games, the technological feasibility of the underlying software is not established until
substantially all product development and testing is complete, which generally includes the development of a working model.
Software development costs that have been capitalized to date have been insignificant.
Foreign Currency Translation
Generally, the functional currency for our foreign operating subsidiaries is its local currency. Assets and liabilities of foreign
operations are translated into U.S. dollars using month-end exchange rates, and revenue and expenses are translated into U.S.
dollars using average exchange rates. The effects of foreign currency translation adjustments are included as a component of
accumulated other comprehensive income (loss) in stockholders’ equity.
Foreign currency transaction gains and losses are a result of the effect of exchange rate changes on transactions denominated in
currencies other than the functional currency. Net gains (losses) on foreign currency transactions of $(10) million, $31 million,
and $(22) million for the fiscal years ended March 31, 2024, 2023, and 2022, respectively, are included in interest and other
income (expense), net, in our Consolidated Statements of Operations. These net gains (losses) on foreign currency transactions
are partially offset by net gains (losses) on our foreign currency forward contracts of $12 million, $(29) million, and $21 million
for the fiscal years ended March 31, 2024, 2023, and 2022, respectively. See Note 5 for additional information on our foreign
currency forward contracts.
45
Income Taxes
We recognize deferred tax assets and liabilities for both the expected impact of differences between the financial statement
amount and the tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax losses and tax
credit carryforwards. We do not recognize any deferred taxes related to the U.S. taxes on foreign earnings as we recognize these
taxes as a period cost.
Every quarter, we perform a realizability analysis to evaluate whether it is more likely than not that all or a portion of our
deferred tax assets will not be realized. Our Swiss deferred tax asset realizability analysis relies upon future Swiss taxable
income as the primary source of taxable income but considers all available sources of Swiss income based on the positive and
negative evidence. We give more weight to evidence that can be objectively verified. However, estimating future Swiss taxable
income requires judgment, specifically related to assumptions about expected growth rates of future Swiss taxable income,
which are based primarily on third party market and industry growth data. Actual results that differ materially from those
estimates could have a material impact on our valuation allowance assessment. Although objectively verifiable, Swiss interest
rates have an impact on the valuation allowance and are based on published Swiss guidance. Any significant changes to such
interest rates could result in a material impact to the valuation allowance. Switzerland has a seven-year carryforward period and
does not permit the carry back of losses. Actions we take in connection with acquisitions could also impact the utilization of our
Swiss deferred tax asset.
Stock Repurchases
Shares of our common stock repurchased pursuant to our repurchase program, if any, are retired. The purchase price of such
repurchased shares of common stock is recorded as a reduction to additional paid-in capital. If the balance in additional paid-in
capital is exhausted, the excess is recorded as a reduction to retained earnings.
Restructuring
We generally recognize employee severance costs when payments are probable and amounts are estimable or when notification
occurs, depending on the region in which an employee works. Costs related to non-lease contracts without future benefit or
contract termination are recognized at the earlier of the contract termination or the cease-use dates. Other exit-related costs are
recognized as incurred.
46
(3) FAIR VALUE MEASUREMENTS
There are various valuation techniques used to estimate fair value, the primary one being the price that would be received from
selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
When determining fair value, we consider the principal or most advantageous market in which we would transact and consider
assumptions that market participants would use when pricing the asset or liability. We measure certain financial and
nonfinancial assets and liabilities at fair value on a recurring and nonrecurring basis.
Fair Value Hierarchy
The three levels of inputs that may be used to measure fair value are as follows:
•
Level 1. Quoted prices in active markets for identical assets or liabilities.
•
Level 2. Observable inputs other than quoted prices included within Level 1, such as quoted prices for similar assets or
liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or model-
derived valuations in which all significant inputs are observable or can be derived principally from or corroborated with
observable market data for substantially the full term of the assets or liabilities.
•
Level 3. Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of
assets or liabilities.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
As of March 31, 2024 and 2023, our assets and liabilities that were measured and recorded at fair value on a recurring basis
were as follows (in millions):
Fair Value Measurements at Reporting Date Using
As of
March 31,
2024
Quoted Prices in
Active Markets
for Identical
Financial
Instruments
Significant
Other
Observable
Inputs
Significant
Unobservable
Inputs
(Level 1)
(Level 2)
(Level 3)
Balance Sheet Classification
Assets
Bank and time deposits
$
58
$
58
$
—
$
—
Cash equivalents
Money market funds
1,038
1,038
—
—
Cash equivalents
Available-for-sale securities:
Corporate bonds
130
—
130
—
Short-term investments
U.S. Treasury securities
95
95
—
—
Short-term investments
U.S. agency securities
9
—
9
—
Short-term investments
Commercial paper
74
—
74
—
Short-term investments and
cash equivalents
Foreign government securities
8
—
8
—
Short-term investments
Asset-backed securities
41
—
41
—
Short-term investments
Certificates of deposit
13
—
13
—
Short-term investments
Foreign currency derivatives
29
—
29
—
Other current assets and other
assets
Deferred compensation plan assets (a)
30
30
—
—
Other assets
Total assets at fair value
$
1,525
$
1,221
$
304
$
—
Liabilities
Foreign currency derivatives
$
20
$
—
$
20
$
—
Accrued and other current
liabilities and other liabilities
Deferred compensation plan liabilities (a)
31
31
—
—
Other liabilities
Total liabilities at fair value
$
51
$
31
$
20
$
—
47
Fair Value Measurements at Reporting Date Using
As of
March 31,
2023
Quoted Prices in
Active Markets
for Identical
Financial
Instruments
Significant
Other
Observable
Inputs
Significant
Unobservable
Inputs
(Level 1)
(Level 2)
(Level 3)
Balance Sheet Classification
Assets
Bank and time deposits
$
56
$
56
$
—
$
—
Cash equivalents
Money market funds
956
956
—
—
Cash equivalents
Available-for-sale securities:
Corporate bonds
113
—
113
—
Short-term investments
U.S. Treasury securities
80
80
—
—
Short-term investments
U.S. agency securities
28
—
28
—
Short-term investments and
cash equivalents
Commercial paper
66
—
66
—
Short-term investments and
cash equivalents
Foreign government securities
11
—
11
—
Short-term investments
Asset-backed securities
37
—
37
—
Short-term investments
Certificates of deposit
14
—
14
—
Short-term investments
Foreign currency derivatives
29
—
29
—
Other current assets and other
assets
Deferred compensation plan assets (a)
23
23
—
—
Other assets
Total assets at fair value
$
1,413
$
1,115
$
298
$
—
Liabilities
Foreign currency derivatives
$
65
$
—
$
65
$
—
Accrued and other current
liabilities and other liabilities
Deferred compensation plan liabilities (a)
24
24
—
—
Other liabilities
Total liabilities at fair value
$
89
$
24
$
65
$
—
(a) The Deferred Compensation Plan consists of various mutual funds. See Note 15 for additional information regarding our
Deferred Compensation Plan.
48
(4) FINANCIAL INSTRUMENTS
Cash and Cash Equivalents
As of March 31, 2024 and 2023, our cash and cash equivalents were $2,900 million and $2,424 million, respectively. Cash
equivalents were valued using quoted market prices or other readily available market information.
Short-Term Investments
Short-term investments consisted of the following as of March 31, 2024 and 2023 (in millions):
As of March 31, 2024
As of March 31, 2023
Cost or
Amortized
Cost
Gross Unrealized
Fair
Value
Cost or
Amortized
Cost
Gross Unrealized
Fair
Value
Gains
Losses
Gains
Losses
Corporate bonds
$
130 $
— $
— $
130 $
114 $
— $
(1) $
113
U.S. Treasury securities
95
—
—
95
80
—
—
80
U.S. agency securities
9
—
—
9
25
—
—
25
Commercial paper
66
—
—
66
63
—
—
63
Foreign government securities
8
—
—
8
11
—
—
11
Asset-backed securities
41
—
—
41
37
—
—
37
Certificates of deposit
13
—
—
13
14
—
—
14
Short-term investments
$
362 $
— $
— $
362 $
344 $
— $
(1) $
343
The following table summarizes the amortized cost and fair value of our short-term investments, classified by stated maturity as
of March 31, 2024 and 2023 (in millions):
As of March 31, 2024
As of March 31, 2023
Amortized
Cost
Fair
Value
Amortized
Cost
Fair
Value
Short-term investments
Due within 1 year
$
231 $
231 $
267 $
266
Due 1 year through 5 years
126
126
72
72
Due after 5 years
5
5
5
5
Short-term investments
$
362 $
362 $
344 $
343
49
(5) DERIVATIVE FINANCIAL INSTRUMENTS
Assets or liabilities associated with our derivative instruments and hedging activities are recorded at fair value in other current
assets/other assets, or accrued and other current liabilities/other liabilities, respectively, on our Consolidated Balance Sheets. As
discussed below, the accounting for gains and losses resulting from changes in fair value depends on the use of the derivative
instrument and whether it is designated and qualifies for hedge accounting.
We transact business in various foreign currencies and have significant international sales and expenses denominated in foreign
currencies, subjecting us to foreign currency risk. We purchase foreign currency forward contracts, generally with maturities of
18 months or less, to reduce the volatility of cash flows primarily related to forecasted revenue and expenses denominated in
certain foreign currencies. Our cash flow risks are primarily related to fluctuations in the Euro, British pound sterling, Canadian
dollar, Swedish krona, Australian dollar, Japanese yen, Chinese yuan, South Korean won and Polish zloty. In addition, we
utilize foreign currency forward contracts to mitigate foreign currency exchange risk associated with foreign-currency-
denominated monetary assets and liabilities, primarily intercompany receivables and payables. The foreign currency forward
contracts not designated as hedging instruments generally have a contractual term of approximately three months or less and are
transacted near month-end. We do not use foreign currency forward contracts for speculative trading purposes.
Cash Flow Hedging Activities
Certain of our forward contracts are designated and qualify as cash flow hedges. To qualify for hedge accounting treatment, all
hedging relationships are formally documented at the inception of the hedges and must be highly effective in offsetting changes
to future cash flows on hedged transactions. The derivative assets or liabilities associated with our hedging activities are
recorded at fair value in other current assets/other assets, or accrued and other current liabilities/other liabilities, respectively, on
our Consolidated Balance Sheets. The gains or losses resulting from changes in the fair value of these hedges is initially
reported, net of tax, as a component of accumulated other comprehensive income (loss) in stockholders’ equity. The gains or
losses resulting from changes in the fair value of these hedges are subsequently reclassified into net revenue or research and
development expenses, as appropriate, in the period when the forecasted transaction is recognized in our Consolidated
Statements of Operations. In the event that the underlying forecasted transactions do not occur, or it becomes remote that they
will occur within the defined hedge period, the gains or losses on the related cash flow hedges are reclassified from
accumulated other comprehensive income (loss) to net revenue or research and development expenses, in our Consolidated
Statements of Operations.
