GAAP Net revenue grew to $1.793 billion
GAAP Net income more than doubled to $1.54 per
diluted share
Net cash provided by operating activities grew
19% to $393.9 million
Net Bookings grew 5% to $1.991 billion
Company repurchased 3.11 million shares of its
common stock for $308.3 million during fiscal year 2018 and fiscal
first quarter 2019 to date
Take-Two Interactive Software, Inc. (NASDAQ:TTWO) today reported
results for its fourth quarter and fiscal year 2018, ended March
31, 2018, and provided its initial financial outlook for its fiscal
first quarter 2019, ending June 30, 2018, and fiscal year 2019,
ending March 31, 2019.
Fiscal Fourth Quarter 2018 GAAP
Financial Highlights
Net revenue was $450.3 million, as compared to $571.6 million in
last year’s fiscal fourth quarter. Recurrent consumer spending
(virtual currency, add-on content and in-game purchases) grew 42%
year-over-year and accounted for 44% of total net revenue. The
largest contributors to net revenue in fiscal fourth quarter 2018
were Grand Theft Auto® Online and Grand Theft Auto V, NBA® 2K18,
Sid Meier’s Civilization VI, WWE® 2K18 and WWE SuperCard, and
Dragon City and Monster Legends.
Digitally-delivered net revenue grew 8% to $301.4 million, as
compared to $278.7 million in last year’s fiscal fourth quarter.
The largest contributors to digitally-delivered net revenue in
fiscal fourth quarter 2018 were Grand Theft Auto Online and Grand
Theft Auto V, NBA 2K18, Sid Meier’s Civilization VI, and WWE 2K18
and WWE SuperCard.
Net income was $90.9 million, or $0.77 per diluted share, as
compared to $99.3 million, or $0.89 per diluted share, for the
year-ago period.
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 March 31,
2018
Financial Data
$ in thousands
Statement of operations
Change in deferred 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
Net
revenue $ 450,274 (38,905 ) Cost of goods sold 189,211
(24,661 ) (1,325 )
(5,292 )
Gross profit 261,063 (14,244
) 1,325 5,292 Operating expenses
173,238 (18,912 )
142 (2,691 )
(1,727 )
Income from operations
87,825 (14,244 ) 20,237 (142
) 7,983 1,727 Interest and other, net
(3,451 )
193
Income before income taxes 91,276 (14,244
) 20,237 193
(142
)
7,983 1,727
In order to calculate net income per diluted share for
management reporting purposes, the Company uses its fully diluted
share count of 118.7 million and adds back to net income the
interest expense, net of tax, on its convertible notes of $0.01
million.
Fiscal Fourth Quarter Operational
Metric – Net Bookings
Total Net Bookings grew to $411.4 million, as compared to $407.1
million during last year’s fiscal fourth quarter. Net Bookings from
recurrent consumer spending grew 15% year-over-year and accounted
for 58% of total Net Bookings. The largest contributors to Net
Bookings were Grand Theft Auto Online and Grand Theft Auto V, NBA
2K18, Dragon City and Monster Legends, WWE 2K18 and WWE SuperCard,
and Sid Meier’s Civilization VI.
Catalog accounted for $293.1 million of Net Bookings led by
Grand Theft Auto, Dragon City and Monster Legends, and Sid Meier’s
Civilization VI.
Digitally-delivered Net Bookings grew 12% to $333.1 million, as
compared to $298.5 million in last year’s fiscal fourth quarter.
The largest contributors to digitally-delivered Net Bookings in
fiscal fourth quarter 2018 were Grand Theft Auto Online and Grand
Theft Auto V, NBA 2K18, Sid Meier’s Civilization VI, Monster
Legends and Dragon City, and WWE SuperCard and WWE 2K18.
Fiscal Year 2018 GAAP Financial
Highlights
Net revenue grew to $1.793 billion, as compared to $1.780
billion in fiscal year 2017. Recurrent consumer spending grew 63%
and accounted for 42% of total net revenue. The largest
contributors to net revenue in fiscal year 2018 were Grand Theft
Auto V and Grand Theft Auto Online, NBA 2K17 and NBA 2K18, WWE 2K18
and WWE SuperCard, Sid Meier’s Civilization VI, and Dragon City and
Monster Legends.
