Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of report (Date of earliest event reported) February 27, 2024

ELECTRONIC ARTS INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

0-17948

94-2838567

(State or Other Jurisdiction of Incorporation)

(Commission File Number)

(IRS Employer Identification No.)

209 Redwood Shores Parkway,

Redwood City,

California

94065-1175

(Address of Principal Executive Offices)

(Zip Code)

(650)

628-1500

(Registrant’s Telephone Number, Including Area Code)

(Former Name or Former Address, if Changed Since Last Report)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

	☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

	☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

	☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

	☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol

Name of Each Exchange on Which Registered

Common Stock, $0.01 par value

NASDAQ Global Select Market


Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933(17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company									☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.									☐

Item 2.05 Costs Associated with Exit or Disposal Activities.

On February 27, 2024, the Board of Directors of Electronic Arts Inc. (the "Company") approved a restructuring plan (the "Plan") focused on aligning its portfolio, investments, and resources in support of its strategic priorities and growth initiatives. These actions are consistent with the Company’s ongoing focus to deliver against its long-term strategy to drive durable growth, strong cash-flow, and stockholder returns. The Plan reflects actions driven by portfolio rationalization, including costs associated with licensor commitments, as well as reductions in real estate and headcount, impacting approximately 5% of the Company's workforce.

The Company estimates that it will incur approximately $125 million to $165 million in total charges in connection with the Plan. These charges consist of approximately $50 million to $65 million associated with office space reductions, approximately $40 million to $55 million related to employee severance and employee-related costs, and $35 million to $45 million in costs associated with licensor commitments. Of the aggregate amount of charges that the Company estimates it will incur, the Company expects that approximately $105 million to $150 million will be future cash expenditures.

The actions associated with the Plan are expected to be substantially complete by December 31, 2024. Certain payments associated with lease obligations will be paid in accordance with their terms.

Item 8.01 Other Events.

On February 28, 2024, the Company's Chief Executive Officer Andrew Wilson sent a letter to employees about the Plan, which is attached to this Current Report on Form 8-K as Exhibit 99.1, and is incorporated herein by reference.

Forward-Looking Statements

This Current Report on Form 8-K contains forward-looking statements. We use words such as “anticipate,” “believe,” “expect,” “intend,” “estimate”, “plan”, “predict”, “seek”, “goal”, “will”, “may”, “likely”, “should”, “could” (and the negative of any of these terms), “future”, and similar expressions to identify forward-looking statements. In addition, any statements that refer to projections of our future financial performance, trends in our business, uncertain events and assumptions and other characterizations of future events or circumstances are forward-looking statements. Forward-looking statements consist of, among other things, statements related to our business, operations and financial results, and our future financial performance, and may include certain assumptions that underlie the forward-looking statements. These forward-looking statements are not guarantees of future performance and reflect management’s current expectations. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that might cause or contribute to such differences include those described in Electronic Arts’ latest Quarterly Report on Form 10-Q under the heading “Risk Factors”, as well as in other documents we have filed with the Securities and Exchange Commission, including Electronic Arts’ Annual Report on Form 10-K, filed on May 24, 2023. We assume no obligation to revise or update any forward-looking statement for any reason, except as required by law.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.


Exhibit No.						Description
99.1						Letter to employees from EA's CEO, Andrew Wilson, dated February 28, 2024.
104						Cover Page Interactive Data File (embedded within the Inline XBRL document).

INDEX TO EXHIBITS


Exhibit No.						Description
99.1						Letter to employees from EA's CEO, Andrew Wilson , dated February 2 8 , 2024

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

ELECTRONIC ARTS INC.

Dated:

February 28, 2024

By:

/s/ Stuart Canfield

Stuart Canfield

Chief Financial Officer

Exhibit 99.1

Letter to employees from EA’s CEO, Andrew Wilson:

Subject: Continuing to evolve our business and teams

Team,

We are entertaining, inspiring, and connecting more people with more content and deeper experiences than ever before. Over the last year, we have organized our company to further empower our creative leaders to deliver our strategic priorities of entertaining massive online communities, telling blockbuster stories, and harnessing the power of community in and around our games. These actions have positioned us to build bigger, bolder experiences for hundreds of millions of players and fans around the world.

We are also leading through an accelerating industry transformation where player needs and motivations have changed significantly. Fans are increasingly engaging with the largest IP, and looking to us for broader experiences where they can play, watch, create content, and forge deeper connections. Our industry exists at the cutting edge of entertainment, and in today’s dynamic environment, we are advancing the way we work and continuing to evolve our business.

As a company full of creators and storytellers, we believe in the value of teams innovating together, and continue to learn and adopt new ways of collaborating to grow and serve our global communities. Given how and where we are working, we are continuing to optimize our global real estate footprint to best support our business. We are also sunsetting games and moving away from development of future licensed IP that we do not believe will be successful in our changing industry. This greater focus allows us to drive creativity, accelerate innovation, and double down on our biggest opportunities — including our owned IP, sports, and massive online communities — to deliver the entertainment players want today and tomorrow. Lastly, we are streamlining our company operations to deliver deeper, more connected experiences for fans everywhere that build community, shape culture, and grow fandom.

In this time of change, we expect these decisions to impact approximately 5 percent of our workforce. I understand this will create uncertainty and be challenging for many who have worked with such dedication and passion and have made important contributions to our company. While not every team will be impacted, this is the hardest part of these changes, and we have deeply considered every option to try and limit impacts to our teams. Our primary goal is to provide team members with opportunities to find new roles and paths to transition onto other projects. Where that’s not possible, we will support and work with each colleague with the utmost attention, care, and respect. Communicating these impacts has already begun and will be largely completed by early next quarter.

I want to extend my appreciation to everyone who has helped contribute to EA’s ongoing story. We are a team that leans into our values to lead the future of entertainment, and I look forward to what we will create together. Thank you for all that you do.

Andrew

Cover Page	Feb. 27, 2024
Cover [Abstract]
Document Type	8-K
Document Period End Date	Feb. 27, 2024
Entity Registrant Name	ELECTRONIC ARTS INC.
Entity Incorporation, State or Country Code	DE
Entity File Number	0-17948
Entity Tax Identification Number	94-2838567
Entity Address, Address Line One	209 Redwood Shores Parkway,
Entity Address, City or Town	Redwood City,
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94065-1175
City Area Code	(650)
Local Phone Number	628-1500
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Title of 12(b) Security	Common Stock, $0.01 par value
Trading Symbol	EA
Security Exchange Name	NASDAQ
Entity Central Index Key	0000712515
Amendment Flag	false