Total gross notional amounts and fair values for currency derivatives with cash flow hedge accounting designation are as
follows (in millions):
As of March 31, 2024
As of March 31, 2023
Notional
Amount
Fair Value
Notional
Amount
Fair Value
Asset
Liability
Asset
Liability
Forward contracts to purchase
$
413 $
1 $
4 $
371 $
2 $
9
Forward contracts to sell
$
2,329 $
24 $
11 $
2,255 $
23 $
46
The effects of cash flow hedge accounting in our Consolidated Statements of Operations for the fiscal years ended March 31,
2024, 2023, and 2022 are as follows (in millions):
Year Ended March 31,
2024
2023
2022
Net revenue
Research and
development
Net revenue
Research and
development
Net revenue
Research and
development
Total amounts presented in
our Consolidated Statements
of Operations in which the
effects of cash flow hedges are
recorded
$
7,562 $
2,420 $
7,426 $
2,328 $
6,991 $
2,186
Gains (losses) on foreign
currency forward contracts
designated as cash flow
hedges
$
56 $
(8) $
185 $
(18) $
(14) $
12
50
Balance Sheet Hedging Activities
Our foreign currency forward contracts that are not designated as hedging instruments are accounted for as derivatives whereby
the fair value of the contracts are reported as other current assets or accrued and other current liabilities on our Consolidated
Balance Sheets, and gains and losses resulting from changes in the fair value are reported in interest and other income
(expense), net, in our Consolidated Statements of Operations. The gains and losses on these foreign currency forward contracts
generally offset the gains and losses in the underlying foreign-currency-denominated monetary assets and liabilities, which are
also reported in interest and other income (expense), net, in our Consolidated Statements of Operations.
Total gross notional amounts and fair values for currency derivatives that are not designated as hedging instruments are
accounted for as follows (in millions):
As of March 31, 2024
As of March 31, 2023
Notional
Amount
Fair Value
Notional
Amount
Fair Value
Asset
Liability
Asset
Liability
Forward contracts to purchase
$
452 $
— $
5 $
504 $
4 $
—
Forward contracts to sell
$
419 $
4 $
— $
587 $
— $
10
The effect of foreign currency forward contracts not designated as hedging instruments in our Consolidated Statements of
Operations for the fiscal years ended March 31, 2024, 2023, and 2022, was as follows (in millions):
2024
2023
2022
Interest and other income (expense), net
Total amounts presented in our Consolidated Statements of
Operations in which the effects of balance sheet hedges are
recorded
$
71 $
(6) $
(48)
Gains (losses) on foreign currency forward contracts not
designated as hedging instruments
$
12 $
(29) $
21
Year Ended March 31,
51
(6) ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
The changes in accumulated other comprehensive income (loss) by component, net of tax, for the fiscal years ended March 31,
2024, 2023, and 2022 are as follows (in millions):
Unrealized Net
Gains (Losses) on
Available-for-Sale
Securities
Unrealized Net
Gains (Losses) on
Derivative
Instruments
Foreign Currency
Translation
Adjustments
Total
Balances as of March 31, 2021
$
— $
(29) $
(21) $
(50)
Other comprehensive income (loss) before
reclassifications
(3)
74
(8)
63
Amounts reclassified from accumulated other
comprehensive income (loss)
—
2
—
2
Total other comprehensive income (loss), net of tax
(3)
76
(8)
65
Balances as of March 31, 2022
$
(3) $
47 $
(29) $
15
Other comprehensive income (loss) before
reclassifications
1
133
(50)
84
Amounts reclassified from accumulated other
comprehensive income (loss)
1
(167)
—
(166)
Total other comprehensive income (loss), net of tax
2
(34)
(50)
(82)
Balances as of March 31, 2023
$
(1) $
13 $
(79) $
(67)
Other comprehensive income (loss) before
reclassifications
1
45
(3)
43
Amounts reclassified from accumulated other
comprehensive income (loss)
—
(48)
—
(48)
Total other comprehensive income (loss), net of tax
1
(3)
(3)
(5)
Balances as of March 31, 2024
$
— $
10 $
(82) $
(72)
The effects on net income of amounts reclassified from accumulated other comprehensive income (loss) for the fiscal years
ended March 31, 2024, 2023, and 2022 were as follows (in millions):
Statement of Operations Classification
Amount Reclassified From Accumulated
Other Comprehensive Income (Loss)
Year Ended March 31,
2024
2023
2022
(Gains) losses on available-for-sale securities:
Interest and other income (expense), net
$
— $
1 $
—
Total, net of tax
—
1
—
(Gains) losses on foreign currency forward contracts designated as cash flow hedges
Net revenue
(56)
(185)
14
Research and development
8
18
(12)
Total, net of tax
(48)
(167)
2
Total net (gain) loss reclassified, net of tax
$
(48) $
(166) $
2
52
(7) GOODWILL AND ACQUISITION-RELATED INTANGIBLES, NET
The changes in the carrying amount of goodwill for the fiscal year ended March 31, 2024 are as follows (in millions):
As of
March 31, 2023
Activity
Effects of Foreign
Currency
Translation
As of
March 31, 2024
Goodwill
$
5,748 $
— $
(1) $
5,747
Accumulated impairment
(368)
—
—
(368)
Total
$
5,380 $
— $
(1) $
5,379
The changes in the carrying amount of goodwill for the fiscal year ended March 31, 2023 are as follows (in millions):
As of
March 31, 2022
Activity
Effects of Foreign
Currency
Translation
As of
March 31, 2023
Goodwill
$
5,755 $
— $
(7) $
5,748
Accumulated impairment
(368)
—
—
(368)
Total
$
5,387 $
— $
(7) $
5,380
Acquisition-related intangibles consisted of the following (in millions):
As of March 31, 2024
As of March 31, 2023
Gross
Carrying
Amount
Accumulated
Amortization
Acquisition-
Related
Intangibles,
Net
Gross
Carrying
Amount
Accumulated
Amortization
Acquisition-
Related
Intangibles,
Net
Finite-lived acquisition-related intangibles
Developed and core technology
$
1,025 $
(821) $
204 $
1,051 $
(754) $
297
Trade names and trademarks
502
(306)
196
596
(285)
311
Registered user base and other intangibles
56
(56)
—
56
(50)
6
Total finite-lived acquisition-related
intangibles
$
1,583 $
(1,183) $
400 $
1,703 $
(1,089) $
614
Indefinite-lived acquisition-related intangibles
In-process research and development
$
— $
— $
— $
4 $
— $
4
Total acquisition-related intangibles, net
$
1,583 $
(1,183) $
400 $
1,707 $
(1,089) $
618
Amortization of intangibles, including impairments, for the fiscal years ended March 31, 2024, 2023, and 2022 are classified in
the Consolidated Statements of Operations as follows (in millions):
Year Ended March 31,
2024
2023
2022
Cost of revenue
$
76 $
120 $
133
Operating expenses
142
158
183
Restructuring
—
66
—
Total
$
218 $
344 $
316
During fiscal year 2024, we recorded impairment charges of $70 million for acquisition-related intangible assets, of which $53
million was recorded within operating expenses and $17 million was recorded within cost of revenue.
During fiscal year 2023, we recorded impairment charges of $106 million for acquisition-related intangible assets, of which
$66 million was recorded within restructuring, $28 million was recorded within operating expenses, and $12 million was
recorded within cost of revenue.
During fiscal year 2022, we recorded impairment charges of $45 million for acquisition-related intangible assets, of which $34
million was recorded within operating expenses and $11 million was recorded within cost of revenue.
53
Acquisition-related intangible assets are generally amortized using the straight-line method over the lesser of their estimated
useful lives or the agreement terms, currently ranging from 2 to 7 years. As of March 31, 2024 and 2023, the weighted-average
remaining useful life for acquisition-related intangible assets was approximately 4.1 years and 4.8 years, respectively.
As of March 31, 2024, future amortization of finite-lived acquisition-related intangibles that will be recorded in the
Consolidated Statements of Operations is estimated as follows (in millions):
Fiscal Year Ending March 31,
2025
$
107
2026
102
2027
83
2028
80
2029
28
Total
$
400
54
(8) RESTRUCTURING ACTIVITIES
Fiscal 2024 Restructuring
In fiscal year 2024, we announced a restructuring plan (the “2024 Restructuring Plan”) focused on aligning our portfolio,
investments, and resources in support of our strategic priorities and growth initiatives. This plan reflects actions driven by
portfolio rationalization, including costs associated with licensor commitments, as well as reductions in real estate and
headcount. The actions associated with this plan are expected to be substantially completed by December 31, 2024.
Under this plan, we estimate that we will incur approximately $125 million to $165 million in charges, consisting primarily of:
•
$50 million to $65 million associated with office space reductions;
•
$40 million to $55 million related to employee severance and employee-related costs; and
•
$35 million to $45 million in costs associated with licensor commitments.
Fiscal 2023 Restructuring
In fiscal year 2023, we announced a restructuring plan (the “2023 Restructuring Plan”) focused on prioritizing investments to
our growth opportunities and optimizing our real estate portfolio. This plan included actions driven by portfolio rationalization
including headcount reductions, in addition to office space reductions. The actions associated with this plan were substantially
completed by September 30, 2023.
Since the inception of the 2023 Restructuring Plan through March 31, 2024, we have incurred net charges of $158 million, and
we do not expect to incur any additional restructuring charges under this plan.
Restructuring activities as of the fiscal year ended March 31, 2024 was as follows (in millions):
Fiscal 2024 Restructuring
Fiscal 2023 Restructuring
Licensor
Commitments
(a)
Workforce (a)
Office Space
Reductions
(b)
Acquisition-
Related
Intangibles
Impairments
and Other
Charges (a)
Workforce (a)
Office Space
Reductions (b)
Total
Charges to operations
$
— $
— $
— $
68 $
43 $
44 $
155
Charges settled in cash
—
—
—
—
(10)
—
(10)
Non-cash items
—
—
—
(66)
—
(44)
(110)
Liability as of March 31, 2023 $
— $
— $
— $
2 $
33 $
— $
35
Charges to operations
30
29
2
—
3
—
64
Charges settled in cash
(17)
(5)
—
(2)
(36)
—
(60)
Non-cash items
(13)
—
(2)
—
—
—
(15)
Liability as of March 31, 2024 $
— $
24 $
— $
— $
— $
— $
24
(a) Charges are recorded within Restructuring in the Consolidated Statement of Operations.