Digitally-delivered net revenue grew 23% to $1.131 billion, as
compared to $921.7 million in fiscal year 2017. The largest
contributors to digitally-delivered net revenue in fiscal year 2018
were Grand Theft Auto Online and Grand Theft Auto V, NBA 2K17 and
NBA 2K18, WWE 2K18 and WWE SuperCard, and Sid Meier’s Civilization
VI.
Net income increased 158% to $173.5 million, or $1.54 per
diluted share, as compared to $67.3 million, or $0.72 per diluted
share, in fiscal year 2017.
Net cash provided by operating activities grew 19% to $393.9
million, as compared to $331.4 million in fiscal year 2017. As of
March 31, 2018, the Company had cash and short-term investments of
$1.424 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:
Twelve Months Ended March 31,
2018
Financial Data
$ in thousands
Statement of operations
Change in deferred 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
Net revenue $ 1,792,892 197,710 Cost of goods
sold 898,311 (32,063 ) (24,610 )
19,344
Gross profit
894,581 229,773 24,610 (19,344 )
Operating expenses 759,004
(91,739 ) 7,080
(26,368 ) (12,318 )
Income from operations 135,577 229,773
116,349 (7,080 ) 7,024 12,318
Interest and other, net 1,048
10,762
Income before income
taxes 136,625 229,773 116,349
10,762
(7,080
)
7,024 12,318
In order to calculate net income per diluted share for
management reporting purposes, the Company uses its fully diluted
share count of 117.6 million and adds back to net income the
interest expense, net of tax, on its convertible notes of $0.83
million.
Fiscal Year 2018 Operational Metric –
Net Bookings
Total Net Bookings grew 5% to $1.991 billion, as compared to
$1.904 billion in fiscal year 2017. Net Bookings from recurrent
consumer spending grew 48% and accounted for 48% of total Net
Bookings. The largest contributors to Net Bookings were Grand Theft
Auto Online and Grand Theft Auto V, NBA 2K18 and NBA 2K17, WWE 2K18
and WWE SuperCard, Dragon City and Monster Legends, and Sid Meier’s
Civilization VI.
Digitally-delivered Net Bookings grew 25% to $1.350 billion, as
compared to $1.081 billion in fiscal year 2017. The largest
contributors to digitally-delivered Net Bookings in fiscal year
2018 were Grand Theft Auto Online and Grand Theft Auto V, NBA 2K18
and NBA 2K17, Monster Legends and Dragon City, and WWE SuperCard
and WWE 2K18.
Management Comments
“During the fourth quarter, Take-Two delivered Net Bookings
growth driven by increased recurrent consumer spending – including
better-than-expected results from Grand Theft Auto Online,” said
Strauss Zelnick, Chairman and CEO of Take-Two. “Our solid
performance marked the completion of another outstanding year for
our Company, highlighted by growth in Net Bookings, earnings and
net cash provided by operating activities, along with margin
expansion. Grand Theft Auto Online and NBA 2K generated record
results, exceeding our original expectations, and we benefited from
strong ongoing sales of Grand Theft Auto V and other catalog
titles.
“We expect fiscal 2019 to be another year of profitable growth
for Take-Two, including both record Net Bookings and record net
cash provided by operating activities, led by the launch of Red
Dead Redemption 2 along with new annual releases from NBA 2K and
WWE 2K. We will also continue to support our titles with offerings
designed to drive engagement and recurrent consumer spending. The
highly-anticipated title from one of 2K’s biggest franchises, which
had been planned for release during the current fiscal year, is now
planned for launch during fiscal 2020 to allow for additional
development time. We remain as excited as ever about this title,
and expect it to enhance our results next fiscal year.
“This year is the 25th anniversary of Take-Two and, over that
time, we have built our Company into a diversified and profitable
enterprise. Take-Two is exceedingly well-positioned – creatively,
strategically and financially – for continued growth and returns
for our shareholders over the long-term.”
Business and Product
Highlights
Since January 1, 2018:
Take-Two:
- During fiscal year 2018, the Company
repurchased 1.51 million shares of its common stock for $154.8
million. During fiscal first quarter 2019 to date, the Company has
repurchased 1.60 million shares of its common stock for $153.5
million.
- Effective March 19, 2018, Take-Two was
added to the S&P 500® index.
