GAAP Net revenue grew 26% to $1.780 billion
GAAP Net income increased to $0.72 per diluted
share
Net cash provided by operating activities grew
27% to $331.4 million
Bookings grew 19% to $1.796 billion
Two tables containing "Additional Data" have been added to the
end of the release.
The corrected release reads:
TAKE-TWO INTERACTIVE SOFTWARE, INC. REPORTS
STRONG RESULTS FOR FISCAL YEAR 2017
GAAP Net revenue grew 26% to $1.780 billion
GAAP Net income increased to $0.72 per diluted
share
Net cash provided by operating activities grew
27% to $331.4 million
Bookings grew 19% to $1.796 billion
Take-Two Interactive Software, Inc. (NASDAQ:TTWO) today reported
strong results for its fourth quarter and fiscal year 2017, ended
March 31, 2017, and provided its initial financial outlook for its
first quarter and fiscal year 2018.
Fiscal Fourth Quarter 2017 GAAP
Financial Highlights
Net revenue grew 52% to $571.6 million, as compared to $377.2
million in last year’s fiscal fourth quarter. The largest
contributors to net revenue in fiscal fourth quarter 2017 were
Mafia III, Grand Theft Auto V® and Grand Theft Auto Online, NBA®
2K17, WWE® 2K17, and Sid Meier’s Civilization® VI.
Digitally-delivered net revenue grew 43% to $278.7 million, as
compared to $194.8 million in last year’s fiscal fourth quarter.
Recurrent consumer spending (virtual currency, downloadable add-on
content and microtransactions) accounted for 50% of
digitally-delivered net revenue, or 24% of total net revenue. The
largest contributors to digitally-delivered net revenue in fiscal
fourth quarter 2017 were Grand Theft Auto V and Grand Theft Auto
Online, NBA 2K17, Mafia III, Sid Meier’s Civilization VI, and XCOM®
2.
Net income increased to $99.3 million, or $0.89 per diluted
share, as compared to $46.4 million, or $0.48 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, 2017
Financial Data
Statement of
Operations
Change in deferred net
revenue and related cost of goods sold
Stock-based compensation
Non-cashamortization of
discount on Convertible Notes
Acquisition- related
expenses
Amortization of intangible
assets
Net revenue $ 571,556 (164,429 ) Cost
of goods sold 314,900 (118,285 )
(5,083 )
(2,630 )
Gross profit 256,656
(46,144 ) 5,083 2,630 Total
operating expenses 145,153
(21,375 ) (1,598 )
(2,564 )
Income from operations
111,503 (46,144 ) 26,458 1,598
5,194 Interest and other, net (392 )
3,351
Income before income taxes
111,111 (46,144 ) 26,458 3,351
1,598 5,194 Earnings per share Diluted
0.89
In order to calculate net income per diluted share for
management reporting purposes, the Company uses its fully diluted
share count of 117.2 million and adds back to net income interest
expense, net of tax, on the convertible notes of $0.5 million.
Fiscal Fourth Quarter Operational
Metric – Bookings
Total Bookings grew 14% to $370.6 million, as compared to $324.4
million during last year’s fiscal fourth quarter. The largest
contributors to Bookings were Grand Theft Auto V and Grand Theft
Auto Online, NBA 2K17, WWE 2K17, and Sid Meier’s Civilization VI.
Catalog accounted for $216.8 million of Bookings led by Grand Theft
Auto. Digitally-delivered Bookings grew 28% to $267.4 million, as
compared to $209.5 million in last year’s fiscal fourth quarter,
led by Grand Theft Auto V and Grand Theft Auto Online, NBA 2K17,
WWE SuperCard and WWE 2K17, and Sid Meier’s Civilization VI.
Bookings from recurrent consumer spending grew 64% year-over-year
and accounted for 70% of digitally-delivered Bookings, or 50% of
total Bookings.
Fiscal Year 2017 GAAP Financial
Highlights
Net revenue grew 26% to $1.780 billion, as compared to $1.414
billion in fiscal year 2016. The largest contributors to net
revenue in fiscal year 2017 were Grand Theft Auto V and Grand Theft
Auto Online, NBA 2K16 and NBA 2K17, Mafia III, WWE 2K17, and Sid
Meier’s Civilization VI.
