GAAP net revenue was $480.8 million
GAAP net income was $0.21 per diluted share
Net cash provided by operating activities was
$203.0 million
Net Bookings were $653.9 million
Company deployed $110.1 million to repurchase
1.06 million shares of common stock
Take-Two Interactive Software, Inc. (NASDAQ:TTWO) today reported
results for its fiscal third quarter 2018, ended December 31, 2017.
In addition, the Company provided its initial financial outlook for
its fiscal fourth quarter ending March 31, 2018, and updated its
financial outlook for its fiscal year ending March 31, 2018.
Fiscal Third Quarter 2018 GAAP
Financial Highlights
Net revenue grew to $480.8 million, as compared to $476.5
million in last year’s fiscal third quarter. Recurrent consumer
spending (virtual currency, add-on content and microtransactions)
grew 64% year-over-year and accounted for 32% of total net revenue.
The largest contributors to net revenue in fiscal third quarter
2018 were Grand Theft Auto® V and Grand Theft Auto Online, NBA®
2K18, WWE® 2K18 and WWE SuperCard, and L.A. Noire.
Digitally-delivered net revenue grew 8% to $258.4 million, as
compared to $240.2 million in last year’s fiscal third quarter, and
accounted for 54% of total net revenue. The largest contributors to
digitally-delivered net revenue in fiscal third quarter 2018 were
Grand Theft Auto Online and Grand Theft Auto V, NBA 2K18, WWE 2K18
and WWE SuperCard, and Sid Meier’s Civilization VI.
Net income increased to $25.1 million, or $0.21 per diluted
share, as compared to net loss of $29.8 million, or $0.33 per
diluted share, for the comparable period last year. Net income
reflects $11.9 million of incremental income tax expense, or
approximately $0.10 per diluted share, due to the application of
the Tax Cuts and Jobs Act, enacted on December 22, 2017. This
amount is a reasonable estimate provided in accordance with
Securities and Exchange Commission guidance. We will provide
additional information about such estimate in our forthcoming Form
10-Q for the fiscal quarter ended December 31, 2017.
Net cash provided by operating activities was $203.0 million. As
of December 31, 2017, the Company had cash and short-term
investments of $1.322 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 December 31,
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
Amortization &
impairment of acquired intangible
assets
Business reorganization
Net revenue $
480,840 173,099 Cost of goods sold 267,983
37,647 8,262
(4,912 )
Gross profit
212,857 135,452 (8,262 ) 4,912
Operating expenses 204,005
(21,288 ) (4,258 )
(700 )
Income from operations
8,852 135,452 13,026 9,170 700
Interest and other, net 3,374
795
Income before income taxes 12,226
135,452 13,026 795 9,170 700
In order to calculate net income per diluted share for
management reporting purposes, the Company uses its fully diluted
share count of 119.5 million and adds back to net income the
interest expense, net of tax, on its convertible notes of $0.01
million.
Operational Metric – Net
Bookings
During fiscal third quarter 2018, total Net Bookings were $653.9
million, as compared to $744.8 million during last year’s fiscal
third quarter, which had benefitted from the launches of Mafia III
and Sid Meier’s Civilization VI. Net Bookings from recurrent
consumer spending grew 44% year-over-year and accounted for 40% of
total Net Bookings. The largest contributors to Net Bookings were
Grand Theft Auto Online and Grand Theft Auto V, NBA 2K18, WWE 2K18,
L.A. Noire, and Dragon City and Monster Legends.
Catalog accounted for $343.5 million of Net Bookings led by
Grand Theft Auto, and Dragon City and Monster Legends.
Digitally-delivered Net Bookings grew 6% to $379.7 million, as
compared to $357.4 million in last year’s fiscal third quarter, and
accounted for 58% of total Net Bookings. The largest contributors
to digitally-delivered Net Bookings in fiscal third quarter 2018
were Grand Theft Auto Online and Grand Theft Auto V, NBA 2K18, WWE
2K18 and WWE SuperCard, and Monster Legends and Dragon City.