Rockstar Games:
- Released Grand Theft Auto V: Premium
Online Edition for PlayStation 4, Xbox One and PC. The Premium
Online Edition includes the complete Grand Theft Auto V story
experience, the ever-evolving world of Grand Theft Auto Online, and
all existing gameplay upgrades and content. Purchasers also receive
the Criminal Enterprise Starter Pack that gives players access to a
huge range of content including properties, vehicles, weapons and
more valued at over GTA$10,000,000 plus GTA$1,000,000 Bonus
Cash.
- Released LA Noire: The VR Case Files,
featuring seven select cases from the original game rebuilt
specifically for a virtual reality experience, for Oculus Rift. LA
Noire: The VR Case Files is also available for the HTC VIVE™
system.
- Released new free content updates for
Grand Theft Auto Online, including:
- The Southern San Andreas Super Sport
Series, which introduced two new racing modes – Hot Ring Circuit
and Target Assault, additional Transform races and Special Vehicle
races, two new Adversary modes: The Vespucci Job and Trap Door, 13
new vehicles, and new tools for the Race Creator.
- The Air Quota and Hardest Target
Adversary Modes.
- Numerous all-new vehicles and
aircraft.
- Announced that Red Dead Redemption 2
will launch for PlayStation 4 and Xbox One on October 26,
2018.
2K:
- NBA 2K18 became our highest-selling
sports title ever, with sell-in to date of over 9 million
units.
- Released the Sid Meier’s Civilization
VI: Rise and Fall expansion pack for PC. This expansion builds upon
the critically acclaimed gameplay experience of Civilization
VI giving players new choices, strategies, and challenges as
they guide a civilization through the ages. The expansion
introduces new Golden Ages and Dark Ages, a new city Loyalty
system, and Governors who can be stationed in players’ cities.
Civilization VI: Rise and Fall also adds nine new
leaders and eight new civilizations from across the world, giving
players even more variety and diversity in how they play
Civilization VI.
- Announced that it is working in
partnership with Tencent to co-develop NBA 2K Online 2 in China.
The title currently is in closed Beta testing and planned for
commercial release this fall. NBA 2K Online 2 is based on the
console edition of NBA 2K and features 2K’s legendary gameplay, 27
customizable position types, new player trading systems,
eSports-optimized features, localized commentary and more.
- Announced that Hangar 13 – the
critically acclaimed storytellers and developer of Mafia III – has
expanded with the opening of a new location in Brighton, United
Kingdom, furthering the studio’s efforts to tap into the world’s
most talented development pools and build a globally diverse team.
Hangar 13 is currently working on an unannounced AAA project for 2K
and will continue to scale in both the U.S. and Europe at a pace
consistent with the development of the game.
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.
- Released Kerbal Space Program: Making
History Expansion for PC. This first expansion for the
critically acclaimed space simulation adds a wealth of new and
exciting content to the game, including a robust Mission Builder
that lets players create and share their own scenarios, and a
History Pack containing missions inspired by historical moments in
space exploration.
- Announced that Kerbal Space Program
will be released on Tencent’s WeGame distribution platform as a
premium PC game at a date to be determined.
Financial Outlook for Fiscal
2019
Take-Two is providing its initial financial outlook for its
fiscal first quarter ending June 30, 2018 and its fiscal year
ending March 31, 2019.