Digitally-delivered net revenue grew 32% to $921.7 million, as
compared to $697.7 million in fiscal year 2016. Recurrent consumer
spending accounted for 50% of digitally-delivered net revenue, or
26% of total net revenue. The largest contributors to
digitally-delivered net revenue in fiscal year 2017 were Grand
Theft Auto V and Grand Theft Auto Online, NBA 2K16 and NBA 2K17,
Sid Meier’s Civilization VI, WWE SuperCard and WWE 2K17, and Mafia
III.
Net income increased to $67.3 million, or $0.72 per diluted
share, as compared to net loss of $8.3 million, or $0.10 per
diluted share, in fiscal year 2016.
Net cash provided by operating activities grew 27% to $331.4
million. As of March 31, 2017, the Company had cash and short-term
investments of $1.392 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, 2017
Financial Data
Statement of
Operations
Change in deferred net
revenue and related cost of goods sold
Stock-based compensation
Non-cash amortization of
discount on Convertible Notes
Acquisition- related
expenses
Amortization of intangible
assets
Gain on long-term
investments
Net revenue $ 1,779,748 124,198 Cost of
goods sold 1,022,959 3,994 (21,056 )
(2,630 )
Gross profit 756,789 120,204 21,056
2,630 Total operating expenses 665,484
(60,823 ) (1,916 )
(2,564 )
Income from operations
91,305 120,204 81,879 1,916
5,194 Interest and other, net (15,690 ) 21,254 Gain on
long-term investments, net 1,350
(1,350 )
Income before income taxes 76,965 120,204
81,879 21,254 1,916 5,194 (1,350
) Earnings per share Diluted $ 0.72
In order to calculate net income per diluted share for
management reporting purposes, the Company uses its fully diluted
share count of 115.9 million and adds back to net income interest
expense, net of tax, on the convertible notes of $4.7 million.
Fiscal Year 2017 Operational Metric –
Bookings
Total Bookings grew 19% to $1.796 billion, as compared to $1.507
billion in fiscal year 2016. The largest contributors to Bookings
were Grand Theft Auto V and Grand Theft Auto Online, NBA 2K17 and
NBA 2K16, Mafia III, WWE 2K17, and Sid Meier’s Civilization VI.
Digitally-delivered Bookings grew 25% to $987.2 million, as
compared to $790.1 million in fiscal year 2016, led by Grand Theft
Auto V and Grand Theft Auto Online, NBA 2K17, Sid Meier’s
Civilization VI, WWE SuperCard and WWE 2K17, and Mafia III.
Bookings from recurrent consumer spending grew 52% year-over-year
and accounted for 57% of digitally-delivered Bookings, or 32% of
total Bookings.
New Operational Metric – Net
Sales
Starting with its financial outlook for the first quarter ending
June 30, 2017, Take-Two will replace Bookings with Net Sales as an
operational metric. The Company is making this change in order to
increase transparency and to be consistent with operational metrics
provided by peers. Net Sales is defined as the net amount of
products and services sold digitally or sold-in physically during
the period. Unlike Bookings, Net Sales includes licensing fees,
merchandise, in-game advertising, strategy guides and publisher
incentives.
Management Comments
“Consumer demand for our entertainment offerings remained
exceedingly strong in the fourth quarter, finishing-off another
outstanding year for our organization,” said Strauss Zelnick,
Chairman and CEO of Take-Two. “During fiscal 2017, we delivered
Bookings and cash provided by operating activities that
significantly exceeded our original expectations, along with
revenue growth and margin expansion. These results were driven by
the continued extraordinary performance of Grand Theft Auto V and
Grand Theft Auto Online, a diverse array of exciting titles from
2K, and record digitally-delivered revenue and Bookings, including
our highest-ever from recurrent consumer spending. We invested our
capital to grow and diversify our business further, including by
acquiring Social Point, a leading free-to-play mobile game
developer.
“As announced yesterday, Rockstar Games has decided to move the
release of Red Dead Redemption 2 to Spring 2018. As Rockstar
stated, Red Dead Redemption 2 will be their first game created from
the ground up for the latest generation of console hardware, and
some extra time is necessary to ensure that they deliver the best
experience possible. Such decisions are not made lightly, and are
driven by our team’s unwavering commitment to unparalleled
quality.