(b) Charges are recorded within General and administrative expenses in the Consolidated Statement of Operations.
The restructuring liability of $24 million as of March 31, 2024, is included in accrued and other current liabilities on the
Consolidated Balance Sheets.
55
(9) ROYALTIES AND LICENSES
Our royalty expenses consist of payments to (1) content licensors, (2) independent software developers, and (3) co-publishing
and distribution affiliates. Content license royalties consist of payments made to celebrities, professional sports organizations,
movie studios and other organizations for our use of their trademarks, copyrights, personal publicity rights, content and/or other
intellectual property. Royalty payments to independent software developers are payments for the development of intellectual
property related to our games. Co-publishing and distribution royalties are payments made to third parties for the delivery of
products.
During fiscal year 2024, we recorded impairment charges of $30 million for costs associated with licensor commitments, all of
which were recorded within Restructuring in the Consolidated Statement of Operations. See Note 8 — Restructuring Activities
for additional information on the impairment charge related to our 2024 Restructuring Plan.
During fiscal years 2023 and 2022, we did not recognize any material losses or impairment charges on royalty-based
commitments.
The current and long-term portions of prepaid royalties and minimum guaranteed royalty-related assets, included in other
current assets and other assets, consisted of (in millions):
As of March 31,
2024
2023
Other current assets
$
98 $
105
Other assets
24
31
Royalty-related assets
$
122 $
136
At any given time, depending on the timing of our payments to our content licensors, independent software developers, co-
publishing, and/or distribution affiliates, we classify any recognized unpaid royalty amounts due to these parties as accrued
liabilities. The current and long-term portions of accrued royalties, included in accrued and other current liabilities and other
liabilities, consisted of (in millions):
As of March 31,
2024
2023
Accrued and other current liabilities
$
189 $
208
Other liabilities
20
—
Royalty-related liabilities
$
209 $
208
As of March 31, 2024, we were committed to pay approximately $1,948 million to content licensors, independent software
developers, and co-publishing and/or distribution affiliates, but performance remained with the counterparty (i.e., delivery of
the product or content or other factors) and such commitments were therefore not recorded in our Consolidated Financial
Statements. See Note 14 for further information on our developer and licensor commitments.
56
(10) BALANCE SHEET DETAILS
Property and Equipment, Net
Property and equipment, net, as of March 31, 2024 and 2023 consisted of (in millions):
As of March 31,
2024
2023
Computer, equipment and software
$
965 $
892
Buildings
376
369
Leasehold improvements
190
186
Equipment, furniture and fixtures, and other
92
92
Land
67
66
Construction in progress
47
11
1,737
1,616
Less: accumulated depreciation
(1,159)
(1,067)
Property and equipment, net
$
578 $
549
Depreciation expense associated with property and equipment was $196 million, $193 million and $162 million for the fiscal
years ended March 31, 2024, 2023, and 2022, respectively.
Accrued and Other Current Liabilities
Accrued and other current liabilities as of March 31, 2024 and 2023 consisted of (in millions):
As of March 31,
2024
2023
Accrued compensation and benefits
$
476 $
436
Accrued royalties
189
208
Deferred net revenue (other)
59
103
Operating lease liabilities (See Note 13)
66
66
Other accrued expenses
286
382
Sales returns and price protection reserves
90
90
Accrued and other current liabilities
$
1,166 $
1,285
Deferred net revenue (other) includes the deferral of licensing arrangements, subscription revenue, and other revenue for which
revenue recognition criteria has not been met.
Deferred net revenue
Deferred net revenue as of March 31, 2024 and 2023, consisted of (in millions):
As of March 31,
2024
2023
Deferred net revenue (online-enabled games)
$
1,814 $
1,901
Deferred net revenue (other)
59
103
Deferred net revenue (noncurrent)
85
67
Total deferred net revenue
$
1,958 $
2,071
During the fiscal years ended March 31, 2024 and 2023, we recognized $1,987 million and $2,176 million of revenue,
respectively, that were included in the deferred net revenue balance at the beginning of the period.
57
Remaining Performance Obligations
As of March 31, 2024, revenue allocated to remaining performance obligations consists of our deferred revenue balance of
$1,958 million. These balances exclude any estimates for future variable consideration as we have elected the optional
exemption to exclude sales-based royalty revenue.
58
(11) INCOME TAXES
The components of our income before provision for income taxes for the fiscal years ended March 31, 2024, 2023, and 2022 are
as follows (in millions):
Year Ended March 31,
2024
2023
2022
Domestic
$
437 $
315 $
204
Foreign
1,152
1,011
877
Income before provision for income taxes
$
1,589 $
1,326 $
1,081
Provision for income taxes for the fiscal years ended March 31, 2024, 2023, and 2022 consisted of (in millions):
Current
Deferred
Total
Year Ended March 31, 2024
Federal
$
138 $
85 $
223
State
20
9
29
Foreign
76
(12)
64
$
234 $
82 $
316
Year Ended March 31, 2023
Federal
$
570 $
(339) $
231
State
92
(76)
16
Foreign
75
202
277
$
737 $
(213) $
524
Year Ended March 31, 2022
Federal
$
203 $
(190) $
13
State
36
(26)
10
Foreign
381
(112)
269
$
620 $
(328) $
292
The differences between the statutory tax rate and our effective tax rate, expressed as a percentage of income before provision
for income taxes, for the fiscal years ended March 31, 2024, 2023, and 2022 were as follows:
Year Ended March 31,
2024
2023
2022
Statutory federal tax expense rate
21.0 %
21.0 %
21.0 %
State taxes, net of federal benefit
1.1 %
1.1 %
1.9 %
Differences between statutory rate and foreign effective tax rate
2.9 %
7.6 %
6.8 %
Excess tax benefit from equity compensation
(0.3) %
(0.3) %
(1.2) %
Research and development credits
(2.4) %
(3.0) %
(2.8) %
Swiss valuation allowance
(0.3) %
8.9 %
2.7 %
Effect of change in enacted tax rate
(5.8) %
— %
— %
Acquired IP intra-entity sales
— %
— %
(5.9) %
Non-deductible stock-based compensation
2.8 %
3.2 %
3.8 %
Other
0.9 %
1.0 %
0.7 %
Effective tax rate
19.9 %
39.5 %
27.0 %
During the fiscal year ended March 31, 2024, we recognized a $92 million tax benefit to remeasure our Swiss deferred tax
assets as a result of an increase in the Swiss statutory tax rate. In addition, we recognized a lower period cost for U.S. tax on our
non-U.S. earnings, including a cumulative one-time benefit, due to R&D capitalization guidance issued by the U.S. Treasury
during the fiscal year. Excluding the effects of these items, the effective tax rate for fiscal year 2024 would have been 29.5%.
59
During the fiscal year ended March 31, 2023, we recognized a $118 million tax charge to increase the valuation allowance on
Swiss deferred tax assets, primarily as a result of an increase in Swiss interest rates.
During the fiscal year ended March 31, 2022, we completed intra-entity sales of intellectual property rights related to
acquisitions to our U.S. and Swiss intellectual property owners (the “Acquired IP intra-entity sales”). The transactions resulted
in overall taxable gains. Under U.S. GAAP, any profit resulting from the Acquired IP intra-entity sales was eliminated upon
consolidation. However, the transactions resulted in a step-up of the U.S. and Swiss tax-deductible basis in the transferred
intellectual property rights and, accordingly, created a temporary difference between the book basis and the tax basis of such
intellectual property rights. As a result, we recognized a $64 million net tax benefit for the current and deferred tax impacts of
the sales.
In addition, during the fiscal year ended March 31, 2022, we recognized a $29 million tax charge to increase the valuation
allowance on Swiss deferred tax assets that are not more likely than not to be realized.
Our foreign subsidiaries are generally subject to U.S. tax, and to the extent earnings from these subsidiaries can be repatriated
without a material tax cost, such earnings will not be indefinitely reinvested. As of March 31, 2024, approximately $1.1 billion
of our cash and cash equivalents were domiciled in foreign tax jurisdictions. All of our foreign cash is available for repatriation
without a material tax cost.
The components of net deferred tax assets, as of March 31, 2024 and 2023 consisted of (in millions):
As of March 31,
2024
2023
Deferred tax assets:
Accruals, reserves and other expenses
$
200 $
197
Tax credit carryforwards
222
218
Research and development capitalization
375
461
Stock-based compensation
41
39
Net operating loss and capital loss carryforwards
403
371
Swiss intra-entity tax asset
1,618
1,665
Total
2,859
2,951
Valuation allowance
(464)
(446)
Deferred tax assets, net of valuation allowance
2,395
2,505
Deferred tax liabilities:
Amortization and depreciation
(10)
(41)
Other
(6)
(3)
Total
(16)
(44)
Deferred tax assets, net of valuation allowance and deferred tax liabilities
$
2,379 $
2,461
As of March 31, 2024, we have net operating loss carry forwards of approximately $2.8 billion of which approximately
$91 million is attributable to various acquired companies. The net operating loss carry forwards include $2.6 billion related to
Switzerland and $94 million related to California. Substantially all of these carryforwards, if not fully realized, will begin to
expire in fiscal year 2027. Switzerland has a seven-year carryforward period and does not permit the carry back of losses. We
also have U.S. federal credit carryforwards of $8 million and California credit carryforwards of $204 million. The California
tax credit carryforwards can be carried forward indefinitely.
As of March 31, 2024, we maintained a total valuation allowance of $464 million related to certain U.S. state deferred tax
assets, Swiss deferred tax assets, and foreign capital loss carryovers, due to uncertainty about the future realization of these
assets.