First Quarter Ending June 30, 2018
- GAAP net revenue is expected to range
from $345 to $395 million
- GAAP net income is expected to range
from $62 to $74 million
- GAAP diluted net income per share is
expected to range from $0.53 to $0.63
- Share count used to calculate GAAP
diluted net income per share is expected to be 116.7 million
(1)
- Net Bookings (operational metric) are
expected to range from $215 to $265 million
The Company is also providing selected data and its updated
management reporting tax rate of 20% 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 June 30,
2018
Financial Data
$ in millions
GAAP outlook (2)
Change in deferred net
revenue and related cost of goods sold
Stock-based compensation
(3)
Amortization of acquired
intangible assets
Net revenue $345 to $395
($130) Cost of goods sold $83 to $109
($8) ($6) ($4) Operating
Expenses $190 to $200 ($30) ($2)
Interest and other, net ($1) Income before
income taxes $73 to 87 ($122) $36
$6
Fiscal Year Ending March 31, 2019
- GAAP net revenue is expected to range
from $2.50 to $2.60 billion
- GAAP net income is expected to range
from $180 to $211 million
- GAAP diluted net income per share is
expected to range from $1.53 to $1.80
- Share count used to calculate GAAP
diluted net income per share is expected to be 117.2 million
(4)
- Net cash provided by operating
activities is expected to be approximately $710 million
- Capital expenditures are expected to be
approximately $60 million
- Net Bookings (operational metric) are
expected to range from $2.67 to $2.77 billion
The Company is also providing selected data and its updated
management reporting tax rate of 20% 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,
2019
Financial Data
$ in millions
GAAP outlook (2)
Change in deferred net
revenue and related cost of goods sold
Stock-based compensation
(3)
Amortization of acquired
intangible assets
Net revenue $2,500 to
$2,600 $170 Cost of goods sold $1,411
to $1,434 $100 ($176) ($4)
Operating Expenses $885 to $925 ($122)
($2) Interest and other, net ($7)
Income before income taxes $211 to 248
$70 $298 $6 1)
For the fiscal first quarter ending June 30, 2018, the
Company’s diluted share count used for management reporting
purposes is expected to be 116.3 million, which includes 112.8
million basic shares and 3.5 million shares representing the
potential dilution from unvested employee stock grants, because
using the “if converted” method and the Company’s fully-diluted
share count of 116.7 million, which includes 0.4 million shares
representing the potential dilution from convertible notes, would
be 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, 2019, the Company’s
fully diluted share count used for both GAAP and management
reporting purposes is expected to be 117.2 million, which includes
113.6 million basic shares and 3.6 million shares representing the
potential dilution from unvested employee stock grants. 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 $0.03 million.
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 January 1, 2018:
Label
Title
Platforms
Release Date
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 2K
XCOM 2 Collection
PC February 1, 2018 2K
Sid Meier’s Civilization VI: Rise and Fall
(DLC)
PC February 8, 2018 2K
XCOM 2 Collection
PS4, Xbox One February 21, 2018 Private Division
Kerbal Space Program: Making History
Expansion (DLC)
PC March 13, 2018 Rockstar Games
L.A. Noire: The VR Case Files
Oculus Rift March 29, 2018 Rockstar Games
Grand Theft Auto V: Premium Online
Edition
PS4, Xbox One, PC April 20, 2018 Take-Two's lineup of future
titles announced to date includes:
Label
Title
Platforms
Release Date
Rockstar Games
Red Dead Redemption 2
PS4, Xbox One October 26, 2018 2K
NBA 2K19
TBA Fall 2018 2K
WWE 2K19
TBA Fall 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 Annual
Report on Form 10-K for the period ended March 31, 2018.
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 March 31, Twelve Months Ended March 31,
2018 2017
2018 2017 Net
revenue
$ 450,274 $ 571,556
$
1,792,892 $ 1,779,748 Cost of goods
sold: Internal royalties
88,271 90,071
383,020
330,782 Product costs
47,177 85,787
203,301 255,914
Software development costs and royalties
26,981 116,922
191,400 335,675 Licenses
26,782
22,120
120,590 100,588
