GAAP net revenue grew 6% to $443.6 million
GAAP net loss was $0.03 per diluted share
Net Bookings grew 20% to $577.0 million
Take-Two Interactive Software, Inc. (NASDAQ:TTWO) today reported
results for its fiscal second quarter 2018, ended September 30,
2017. In addition, the Company provided its initial financial
outlook for its fiscal third quarter ending December 31, 2017, and
updated its financial outlook for its fiscal year ending March 31,
2018.
Fiscal Second Quarter 2018 GAAP
Financial Highlights
Net revenue was $443.6 million, as compared to $420.2 million in
last year’s fiscal second quarter. Recurrent consumer spending
(virtual currency, add-on content and microtransactions) grew 66%
year-over-year and accounted for 48% of total net revenue. The
largest contributors to net revenue in fiscal second quarter 2018
were NBA® 2K17, Grand Theft Auto® Online and Grand Theft Auto V,
WWE® SuperCard and WWE 2K17, and XCOM® 2.
Digitally-delivered net revenue grew 31% to $302.9 million, as
compared to $230.8 million in last year’s fiscal second quarter,
and accounted for 68% of total net revenue. The largest
contributors to digitally-delivered net revenue in fiscal second
quarter 2018 were NBA 2K17, Grand Theft Auto Online and Grand Theft
Auto V, XCOM 2, and WWE SuperCard.
Net loss was $2.7 million, or $0.03 per diluted share, as
compared to net income of $36.4 million, or $0.39 per diluted
share, for the comparable period last year.
As of September 30, 2017, the Company had cash and short-term
investments of $1.263 billion.
The following data, together with a management reporting tax
rate of 22%, are used internally by the Company’s management and
Board of Directors to adjust the Company’s GAAP financial results
in order to facilitate comparison of its operating performance
between periods and to better understand its core business and
future outlook:
Three Months Ended September 30, 2017
Financial Data $ in thousands
Statement of
Operations
Change indeferred net
revenue and related cost of goods
sold
Stock-based compensation
Non-cash amounts related
to convertible notes
Acquisition related
expenses
Amortization &
impairment of acquired intangible
assets
Business reorganization
Other, net
Net revenue $ 443,562
133,427 Cost of goods sold 246,548 33,930
(28,065 ) (4,899 )
Gross profit 197,014
99,497 28,065 4,899 Operating expenses
208,333 (30,946 )
7,012 (15,523 ) (1,713 )
Income (loss) from operations (11,319 )
99,497 59,011
(7,012
)
20,422 1,713 Interest and other, net (2,969 )
5,640
(93 )
Income (loss) before income
taxes (14,288 ) 99,497 59,011
5,640
(7,012
)
20,422 1,713 (93 )
In order to calculate net income per diluted share for
management reporting purposes, the Company uses its fully diluted
share count of 118.1 million and adds back to net income the
interest expense, net of tax, on the convertible notes of $0.3
million.
Operational Metric – Net
Bookings
As previously announced, starting with fiscal second quarter
2018, Take-Two has changed the name of its operational metric from
Net Sales to Net Bookings. The Company has made this change to
avoid confusion with the net sales captions used by some companies
in their GAAP financial statements, and to be consistent with
operational metrics provided by its peers. Net Bookings is defined
as the net amount of products and services sold digitally or
sold-in physically during the period, and includes licensing fees,
merchandise, in-game advertising, strategy guides and publisher
incentives. The Company’s definition of Net Bookings is identical
to its previous definition of Net Sales.
During fiscal second quarter 2018, total Net Bookings grew 20%
to $577.0 million, as compared to $479.4 million during last year’s
fiscal second quarter. Net Bookings from recurrent consumer
spending grew 84% year-over-year and accounted for 42% of total Net
Bookings. The largest contributors to Net Bookings were NBA 2K18
and NBA 2K17, Grand Theft Auto Online and Grand Theft Auto V,
Dragon City and Monster Legends, and XCOM 2.
Catalog accounted for $310.5 million of Net Bookings led by
Grand Theft Auto, NBA 2K, Dragon City and Monster Legends, and XCOM
2.
Digitally-delivered Net Bookings grew 52% to $355.7 million, as
compared to $234.2 million in last year’s fiscal second quarter,
and accounted for 62% of total Net Bookings. The largest
contributors to digitally-delivered Net Bookings in fiscal second
quarter 2018 were Grand Theft Auto Online and Grand Theft Auto V,
NBA 2K18 and NBA 2K17, Dragon City and Monster Legends, and XCOM
2.