60
The total unrecognized tax benefits as of March 31, 2024, 2023, and 2022 were $804 million, $867 million and $636 million,
respectively. A reconciliation of the beginning and ending balance of unrecognized tax benefits is summarized as follows (in
millions):
Balance as of March 31, 2021
$
584
Increases in unrecognized tax benefits related to prior year tax positions
5
Decreases in unrecognized tax benefits related to prior year tax positions
(21)
Increases in unrecognized tax benefits related to current year tax positions
139
Decreases in unrecognized tax benefits related to settlements with taxing authorities
(50)
Reductions in unrecognized tax benefits due to lapse of applicable statute of limitations
(18)
Changes in unrecognized tax benefits due to foreign currency translation
(3)
Balance as of March 31, 2022
636
Increases in unrecognized tax benefits related to current year tax positions
245
Decreases in unrecognized tax benefits related to settlements with taxing authorities
(2)
Reductions in unrecognized tax benefits due to lapse of applicable statute of limitations
(6)
Changes in unrecognized tax benefits due to foreign currency translation
(6)
Balance as of March 31, 2023
867
Increases in unrecognized tax benefits related to prior year tax positions
14
Decreases in unrecognized tax benefits related to prior year tax positions
(173)
Increases in unrecognized tax benefits related to current year tax positions
97
Reductions in unrecognized tax benefits due to lapse of applicable statute of limitations
(2)
Changes in unrecognized tax benefits due to foreign currency translation
1
Balance as of March 31, 2024
$
804
As of March 31, 2024, approximately $441 million of the unrecognized tax benefits would affect our effective tax rate, a
portion of which would be impacted by a valuation allowance.
Interest and penalties related to estimated obligations for tax positions taken in our tax returns are recognized in income tax
expense in our Consolidated Statements of Operations. The combined amount of accrued interest and penalties related to tax
positions taken on our tax returns and included in non-current other liabilities was approximately $82 million as of March 31,
2024 and $54 million as of March 31, 2023.
We file income tax returns in the United States, including various state and local jurisdictions. As of March 31, 2024, our
subsidiaries file tax returns in various foreign jurisdictions, including Canada, Germany, South Korea, Switzerland, and the
United Kingdom. As of the period ended March 31, 2024, we remain subject to income tax examination in these jurisdictions,
including the United States for fiscal years after 2017, Canada for fiscal years after 2013, Germany for fiscal years after 2016,
South Korea for fiscal years after 2018, Switzerland for fiscal years after 2014, and the United Kingdom for fiscal years after
2021.
We are currently under income tax examination in various jurisdictions, including the United States for fiscal years 2018
through 2020, and Germany for fiscal years 2013 through 2019.
The timing and potential resolution of income tax examinations is highly uncertain. While we continue to measure our uncertain
tax positions, the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities may differ
materially from the amounts accrued.
It is also reasonably possible that an additional immaterial reduction of unrecognized tax benefits may occur within the next 12
months, a portion of which would impact our effective tax rate. The actual amount could vary significantly depending on the
ultimate timing and nature of any settlements and tax interpretations.
61
(12) FINANCING ARRANGEMENTS
Senior Notes
In February 2021, we issued $750 million aggregate principal amount of 1.85% Senior Notes due February 15, 2031 (the “2031
Notes”) and $750 million aggregate principal amount of 2.95% Senior Notes due February 15, 2051 (the “2051 Notes”). Our
proceeds were $1,478 million, net of discount of $6 million and issuance costs of $16 million. Both the discount and issuance
costs are being amortized to interest expense over the respective terms of the 2031 Notes and the 2051 Notes using the effective
interest rate method. The effective interest rate is 1.98% for the 2031 Notes and 3.04% for the 2051 Notes. Interest is payable
semiannually in arrears, on February 15 and August 15 of each year.
In February 2016, we issued $400 million aggregate principal amount of 4.80% Senior Notes due March 1, 2026 (the “2026
Notes”). Our proceeds were $395 million, net of discount of $1 million and issuance costs of $4 million. Both the discount and
issuance costs are being amortized to interest expense over the term of the 2026 Notes using the effective interest rate method.
The effective interest rate was 4.97%. Interest is payable semiannually in arrears, on March 1 and September 1 of each year.
The carrying and fair values of the Senior Notes are as follows (in millions):
As of
March 31, 2024
As of
March 31, 2023
Senior Notes:
4.80% Senior Notes due 2026
$
400
$
400
1.85% Senior Notes due 2031
750
750
2.95% Senior Notes due 2051
750
750
Total principal amount
$
1,900
$
1,900
Unaccreted discount
(5)
(6)
Unamortized debt issuance costs
(13)
(14)
Net carrying value of Senior Notes
$
1,882
$
1,880
Fair value of Senior Notes (Level 2)
$
1,515
$
1,540
As of March 31, 2024, the remaining life of the 2026 Notes, 2031 Notes and 2051 Notes is approximately 1.9 years, 6.9 years,
and 26.9 years, respectively.
The Senior Notes are senior unsecured obligations and rank equally with all our other existing and future unsubordinated
obligations and any indebtedness that we may incur from time to time under our Credit Facility.
The 2026 Notes, 2031 Notes and 2051 Notes are redeemable at our option at any time prior to December 1, 2025, November
15, 2030, and August 15, 2050, respectively, subject to a make-whole premium. After such dates, we may redeem each such
series of Notes, respectively, at a redemption price equal to 100% of the aggregate principal amount plus accrued and unpaid
interest. In addition, upon the occurrence of a change of control repurchase event, the holders of each such series of Notes may
require us to repurchase all or a portion of these Notes, at a price equal to 101% of their principal amount, plus accrued and
unpaid interest to the date of repurchase. Each such series of Notes also include covenants that limit our ability to incur liens on
assets and to enter into sale and leaseback transactions, subject to certain allowances.
62
Credit Facility
On March 22, 2023, we entered into a $500 million unsecured revolving credit facility (the “Credit Facility") with a syndicate
of banks. The Credit Facility terminates on March 22, 2028 unless the maturity is extended in accordance with its terms. The
Credit Facility contains an option to arrange with existing lenders and/or new lenders to provide up to an aggregate of
$500 million in additional commitments for revolving loans. Proceeds of loans made under the Credit Facility may be used for
general corporate purposes.
The loans denominated in U.S. dollars bear interest, at our option, at the base rate plus an applicable spread or at a forward-
looking term rate based upon the secured overnight financing rate plus a credit spread adjustment of 0.10% per annum (the
“Adjusted Term SOFR Rate”) plus an applicable spread, in each case with such spread based on our debt credit ratings. We are
also obligated to pay other customary fees for a credit facility of this size and type. Interest is due and payable in arrears
quarterly for loans bearing interest at the base rate and at the end of an interest period in the case of loans bearing interest at the
Adjusted Term SOFR Rate. Principal, together with all accrued and unpaid interest, is due and payable on the maturity date, as
such date may be extended in connection with the extension option. We may prepay the loans and terminate the commitments,
in whole or in part, at any time without premium or penalty, subject to certain conditions.
The Credit Facility contains customary affirmative and negative covenants, including covenants that limit or restrict our ability
to, among other things, incur subsidiary indebtedness, grant liens, and dispose of all or substantially all assets, in each case
subject to customary exceptions for a credit facility of this size and type. We are also required to maintain compliance with a
debt to EBITDA ratio. As of March 31, 2024, we were in compliance with the debt to EBITDA ratio.
The Credit Facility contains customary events of default, including among others, non-payment defaults, covenant defaults,
cross-defaults to material indebtedness, bankruptcy and insolvency defaults, material judgment defaults and a change of control
default, in each case, subject to customary exceptions for a credit facility of this size and type. The occurrence of an event of
default could result in the acceleration of the obligations under the Credit Facility and an increase in the applicable interest rate.
As of March 31, 2024, no amounts were outstanding under the Credit Facility. $2 million of debt issuance costs that were paid
in connection with obtaining this credit facility are being amortized to interest expense over the 5-year term of the Credit
Facility.
Interest Expense
The following table summarizes our interest expense recognized for fiscal years 2024, 2023, and 2022 that is included in
interest and other income (expense), net on our Consolidated Statements of Operations (in millions):
Year Ended March 31,
2024
2023
2022
Amortization of debt discount
$
— $
(1) $
(1)
Amortization of debt issuance costs
(2)
(2)
(2)
Coupon interest expense
(55)
(55)
(55)
Other interest expense
(1)
—
—
Total interest expense
$
(58) $
(58) $
(58)
63
(13) LEASES
Our leases primarily consist of facility leases for our offices and development studios, data centers, and server equipment, with
remaining lease terms of up to 13 years. Our lease terms may include options to extend or terminate the lease. When it is
reasonably certain that we will exercise those options, we include them in our measurement of lease payments and lease terms.
Substantially all of our leases are classified as operating leases.
We determine if an arrangement is or contains a lease at contract inception. The contract is or contains a lease if the contract
conveys the right to control the use of an identified asset for a period of time in exchange for consideration. In determining if a
contract is or contains a lease, we apply judgment whether the contract provides the right to obtain substantially all of the
economic benefits, the right to direct, or control the use of the identified asset throughout the period of use.
Operating lease right-of-use (“ROU”) assets and liabilities are recognized at the commencement date based on the present value
of future lease payments over the lease term. In determining the present value of the future lease payments, we use our
incremental borrowing rate as none of our leases provide an implicit rate. Our incremental borrowing rate is an assumed rate
based on our credit rating, credit history, current economic environment, and the lease term. Operating lease ROU assets are
further adjusted for any payments made, incentives received, and initial direct costs incurred prior to the commencement date.
Operating lease ROU assets are amortized on a straight-line basis over the lease term and recognized as lease expense within
cost of revenue or operating expenses on our Consolidated Statements of Operations. Operating lease liabilities decrease by
lease payments we make over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance
sheet. When we commit to a plan to abandon an operating lease at a future date, the amortization of the operating lease ROU
asset and depreciation of the associated leasehold improvements are accelerated based on the revised useful life of the operating
lease.
Some of our operating leases contain lease and non-lease components. Non-lease components primarily include fixed payments
for common area maintenance and utilities. We elected to account for lease and non-lease components as a single lease
component. Variable lease and non-lease components are recognized on our Consolidated Statements of Operations as incurred.