Management Comments
“During the holiday season, we benefited from high consumer
demand for our offerings, enabling our Company to deliver another
quarter of both strong Net Bookings and net cash provided by
operating activities,” said Strauss Zelnick, Chairman and CEO of
Take-Two. “Our stellar results were highlighted by record recurrent
consumer spending on both Grand Theft Auto Online and NBA 2K18,
robust ongoing sales of Grand Theft Auto V, and the successful
launch of WWE 2K18. We took advantage of favorable market
conditions to deploy $110 million of cash to repurchase more than 1
million shares of our stock. As a result of our outstanding third
quarter performance and increased fourth quarter forecast, we are
raising our fiscal 2018 outlook for Net Bookings.
“In addition to achieving superb results, we announced the
formation of Private Division, our new label that is dedicated
to bringing titles from top independent developers to market.
Private Division already has deals to publish several upcoming
titles based on new IP from renowned talent, and represents an
exciting new growth opportunity that complements Take-Two’s core
business.
“Rockstar Games has announced that Red Dead Redemption 2 will
launch on October 26, 2018. We continue to expect to deliver both
record Net Bookings and record net cash provided by operating
activities in fiscal 2019, in excess of $2.5 billion and $700
million, respectively, led by the launches of 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 October 1, 2017:
- Take-Two announced the formation
of Private Division, a new publishing label that focuses on
bringing titles from top independent developers to market. Private
Division will publish several upcoming titles based on new IP from
renowned industry creative talent, including the previously
announced Ancestors: The Humankind
Odyssey from Panache Digital Games; an unannounced RPG
currently codenamed Project Wight from The
Outsiders; an unannounced RPG from Obsidian Entertainment; and
an unannounced sci-fi first-person shooter from V1
Interactive. Private Division is also the publisher for Kerbal
Space Program, which Take-Two acquired in May 2017.
- Take-Two deployed $110.1 million to
repurchase 1.06 million shares of its common stock.
- Effective December 18, 2017, Take-Two
was added to the NASDAQ-100 Index® (Nasdaq: NDX). The
NASDAQ-100 Index is composed of the 100 largest non-financial
companies listed on The NASDAQ Stock Market®.
Rockstar Games:
- Released new versions of the
blockbuster detective thriller, L.A. Noire, 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 came the release of 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.
- Released new free content updates for
Grand Theft Auto Online, including:
- More themed content drops for
Smuggler’s Run featuring:
- 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
Adversary Mode.
- The Doomsday Heist, a story-driven
online adventure involving the planning, preparation and execution
of a series of epic co-operative heist missions and featuring a ton
of new vehicles and gear, inside the biggest Grand Theft Auto
Online update yet.
- Festive Surprise 2017, which featured
holiday-themed items in stores across Los Santos, the Firework
Launcher, as well as the return of favorite items from past holiday
seasons and more.
- Released the Criminal Enterprise
Starter Pack that gives players access to a huge range of the most
exciting and popular additions to Grand Theft Auto Online,
including properties, vehicles, weapons and more valued at over
GTA$10,000,000 plus GTA$1,000,000 Bonus Cash.
- Announced that Red Dead Redemption 2,
which had been planned for release during Spring 2018, will now
launch on October 26, 2018 to allow additional time to polish
further the final product.
2K:
- Released the Sid Meier’s Civilization
VI: Khemer and Indonesia Civilization and Scenario Pack bringing
new challenges and scenarios to Firaxis Games’ popular strategy
series, and announced that its Rise and Fall expansion pack for the
title will launch on February 8, 2018.
- Launched WWE 2K18 for PlayStation 4,
Xbox One, Nintendo Switch 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, new online-centric Road to Glory mode, notable
gameplay improvements, and a powerful new graphics engine. WWE 2K18
has been supported with a series of downloadable content, including
a Season Pass.
- Released WWE SuperCard – Season 4, the
latest addition to the Company’s action-packed collectible
card-battling game, as a free downloadable update for iOS and
Android™ devices. Featuring 250 new cards, three new card tiers,
and much more, the WWE SuperCard series – which has now
been downloaded more than 16.5 million times to date – delivers the
best in competitive and engaging WWE action for mobile
devices.
