Electronic Arts Inc. stock research
FY2023 Q4
Electronic Arts (EA) Gross Margin — Quarter Ended Mar 31, 2023
Revenue was flat compared to the prior quarter, while cost of revenue declined significantly, leading to a higher gross profit and an improved gross margin. Year over year, revenue increased but cost of revenue also rose, resulting in a slightly lower gross margin.
Gross margin takeaway
Quarter ended Mar 31, 2023 · FY2023 Q4
Revenue was flat compared to the prior quarter, while cost of revenue declined significantly, leading to a higher gross profit and an improved gross margin. Year over year, revenue increased but cost of revenue also rose, resulting in a slightly lower gross margin.
- The sequential improvement in gross margin was driven by a reduction in cost of revenue, as revenue remained stable. This allowed gross profit to increase even without a change in revenue.
- Compared to the immediately preceding quarter, gross margin strengthened as cost of revenue fell and gross profit rose. Relative to the same quarter one year earlier, gross margin weakened slightly because cost of revenue grew faster than revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
76.1%
Gross profit
$1.4B
Revenue
$1.9B
Cost of revenue
$448.0M
Quarter-over-quarter change
n/a
Year-over-year change
-0.9 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Mar 31, 2023 | $1.9B | $1.4B | $448.0M | 76.1% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Previous quarter unavailable
n/a
Year-over-year change
Mar 31, 2022
-0.9 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The sequential improvement in gross margin was driven by a reduction in cost of revenue, as revenue remained stable. This allowed gross profit to increase even without a change in revenue.
Compared to the immediately preceding quarter, gross margin strengthened as cost of revenue fell and gross profit rose. Relative to the same quarter one year earlier, gross margin weakened slightly because cost of revenue grew faster than revenue.
Monitor the trajectory of cost of revenue, as it showed a sharp sequential decline but a year-over-year increase.