The components of lease expenses for the fiscal years ended March 31, 2024, 2023, and 2022 are as follows (in millions):
Year Ended March 31,
2024
2023
2022
Operating lease costs
$
80 $
138 $
98
Variable lease costs
31
22
21
Short-term lease costs
1
7
2
Total lease expense
$
112 $
167 $
121
During the fiscal year ended March 31, 2023, we recorded accelerated amortization of certain ROU Assets of $34 million
within the operating lease costs and accelerated deprecation of property, plant and equipment for $10 million as part of our
2023 Restructuring Plan. See Note 8 — Restructuring Activities for additional information.
Supplemental cash and noncash information related to our operating leases for the fiscal years ended March 31, 2024, 2023, and
2022 are as follows (in millions):
Year Ended March 31,
2024
2023
2022
Cash paid for amounts included in the measurement of lease
liability
$
74 $
97 $
97
ROU assets obtained in exchange for new lease obligations
$
37 $
97 $
150
Weighted average remaining lease term and discount rate at March 31, 2024 and 2023 are as follows:
At March 31, 2024
At March 31, 2023
Lease term
7.1 years
7.5 years
Discount rate
3.6 %
3.3 %
64
Operating lease ROU assets and liabilities recorded on our Consolidated Balance Sheets as of March 31, 2024 and 2023 are as
follows (in millions):
As of March 31,
Balance Sheet Classification
2024
2023
Operating lease ROU assets
$
243
$
276
Other assets
Operating lease liabilities
$
66
$
66
Accrued and other current liabilities
Noncurrent operating lease liabilities
248
277
Other liabilities
Total operating lease liabilities
$
314
$
343
Future minimum lease payments under operating leases as of March 31, 2024 were as follows (in millions):
Fiscal Years Ending March 31,
2025
$
74
2026
61
2027
46
2028
37
2029
26
Thereafter
112
Total future lease payments
356
Less imputed interest
(42)
Total operating lease liabilities
$
314
In addition to the amounts included in the table above, as of March 31, 2024, we have entered into an office lease that has not
yet commenced with aggregate future lease payments of approximately $98 million. This lease is expected to commence in
fiscal year 2025, and will have a lease term of 12 years.
65
(14) COMMITMENTS AND CONTINGENCIES
Development, Celebrity, Professional Sports Organizations and Other Content Licenses: Payments and Commitments
The products we produce in our studios are designed and created by our employee designers, artists, software programmers and
by non-employee software developers (“independent artists” or “third-party developers”). We typically advance development
funds to the independent artists and third-party developers during development of our games, usually in installment payments
made upon the completion of specified development milestones. Contractually, these payments are generally considered
advances against subsequent royalties on the sales of the products. These terms are set forth in written agreements entered into
with the independent artists and third-party developers. In addition, we have certain celebrity, professional sports organizations
and other content license contracts that contain minimum guarantee payments and marketing commitments to promote the
games we publish that may not be dependent on any deliverables.
These developer and content license commitments represent the sum of the cash payments for flat fees, minimum guaranteed
payments, and service payments. The majority of these commitments are conditional upon performance by the counterparty.
These payments and any related marketing and development commitments are included in the table below.
The following table summarizes our minimum contractual obligations as of March 31, 2024 (in millions):
Fiscal Years Ending March 31,
Total
2025
2026
2027
2028
2029
Thereafter
Unrecognized commitments
Developer/licensor commitments
$
1,948
$
343
$
473
$
476
$
216
$
210
$
230
Marketing commitments
1,364
247
276
280
199
111
251
Senior Notes interest
725
49
54
36
36
36
514
Operating lease imputed interest
42
10
8
6
5
4
9
Operating leases not yet commenced
98
6
8
8
8
8
60
Other purchase obligations
436
215
160
49
10
2
—
Total unrecognized commitments
4,613
870
979
855
474
371
1,064
Recognized commitments
Senior Notes principal and interest
1,906
6
400
—
—
—
1,500
Operating leases
314
64
53
40
32
22
103
Transition Tax and other taxes
13
6
7
—
—
—
—
Total recognized commitments
2,233
76
460
40
32
22
1,603
Total Commitments
$
6,846
$
946
$
1,439
$
895
$
506
$
393
$
2,667
The unrecognized amounts represented in the table above reflect our minimum cash obligations for the respective fiscal years,
but do not necessarily represent the periods in which they will be recognized and expensed in our Consolidated Financial
Statements. In addition, the amounts in the table above are presented based on the dates the amounts are contractually due as of
March 31, 2024; however, certain payment obligations may be accelerated depending on the performance of our operating
results.
In addition to the amounts included in the table above, in our Consolidated Balance Sheets as of March 31, 2024, we had a net
liability for unrecognized tax benefits and an accrual for the payment of related interest totaling $490 million, of which we are
unable to make a reasonably reliable estimate of when cash settlement with a taxing authority will occur.
Legal Proceedings
We are subject to claims and litigation arising in the ordinary course of business. We do not believe that any liability from any
reasonably foreseeable disposition of such claims and litigation, individually or in the aggregate, would have a material adverse
effect on our Consolidated Financial Statements.
66
(15) STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS
Valuation Assumptions
We recognize compensation cost for stock-based awards to employees based on the awards’ estimated grant-date fair value
using a straight-line approach over the service period for which such awards are expected to vest. We account for forfeitures as
they occur.
The estimation of the fair value of market-based restricted stock units, stock options and Employee Stock Purchase Plan
(“ESPP”) purchase rights is affected by assumptions regarding subjective and complex variables. Generally, our assumptions
are based on historical information and judgment is required to determine if historical trends may be indicators of future
outcomes. We estimate the fair value of our stock-based awards as follows:
•
Restricted Stock Units and Performance-Based Restricted Stock Units. The fair value of restricted stock units and
performance-based restricted stock units (other than market-based restricted stock units) is determined based on the
quoted market price of our common stock on the date of grant.
•
Market-Based Restricted Stock Units. Market-based restricted stock units consist of grants of performance-based
restricted stock units to certain members of executive management that vest contingent upon the achievement of pre-
determined market and service conditions (referred to herein as “market-based restricted stock units”). The fair value
of our market-based restricted stock units is estimated using a Monte-Carlo simulation model. Key assumptions for the
Monte-Carlo simulation model are the risk-free interest rate, expected volatility, expected dividends and correlation
coefficient.
•
Stock Options and ESPP. The fair value of stock options and stock purchase rights granted pursuant to our equity
incentive plans and our 2000 Employee Stock Purchase Plan, as amended, respectively, is estimated using the Black-
Scholes valuation model based on the multiple-award valuation method. Key assumptions of the Black-Scholes
valuation model are the risk-free interest rate, expected volatility, expected term and expected dividends. The risk-free
interest rate is based on U.S. Treasury yields in effect at the time of grant for the expected term of the option. Expected
volatility is based on a combination of historical stock price volatility and implied volatility of publicly-traded options
on our common stock. An expected term is estimated based on historical exercise behavior, post-vesting termination
patterns, options outstanding and future expected exercise behavior.
There were an insignificant number of stock options granted during fiscal years 2024, 2023, and 2022.
The estimated assumptions used in the Black-Scholes valuation model to value our ESPP purchase rights were as follows:
ESPP Purchase Rights
Year Ended March 31,
2024
2023
2022
Risk-free interest rate
5.0 - 5.5%
3.1 - 5.0%
0.1% - 1.1%
Expected volatility
19 - 24%
27 - 31%
25 - 30%
Weighted-average volatility
23%
29%
27%
Expected term
6 - 12 months
6 - 12 months
6 - 12 months
Expected dividends
0.8%
0.8 %
0.6 %
The assumptions used in the Monte-Carlo simulation model to value our market-based restricted stock units were as follows:
Year Ended March 31,
2024
2023
2022
Risk-free interest rate
4.4%
3.3 %
0.4%
Expected volatility
25 - 59%
33 - 56%
24 - 76%
Weighted-average volatility
39%
43%
40%
Expected dividends
None
None
None
67
Summary of Plans and Plan Activity
Equity Incentive Plans
We have equity awards outstanding under two incentive plans: our 2019 Equity Incentive Plan (the “2019 Equity Plan”), as
amended, and our 2000 Equity Incentive Plan, as amended (the “2000 Equity Plan”). Our 2019 Equity Plan allows us to grant
options to purchase our common stock and to grant restricted stock, restricted stock units and stock appreciation rights to our
employees, officers, and directors, up to a maximum of 29.5 million shares, plus any shares authorized for grant or subject to
awards under the 2000 Equity Plan that are not delivered to participants for any reason. Pursuant to the 2019 Equity Plan,
incentive stock options may be granted to employees and officers and non-qualified options may be granted to employees,
officers, and directors, at not less than 100 percent of the fair market value on the date of grant.
Approximately 15.9 million options or 11.1 million restricted stock units were available for grant under our 2019 Equity Plan as
of March 31, 2024.
Stock Options
Options granted under the 2019 Equity Plan and the 2000 Equity Plan generally expire ten years from the date of grant. All
outstanding options were fully vested and exercisable as of March 31, 2024.
The following table summarizes our stock option activity for the fiscal year ended March 31, 2024:
Options
(in thousands)
Weighted-
Average
Exercise Prices
Weighted-
Average
Remaining
Contractual
Term
(in years)
Aggregate
Intrinsic Value
(in millions)
Outstanding as of March 31, 2023
121 $
40.43
Granted
3
131.04
Exercised
(112)
40.49
Forfeited, cancelled or expired
—
—
Outstanding as of March 31, 2024
12 $
64.00
3.95
$
1
Vested and expected to vest
12 $
64.00
3.95
$
1
Exercisable as of March 31, 2024
12 $
64.00
3.95
$
1
The aggregate intrinsic value represents the total pre-tax intrinsic value based on our closing stock price as of March 31, 2024,
which would have been received by the option holders had all the option holders exercised their options as of that date. The
total intrinsic values of stock options exercised during fiscal years 2024, 2023, and 2022 were $10 million, $15 million, and $8
million, respectively. We issue new common stock from our authorized shares upon the exercise of stock options.
Restricted Stock Units
We grant restricted stock units under our 2019 Equity Plan to employees worldwide. Restricted stock units are unfunded,
unsecured rights to receive common stock upon the satisfaction of certain vesting criteria. Upon vesting, a number of shares of
common stock equivalent to the number of restricted stock units are typically issued net of required tax withholding
requirements, if any. Restricted stock units are subject to forfeiture and transfer restrictions. Vesting for restricted stock units is
based on the holders’ continued employment with us through each applicable vest date. If the vesting conditions are not met,
unvested restricted stock units will be forfeited. Our restricted stock units generally vest over 35 months to four years.
68
Each restricted stock unit granted reduces the number of shares available for grant by 1.43 shares under our 2019 Equity Plan.