Management Comments
“Our positive momentum continued in the second quarter, enabling
Take-Two to deliver another period of better-than-expected
operating results,” said Strauss Zelnick, Chairman and CEO of
Take-Two. “Grand Theft Auto Online delivered its best quarter yet,
Net Bookings from Grand Theft Auto V grew year-over-year, and we
enjoyed the successful launch of NBA 2K18, which generated growth
in both units sold and recurrent consumer spending.
“As a result of our outperformance in the second quarter and
increased forecast for the remainder of the fiscal year, we are
raising our fiscal 2018 outlook for Net Bookings and net cash
provided by operating activities. We now expect fiscal 2018 to be
another year of Net Bookings growth, as well as strong cash flow.
Looking ahead, we expect fiscal 2019 to be a record year for Net
Bookings and net cash provided by operating activities led by the
upcoming launches of Rockstar Games’ Red Dead Redemption 2 and a
highly anticipated new title from one of 2K’s biggest franchises.
We have a robust development pipeline and are better positioned
than ever for long-term growth and margin expansion.”
Business and Product
Highlights
Since July 1, 2017:
Rockstar Games:
- Grand Theft Auto V has now sold in more
than 85 million units. According to The NPD Group, Grand Theft Auto
V is now the all-time best-selling video game, both in revenues and
units, based on combined U.S. digital and physical sales across PC,
console and portable.
- Released new free content updates for
Grand Theft Auto Online, including:
- Smuggler’s Run, a major update focused
on aerial vehicles and gameplay that introduces new smuggling-based
business opportunities, a new Hangar property for storing a range
of aircraft, including planes, choppers and ultralights for
transporting criminal cargo across the state; and an array of
themed content drops post-launch featuring:
- Motor Wars, a vehicle-based battle for
survival in an ever-shrinking combat area.
- The Bombushka military bomber and
Bombushka Run Adversary Mode.
- The Mammoth Mogul aircraft and
Stockpile, a new, jet-fueled take on capture-the-flag.
- Transform Races, a new form of Stunt
Race where players switch vehicle classes instantly mid-race across
land, air and sea.
- Special Halloween content including the
Vigilante weaponized vehicle, the Seabreeze aircraft and Condemned,
a nightmarish version of tag where the only way to escape certain
death is to take down another player.
- Announced that new versions of the
blockbuster detective thriller, L.A. Noire, are scheduled to
release on November 14, 2017 for Nintendo Switch™, PlayStation®4
and Xbox One. These new versions include the original L.A. Noire
game plus all of its additional downloadable content, with specific
enhancements tailored to the unique capabilities of each platform.
Following these in December, 2017, comes LA Noire: The VR Case
Files, featuring seven select cases from the original game rebuilt
specifically for a virtual reality experience on the HTC VIVE™
system.
2K:
- Launched WWE 2K18 for PlayStation 4,
Xbox One and PC. Developed collaboratively by Yuke's and Visual
Concepts, WWE 2K18 features Seth Rollins as its cover Superstar,
along with the largest playable roster in franchise history, the
new online-centric Road to Glory mode, notable gameplay
improvements, and a powerful new graphics engine. In addition, WWE
2K18 will be released for Nintendo Switch during fall 2017, marking
the first time in five years that a WWE game has been available on
a Nintendo platform. WWE 2K18 is being supported with a series of
downloadable content, including a Season Pass.
- Launched NBA 2K18, the current
iteration of our top-rated and top-selling NBA video game
simulation series, for PlayStation 4, PlayStation 3, Xbox One, Xbox
360, Nintendo Switch and PC. Developed by Visual Concepts, NBA 2K18
received positive reviews from influential critics, including
91/100 from Forbes, 9/10 from Game Informer and 4.5/5 from Digital
Trends. To date, NBA 2K18 has sold-in over 6 million units, and
both sell-in and sell-through of the title have grown more than 20%
over the prior year’s release, including a significant increase in
digitally-delivered sales.
- Released XCOM 2: War of the
Chosen, the expansion pack for the 2016 award-winning strategy
title from Firaxis Games, for PlayStation 4, Xbox One and PC. Fans
and critics have been delighted by the new Chosen enemies and
Faction Heroes, with Game Informer awarding the title 9.25 out of
10 calling it, “One of the most rewarding strategy games in
years”.
