How Does This Game Publisher Earn Revenue?
Electronic Arts makes and publishes video games, selling access to its titles and related in-game content. The business is built around operating game franchises at scale and monetizing players over time. It runs as a large, publicly traded publisher with a global customer base. The company’s equity value sits around USD 50.2 billion.
Are Margins Holding Up Despite Lower Sales?
FundamentalsFor the fiscal year ended March 31, 2025 (reported in USD), revenue was about USD 7.46 billion, alongside EBIT of roughly USD 1.52 billion and net income of about USD 1.12 billion. Revenue slipped 1.3% versus the prior year, while trailing margins show a wide spread between gross margin at 78.26% and operating margin at 13.59%, with net profit margin at 9.31%.
Cash was around USD 2.14 billion at year-end. With depreciation and amortization of USD 356 million and capital expenditure of USD 221 million, the cash flow proxy came in at about USD 1.17 billion.
Is The Market Overpaying For Stability?
DCF / MultiplesThe current price of USD 200.44 sits above the DCF fair value range, even under the stronger outcome in that range. That premium also shows up in the headline multiples, with a 73.80 P/E and 46.45 EV/EBITDA alongside a 6.87 price-to-sales.
Valuation Leaves Little Cushion
TakeawayThe price treats durability as a given, not something earned. That can work if margins stay resilient and cash keeps compounding. But the recent revenue dip makes the valuation feel tightly wound. If cash generation softens, the gap to fair value can matter quickly.