The following table summarizes our restricted stock units activity, excluding performance-based and market-based restricted
stock unit activity which is discussed below, for the fiscal year ended March 31, 2024:
Restricted
Stock Units
(in thousands)
Weighted-
Average Grant
Date Fair Values
Outstanding as of March 31, 2023
7,502 $
128.54
Granted
4,798
129.30
Vested
(4,015)
129.71
Forfeited or cancelled
(805)
129.37
Outstanding as of March 31, 2024
7,480 $
128.31
The grant date fair value of restricted stock units is based on the quoted market price of our common stock on the date of grant.
The weighted-average grant date fair values of restricted stock units granted during fiscal years 2024, 2023, and 2022 were
$129.30, $126.41, and $136.78, respectively. The fair values of restricted stock units that vested during fiscal years 2024, 2023,
and 2022 were $519 million, $460 million, and $457 million, respectively.
Performance-Based Restricted Stock Units
Our performance-based restricted stock units vest upon the achievement of pre-determined performance-based milestones,
including, but not limited to, management reporting milestones of net bookings and operating income metrics, as well as service
conditions. If these performance-based milestones are not met but service conditions are met, the performance-based restricted
stock units will not vest, in which case any compensation expense we have recognized to date will be reversed. Generally, the
measurement periods of our performance-based restricted stock units are 3 years, with awards vesting after each annual
measurement period or cliff-vesting after the completion of the total aggregate measurement period.
Each quarter, we update our assessment of the probability that the performance milestones will be achieved. We amortize the
fair values of performance-based restricted stock units over the requisite service period. The performance-based restricted stock
units contain threshold, target and maximum milestones for each performance-based milestone. The number of shares of
common stock to be issued at vesting will range from zero to 200 percent of the target number of performance-based restricted
stock units attributable to each performance-based milestone based on the company’s performance as compared to these
threshold, target and maximum performance-based milestones. Each performance-based milestone is weighted evenly and the
number of shares that vest based on each performance-based milestone is independent from the other.
The following table summarizes our performance-based restricted stock unit activity, presented with the maximum number of
shares that could potentially vest, for the fiscal year ended March 31, 2024:
Performance-
Based Restricted
Stock Units
(in thousands)
Weighted-
Average Grant
Date Fair Value
Outstanding as of March 31, 2023
557 $
130.03
Granted
682
128.66
Vested
(73)
127.98
Forfeited or cancelled
(330)
128.74
Outstanding as of March 31, 2024
836 $
129.60
The weighted-average grant date fair values of performance-based restricted stock units granted during fiscal years 2024, 2023,
and 2022 were $128.66, $127.98, and $140.48 respectively. The fair values of performance-based restricted stock units that
vested during fiscal years 2024, 2023, and 2022 were $11 million, $9 million, and $38 million respectively.
69
Market-Based Restricted Stock Units
Our market-based restricted stock units vest contingent upon the achievement of pre-determined market and service conditions.
If these market conditions are not met but service conditions are met, the market-based restricted stock units will not vest;
however, any compensation expense we have recognized to date will not be reversed. The number of shares of common stock
to be issued at vesting will range from zero to 200 percent of the target number of market-based restricted stock units based on
our total stockholder return (“TSR”) relative to the performance of companies in the Nasdaq-100 Index for each measurement
period, over a three-year period.
The following table summarizes our market-based restricted stock unit activity, presented with the maximum number of shares
that could potentially vest, for the year ended March 31, 2024:
Market-Based
Restricted Stock
Units
(in thousands)
Weighted-
Average Grant
Date Fair Value
Outstanding as of March 31, 2023
822 $
149.98
Granted
143
152.92
Vested
(50)
125.62
Forfeited or cancelled
(561)
141.20
Outstanding as of March 31, 2024
354 $
168.53
The weighted-average grant date fair values of market-based restricted stock units granted during fiscal years 2024, 2023, and
2022 were $152.92, $176.70, and $170.44, respectively. The fair values of market-based restricted stock units that vested
during fiscal years 2024, 2023, and 2022 were $4 million, $12 million, and $37 million, respectively.
ESPP
Pursuant to our ESPP, eligible employees may authorize payroll deductions of between 2 percent and 10 percent of their
compensation to purchase shares of common stock at 85 percent of the lower of the market price of our common stock on the
date of commencement of the applicable offering period or on the last day of each six-month purchase period.
The following table summarizes our ESPP activity for fiscal years ended March 31, 2024, 2023, and 2022:
Shares Issued
(in millions)
Exercise Prices for
Purchase Rights
Weighted-Average
Fair Values of
Purchase Rights
Fiscal Year 2022
0.6
$113.39 - $118.14
$
35.94
Fiscal Year 2023
0.7
$96.34 - $111.86
$
33.91
Fiscal Year 2024
0.8
$94.96 - $102.58
$
30.82
The fair values were estimated on the date of grant using the Black-Scholes valuation model. We issue new common stock out
of the ESPP’s pool of authorized shares. As of March 31, 2024, 2.8 million shares were available for grant under our ESPP.
70
Stock-Based Compensation Expense
The following table summarizes stock-based compensation expense resulting from stock options, restricted stock units, market-
based restricted stock units, performance-based restricted stock units, and the ESPP purchase rights included in our
Consolidated Statements of Operations (in millions):
Year Ended March 31,
2024
2023
2022
Cost of revenue
$
8 $
7 $
6
Research and development
418
367
356
Marketing and sales
52
59
54
General and administrative
106
115
112
Stock-based compensation expense
$
584 $
548 $
528
During the fiscal years ended March 31, 2024, 2023, and 2022, we recognized $79 million, $72 million, and $68 million,
respectively, of deferred income tax benefit related to our stock-based compensation expense.
As of March 31, 2024, our total unrecognized compensation cost related to stock options, restricted stock units, market-based
restricted stock units, and performance-based restricted stock units was $734 million and is expected to be recognized over a
weighted-average service period of 1.7 years. Of the $734 million of unrecognized compensation cost, $710 million relates to
restricted stock units, $12 million relates to market-based restricted stock units, and $12 million relates to performance-based
restricted stock units.
Deferred Compensation Plan
We have a Deferred Compensation Plan (“DCP”) for the benefit of a select group of management or highly compensated
employees and directors, which is unfunded and intended to be a plan that is not qualified within the meaning of section 401(a)
of the Internal Revenue Code. The DCP permits the deferral of the annual base salary and/or director cash compensation up to a
maximum amount. The deferrals are held in a separate trust, which has been established by us to administer the DCP. The trust
is a grantor trust and the specific terms of the trust agreement provide that the assets of the trust are available to satisfy the
claims of general creditors in the event of our insolvency. The assets held by the trust are classified as trading securities and are
held at fair value on our Consolidated Balance Sheets. The assets and liabilities of the DCP are presented in other assets and
other liabilities on our Consolidated Balance Sheets, respectively, with changes in the fair value of the assets and in the deferred
compensation liability recognized as compensation expense. The estimated fair value of the assets was $30 million and $23
million as of March 31, 2024 and 2023, respectively. As of March 31, 2024 and 2023, $31 million and $24 million were
recorded, respectively, to recognize undistributed deferred compensation due to employees.
401(k) Plan, Registered Retirement Savings Plan and ITP Plan
We have a 401(k) plan covering substantially all of our U.S. employees, a Registered Retirement Savings Plan covering
substantially all of our Canadian employees, and an ITP pension plan covering substantially all our Swedish employees. These
plans may permit us to make discretionary contributions to employees’ accounts based on our financial performance. We
contributed an aggregate of $39 million, $42 million, and $41 million to these plans in fiscal years 2024, 2023, and 2022,
respectively.
Stock Repurchase Program
In November 2020, our Board of Directors authorized a program to repurchase up to $2.6 billion of our common stock. We
completed repurchases under the November 2020 program in October 2022.
In August 2022, our Board of Directors authorized a program to repurchase up to $2.6 billion of our common stock. This
program was terminated on May 8, 2024 and was superseded and replaced by a new stock repurchase program approved in
May 2024.
71
In May 2024, the Company’s Audit Committee, upon delegation from the Company’s Board of Directors, authorized a new
program to repurchase up to $5.0 billion of our common stock. This program supersedes and replaces the August 2022 program
and expires on May 9, 2027. Under this program, we may purchase stock in the open market or through privately negotiated
transactions in accordance with applicable securities laws, including pursuant to pre-arranged stock trading plans. The timing
and actual amount of the stock repurchases will depend on several factors including price, capital availability, regulatory
requirements, alternative investment opportunities and other market conditions. We are not obligated to repurchase a specific
number of shares of our common stock under this program and it may be modified, suspended or discontinued at any time. We
are actively repurchasing shares under this program.
The following table summarizes total shares repurchased during fiscal years 2024, 2023, and 2022:
November 2020 Program
August 2022 Program
Total
(In millions)
Shares
Amount
Shares
Amount(a)
Shares
Amount
Fiscal Year 2022
9.5 $
1,300
— $
—
9.5 $
1,300
Fiscal Year 2023
5.1 $
650
5.3 $
645
10.4 $
1,295
Fiscal Year 2024
— $
—
10.0 $
1,300
10.0 $
1,300
(a)Amount excludes excise taxes. Accrued excise taxes are included in accrued and other current liabilities and additional paid-in capital on the Consolidated
Balance Sheets.
72
(16) INTEREST AND OTHER INCOME (EXPENSE), NET
Interest and other income (expense), net, for the fiscal years ended March 31, 2024, 2023, and 2022 consisted of (in millions):
Year Ended March 31,
2024
2023
2022
Interest expense
$
(58) $
(58) $
(58)
Interest income
126
49
4
Net gain (loss) on foreign currency transactions
(10)
31
(22)
Net gain (loss) on foreign currency forward contracts
12
(29)
21
Other income (expense), net
1
1
7
Interest and other income (expense), net
$
71 $
(6) $
(48)
73
(17) EARNINGS PER SHARE
The following table summarizes the computations of basic earnings per share (“Basic EPS”) and diluted earnings per share
(“Diluted EPS”). Basic EPS is computed as net income divided by the weighted-average number of common shares outstanding
for the period. Diluted EPS reflects the potential dilution that could occur from common shares issuable through stock-based
compensation plans including stock options, restricted stock units, market-based restricted stock units, performance-based
restricted stock units, and ESPP purchase rights using the treasury stock method.
