AI Takeaway
EA's Q3 FY2026 results showed nearly flat revenue growth of +1.0% to $1.90B, but operating income collapsed 66.3% to $127M and net income fell 70.0% to $88M, driven by sharply higher costs and expenses, while year-to-date operating cash flow surged 29.0% to $1.97B.
Revenue
$1.9B
++0.96% YoY
EPS (Basic)
$0.35
-68.75% YoY
Gross Margin
73.8%
-1.98% YoY
Operating Income
$127M
-66.31% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-Q filing
Total revenue grew just 1.0% year-over-year to $1.90B in Q3 FY2026, compared to $1.88B in the prior-year period, indicating limited top-line momentum despite the company's broad gaming portfolio.
Source: Source: 10-Q Income Statement
Cost of revenue rose 9.2% YoY to $498M, outpacing revenue growth and causing gross profit to decline 1.7% to $1.40B, compressing gross margin from 75.8% to 73.8%.
Source: Source: 10-Q Income Statement
Operating income fell 66.3% YoY to $127M from $377M, reflecting significant increases in operating expenses beyond cost of revenue, suggesting elevated investment in R&D, marketing, or restructuring charges during the quarter.
Source: Source: 10-Q Income Statement
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Upgrade to unlockOperating margin contracted sharply from 20.0% to 6.7% YoY, a decline of over 13 percentage points. If cost pressures persist—whether from higher content development costs, licensing fees, or restructuring—profitability could remain under pressure in future quarters.
Source: Source: 10-Q Income Statement
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Upgrade to unlockReported EPS of $4.82 versus the $4.86 analyst consensus — a -0.9% miss for Q3 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $1.9B | $1.88B | +0.96% |
Cost of Revenue | $498M | $456M | +9.21% |
Gross Profit | $1.4B | $1.43B | -1.68% |
Operating Income | $127M | $377M | -66.31% |
Net Income | $88M | $293M | -69.97% |
EPS (Basic) | $0.35 | $1.12 | -68.75% |
EPS (Diluted) | $0.35 | $1.11 | -68.47% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $13.28B | $13.45B | -1.27% |
Current Assets | $4.11B | $4.27B | -3.84% |
Total Liabilities | $7.13B | $6.04B | +18.03% |
Current Liabilities | $4.44B | $3.1B | +42.91% |
Stockholders' Equity | $6.15B | $7.41B | -17.00% |
Cash & Equivalents | $2.78B | $2.78B | +0.29% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash FlowYTD | $1.97B | $1.53B | +28.95% |
Investing Cash FlowYTD | $-214M | $-177M | -20.90% |
Financing Cash FlowYTD | $-1.13B | $-1.45B | +21.97% |
Dividends PaidYTD | $143M | $151M | -5.30% |
Share BuybacksYTD | $769M | $1.13B | -32.13% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Gross Margin | 73.8% | 75.8% | -1.98% |
Operating Margin | 6.7% | 20.0% | -13.34% |
Net Margin | 4.6% | — | — |
ROE | 1.4% | — | — |
ROA | 0.7% | — | — |
Current Ratio | $0.926 | — | — |
Debt to Equity | $1.159 | — | — |
Other companies in Interactive Home Entertainment
EA's Q3 FY2026 results were mixed: revenue grew modestly 1.0% to $1.90B, but operating income plunged 66.3% to $127M and net income fell 70.0% to $88M due to sharply higher costs. On the positive side, year-to-date operating cash flow surged 29.0% to $1.97B, showing the business still generates strong cash.
EA's net income fell 70.0% YoY to $88M primarily because operating expenses rose significantly faster than revenue, with cost of revenue alone up 9.2% while revenue grew only 1.0%. This caused operating margin to collapse from 20.0% to just 6.7%, suggesting elevated investment spending or one-time charges during the quarter.
EA is not in immediate financial distress, as it holds $2.78B in cash and generated $1.97B in YTD operating cash flow, but there are warning signs: the current ratio fell below 1.0 to 0.93, total liabilities rose 18.0% to $7.13B, and stockholders' equity declined 17.0% to $6.15B, indicating rising leverage that investors should monitor.
EA's revenue grew just 1.0% year-over-year to $1.90B in Q3 FY2026, compared to $1.88B in the prior-year quarter, representing very modest top-line growth. This limited revenue expansion, combined with rising costs, was the primary driver of the significant earnings decline.
EA continued share repurchases but at a reduced pace, with year-to-date buybacks of $769M compared to $1.13B in the same period last year, a 32.1% decline. The company also paid $143M in dividends YTD, suggesting it is conserving capital amid weaker profitability and higher liabilities.