EA
Electronic Arts Inc.
Communication Services · Electronic Gaming & Multimedia · United States · Stock
Score Breakdown
Scored for Dividend Income profile
Sub-scores are 0–20 each; Model Score is weighted by your selected investment goal. How it works →
Why Ranked Here
- The composite score reflects a company with solid profitability metrics but weighed down by near-flat revenue growth, a significant decline in net income and EPS, and mixed quarterly momentum.
- The dividend factor contributed positively due to four years of consistent $0.76 per share payments and a conservative 21.5% payout ratio, partially offsetting weakness elsewhere.
- The absence of a macro theme assignment means EA receives no theme score credit, limiting the total composite score under the current model methodology.
Why Not Higher
- Net income declined 20.9% and diluted EPS fell 17.4% year-over-year, while revenue grew only 0.9%, producing a low growth sub-score that significantly constrains the overall rating.
- Quarterly revenue trended downward across the most recent four quarters and operating income declined through three consecutive quarters, reflecting a momentum profile that the model could only partially credit due to the late-period recovery.
Data Confidence
9 / 10
Very High — full data coverage
Why This Score
Grounded in figures from this company's SEC EDGAR filings — not a restatement of the score itself.
Revenue grew only modestly from FY2025 to FY2026, rising from $7,463,000,000 to $7,531,000,000 (+0.9%), while net income declined from $1,121,000,000 in FY2025 to $887,000,000 in FY2026 (-20.9%), and diluted EPS fell from $4.25 in FY2025 to $3.51 in FY2026 (-17.4%).
The model penalized EA for near-flat top-line growth combined with meaningful deterioration in bottom-line profitability and per-share earnings, resulting in a low growth sub-score.
In FY2026, EA posted an operating margin of 15.4%, a net margin of 11.8%, and a return on assets of 6.8%.
These figures indicate that EA maintains solid profitability at both the operating and net levels, and generates a meaningful return on its asset base, which the model rewarded with an above-midpoint sub-score.
Filing evidence currently available does not support a more specific explanation for this factor.
Quarterly revenue trended downward over the most recent four quarters, from $2,025,000,000 in 2025Q2 to $1,671,000,000 in 2026Q1. Operating income followed a similar declining pattern from 2026Q1 through 2026Q3 ($271,000,000, $200,000,000, and $127,000,000 respectively) before recovering sharply to $564,000,000 in 2026Q4, with net income showing a comparable late-quarter rebound to $461,000,000 in 2026Q4.
The model reflects a mixed momentum picture: a sustained revenue and earnings decline through most of the period was partially offset by a strong recovery in the final quarter, producing a near-midpoint sub-score.
EA has maintained a consistent dividend per share of $0.76 across FY2023, FY2024, FY2025, and FY2026, and the dividend payout ratio in FY2026 stood at a conservative 21.5% of net income.
The model rewarded the combination of a stable, uninterrupted dividend history and a low payout ratio, which signals that the dividend is well-covered by earnings and leaves room for future increases or capital flexibility.
EA is not currently assigned to any of the 24 tracked macro themes.
Without an active macro theme assignment, EA does not receive theme-related score credit under the model's current methodology; this reflects the model's classification status rather than any qualitative judgment about the company.
Research Summary
AI-generated analysis reflects data and conditions as of the report date shown above. Verify any specific figures through primary sources before acting on this analysis.
Electronic Arts posted near-flat revenue growth of just 0.9% in FY2026, while net income fell sharply by 20.9% and diluted EPS declined 17.4%, reflecting meaningful bottom-line deterioration despite a modest top-line gain. On the profitability side, EA maintained solid operating and net margins of 15.4% and 11.8% respectively, with a return on assets of 6.8%. Momentum was mixed, with quarterly revenue and operating income declining through most of the tracked period before a strong recovery in the final quarter. EA's dividend has remained stable at $0.76 per share across four consecutive fiscal years, supported by a conservative payout ratio of 21.5%, though the absence of a macro theme assignment limits additional score credit under the current model.
Plain English
EA barely grew its sales last year and actually made significantly less profit, but it still runs a reasonably efficient business and has kept paying a steady, affordable dividend — the main concern is that earnings are heading in the wrong direction.
Bull Case vs. Bear Case
Bull Case
- EA maintains solid profitability with a 15.4% operating margin and 11.8% net margin in FY2026, indicating the core business generates meaningful earnings relative to revenue.
- The dividend has been stable at $0.76 per share for four consecutive fiscal years with a low payout ratio of 21.5%, suggesting the dividend is well-covered and the company retains significant financial flexibility.
- A sharp recovery in operating income to $564 million and net income to $461 million in 2026Q4 suggests the business may have stabilized after a difficult stretch.
Bear Case
- Net income fell 20.9% year-over-year from $1,121 million to $887 million, and diluted EPS dropped 17.4% from $4.25 to $3.51, signaling meaningful deterioration in bottom-line profitability.
- Quarterly revenue declined consistently from $2,025 million in 2025Q2 to $1,671 million in 2026Q1, reflecting a sustained downward trend in top-line momentum.
- EA is not assigned to any of the 24 tracked macro themes, meaning it receives no theme-related score credit and lacks a near-term macro tailwind under the current model framework.
What Could Change the Picture
Bullish Triggers
- If the strong 2026Q4 operating income recovery of $564 million proves to be the start of a sustained earnings rebound rather than a one-quarter anomaly, the growth and momentum outlook could improve materially.
- A dividend increase above the long-held $0.76 per share level, supported by the low 21.5% payout ratio, could signal renewed management confidence in earnings trajectory.
Bearish Triggers
- If quarterly revenue continues declining beyond the 2026Q1 trough of $1,671 million without recovery, the near-flat annual revenue growth story could turn negative.
- Further compression in net income below the already-reduced FY2026 level of $887 million would deepen concerns about the sustainability of current profitability metrics.
Risk Profile
High RiskEA's interest coverage ratio of 21.9x in FY2026 suggests the company is not under immediate debt-service pressure, but the sustained decline in quarterly revenue and operating income through most of the tracked period — with operating income falling from $271 million in 2026Q1 to $127 million in 2026Q3 — highlights meaningful operational risk if the 2026Q4 recovery does not persist.
This report is for educational and research purposes only. It does not constitute financial, investment, legal, or tax advice — always conduct your own due diligence before making investment decisions.