Total cost of goods sold
189,211
314,900
898,311 1,022,959
Gross profit
261,063 256,656
894,581 756,789
Selling and marketing
47,451 38,312
256,092
285,453 General and administrative
60,450 62,042
247,828 211,409 Research and development
54,128
36,421
196,373 137,915 Depreciation and amortization
9,479 8,378
43,969 30,707 Business reorganization
1,730 -
14,742
- Total operating expenses
173,238 145,153
759,004
665,484 Income from operations
87,825
111,503
135,577 91,305 Interest and other, net
3,451
(392 )
1,048 (15,690 ) Gain on long-term investments, net
- -
-
1,350 Income before income taxes
91,276
111,111
136,625 76,965 (Benefit from) provision for income
taxes
423 11,831
(36,908 ) 9,662 Net income
$
90,853 $ 99,280
$ 173,533
$ 67,303 Earnings per share: Basic earnings per share
$ 0.80 $ 0.97
$ 1.57 $ 0.73 Diluted
earnings per share
$ 0.77 $ 0.89
$ 1.54
$ 0.72 Weighted average shares outstanding: Basic
113,330 100,490
110,210 90,180 Diluted
118,675
117,245
112,864 94,073
Computation of Basic
EPS: Net income
$ 90,853 $ 99,280
$
173,533 $ 67,303 Less: net income allocated to participating
securities
(82 ) (1,370 )
(159 ) (1,275 ) Net loss for basic and diluted
EPS calculation
$ 90,771 $ 97,910
$ 173,374 $ 66,028 Weighted
average shares outstanding - basic
113,330 101,896
110,210 91,921 Less: weighted average participating shares
outstanding
(102 ) (1,406 )
(101 ) (1,741 ) Weighted average common shares
outstanding - basic
113,228 100,490
110,109 90,180
Basic earnings per share
$ 0.80 $ 0.97
$
1.57 $ 0.73
Computation of Diluted EPS: Net
income
$ 90,853 $ 99,280
$ 173,533 $
67,303 Less: net income allocated to participating securities
(78 ) (1,191 )
(155 ) (1,246 ) Add:
interest expense, net of tax, on Convertible Notes
249 4,980
-
- Net income for diluted EPS calculation
$
91,024 $ 103,069
$ 173,378
$ 66,057 Weighted average common shares
outstanding - basic
113,228 101,896
110,109 91,921
Add: dilutive effect of common stock equivalents
5,447 15,349
2,755
2,152 Total weighted average shares outstanding -
diluted
118,675 117,245
112,864 94,073 Less: weighted
average participating shares outstanding
(102
) (1,406 )
(101 ) (1,741
) Weighted average common shares outstanding - diluted
118,573 115,839
112,763
92,332 Diluted earnings per share
$ 0.77 $ 0.89
$ 1.54 $ 0.72
TAKE-TWO INTERACTIVE SOFTWARE, INC. and
SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in
thousands, except per share amounts) March
31, March 31, 2018
2017 ASSETS Current assets: Cash and
cash equivalents
$ 808,973 $ 943,396 Short-term
investments
615,406 448,932 Restricted cash
437,398
337,818
Accounts receivable, net of allowances of
$54,290 and $66,483 at March 31, 2018 and 2017, respectively
247,649 219,558 Inventory
15,162 16,323 Software
development costs and licenses
33,284 41,721 Deferred cost
of goods sold
117,851 127,901 Prepaid expenses and other
133,454 59,593 Total current
assets
2,409,177 2,195,242
Fixed assets, net
102,478 67,300 Software development
costs and licenses, net of current portion
639,369 381,910
Deferred cost of goods sold, net of current portion
26,719 -
Goodwill
399,530 359,115 Other intangibles, net
103,681 110,262 Other assets
56,887
35,325 Total assets
$ 3,737,841
$ 3,149,154
LIABILITIES AND STOCKHOLDERS'
EQUITY Current liabilities: Accounts payable
$
35,029 $ 31,892 Accrued expenses and other current
liabilities
914,748 750,875 Deferred revenue
777,152 903,125 Total current
liabilities
1,726,929 1,685,892
Long-term debt
8,068 251,929 Non-current deferred
revenue
355,589 10,406 Other long-term liabilities
158,285 197,199 Total liabilities
2,248,871 2,145,426
Stockholders' equity: Preferred stock, $.01 par value, 5,000 shares
authorized
- - Common stock, $.01 par value, 200,000 shares
authorized; 132,743 and 119,813 shares issued and 114,038 and
102,621 outstanding at March 31, 2018 and 2017, respectively
1,327 1,198 Additional paid-in capital
1,888,039
1,452,754 Treasury stock, at cost; 18,705 and 17,192 common shares
at March 31, 2018 and 2017, respectively
(458,180 )
(303,388 ) Retained earnings (accumulated deficit)
73,516
(99,694 ) Accumulated other comprehensive loss
(15,732 ) (47,142 ) Total stockholders' equity
1,488,970 1,003,728 Total
liabilities and stockholders' equity
$ 3,737,841
$ 3,149,154
TAKE-TWO INTERACTIVE SOFTWARE, INC. and