- Released Sign of the Times – the third
downloadable add-on content pack for Mafia III, which is available
for individual purchase or as part of the title’s Season Pass, for
PlayStation 4, Xbox One and PC.
Financial Outlook for Fiscal
2018
Take-Two is providing its initial financial outlook for its
fiscal third quarter ending December 31, 2017, and updating its
financial outlook for its fiscal year ending March 31, 2018, as
follows:
Third Quarter Ending December 31, 2017
- GAAP net revenue is expected to range
from $440 to $490 million
- GAAP net (loss) is expected to range
from ($40) to ($29) million
- GAAP diluted net (loss) per share is
expected to range from ($0.35) to ($0.25)
- Share count used to calculate GAAP
diluted net loss per share is expected to be 113.6 million (1)
- Net Bookings (operational metric) are
expected to range from $610 to $660 million
The Company is also providing selected data and its management
reporting tax rate of 22% that are used internally by its
management and Board of Directors to adjust the Company’s GAAP
financial outlook in order to facilitate comparison of its
operating performance between periods and to better understand its
core business and future outlook:
Three Months Ending December 31, 2017
Financial Data $ in millions
GAAPoutlook (2)
Change in deferred net
revenue and related cost of goods sold
Stock-based compensation
(3)
Non-cash amounts related
to convertible notes
Amortization of acquired
intangible assets
Net revenue $440 to $490 $170
Cost of goods sold $262 to $291 $40
($7) ($4) Operating Expenses $220 to
$230 ($26) ($4) Interest and other, net
($1) ($1) Income (loss) before income taxes
($41) to ($30) $130 $33 $1 $8
Fiscal Year Ending March 31, 2018
As a result of its better-than-expected fiscal second quarter
2018 operating performance and increased outlook for the remainder
of the fiscal year, Take-Two is raising its fiscal year 2018
outlook for Net Bookings and net cash provided by operating
activities. In addition, due primarily to higher internal royalties
driven by the strong performance of Grand Theft Auto V and Grand
Theft Auto Online, as well as higher equity compensation expense,
the Company is reducing its outlook for GAAP net income.
- GAAP net revenue is expected to range
from $1.74 to $1.84 billion
- GAAP net income is expected to range
from $63 to $91 million
- GAAP diluted net income per share is
expected to range from $0.55 to $0.80
- Share count used to calculate GAAP
diluted net income per share is expected to be 113.6 million
(4)
- Net cash provided by operating
activities is expected to be approximately $300 million
- Capital expenditures are expected to be
approximately $60 million
- Net Bookings (operational metric) are
expected to range from $1.93 to $2.03 billion
The Company is also providing selected data and its management
reporting tax rate of 22% that are used internally by its
management and Board of Directors to adjust the Company’s GAAP
financial outlook in order to facilitate comparison of its
operating performance between periods and to better understand its
core business and future outlook:
Twelve Months Ending March 31, 2018
Financial Data $ in millions
GAAPoutlook (2)
Change indeferred net
revenue and related cost of goods sold
Stock-based compensation
(3)
Non-cash amounts related
to convertible notes
Acquisition related
expenses
Amortization & impairment
of acquired intangible assets
Business reorganization
excluding stock-based compensation
Net revenue $1,740 to
$1,840 $194 Cost of goods sold $893 to
$944 $10 ($44) ($16) Operating
Expenses $805 to $825
($100) (5)
$7 ($27) ($12) Interest and other, net
$3 ($11) Income (loss) before income taxes
$39 to $68 $184 $144 $11 ($7)
$43 $12 1) For the fiscal
third quarter ending December 31, 2017, the Company’s fully diluted
share count used for management reporting purposes is expected to
be 119.8 million, which includes 113.6 million basic shares, 4.2
million shares representing the potential dilution from unvested
employee stock grants, and 2.0 million shares representing the
potential dilution from convertible notes. The interest expense,
net of tax, on the convertible notes, which is added back to net
income to calculate diluted net income per share for management
reporting purposes is $0.1 million. Take-Two’s GAAP net income per
diluted share outlook is calculated using its basic share count of
113.6 million because using the “if-converted” method and the
Company’s fully diluted share count of 119.8 million would have
been anti-dilutive. 2) The individual components of the financial
outlook may not foot to the totals as the Company does not expect
actual results for every component to be at the low end or high end
of the outlook range simultaneously. 3) The Company's stock-based
compensation expense for the periods above includes the cost of
approximately 0.6 million restricted stock units previously granted
to ZelnickMedia that are subject to variable accounting. Actual
expense to be recorded in connection with these shares is dependent
upon several factors, including future changes in Take-Two's stock
price. 4) For the fiscal year ending March 31, 2018, the Company’s
fully diluted share count used for management reporting purposes is
expected to be 118.8 million, which includes 110.0 million basic
shares, 3.6 million shares representing the potential dilution from
unvested employee stock grants, and 5.2 million shares representing
the potential dilution from convertible notes. The interest
expense, net of tax, on the convertible notes, which is added back
to net income to calculate diluted net income per share for
management reporting purposes is $1.0 million. Take-Two’s GAAP net
income per diluted share outlook is calculated using a diluted
share count of 113.6 million (basic shares plus unvested employee
stock grants ), because using the “if-converted” method and the
Company’s fully diluted share count of 118.8 million would have
been anti-dilutive. 5) Includes $2.4 million of stock-based
compensation related to business reorganization.