- Launched NHL® SuperCard 2K18, the
foremost NHL collectible card-battling game. Featuring cover
athlete Kyle Turris, center for the Nashville Predators, NHL
SuperCard is available for download free of charge for iOS and
Android devices and offers more than 450 cards, thrilling game
modes, weekly events and more to bring players on the ice and into
the action.
Private Division:
- Released Kerbal Space Program Enhanced
Edition, the new console version of the beloved space simulation
game, for digital download on PlayStation 4 and Xbox One. Kerbal
Space Program Enhanced Edition is built from the ground up to
include re-worked and console-optimized UI, a new control scheme
exclusively for consoles, and more ways to enjoy launching
spaceships into orbit. As a thank you to the existing console
community, all owners of the prior console version of Kerbal Space
Program can redeem the Enhanced Edition for free.
Financial Outlook for Fiscal
2018
Take-Two is providing its initial financial outlook for its
fiscal fourth quarter ending March 31, 2018, and updating its
financial outlook for its fiscal year ending March 31, 2018, as
follows:
Fourth Quarter Ending March 31, 2018
- GAAP net revenue is expected to range
from $460 to $510 million
- GAAP net income is expected to range
from $87 to $99 million
- GAAP diluted net income per share is
expected to range from $0.73 to $0.83
- Share count used to calculate GAAP
diluted net income per share is expected to be 118.8 million
(1)
- Net Bookings (operational metric) are
expected to range from $410 to $460 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 March 31, 2018
Financial Data $ in millions
GAAP outlook (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 $460 to $510
($50) Cost of goods sold $196 to $225
($20) ($6) ($4) Operating
Expenses $190 to $200 ($23) ($3)
Interest and other, net ($3) ($0)
Income before income taxes $77 to $88 ($30)
$29 $0 $7
Fiscal Year Ending March 31, 2018
As a result of its strong fiscal third quarter 2018 results and
increased outlook for the fiscal fourth quarter, Take-Two is
raising its fiscal year 2018 outlook for Net Bookings. In addition,
the Company is increasing its outlook for GAAP net revenue and GAAP
net income.
- GAAP net revenue is expected to range
from $1.80 to $1.85 billion
- GAAP net income is expected to range
from $170 to $181 million
- GAAP diluted net income per share is
expected to range from $1.50 to $1.60
- Share count used to calculate GAAP
diluted net income per share is expected to be 113.2 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 $1.99 to $2.04 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
GAAP
outlook (2)
Change in deferred
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 $1,803 to $1,853 $187 Cost of
goods sold $905 to $934 $11 ($30)
($17) Operating Expenses $776 to $786
($93)(5)
$7 ($27) ($13)
Interest and other, net $0 ($10)
Income before income taxes $123 to $133 $176
$123 $10 ($7) $44 $13
1) For the fiscal fourth quarter ending
March 31, 2018, the Company’s fully diluted share count used for
both GAAP and management reporting purposes is expected to be 118.8
million, which includes 114.0 million basic shares, 4.1 million
shares representing the potential dilution from unvested employee
stock grants, and 0.7 million shares representing the potential
dilution from convertible notes. For management reporting purposes,
the interest expense, net of tax, on the convertible notes, which
is added back to net income to calculate diluted net income per
share is $0.03 million. 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 118.0 million, which includes
110.1 million basic shares, 3.1 million shares representing the
potential dilution from unvested employee stock grants, and 4.8
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 $0.83 million.