“That said, we still expect fiscal 2018 to be a year of strong
earnings and cash provided by operating activities for Take-Two,
despite an unusually light release slate, driven by new releases of
NBA 2K and WWE 2K, our robust catalog led by Grand Theft Auto, and
innovative offerings designed to drive engagement and recurrent
consumer spending. Looking ahead to fiscal 2019, we expect to
deliver both record Net Sales and record net cash provided by
operating activities, in excess of $2.5 billion and $700 million,
respectively, led by the launches of Rockstar Games’ Red Dead
Redemption 2 and a highly anticipated new title from one of 2K’s
biggest franchises.”
Business and Product
Highlights
Since January 1, 2017:
Take-Two:
- Expanded its relationship with the NBA
through the creation of the NBA 2K eSports League, a new,
professional competitive gaming league. Set to debut in 2018, this
groundbreaking competitive gaming league is jointly owned by
Take-Two and the NBA, and will consist of teams operated by
actual NBA franchises. The NBA 2K eSports
League will follow a professional sports league format:
competing head-to-head throughout a regular season, participating
in a bracketed playoff system, and concluding with a championship
matchup.
- Broadened the skills of its Board of
Directors through the appointment of LaVerne Srinivasan to the
Board and to its Corporate Governance Committee. Ms. Srinivasan is
Vice President of the National Program and Program Director for
Education at the Carnegie Corporation of New York. Prior to her
current position, she worked at various educational technology,
urban district change, and non-profit education reform companies.
From 1993 through 2003, she served in various roles at BMG
Entertainment, including Senior Vice President and General Counsel.
Ms. Srinivasan holds an A.B. in sociology from Harvard College and
a J.D. from Harvard Law School.
- Acquired privately-held Social Point
S.L. for $250 million, comprised of $175 million in cash and
1,480,168 unregistered shares of Take-Two common stock (calculated
by dividing $75 million by the average closing price per share on
the Nasdaq Global Select Market during the thirty trading day
period ending on January 26, 2017), plus potential earn-out
consideration of up to an aggregate of $25.9 million in cash and
shares of Take-Two common stock. The cash portion was funded from
Take-Two’s cash on hand. Founded in 2008 and headquartered in
Barcelona, Spain, Social Point is a highly-successful free-to-play
mobile game developer that focuses on delivering high-quality,
deeply-engaging entertainment experiences. The transaction is
expected to be accretive to net income per share, excluding
transaction costs and amortization of intangible assets, in fiscal
year 2018.
Rockstar Games:
- Released new free content updates for
Grand Theft Auto Online, including:
- Cunning Stunts Special Vehicle Circuit
Update, which features new vehicles and race types, as well as
adding Props and psychedelic Stunt Tubes to the Stunt Race
Creator;
- Land Grab, which allows teams to battle
across seven new maps to control territory in an unforgiving
cyberspace;
- Tiny Racers, an all-new retro-styled
Adversary Mode, which pits players against each other on special
tracks made for vehicular combat with a shifting bird’s eye
perspective in the spirit of classic Grand Theft Auto titles.
- Made Grand Theft Auto IV and Grand
Theft Auto: Episodes from Liberty City available as part of
Microsoft’s Xbox One Backwards Compatibility program, enabling
owners of the Xbox 360 versions of Grand Theft Auto IV (including
The Complete Edition), Grand Theft Auto: Episodes from Liberty
City, Grand Theft Auto: The Lost and Damned and Grand Theft Auto:
The Ballad of Gay Tony to play these games on Xbox One. In
addition, Grand Theft Auto IV and Grand Theft Auto: Episodes from
Liberty City are now available for purchase through digital
download from the Games Store on Xbox One.
- Announced that Red Dead Redemption 2®
is now planned for release worldwide in Spring 2018 (fiscal year
2019) for PlayStation4 and Xbox One.
2K:
- Launched WWE 2K17 for the PC, and
released the title’s supporting Future Stars Pack and Hall of Fame
Showcase downloadable add-on content. Developed collaboratively by
Yuke's and Visual Concepts, WWE 2K17 has sold-in approximately 3
million units to date.