Key assumptions and dependencies underlying the Company’s
financial outlook include: the timely delivery of the titles
included in this financial outlook; continued consumer acceptance
of the Xbox One and PlayStation 4; the ability to develop and
publish products that capture market share for these new-generation
systems while also leveraging opportunities on the Nintendo Switch,
Xbox 360, PlayStation 3, PC and mobile platforms; and stable
foreign exchange rates. See also “Cautionary Note Regarding Forward
Looking Statements” below.
Product Releases
The following titles were released since July 1, 2017:
Label
Title
Platforms
Release Date
2K
Mafia III: Sign of the Times (DLC)
PS4, Xbox One, PC July 25, 2017 2K
Sid Meier’s Civilization VI: Nubia
Civilization/Scenario Pack (DLC)
PC July 27, 2017 2K
XCOM 2: War of the Chosen (DLC)
PC August 29, 2017 2K
XCOM 2: War of the Chosen (DLC)
PS4, Xbox One September 12, 2017 2K
NBA 2K18
PS4, PS3, Xbox One, Xbox 360, Switch (digital), PC September 15,
2017 2K
NHL SuperCard
iOS, Android October 4, 2017 2K
WWE 2K18
PS4, Xbox One October 13, 2017 2K
NBA 2K18
Switch (physical) October 17, 2017 2K
WWE 2K18
PC October 17, 2017 2K
WWE 2K18: Accelerator (DLC)
PS4, Xbox One, PC October 17, 2017 2K
WWE 2K18: MyPlayer Kickstarter (DLC)
PS4, Xbox One, PC October 17, 2017 2K
Sid Meier’s Civilization VI: Khemer &
Indonesia Civilization/Scenario Pack (DLC)
PC October 19, 2017 Take-Two's lineup of future titles
announced to date includes:
Label
Title
Platforms
Release Date
Rockstar Games
L.A. Noire
Xbox One, PS4, Switch November 14, 2017 Rockstar Games
L.A. Noire: The VR Case Files
HTC Vive December, 2017 2K
WWE 2K18
Switch Fall 2017 Take-Two
Kerbal Space Program: Making History
Expansion
PC Fiscal 4th Quarter 2018 Rockstar Games
Red Dead Redemption 2
PS4, Xbox One Spring 2018
Conference Call
Take-Two will host a conference call today at 4:30 p.m. Eastern
Time to review these results and discuss other topics. The call can
be accessed by dialing (877) 407-0984 or (201) 689-8577. A live
listen-only webcast of the call will be available by visiting
http://ir.take2games.com and a replay will be available following
the call at the same location.
Final Results
The financial results discussed herein are presented on a
preliminary basis; final data will be included in Take-Two’s
Quarterly Report on Form 10-Q for the period ended September 30,
2017.
About Take-Two Interactive
Software
Headquartered in New York City, Take-Two Interactive
Software, Inc. is a leading developer, publisher and marketer
of interactive entertainment for consumers around the globe. The
Company develops and publishes products principally through its two
wholly-owned labels Rockstar Games and 2K. Our products are
designed for console systems and personal computers, including
smartphones and tablets, and are delivered through physical retail,
digital download, online platforms and cloud streaming services.
The Company’s common stock is publicly traded on NASDAQ under the
symbol TTWO. For more corporate and product information please
visit our website at http://www.take2games.com.