Take-Two’s GAAP net income per diluted share outlook is calculated
using a diluted share count of 113.2 million (basic shares plus
unvested employee stock grants ), because using the “if-converted”
method and the Company’s fully diluted share count of 118.0 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 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 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 October 1, 2017:
Label
Title
Platforms
Release Date
2K
NHL SuperCard 2K18
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 Rockstar Games
L.A. Noire
PS4, Xbox One, Switch November 14, 2017 2K
Bioshock 10th Anniversary Collector’s
Edition
PS4, Xbox One November 14, 2017 2K
Carnival Games VR: Alley Adventure
(DLC)
PSVR, HTC Vive, Oculus Rift November 14, 2017 2K
WWE SuperCard Season 4 (update)
iOS/Android November 16, 2017 2K
WWE 2K18: NXT Generation Pack (DLC)
PS4, Xbox One, PC November 21, 2017 2K
WWE 2K18
Switch December 6, 2017 2K
WWE 2K18: New Moves Pack (DLC)
PS4, Xbox One, PC December 12, 2017 Rockstar Games
L.A. Noire
HTC Vive December 15, 2017 Private Division
Kerbal Space Program Enhanced Edition
PS4, Xbox One January 16, 2018 2K
WWE 2K18: Enduring Icons Pack (DLC)
PS4, Xbox One, PC January 16, 2018
Take-Two's lineup of future titles
announced to date includes:
Label
Title
Platforms
Release Date
2K
Sid Meier’s Civilization VI: Rise and Fall
(DLC)
PC February 8, 2018 Private Division
Kerbal Space Program: Making History
Expansion
PC March 13, 2018 Rockstar Games
Red Dead Redemption 2
PS4, Xbox One October 26, 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 December 31,
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 wholly-owned labels
Rockstar Games and 2K, as well as its new Private Division label
and Social Point, a leading developer of mobile games. 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 December 31, Nine Months Ended
December 31, 2017 2016
2017 2016
Net revenue
$ 480,840 $ 476,473
$ 1,342,618 $ 1,208,192 Cost of
goods sold: Internal royalties
112,996 103,613
294,749 240,711 Software development costs and royalties
54,008 109,900
164,419 218,753 Product costs
69,492 70,089
156,124 170,127 Licenses
31,487 27,472
93,808
78,468 Total cost of goods sold
267,983 311,074
709,100
708,059 Gross profit
212,857
165,399
633,518 500,133 Selling and marketing
79,513 95,820
208,641 247,141 General and
administrative
65,951 52,939
187,378 149,367 Research
and development
49,977 37,589
142,245 101,494
Depreciation and amortization
7,864 7,460
34,490
22,329 Business reorganization
700 -
13,012 - Total operating
expenses
204,005 193,808
585,766 520,331 Income (loss) from
operations
8,852 (28,409 )
47,752 (20,198 ) Interest
and other, net
3,374 (3,715 )
(2,403 ) (15,298
) Gain on long-term investments, net
-
-
- 1,350 Income (loss)
before income taxes
12,226 (32,124 )
45,349 (34,146 )
Benefit from income taxes
(12,914 )
(2,282 )
(37,331 ) (2,169 ) Net income
(loss)
$ 25,140 $ (29,842 )
$
82,680 $ (31,977 ) Earnings (loss) per share:
Basic earnings (loss) per share
$ 0.22 $ (0.33 )
$ 0.76 $ (0.37 ) Diluted earnings (loss) per share
$ 0.21 $ (0.33 )
$ 0.74 $ (0.37 )
Weighted average shares outstanding: Basic
113,991
90,428
109,010 86,796 Diluted
117,918 90,428
111,440 86,796
Computation of Basic EPS: Net
income (loss)
$ 25,140 $ (29,842 )
$
82,680 $ (31,977 ) Less: net income allocated to
participating securities
(62 ) -
(487 ) - Net loss for basic and
diluted EPS calculation
$ 25,078 $ (29,842 )
$ 82,193 $ (31,977 ) Weighted average
shares outstanding - basic
113,991 90,428
109,010
86,796 Less: weighted average participating shares outstanding
(279 ) -
(278
) - Weighted average common shares outstanding
- basic
113,712 90,428