Year Ended March 31,
(In millions, except per share amounts)
2024
2023
2022
Net income
$
1,273 $
802 $
789
Shares used to compute earnings per share:
Weighted-average common stock outstanding — basic
270
277
284
Dilutive potential common shares related to stock award plans
2
1
2
Weighted-average common stock outstanding — diluted
272
278
286
Earnings per share:
Basic
$
4.71 $
2.90 $
2.78
Diluted
$
4.68 $
2.88 $
2.76
Certain restricted stock units, market-based restricted stock units and performance-based restricted stock units were excluded
from the treasury stock method computation of diluted shares as their inclusion would have had an antidilutive effect. For the
fiscal year ended March 31, 2024, one million such shares were excluded, and for the fiscal years ended March 31, 2023 and
2022, two million and one million such shares were excluded, respectively.
74
(18) SEGMENT AND REVENUE INFORMATION
Our reporting segment is based upon: our internal organizational structure; the manner in which our operations are managed;
the criteria used by our Chief Executive Officer, our Chief Operating Decision Maker (“CODM”), to evaluate segment
performance; the availability of separate financial information; and overall materiality considerations. Our CODM currently
reviews total company operating results to assess overall performance and allocate resources. As of March 31, 2024, we have
only one reportable segment, which represents our only operating segment.
Information about our total net revenue by timing of recognition for the fiscal years ended March 31, 2024, 2023, and 2022 is
presented below (in millions):
Year Ended March 31,
2024
2023
2022
Net revenue by timing of recognition
Revenue recognized at a point in time
$
2,563 $
2,389 $
2,326
Revenue recognized over time
4,999
5,037
4,665
Net revenue
$
7,562 $
7,426 $
6,991
Generally, performance obligations that are recognized upfront upon transfer of control are classified as revenue recognized at a
point in time, while performance obligations that are recognized over either the estimated offering period, contractual term or
subscription period as the services are provided are classified as revenue recognized over time.
Revenue recognized at a point in time includes revenue allocated to the software license performance obligation. This also
includes a portion of revenue from the licensing of software to third-parties.
Revenue recognized over time includes service revenue allocated to the future update rights and the online hosting performance
obligations. This also includes revenue recognized from third parties that publish games and services under a license to certain
of our intellectual property assets and service revenue allocated to the future update rights from licensing of software to third-
parties, online-hosted services such as our Ultimate Team game mode, and subscription services.
Information about our total net revenue by composition for the fiscal years ended March 31, 2024, 2023, and 2022 is presented
below (in millions):
Year Ended March 31,
2024
2023
2022
Net revenue by composition
Full game downloads
$
1,343 $
1,262 $
1,282
Packaged goods
672
675
711
Full game
2,015
1,937
1,993
Live services and other
5,547
5,489
4,998
Net revenue
$
7,562 $
7,426 $
6,991
Full game net revenue includes full game downloads and packaged goods. Full game downloads primarily includes revenue
from digital sales of full games on console, PC, and certain licensing revenue. Packaged goods primarily includes revenue from
software that is sold physically through traditional channels such as brick and mortar retailers.
Live services and other net revenue primarily includes revenue from sales of extra content for console, PC, and mobile games,
certain licensing revenue, subscriptions, and advertising.
75
Information about our total net revenue by platform for the fiscal years ended March 31, 2024, 2023, and 2022 is presented
below (in millions):
Year Ended March 31,
2024
2023
2022
Platform net revenue
Console
$
4,632 $
4,443 $
4,400
PC and other
1,717
1,729
1,532
Mobile
1,213
1,254
1,059
Net revenue
$
7,562 $
7,426 $
6,991
Information about our operations in North America and internationally for the fiscal years ended March 31, 2024, 2023, and
2022 is presented below (in millions):
Year Ended March 31,
2024
2023
2022
Net revenue from unaffiliated customers
North America
$
3,001 $
3,151 $
3,039
International
4,561
4,275
3,952
Net revenue
$
7,562 $
7,426 $
6,991
As of March 31,
2024
2023
Long-lived assets
North America
$
420 $
445
International
158
104
Total
$
578 $
549
We attribute net revenue from external customers to individual countries based on the location of the legal entity that sells the
products and/or services. Note that revenue attributed to the legal entity that makes the sale is often not the country where the
consumer resides. For example, revenue generated by our Swiss legal entity includes digital revenue from consumers who
reside outside of Switzerland, including consumers who reside outside of Europe. Revenue generated by our Swiss legal entity
during fiscal years 2024, 2023, and 2022 represents $4,374 million, $4,085 million and $3,423 million or 58 percent, 55 percent
and 49 percent of our total net revenue, respectively. Revenue generated in the United States represents over 99 percent of our
total North America net revenue. There were no other countries with net revenue greater than 10 percent.
In fiscal year 2024, our direct sales to Sony and Microsoft represented approximately 37 percent and 16 percent of total net
revenue, respectively. In fiscal year 2023, our direct sales to Sony and Microsoft represented approximately 32 percent and 16
percent of total net revenue, respectively. In fiscal year 2022, our direct sales to Sony and Microsoft represented approximately
33 percent and 16 percent of total net revenue, respectively.
76
Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors
Electronic Arts Inc.:
Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting
We have audited the accompanying consolidated balance sheets of Electronic Arts Inc. and subsidiaries (the Company) as of
March 30, 2024 and April 1, 2023, the related consolidated statements of operations, comprehensive income, stockholders’
equity, and cash flows for each of the fiscal years in the three-year period ended March 30, 2024, and the related notes
(collectively, the consolidated financial statements). We also have audited the Company’s internal control over financial
reporting as of March 30, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial
position of the Company as of March 30, 2024 and April 1, 2023, and the results of its operations and its cash flows for each of
the fiscal years in the three-year period ended March 30, 2024, in conformity with U.S. generally accepted accounting
principles. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial
reporting as of March 30, 2024 based on criteria established in Internal Control – Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission.
Basis for Opinions
The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal
control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included
in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an
opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial
reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight
Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement,
whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material
respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement
of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated
financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal
control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the
risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based
on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the
circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.
77
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial
statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or
disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or
complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated
financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate
opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Assessment of the estimated offering period
As discussed in Note 2 to the consolidated financial statements, revenue for transactions that include future update rights and/or
online hosting performance obligations are subject to deferral and recognized over the Estimated Offering Period. Determining
the Estimated Offering Period is inherently subjective because it is not an explicitly defined period. The Company’s
determination of the Estimated Offering Period considers the following factors:
•
the average period of time customers are online
•
for physical games sold at retail, the period of time between the date a game unit is sold to a reseller and the date the
reseller sells the game unit to the customer
•
known and expected online gameplay trends
•
disclosed service periods for competitors’ games.
The Company reported net revenue of $7,562 million for the year-ended March 30, 2024 and deferred net revenue of $1,958
million as of March 30, 2024.
We identified the assessment of the Estimated Offering Period as a critical audit matter. A high degree of audit effort and
subjective and complex auditor judgment was required to evaluate the sufficiency of audit evidence obtained over the Estimated
Offering Period, including whether historical experience and other qualitative factors, such as those described above, are
indicative of the time period during which the Company’s games and extra content are played by its customers.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested
the operating effectiveness of certain internal controls over the Company’s process to determine the Estimated Offering Period,
including controls over the factors noted above and the Company’s review of the Estimated Offering Period concluded for use
in recognizing revenue. We evaluated the model the Company used to develop the Estimated Offering Period against the
accounting requirements and for potential management bias. We computed the average period of time customers are online as
well as the period of time between the date a game unit is sold to a reseller and the date the reseller sells the game unit to the
customer by using the Company’s internal data. We compared the results of these computations against the periods used by the
Company in its Estimated Offering Period model. We obtained disclosed service periods for competitors’ games and compared
them against the data used by the Company. We compared known and expected online gameplay trends used in the
determination of the Estimated Offering Period to historical Company information and publicly available industry information.
We performed a sensitivity analysis over the Company’s Estimated Offering Period to assess the impact of potential changes in
the Estimated Offering Period on revenue. We assessed the sufficiency of evidence obtained related to the Estimated Offering
Period by evaluating the results of the procedures performed.
/s/ KPMG LLP
We have served as the Company’s auditor since 1987.
Santa Clara, California
May 22, 2024
78
Item 9:
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Not applicable.
Item 9A: Controls and Procedures
Definition and Limitations of Disclosure Controls
Our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are controls and
other procedures that are designed to ensure that information required to be disclosed in our reports filed under the Exchange
Act, such as this report, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules
and forms. Disclosure controls and procedures are also designed to ensure that such information is accumulated and
communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow
timely decisions regarding required disclosure. Our management evaluates these controls and procedures on an ongoing basis.
There are inherent limitations to the effectiveness of any system of disclosure controls and procedures. These limitations
include the possibility of human error, the circumvention or overriding of the controls and procedures and reasonable resource
constraints. In addition, because we have designed our system of controls based on certain assumptions, which we believe are
reasonable, about the likelihood of future events, our system of controls may not achieve its desired purpose under all possible
future conditions. Accordingly, our disclosure controls and procedures provide reasonable assurance, but not absolute
assurance, of achieving their objectives.
Evaluation of Disclosure Controls and Procedures
Our Chief Executive Officer and our Chief Financial Officer, after evaluating the effectiveness of our disclosure controls and
procedures, believe that as of the end of the period covered by this report, our disclosure controls and procedures were effective
in providing the requisite reasonable assurance that material information required to be disclosed in the reports that we file or
submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s
rules and forms, and is accumulated and communicated to our management, including our Chief Executive Officer and Chief
Financial Officer, as appropriate to allow timely decisions regarding the required disclosure.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in
Rules 13a-15(f) and 15d-15(f) under the Exchange Act.
Our internal control over financial reporting is designed to provide reasonable, but not absolute, assurance regarding the
reliability of financial reporting and the preparation of financial statements in accordance with generally accepted accounting
principles. There are inherent limitations to the effectiveness of any system of internal control over financial reporting. These
limitations include the possibility of human error, the circumvention or overriding of the system and reasonable resource
constraints. Because of its inherent limitations, our internal control over financial reporting may not prevent or detect
misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become
inadequate because of changes in conditions, or that the degree of compliance with our policies or procedures may deteriorate.
Our management assessed the effectiveness of our internal control over financial reporting as of the end of our most recently
completed fiscal year. In making its assessment, management used the criteria set forth in Internal Control-Integrated
Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this
assessment, our management has concluded that, as of the end of our most recently completed fiscal year, our internal control
over financial reporting was effective and provided a reasonable level of assurance.
