Electronic Arts Digital Revenue up 40 Percent, No Thanks to Facebook

Electronic Arts is starting to see digital revenue ramp, but not from the Facebook platform.

In the second quarter, the company said digital revenue totaled $324 million, up from $234 million in the year-ago period. The increase was fueled by downloadable content for consoles and mobile games, but probably not Facebook games.

EA doesn’t break out revenue from Facebook, but you can guess they didn’t do so well given that it reported 42 million monthly active users during the period, down from 101 million in the second quarter last year. Meanwhile, it says mobile revenue has increased 60 percent since the same period last year; full-game downloads were up more than 40 percent.

Overall, the company reported non-GAAP revenue of $1.08 billion during the quarter, which was in line with its guidance of up to $1.05 billion. Non-GAAP diluted earnings per share of 15 cents a share was above its guidance of up to 12 cents a share.

The company attributed the higher than expected revenue was primarily due to digital growth. Specifically, it said record numbers of players are engaging in online features and content downloads for its Battlefield and FIFA soccer games. FIFA generated more than $115 million in the first half of 2013 in digital revenue; and Battlefield 3’s premium service has sold more than two million subscriptions to date. Additionally, the company’s Simpsons game called Tapped Out on iOS has been the top grossing game for the past four weeks.

EA’s CFO Blake Jorgensen said the company believes social will be key for games going forward, but not necessarily as an individual platform. “I would say that overall, digital is growing the fastest, and within digital, it’s the mobile business that’s growing the fastest,” he said. “Clearly, mobile is up dramatically, and it’s no surprise — it’s driven by smartphones, tablets.”

The digital revenue more than offset the drop EA is seeing from packaged good sales. However, its guidance for the current quarter, which includes the holidays, is missing analyst expectations. It expects earnings per share of 50 cents to 60 cents, well below consensus estimates of 71 cents (excluding some items). For non-GAAP revenue, it guided $1.25 billion to $1.35 billion, which was lower than the consensus estimate of $1.38 billion.

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