108,732 86,796 Basic earnings
(loss) per share
$ 0.22 $ (0.33 )
$
0.76 $ (0.37 )
Computation of Diluted EPS: Net
income (loss)
$ 25,140 $ (29,842 )
$
82,680 $ (31,977 ) Less: net income allocated to
participating securities
(59 ) -
(206 ) - Net income (loss) for
diluted EPS calculation
$ 25,081 $ (29,842 )
$ 82,474 $ (31,977 ) Weighted average
common shares outstanding - basic
113,712 90,428
108,732 86,796 Add: dilutive effect of common stock
equivalents
4,206 -
2,708 - Total weighted average shares
outstanding - diluted
117,918 90,428
111,440 86,796
Less: weighted average participating shares outstanding
(279 ) -
(278 )
- Weighted average common shares outstanding -
diluted
117,639 90,428
111,162 86,796 Diluted earnings
(loss) per share
$ 0.21 $ (0.33 )
$
0.74 $ (0.37 )
TAKE-TWO INTERACTIVE
SOFTWARE, INC. and SUBSIDIARIES CONSOLIDATED BALANCE
SHEETS (in thousands, except per share amounts)
December 31, March 31, 2017
2017 ASSETS Current
assets: Cash and cash equivalents
$ 774,455 $ 943,396
Short-term investments
547,329 448,932 Restricted cash
374,806 337,818
Accounts receivable, net of allowances of
$67,685 and $66,483 at December 31, 2017 and March 31, 2017
respectively
425,931 219,558 Inventory
30,857 16,323 Software
development costs and licenses
39,369 41,721 Deferred cost
of goods sold
164,112 127,901 Prepaid expenses and other
90,865 59,593 Total current
assets
2,447,724 2,195,242
Fixed assets, net
96,570 67,300 Software development
costs and licenses, net of current portion
586,866 381,910
Goodwill
389,728 359,115 Other intangibles, net
108,112 110,262 Other assets
53,610
35,325 Total assets
$ 3,682,610
$ 3,149,154
LIABILITIES AND STOCKHOLDERS'
EQUITY Current liabilities: Accounts payable
$
45,998 $ 31,892 Accrued expenses and other current
liabilities
907,345 750,875 Deferred revenue
1,118,774 903,125 Total current
liabilities
2,072,117 1,685,892
Long-term debt
13,838 251,929 Non-current deferred
revenue
44,501 10,406 Other long-term liabilities
151,334 197,199 Total liabilities
2,281,790 2,145,426
Stockholders' equity: Preferred stock, $.01 par value, 5,000
shares authorized
- - Common stock, $.01 par value, 200,000
shares authorized; 132,581 and 119,813 shares issued and 114,325
and 102,621 outstanding at December 31, 2017 and March 31, 2017,
respectively
1,326 1,198 Additional paid-in capital
1,861,424 1,452,754 Treasury stock, at cost; 18,256 and
17,192 common shares at December 31, 2017 and March 31, 2017,
respectively
(413,524 ) (303,388 ) Accumulated
deficit
(17,311 ) (99,694 ) Accumulated other
comprehensive loss
(31,095 ) (47,142 )
Total stockholders' equity
1,400,820
1,003,728 Total liabilities and stockholders' equity
$ 3,682,610 $ 3,149,154
TAKE-TWO INTERACTIVE SOFTWARE, INC. and
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH
FLOWS
(in thousands)
Nine Months Ended December 31, 2017
2016
Operating activities:
Net income (loss)
$ 82,680 $ (31,977 )
Adjustments to reconcile net loss to net cash provided by operating
activities: Amortization and impairment of software development
costs and licenses
62,235 130,019 Depreciation
23,233
22,329 Amortization and impairment of intellectual property
26,470 1,398 Impairment of in-process research and
development
11,257 - Stock-based compensation
96,111
55,421 Amortization of discount on Convertible Notes
15,424
17,870 Gain on conversions of Convertible Notes
(4,855
) - Amortization of debt issuance costs
554 1,078
Other, net
3,432 (3,604 ) Changes in assets and liabilities:
Restricted cash
(36,988 ) (17,372 ) Accounts
receivable
(206,084 ) (160,095 ) Inventory
(12,976 ) (15,876 ) Software development costs and
licenses
(186,373 ) (194,422 ) Prepaid expenses and
other assets
(39,133 ) (31,460 ) Deferred revenue