All trademarks and copyrights contained herein are the property
of their respective holders.
Cautionary Note Regarding
Forward-Looking Statements
The statements contained herein which are not historical facts
are considered forward-looking statements under federal securities
laws and may be identified by words such as "anticipates,"
"believes," "estimates," "expects," "intends," "plans,"
"potential," "predicts," "projects," "seeks," “should,” "will," or
words of similar meaning and include, but are not limited to,
statements regarding the outlook for the Company's future business
and financial performance. Such forward-looking statements are
based on the current beliefs of our management as well as
assumptions made by and information currently available to them,
which are subject to inherent uncertainties, risks and changes in
circumstances that are difficult to predict. Actual outcomes and
results may vary materially from these forward-looking statements
based on a variety of risks and uncertainties including: our
dependence on key management and product development personnel, our
dependence on our Grand Theft Auto products and our ability to
develop other hit titles, the timely release and significant market
acceptance of our games, the ability to maintain acceptable pricing
levels on our games, and risks associated with international
operations. Other important factors and information are contained
in the Company's most recent Annual Report on Form 10-K, including
the risks summarized in the section entitled "Risk Factors," the
Company’s most recent Quarterly Report on Form 10-Q, and the
Company's other periodic filings with the SEC, which can be
accessed at www.take2games.com. All forward-looking statements are
qualified by these cautionary statements and apply only as of the
date they are made. The Company undertakes no obligation to update
any forward-looking statement, whether as a result of new
information, future events or otherwise.
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands,
except per share amounts)
Three months ended September 30, Six Months Ended
September 30, 2017 2016
2017 2016
Net revenue
$ 443,562 $ 420,167
$ 861,778 $ 731,719 Cost of
goods sold: Internal royalties
104,049 77,425
181,753
137,098 Software development costs and royalties
66,782
45,194
110,411 108,853 Product costs
42,563 55,059
86,632 100,038 Licenses
33,154
27,927
62,321 50,996
Total cost of goods sold
246,548
205,605
441,117 396,985
Gross profit
197,014 214,562
420,661 334,734
Selling and marketing
76,914 80,187
129,128
151,321 General and administrative
60,824 49,685
121,427 96,428 Research and development
49,999 30,005
92,268 63,905 Business reorganization
1,713 -
12,312 - Depreciation and amortization
18,883
7,491
26,626
14,869 Total operating expenses
208,333
167,368
381,761 326,523
Income (loss) from operations
(11,319 ) 47,194
38,900 8,211 Interest and other, net
(2,969 )
(7,078 )
(5,777 ) (11,584 ) Gain on long-term
investments, net
- -
- 1,350 Income (loss) before income
taxes
(14,288 ) 40,116
33,123 (2,023 )
(Benefit from) provision for income taxes
(11,552 ) 3,684
(24,417
) 112 Net income (loss)
$ (2,736
) $ 36,432
$ 57,540 $ (2,135 )
Earnings (loss) per share: Basic earnings (loss) per share
$ (0.03 ) $ 0.42
$ 0.54 $ (0.03
) Diluted earnings (loss) per share
$ (0.03 )
$ 0.39
$ 0.53 $ (0.03 ) Weighted average
shares outstanding: Basic
109,430 87,176
107,232
84,990 Diluted
109,430 115,202
109,356 84,990
Computation of Basic EPS: Net income (loss)
$
(2,736 ) $ 36,432
$ 57,540 $ (2,135 )
Less: net income allocated to participating securities
- (745 )
(487 ) -
Net loss for basic and diluted EPS calculation
$
(2,736 ) $ 35,687
$ 57,053
$ (2,135 ) Weighted average shares outstanding -
basic
109,430 87,176
107,232 84,990 Less: weighted
average participating shares outstanding
-
(1,783 )
(908 ) -
Weighted average common shares outstanding - basic
109,430 85,393
106,324
84,990 Basic earnings (loss) per share
$ (0.03 ) $ 0.42
$ 0.54 $ (0.03