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH
FLOWS
(in thousands)
Twelve Months Ended March 31, 2018
2017
Operating activities:
Net income
$ 173,533 $ 67,303 Adjustments to
reconcile net income to net cash provided by operating activities:
Amortization and impairment of software development costs and
licenses
77,887 221,911 Depreciation
32,202 30,707
Amortization of intellectual property
34,830 6,738
Impairment of in-process research and development
11,257 -
Stock-based compensation
116,349 81,879 Deferred income
taxes
(32,523 ) 3,020 Amortization of discount on
Convertible Notes
15,662 21,222 Gain on redemption of
Convertible Notes
(4,900 ) - Amortization of debt
issuance costs
578 1,227 Gain on long-term investments, net
- (1,350 ) Other, net
6,375 (3,410 ) Changes in
assets and liabilities: Restricted cash
(99,580 )
(76,474 ) Accounts receivable
(26,998 ) (41,956 )
Inventory
3,917 (4,942 ) Software development costs and
licenses
(225,269 ) (252,951 ) Prepaid expenses and
other current and other non-current assets
(74,544 )
(22,155 ) Deferred revenue
198,397 126,285 Deferred cost of
goods sold
(11,959 ) (14,969 ) Accounts payable,
accrued expenses and other liabilities
198,733
189,344 Net cash provided by operating activities
393,947 331,429
Investing activities:
Change in bank time deposits
(40,918 ) 89,076
Proceeds from available-for-sale securities
241,012 155,936
Purchases of available-for-sale securities
(369,998 )
(221,671 ) Purchases of fixed assets
(61,557 )
(21,167 ) Proceeds from sale of long-term investments
-
1,350 Purchase of long-term investments
(5,000 )
(1,885 ) Asset acquisition
(25,965 ) - Business
acquisition, net of cash acquired
(9,401 )
(130,669 ) Net cash used in investing activities
(271,827 ) (129,030 )
Financing activities:
Excess tax benefit from stock-based compensation
- 1,990 Tax
payment related to net share settlements on restricted stock awards
(112,884 ) (51,762 ) Repurchase of common stock
(154,792 ) - Other
(13,791 )
- Net cash used in financing activities
(281,467 ) (49,772 ) Effects of foreign
currency exchange rates on cash and cash equivalents
24,924 (7,973 ) Net change in cash and
cash equivalents
(134,423 ) 144,654 Cash and cash
equivalents, beginning of year
943,396
798,742 Cash and cash equivalents, end of period
$
808,973 $ 943,396
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
March 31, 2018
Three Months Ended
March 31, 2017
Amount % of Total Amount % of Total
Net
revenue by geographic region United States
$
255,710 57% $ 296,040 52% International
194,564 43% 275,516 48% Total net revenue
$ 450,274 100% $ 571,556 100%
Net
bookings by geographic region United States
$
232,272 56% $ 239,360 59% International
179,096 44% 167,767 41% Total net bookings
$ 411,368 100% $ 407,127 100%
Three Months Ended
March 31, 2018
Three Months Ended
March 31, 2017
Amount % of Total Amount % of Total
Net
revenue by distribution channel Digital online
$
301,382 67% $ 278,683 49% Physical retail and other
148,892 33% 292,873 51% Total net
revenue
$ 450,274 100% $ 571,556 100%
Net bookings by distribution channel Digital online
$
333,135 81% $ 298,485 73% Physical retail and other
78,233 19% 108,642 27% Total net
bookings
$ 411,368 100% $ 407,127 100%
Three Months Ended
March 31, 2018
Three Months Ended
March 31, 2017
Amount % of Total Amount % of Total
Net revenue by
platform mix Console
$ 363,464 81% $
479,958 84% PC and other
86,810 19%
91,598 16% Total net revenue
$ 450,274 100% $
571,556 100%
Net bookings by platform mix Console
$ 313,368 76% $ 318,648 78% PC and other
98,000 24% 88,479 22% Total net
bookings
$ 411,368 100% $ 407,127 100%
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
Net Revenue and Net Bookings by Geographic Region, Distribution
Channel, and Platform Mix (in thousands)
Twelve Months Ended
March 31, 2018
Twelve Months Ended
March 31, 2017
Amount % of Total Amount % of Total
Net
revenue by geographic region United States
$
1,052,313 59% $ 999,128 56% International
740,579 41% 780,620 44% Total net revenue
$ 1,792,892 100% $ 1,779,748 100%
Net bookings by geographic region United States
$
1,161,502 58% $ 1,077,484 57% International
829,100 42% 826,462 43% Total net bookings
$ 1,990,602 100% $ 1,903,946 100%
Twelve Months Ended
March 31, 2018
Twelve Months Ended