KPMG LLP, our independent registered public accounting firm, has issued an auditors’ report on the effectiveness of our
internal control over financial reporting. That report appears on Page 77.
Changes in Internal Control over Financial Reporting
There has been no change in our internal controls over financial reporting identified in connection with our evaluation that
occurred during the fiscal quarter ended March 31, 2024 that has materially affected or is reasonably likely to materially affect
our internal control over financial reporting.
79
Item 9B:
Other Information
Rule 10b5-1 Plans
During the three months ended March 31, 2024, none of our directors or executive officers adopted or terminated a “Rule
10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as defined in Item 408 of Regulation S-K.
Item 9C: Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not Applicable.
80
PART III
Item 10:
Directors, Executive Officers and Corporate Governance
The information required by Item 10, other than the information regarding executive officers, which is included in Part I, Item 1
of this report, is incorporated herein by reference to the information to be included in our 2024 Proxy under the headings
“Proxy Highlights”, “Board of Directors and Corporate Governance,” “Insider Trading, Anti-Hedging and Anti-Pledging
Policies” and, as applicable, “Delinquent Section 16(a) Reports.”
Item 11:
Executive Compensation
The information required by Item 11 is incorporated herein by reference to the information to be included in the 2024 Proxy
under the headings “Director Compensation”, “Compensation Discussion & Analysis” and “Compensation Committee
Interlocks and Insider Participation.”
Item 12:
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by Item 12 is incorporated herein by reference to the information to be included in the 2024 Proxy
under the headings “Executive Compensation Tables” and “Security Ownership of Certain Beneficial Owners and
Management.”
Item 13:
Certain Relationships and Related Transactions, and Director Independence
The information required by Item 13 is incorporated herein by reference to the information to be included in the 2024 Proxy
under the headings “Director Independence”, “Related Persons Transaction Policy”, and, as applicable, “Related Person
Transactions.”
Item 14:
Principal Accountant Fees and Services
The information required by Item 14 is incorporated herein by reference to the information to be included in Proposal 3 of the
2024 Proxy and under the heading “Audit Matters.”
PART IV
Item 15:
Exhibits and Financial Statements
(a) Documents filed as part of this report
1. Financial Statements: See Index to Consolidated Financial Statements under Item 8 on Page 33 of this report.
2. Financial Statement Schedules: The Financial Statement Schedules have been omitted because they are not applicable or are
not required or are not present in material amounts or the information required to be set forth herein is included in the
Consolidated Financial Statements or Notes thereto.
3. Exhibits: The exhibits listed in the accompanying index to exhibits on Page 82 are filed or incorporated by reference as part
of this report.
Item 16:
Form 10-K Summary
None.
81
ELECTRONIC ARTS INC.
2024 FORM 10-K ANNUAL REPORT
EXHIBIT INDEX
3.01
Amended and Restated Certificate of Incorporation
8-K
000-17948
8/13/2021
3.02
Certificate of Amendment to Amended and Restated
Certificate of Incorporation
8-K
000-17948
8/15/2022
3.03
Amended and Restated Bylaws
8-K
000-17948
8/15/2022
4.01
Specimen Certificate of Registrant’s Common Stock
10-Q
000-17948
2/6/2018
4.02
Description of Securities
X
4.03
Indenture, dated as of February 24, 2016 by and between
Electronic Arts Inc. and U.S. Bank National Association, as
Trustee
8-K
000-17948
2/24/2016
4.04
First Supplemental Indenture, dated as of February 24, 2016,
between Electronic Arts Inc. and U.S. Bank National
Association, as Trustee
8-K
000-17948
2/24/2016
4.05
Second Supplemental Indenture, dated as of February 11,
2021, between Electronic Arts Inc. and U.S. Bank National
Association, as Trustee
8-K
000-17948
2/11/2021
10.01*
Form of Indemnity Agreement with Directors
10-K
000-17948
6/4/2004
10.02*
Electronic Arts Inc. Executive Bonus Plan
8-K
000-17948
5/25/2021
10.03*
Electronic Arts Inc. Amended and Restated Change in
Control Severance Plan
8-K
000-17948
11/19/2021
10.04*
Electronic Arts Inc. Deferred Compensation Plan
X
10.05*
First Amendment to the Electronic Arts Deferred
Compensation Plan, as amended and restated
10-K
000-17948
5/22/2009
10.06*
EA Bonus Plan
8-K
000-17948
5/18/2018
10.07*
Form of Performance-Based Restricted Stock Unit
Agreement
10-K
000-17948
5/25/2022
10.08*
Form of Performance-Based Restricted Stock Unit
Agreement
10-K
000-17948
5/24/2023
10.09*
Form of Performance-Based Restricted Stock Unit
Agreement
8-K
000-17948
5/16/2024
10.10*
2000 Equity Incentive Plan, as amended, and related
documents
8-K
000-17948
8/1/2016
10.11*
2000 Employee Stock Purchase Plan, as amended
10-Q
000-17948
2/8/2022
10.12*
Form of Restricted Stock Unit Agreement
X
10.13*
Form of Restricted Stock Unit Agreement For Non-
Employee Directors
10-K
000-17948
5/24/2023
10.14*
Amended and Restated 2019 Equity Incentive Plan
8-K
000-17948
8/15/2022
10.15*
Electronic Arts Inc. Executive Officer Cash Severance Policy
8-K
000-17948
9/1/2022
10.16*
Offer Letter for Employment at Electronic Arts Inc. to
Andrew Wilson, dated September 15, 2013
8-K
000-17948
9/17/2013
10.17*
Offer Letter for Employment at Electronic Arts Inc. to
Christopher Suh, dated January 14, 2022
8-K
000-17948
1/31/2022
Incorporated by Reference
Filed
Herewith
Number
Exhibit Title
Form
File No.
Filing Date
82
10.18*
Offer Letter for Employment at Electronic Arts Inc. to Stuart
Canfield, dated June 19, 2023
8-K
000-17948
6/20/2023
10.19*
Offer Letter for Employment at Electronic Arts Inc. to Mala
Singh, dated August 27, 2016
10-Q
000-17948
11/8/2016
10.20**
Durango Publisher License Agreement, dated June 29, 2012,
by and among Electronic Arts Inc., EA International (Studio
& Publishing) Ltd., Microsoft Licensing, GP and Microsoft
Corporation
10-K
000-17948
5/21/2014
10.21**
Xbox Console Publisher License Agreement, dated as of
September 30, 2020, between Microsoft Corporation,
Electronic Arts Inc. and EA Swiss Sàrl
10-Q
000-17948
11/10/2020
10.22**
Playstation Global Developer & Publisher Agreement, dated
April 1, 2018, by and among Electronic Arts Inc., EA
International (Studio & Publishing) Ltd., Sony Interactive
Entertainment Inc., Sony Interactive Entertainment LLC, and
Sony Interactive Entertainment Europe Ltd
10-Q
000-17948
8/8/2018
10.23**
PlayStation 5 Amendment to the PlayStation Global
Developer and Publisher Agreement, dated as of October 15,
2020, by and among Electronic Arts Inc., EA Swiss Sàrl,
Sony Interactive Entertainment, Inc., Sony Interactive
Entertainment LLC, and Sony Interactive Entertainment
Europe Limited
10-Q
000-17948
11/10/2020
10.24
Credit Agreement, dated March 22, 2023, by and among
Electronic Arts Inc., the lenders from time to time party
thereto, and JPMorgan Chase Bank, N.A., as Administrative
Agent
8-K
000-17948
3/22/2023
19.1
Electronic Arts Inc. Insider Trading Policy
X
21.1
Subsidiaries of the Registrant
X
23.1
Consent of KPMG LLP, Independent Registered Public
Accounting Firm
X
31.1
Certification of Chief Executive Officer pursuant to Rule
13a-14(a) of the Exchange Act, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
X
31.2
Certification of Chief Financial Officer pursuant to Rule
13a-14(a) of the Exchange Act, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
X
Additional exhibits furnished with this report:
32.1
Certification of Chief Executive Officer pursuant to Section
906 of the Sarbanes-Oxley Act of 2002
X
32.2
Certification of Chief Financial Officer pursuant to Section
906 of the Sarbanes-Oxley Act of 2002
X
97
Electronic Arts Inc. Clawback Policy
X
101.INS†
Inline XBRL Instance Document
X
101.SCH†
Inline XBRL Taxonomy Extension Schema Document
X
101.CAL†
Inline XBRL Taxonomy Extension Calculation Linkbase
Document
X
101.DEF†
Inline XBRL Taxonomy Extension Definition Linkbase
Document
X
Incorporated by Reference
Filed
Herewith
Number
Exhibit Title
Form
File No.
Filing Date
83
101.LAB†
Inline XBRL Taxonomy Extension Label Linkbase
Document
X
101.PRE†
Inline XBRL Taxonomy Extension Presentation Linkbase
Document
X
104
The Cover Page Interactive Data File, formatted in Inline
XBRL (included in Exhibit 101)
Incorporated by Reference
Filed
Herewith
Number
Exhibit Title
Form
File No.
Filing Date
*
Management contract or compensatory plan or arrangement.
**
Confidential portions of these documents have been omitted and filed separately with the Securities and Exchange
Commission pursuant to a request for confidential treatment.
84
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized.
ELECTRONIC ARTS INC.
By: /s/ Andrew Wilson
Andrew Wilson
Chief Executive Officer
Date: May 22, 2024
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the Registrant and in the capacities indicated and on the 22nd of May, 2024.
Name
Title
/s/ Andrew Wilson
Chief Executive Officer
Andrew Wilson
/s/ Stuart Canfield
Executive Vice President and
Stuart Canfield
Chief Financial Officer
/s/ Eric Kelly
Senior Vice President and
Eric Kelly
Chief Accounting Officer
Directors:
/s/ Andrew Wilson
Chair of the Board
Andrew Wilson
/s/ Kofi A. Bruce
Director
Kofi A. Bruce
/s/ Rachel A. Gonzalez
Director
Rachel A. Gonzalez
/s/ Jeffrey T. Huber
Director
Jeffrey T. Huber
/s/ Talbott Roche
Director
Talbott Roche
/s/ Richard A. Simonson
Director
Richard A. Simonson
/s/ Luis A. Ubiñas
Director
Luis A. Ubiñas
/s/ Heidi Ueberroth
Director
Heidi Ueberroth
85
To learn more visit
https://ir.ea.com