)
Computation of Diluted EPS: Net income (loss)
$ (2,736 ) $ 36,432
$ 57,540 $
(2,135 ) Less: net income allocated to participating securities
- (564 )
(478 ) - Add: interest expense, net
of tax, on Convertible Notes
- 8,669
- - Net income (loss) for
diluted EPS calculation
$ (2,736 ) $ 44,537
$ 57,062 $ (2,135 ) Weighted
average common shares outstanding - basic
109,430 85,393
106,324 84,990 Add: dilutive effect of common stock
equivalents
- 29,809
3,032 - Total weighted average shares
outstanding - diluted
109,430 115,202
109,356 84,990
Less: weighted average participating shares outstanding
- (1,783 )
(908 )
- Weighted average common shares outstanding - diluted
109,430 113,419
108,448 84,990 Diluted earnings
(loss) per share
$ (0.03 ) $ 0.39
$
0.53 $ (0.03 )
TAKE-TWO INTERACTIVE
SOFTWARE, INC. and SUBSIDIARIES CONSOLIDATED BALANCE
SHEETS (in thousands, except per share amounts)
September 30, March 31, 2017
2017 ASSETS (Unaudited)
Current assets: Cash and cash equivalents
$ 749,626 $
943,396 Short-term investments
513,516 448,932 Restricted
cash
469,101 337,818
Accounts receivable, net of allowances of
$50,109 and $66,483 at September 30, 2017 and March 30, 2017,
respectively
429,019 219,558 Inventory
36,431 16,323 Software
development costs and licenses
41,983 41,721 Deferred cost
of goods sold
115,135 127,901 Prepaid expenses and other
100,704 59,593 Total current
assets
2,455,515 2,195,242
Fixed assets, net
86,689 67,300 Software development
costs and licenses, net of current portion
595,076 381,910
Deferred cost of goods sold, net of current portion
10,820 -
Goodwill
381,359 359,115 Other intangibles, net
116,527 110,262 Other assets
50,394
35,325 Total assets
$ 3,696,380
$ 3,149,154
LIABILITIES AND STOCKHOLDERS'
EQUITY Current liabilities: Accounts payable
$
75,810 $ 31,892 Accrued expenses and other current
liabilities
952,568 750,875 Deferred revenue
822,126 903,125 Total current
liabilities
1,850,504 1,685,892
Long-term debt
52,369 251,929 Non-current deferred
revenue
167,070 10,406 Other long-term liabilities
153,991 197,199 Total liabilities
2,223,934 2,145,426
Stockholders' equity: Preferred stock, $.01 par value, 5,000
shares authorized
- - Common stock, $.01 par value, 200,000
shares authorized; 130,723 and 119,813 shares issued and 113,531
and 102,621 outstanding at September 30, 2017 and March 31, 2017,
respectively
1,307 1,198 Additional paid-in capital
1,845,450 1,452,754 Treasury stock, at cost; 17,192 common
shares at September 30, 2017 and March 31, 2017, respectively
(303,388 ) (303,388 ) Accumulated deficit
(42,451 ) (99,694 ) Accumulated other comprehensive
loss
(28,472 ) (47,142 ) Total
stockholders' equity
1,472,446
1,003,728 Total liabilities and stockholders' equity
$ 3,696,380 $ 3,149,154
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
Six Months Ended September 30, 2017
2016 Operating
activities: Net income (loss)
$ 57,540 $ (2,135 )
Adjustments to reconcile net loss to net cash provided by
operating activities: Amortization and impairment of software
development costs and licenses
38,862 63,459 Depreciation
15,369 14,869 Amortization and impairment of intellectual
property
17,286 - Impairment of in-process research and
development
11,257 - Stock-based compensation
83,083
33,333 Amortization of discount on Convertible Notes
13,915
12,981 Gain on conversions of Convertible Notes
(4,141
) - Amortization of debt issuance costs
482 779
Other, net
1,194 (2,912 ) Changes in assets and liabilities:
Restricted cash
(131,283 ) (106,940 ) Accounts
receivable
(209,198 ) (212,032 ) Inventory
(18,721 ) (62,555 ) Software development costs and
licenses
(146,009 ) (148,512 ) Prepaid expenses and
other assets
(45,089 ) (8,560 ) Deferred revenue
65,671 80,913 Deferred cost of goods sold
4,379
(17,287 ) Accounts payable, accrued expenses and other liabilities
246,472 303,790 Net cash
provided by (used in) operating activities
1,069
(50,809 )
Investing activities: Change
in bank time deposits
(40,000 ) 66,841 Proceeds from