March 31, 2017
Amount % of Total Amount % of Total
Net
revenue by distribution channel Digital online
$
1,130,946 63% $ 921,734 52% Physical retail and other
661,946 37% 858,014 48% Total net
revenue
$ 1,792,892 100% $ 1,779,748 100%
Net bookings by distribution channel Digital online
$ 1,349,508 68% $ 1,081,262 57% Physical
retail and other
641,094 32% 822,684
43% Total net bookings
$ 1,990,602 100% $
1,903,946 100%
Twelve Months Ended
March 31, 2018
Twelve Months Ended
March 31, 2017
Amount % of Total Amount % of Total
Net revenue by
Platform Mix Console
$ 1,463,307 82% $
1,440,724 81% PC and other
329,586 18%
339,024 19% Total net revenue
$ 1,792,892 100%
$ 1,779,748 100%
Net bookings by platform mix Console
$ 1,611,625 81% $ 1,554,319 82% PC and other
378,977 19% 349,627 18% Total net
bookings
$ 1,990,602 100% $ 1,903,946 100%
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
ADDITIONAL DATA (in thousands) Three Months Ended
March 31, 2018 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 $ 450,274 $ 88,271 $ 26,981 $ 47,177 $
26,782 $ 47,451 Net effect from deferral and related cost of goods
sold (38,905 ) (3,244 ) (12,397 ) (9,020 ) Stock-based compensation
(1,325 ) (4,471 ) Amortization and impairment of acquired
intangibles (5,292 ) (852 )
Three Months Ended
March 31, 2018
General and
Administrative
Research and Development
Depreciation and
Amortization
Business Reorganization
Interest and Other, net
As reported $ 60,450 $ 54,128 $ 9,479 $ 1,730 $ 3,451
Stock-based compensation (9,408 ) (5,030 ) (3 ) Non-cash amounts
related to convertible notes 193 Acquisition related expenses 142
Amortization and impairment of acquired intangibles (1,705 ) (134 )
Impact of business reorganization (1,727 )
Three Months
Ended March 31, 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 $ 571,556 $ 90,071 $ 116,922 $ 85,787 $
22,120 $ 38,312 Net effect from deferral and related cost of goods
sold (164,429 ) (67,678 ) (47,535 ) (3,072 ) Stock-based
compensation (5,083 ) (2,694 ) Amortization of intangibles (2,630 )
(1,497 )
Three Months Ended March 31, 2017
General and
Administrative
Research and Development
Depreciation and
Amortization
Interest and Other, net As reported $
62,042 $ 36,421 $ 8,378 $ (392 ) Stock-based compensation (16,047 )
(2,634 ) Non-cash amounts related to convertible notes 3,351
Acquisition related expenses (1,598 ) Amortization of intangibles
(989 ) (78 )
TAKE-TWO INTERACTIVE SOFTWARE,
INC. and SUBSIDIARIES ADDITIONAL DATA (in
thousands) Twelve Months Ended March 31, 2018
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 $ 1,792,892 $ 383,020 $ 191,400 $ 203,301
$ 120,590 $ 256,092 Net effect from deferral and related cost of
goods sold 197,710 (5,812 ) 6,912 5,900 Stock-based compensation
(24,610 ) (13,258 ) Amortization and impairment of acquired
intangibles (19,719 ) (8,107 )
Twelve Months Ended March
31, 2018
General and
Administrative
Research and Development
Depreciation and
Amortization
Business Reorganization
Interest and Other, net
As reported $ 247,828 $ 196,373 $ 43,969 $ 14,742 $
1,048 Stock-based compensation (58,037 ) (18,020 ) (2,424 )
Non-cash amounts related to convertible notes 10,762 Acquisition
related expenses 7,080 Amortization and impairment of acquired
intangibles (6,494 ) (11,767 ) Impact of business reorganization
(12,318 ) Other, net (93 )
Twelve Months Ended March 31,
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 $ 1,779,748 $ 330,782 $ 335,675 $ 255,914
$ 100,588 $ 285,453 Net effect from deferral and related cost of
goods sold 124,198 (6,709 ) 2,536 8,167 Stock-based compensation
(21,056 ) (9,963 ) Amortization of intangibles (2,630 ) (1,497 )
Twelve Months Ended March 31, 2017
General and
Administrative
Research and Development
Depreciation and
Amortization
Interest and Other, net
Gain on long-term
investments
As reported $ 211,409 $ 137,915 $ 30,707 $ (15,690 )
$ 1,350 Stock-based compensation (42,908 ) (7,952 ) Non-cash
amounts related to convertible notes 21,254 Acquisition related
expenses (1,916 ) Amortization of intangibles (989 ) (78 ) Proceeds
from sale of long-term investments (1,350 )
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180516006245/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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