Video game publisher Electronic Arts reported better-than-expected quarterly revenue on Tuesday, riding on the continued success of its battle royale game "Apex Legends", sending its shares up as much as 5% in extended trading.
The company's live services led by Apex Legends, The Sims 4, and FIFA Ultimate Team spurred growth with net bookings jumping 12% to $504 million from a year ago.
Apex Legends is the fastest growing game in EA's history.
"We have 8 million to 10 million people on a weekly basis playing the game," said Chief Executive Officer Andrew Wilson on a conference call with analysts.
The formidable tournament title propped up the game publisher's revenue.
"We did not have any brand new games in the quarter so most of the quarter is either our live services business as well as our catalogue titles," Chief Operating Officer and CFO Blake Jorgensen told Reuters.
"Battlefield" and "FIFA" are also important game franchises, but the rise of mobile-based, free-to-play games with engaging formats are challenging the dominance of EA, Activision Blizzard and Take-Two Interactive Software Inc.
Battle royale games, which players fight to death until the last survivor, became wildly popular in 2018 thanks to "PUBG" and Epic Games' "Fortnite".
"Our plan to bring Apex Legends to China and a worldwide mobile launch are also on course," said Wilson.
Season two of Apex Legends was launched on July 2. EA still forecasts net bookings from Apex Legends in the range of $300 million to $400 million in fiscal year 2020.
In addition, EA had stronger than expected FIFA and mobile game sales in the quarter.
On an adjusted basis, EA's revenue was $743 million in the first quarter, beating the average analyst estimate of $719.2 million.
EA, however, expects second-quarter adjusted revenue of $1.23 billion, slightly below analysts' estimates of $1.24 billion, according to Refinitiv data.
The company maintained its full-year adjusted revenue forecast of $5.10 billion, below estimates of $5.18 billion.
Net income rose to $1.42 billion, or $4.75 per share, in the quarter ended June 30, from $293 million, or 95 cents per share, a year earlier.
Net income was boosted by $1.08 billion of income tax benefits.
Shares of the company rose 5% to $92.57.