238,590 302,728 Deferred cost of goods sold
(33,578
) (66,502 ) Accounts payable, accrued expenses and other
liabilities
164,086 230,067 Net
cash provided by operating activities
204,085
239,602
Investing activities:
Change in bank time deposits
10,000 66,841 Proceeds from
available-for-sale securities
172,925 101,357 Purchases of
available-for-sale securities
(282,596 ) (104,357 )
Purchases of fixed assets
(47,478 ) (14,369 )
Proceeds from sale of long-term investments
- 1,350 Purchase
of long-term investments
- (1,885 ) Asset acquisition
(25,965 ) (750 ) Business acquisition
(9,401 ) - Net cash (used in) provided
by investing activities
(182,515 )
48,187
Financing activities:
Excess tax benefit from stock-based compensation
- 1,499 Tax
payment related to net share settlements on restricted stock awards
(94,930 ) (36,734 ) Repurchase of common stock
(110,136 ) - Net cash used in financing
activities
(205,066 ) (35,235 )
Effects of foreign exchange rates on cash and cash equivalents
14,555 (11,866 ) Net change in
cash and cash equivalents
(168,941 ) 240,688 Cash and
cash equivalents, beginning of year
943,396
798,742 Cash and cash equivalents, end of period
$ 774,455 $ 1,039,430
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
Net Revenue and Net Bookings by Geographic Region, Distribution
Channel, and Platform Mix (in thousands)
Three Months Ended
December 31, 2017
Three Months Ended
December 31, 2016
Amount % of Total Amount % of Total
Net
revenue by geographic region United States
$
262,338 55% $ 257,504 54% International
218,502 45% 218,969 46% Total net revenue
480,840 100% 476,473 100%
Net
bookings by geographic region United States
$
381,277 58% $ 396,914 53% International
272,664 42% 347,909 47% Total net bookings
$ 653,941 100% $ 744,823 100%
Three Months Ended
December 31, 2017
Three Months Ended
December 31, 2016
Amount % of Total Amount % of Total
Net
revenue by distribution channel Digital online
$
258,442 54% $ 240,213 50% Physical retail and other
222,398 46% 236,260 50% Total net
revenue
480,840 100% 476,473 100%
Net bookings by distribution channel Digital online
$ 379,723 58% $ 357,435 48% Physical retail
and other
274,218 42% 387,388 52% Total
net bookings
$ 653,941 100% $ 744,823 100%
Three Months Ended
December 31, 2017
Three Months Ended
December 31, 2016
Amount % of Total Amount % of Total
Net revenue by
platform mix Console
$ 394,461 82% $
354,220 74% PC and other
86,379 18%
122,253 26% Total net revenue
480,840 100%
476,473 100%
Net bookings by platform mix
Console
$ 546,645 84% $ 600,443 81% PC and
other
107,296 16% 144,380 19% Total net
bookings
$ 653,941 100% $ 744,823 100%
TAKE-TWO INTERACTIVE SOFTWARE, INC. and
SUBSIDIARIES Net Revenue and Net Bookings by Geographic
Region, Distribution Channel, and Platform Mix (in
thousands) Nine Months Ended
December 31, 2017
Nine Months Ended
December 31, 2016
Amount % of Total Amount % of Total
Net
revenue by geographic region United States
$
796,603 59% $ 703,088 58% International
546,015 41% 505,104 42% Total net revenue
1,342,618 100% 1,208,192 100%
Net bookings by geographic region United States
$
929,229 59% $ 838,123 56% International
650,005 41% 658,696 44% Total net bookings
1,579,234 100% 1,496,819 100%
Nine Months Ended
December 31, 2017
Nine Months Ended
December 31, 2016
Amount % of Total Amount % of Total
Net
revenue by distribution channel Digital online
$
829,564 62% $ 643,051 53% Physical retail and other
513,054 38% 565,141 47% Total net
revenue
1,342,618 100% 1,208,192 100%
Net bookings by distribution channel Digital online
$ 1,016,373 64% $ 782,777 52% Physical retail
and other
562,861 36% 714,042 48% Total
net bookings
1,579,234 100% 1,496,819
100%
Nine Months Ended