available-for-sale securities
111,480 72,387 Purchases of
available-for-sale securities
(134,273 ) (74,552 )
Purchases of fixed assets
(32,717 ) (8,283 ) Proceeds
from sale of long-term investments
- 1,350 Purchase of
long-term investments
- (1,885 ) Asset acquisition
(25,965 ) - Net cash (used in) provided
by investing activities
(121,475 )
55,858
Financing activities: Excess tax
benefit from stock-based compensation
- 1,143 Tax payment
related to net share settlements on restricted stock awards
(86,125 ) (30,621 ) Net cash used in financing
activities
(86,125 ) (29,478 )
Effects of foreign exchange rates on cash and cash equivalents
12,761 (4,310 ) Net change in
cash and cash equivalents
(193,770 ) (28,739 ) Cash
and cash equivalents, beginning of year
943,396
798,742 Cash and cash equivalents, end of
period
$ 749,626 $ 770,003
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
Net Revenue and Net Bookings by Geographic Region, Distribution
Channel, and Product Platform (in thousands)
Three Months Ended
September 30, 2017
Three Months EndedSeptember 30, 2016
Amount % of Total Amount % of Total
Net
revenue by geographic region United States
$
276,005 62% $ 252,483 60% International
167,557 38% 167,684 40% Total net revenue
$ 443,562 100% $ 420,167 100%
Net
bookings by geographic region United States
$
348,082 60% $ 297,969 62% International
228,907 40% 181,472 38% Total net bookings
$ 576,989 100% $ 479,441 100%
Three Months Ended September 30,
2017
Three Months EndedSeptember 30, 2016
Amount % of Total Amount % of Total
Net
revenue by distribution channel Digital online
$
302,886 68% $ 230,759 55% Physical retail and other
140,676 32% 189,408 45% Total net
revenue
$ 443,562 100% $ 420,167 100%
Net bookings by distribution channel Digital online
$
355,736 62% $ 234,178 49% Physical retail and other
221,253 38% 245,263 51% Total net
bookings
$ 576,989 100% $ 479,441 100%
Three Months Ended September 30,
2017
Three Months EndedSeptember 30, 2016
Amount % of Total Amount % of Total
Net revenue by
product platform Console
$ 360,465 81% $
230,759 55% PC and other
83,097 19%
189,408 45% Total net revenue
$ 443,562 100% $
420,167 100%
Net bookings by product platform Console
$ 485,864 84% $ 421,384 88% PC and other
91,125 16% 58,057 12% Total net
bookings
$ 576,989 100% $ 479,441 100%
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
Net Revenue and Net Bookings by Geographic Region, Distribution
Channel, and Product Platform (in thousands)
Six Months Ended September 30,
2017
Six Months EndedSeptember 30, 2016
Amount % of Total Amount % of Total
Net
revenue by geographic region United States
$
534,265 62% $ 445,584 61% International
327,513 38% 286,135 39% Total net revenue
$ 861,778 100% $ 731,719 100%
Net
bookings by geographic region United States
$
547,953 59% $ 441,209 59% International
377,341 41% 310,787 41% Total net bookings
$ 925,294 100% $ 751,996 100%
Six Months Ended September 30,
2017
Six Months EndedSeptember 30, 2016
Amount % of Total Amount % of Total
Net
revenue by distribution channel Digital online
$
571,122 66% $ 402,837 55% Physical retail and other
290,656 34% 328,882 45% Total net
revenue
$ 861,778 100% 731,719 100%
Net bookings by distribution channel Digital online
$ 636,650 69% $ 425,341 57% Physical retail
and other
288,644 31% 326,655 43% Total
net bookings
$ 925,294 100% $ 751,996 100%
Six Months Ended September 30,
2017
Six Months EndedSeptember 30, 2016
Amount % of Total Amount % of Total
Net Revenues
by product platform Console
$ 705,382 82%
$ 607,064 83% PC and other
156,396 18%
124,655 17% Total net revenue
$ 861,778 100% $
731,719 100%
Net bookings by product platform Console
$ 751,614 81% $ 635,228 84% PC and other
173,680 19% 116,768 16% Total net
bookings
$ 925,294 100% $ 751,996 100%
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
ADDITIONAL DATA (in
thousands) Three Months Ended September 30, 2017
Net Revenue
Cost of Goods Sold- Internal
Royalties
Cost of Goods Sold- Software