December 31, 2017
Nine Months Ended
December 31, 2016
Amount % of Total Amount % of Total
Net Revenues
by Platform Mix Console
$ 1,099,843 82% $
961,285 80% PC and other
242,775 18%
246,907 20% Total net revenue
1,342,618 100%
1,208,192 100%
Net bookings by platform mix
Console
$ 1,298,258 82% $ 1,235,671 83% PC and
other
280,976 18% 261,148 17% Total net
bookings
1,579,234 100% 1,496,819 100%
TAKE-TWO
INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES ADDITIONAL
DATA (in thousands) Three Months Ended December 31,
2017 Net Revenues
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 $ 480,840 $ 112,996 $ 54,008 $ 69,492 $
31,487 $ 79,513 Net effect from deferral and related cost of goods
sold 173,099 108 20,576 16,963 Stock-based compensation 8,262
(3,014 ) Amortization and impairment of acquired intangibles (4,912
) (2,477 )
Three Months Ended December 31,
2017
General and
Administrative
Research and Development
Depreciation and
Amortization
Business Reorganization
Interest and Other, net
As reported $ 65,951 $ 49,977 $ 7,864 $ 700 $ 3,374
Stock-based compensation (16,051 ) (2,223 ) Non-cash amounts
related to Convertible Notes 795 Acquisition related expenses -
Amortization and impairment of acquired intangibles (18 ) (1,635 )
(128 ) Impact of business reorganization (700 ) Other, net -
Three Months Ended December 31, 2016
Net Revenues
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 $ 476,473 $ 103,613 $ 109,900 $ 70,089 $
27,472 $ 95,820 Net effect from deferral and related cost of goods
sold 268,350 58,446 47,272 11,953 Stock-based compensation (5,566 )
(2,441 )
Three Months Ended December 31, 2016
General and
Administrative
Research and Development
Depreciation and
Amortization
Interest and Other, net As reported $
52,939 $ 37,589 $ 7,460 $ (3,715 ) Stock-based compensation (10,382
) (3,243 ) Non-cash amortization of discount on Convertible Notes
4,922
TAKE-TWO INTERACTIVE SOFTWARE, INC.
and SUBSIDIARIES ADDITIONAL DATA (in thousands)
Nine Months Ended December 31, 2017
Net Revenues
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 $ 1,342,618 $ 294,749 $ 164,419 $ 156,124
$ 93,808 $ 208,641 Net effect from deferral and related cost of
goods sold 236,616 (2,944 ) 19,308 14,920 Stock-based compensation
(23,284 ) (8,787 ) Amortization and impairment of acquired
intangibles (14,052 ) (7,255 )
Nine Months Ended December
31, 2017
General and
Administrative
Research and Development
Depreciation and
Amortization
Business Reorganization
Interest and Other, net
As reported $ 187,378 $ 142,245 $ 34,490 $ 13,012 $
(2,403 ) Stock-based compensation (48,629 ) (12,990 ) (2,421 )
Non-cash amounts related to Convertible Notes 10,569 Non-cash
(gain) loss on redemption of Convertible Notes Acquisition related
expenses 6,939 Amortization and impairment of acquired intangibles
(4,788 ) (11,633 ) Impact of business reorganization (10,591 )
Other, net (93 )
Nine Months Ended December 31, 2016
Net Revenues
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 $ 1,208,192 $ 240,711 $ 218,753 $ 170,127
$ 78,468 $ 247,141 Net effect from deferral and related cost of
goods sold 288,627 60,971 50,071 11,239 (7,269 ) Stock-based
compensation (15,974 )
Nine Months Ended December 31,
2016
General and
Administrative
Research and Development
Depreciation and
Amortization
Interest and Other, net
As reported $ 149,367 $ 101,494 $ 22,329 $ (15,298 )
Stock-based compensation (26,851 ) (5,317 ) Non-cash amortization
of discount on Convertible Notes 17,903 Acquisition related
expenses (317 )
View source
version on businesswire.com: http://www.businesswire.com/news/home/20180207006003/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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