Development Costs and Royalties
Cost of Goods Sold- Product
Costs
Cost of Goods Sold-
Licenses
Selling and Marketing
As reported $ 443,562 $ 104,049 $ 66,782 $ 42,563 $
33,154 $ 76,914 Net effect from deferral and related cost of goods
sold 133,427 4,604 16,538 12,788 Stock-based compensation (28,065 )
(3,186 ) Amortization and impairment of acquired intangibles (4,899
) (2,470 )
Three Months Ended September 30,
2017
General and
Administrative
Research and Development
Business Reorganization
Depreciation and
Amortization
Interest and Other, net
As reported $ 60,824 $ 49,999 $ 1,713 $ 18,883 $
(2,969 ) Stock-based compensation (19,458 ) (8,302 ) Non-cash
amounts related to Convertible Notes 5,640 Acquisition related
expenses 7,012 Amortization and impairment of acquired intangibles
(38 ) (1,630 ) (11,385 ) Impact of business reorganization (1,713 )
Other, net (93 )
Three Months Ended September 30,
2016 Net Revenue
Cost of Goods Sold- Internal
Royalties
Cost of Goods Sold- Software
Development Costs and Royalties
Cost of Goods Sold- Product
Costs
Cost of Goods Sold-
Licenses
Selling and Marketing
As reported $ 420,167 $ 77,425 $ 45,194 $ 55,059 $
27,927 $ 80,187 Net effect from deferral and related cost of goods
sold 59,274 4,795 11,691 12,293 Stock-based compensation (5,566 )
(2,279 )
Three Months Ended September 30, 2016
General and
Administrative
Research and Development
Depreciation and
Amortization
Interest and Other, net
As reported $ 49,685 $ 30,005 $ 7,491 $ (7,078 )
Stock-based compensation (9,774 ) (614 ) Non-cash amortization of
discount on Convertible Notes 6,882
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
ADDITIONAL DATA (in thousands) Six Months
Ended September 30, 2017 Net Revenue
Cost of Goods Sold- Internal
Royalties
Cost of Goods Sold- Software
Development Costs and Royalties
Cost of Goods Sold- Product
Costs
Cost of Goods Sold-
Licenses
Selling and Marketing
As reported $ 861,778 $ 181,753 $ 110,411 $ 86,632 $
62,321 $ 129,128 Net effect from deferral and related cost of goods
sold 63,516 (3,052 ) (1,268 ) (2,043 ) Stock-based compensation
(31,546 ) (5,772 ) Amortization and impairment of acquired
intangibles (9,140 ) (4,778 )
Six Months Ended September
30, 2017
General and
Administrative
Research and Development
Business Reorganization
Depreciation and
Amortization
Interest and Other, net
As reported $ 121,427 $ 92,268 $ 12,312 $ 26,626 $
(5,777 ) Stock-based compensation (32,578 ) (10,766 ) (2,421 )
Non-cash amounts related to Convertible Notes 9,774 Non-cash (gain)
loss on redemption of Convertible Notes Acquisition related
expenses 6,956 Amortization and impairment of acquired intangibles
(3,153 ) (11,505 ) Impact of business reorganization (9,891 )
Other, net (93 )
Six Months Ended September 30, 2016
Net Revenue
Cost of Goods Sold- Internal
Royalties
Cost of Goods Sold- Software
Development Costs and Royalties
Cost of Goods Sold- Product
Costs
Cost of Goods Sold-
Licenses
Selling and Marketing
As reported $ 731,719 $ 137,098 $ 108,853 $ 100,038 $
50,996 $ 151,321 Net effect from deferral and related cost of goods
sold 20,277 2,069 2,799 (713 ) (4,828 ) Stock-based compensation
(9,952 )
Six Months Ended September 30, 2016
General and
Administrative
Research and Development
Depreciation and
Amortization
Interest and Other, net
Gain on long-term
investments
As reported $ 96,428 $ 63,905 $ 14,869 $ (11,584 ) $
1,350 Stock-based compensation (16,479 ) (2,074 ) Non-cash
amortization of discount on Convertible Notes 12,981 Impact of
business reorganization Gain on long-term investment (1,350 )
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171107006482/en/
Take-Two Interactive Software, Inc.Investor
Relations:Henry A. Diamond, 646-536-3005Senior Vice
PresidentInvestor Relations & Corporate
CommunicationsHenry.Diamond@take2games.comorCorporate Press:Alan
Lewis, 646-536-2983Vice PresidentCorporate Communications &
Public AffairsAlan.Lewis@take2games.com
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