- Announced that NBA 2K will feature Hall
of Famer Shaquille O’Neal on the cover of the NBA 2K18 Legend
Edition. This special edition will place a spotlight on “The Big
Aristotle” with special Shaq-themed memorabilia and content,
extending his legacy as the most dominant center in NBA history.
NBA 2K18 will be available for PlayStation®4 system and
PlayStation®3 computer entertainment system, Xbox One and Xbox 360,
Nintendo Switch, and Windows PC platforms on September 19,
2017.
- Released the Australia Civilization
& Scenario Pack and the Persia & Macedon Civilization &
Scenario Pack for Sid Meier’s Civilization VI. Developed by Firaxis
Games, Sid Meier’s Civilization VI received stellar reviews and is
the fastest-selling release in the history of the series, with
sell-in of nearly 2 million units to date. The title will be
supported with additional free and paid downloadable add-on
content.
- Released the Faster Baby! downloadable
add-on pack for Mafia III. Developed by Hangar 13, Mafia III will
also be supported with the Stones Unturned and Sign of the Times
add-on packs that are planned for release during summer 2017.
- Released WWE SuperCard - Season 3
Update #3 for iOS and Android devices. Developed by Cat Daddy
Games, Update #3 is a free update to WWE SuperCard, the popular WWE
collectible card-battling game, which has now been downloaded more
than 14 million times.
Financial Outlook for Fiscal
2018
Take-Two is providing its initial financial outlook for its
fiscal first quarter ending June 30, 2017 and its fiscal year
ending March 31, 2018.
First Quarter Ending June 30, 2017
- GAAP net revenue is expected to range
from $390 to $440 million
- GAAP net income is expected to range
from $74 to $85 million
- GAAP diluted net income per share is
expected to range from $0.65 to $0.75
- Share count used to calculate diluted
net income per share is expected to be 119.0 million (1)
- Net Sales (operational metric) are
expected to range from $240 to $290 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 Ended June 30, 2017
Financial Data $ in millions
GAAP Outlook (2)
Change in deferred net
revenue and related cost of goods sold
Stock-based compensation
(3)
Non-cash amortization of
discount on Convertible Notes
Amortization of Intangible
Assets
Reorganization Net
revenue $390 to $440 ($150) Cost of
goods sold $147 to $175 ($45) ($3)
($4) ($3) Operating Expenses $160 to
$170 ($23) ($4) ($4) Interest
and other, net $3 ($3) Income (loss)
before income taxes $80 to $93 ($105) $26
$3 $8 $7
Fiscal Year Ending March 31, 2018
- GAAP net revenue is expected to range
from $1.95 to $2.05 billion
- GAAP net income is expected to range
from $504 to $540 million
- GAAP diluted net income per share is
expected to range from $4.35 to $4.65
- Share count used to calculate diluted
net income per share is expected to be 119.7 million (4)
- Net cash provided by operating
activities is expected to be approximately $150 million
- Capital expenditures are expected to be
approximately $60 million
- Net Sales (operational metric) are
expected to range from $1.42 to $1.52 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 Ended 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 amortization of
discount on Convertible Notes
Amortization of
Intangible Assets
Reorganization
Net revenue $1,950 to $2,050
($533) Cost of goods sold $671 to $712
($60) ($13) ($17) ($3)
Operating Expenses $720 to $740 ($70)
($15) ($4) Interest and other, net
$10 ($14) Income (loss) before income
taxes $549 to $588 ($473) $83 $14
$32 $7 1) Includes 105.8 million basic
shares, 1.2 million participating shares and 12.0 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 $0.6 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 0.9
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)
Includes 106.8 million basic shares, 0.9 million participating
shares and 12.0 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
$2.2 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 the Xbox One and PlayStation 4; the ability to develop and
publish products that capture market share for these new-generation
systems while continuing to leverage opportunities on the Xbox 360,
PlayStation 3 and PC; and stable foreign exchange rates. See also
“Cautionary Note Regarding Forward Looking Statements” below.
Product Releases
The following titles were released since January 1, 2017:
Label
Title
Platforms
Release Date
2K
WWE 2K17: Future Stars Pack (DLC)
PS4, PS3, Xbox One, Xbox 360 January
17, 2017
2K
WWE 2K17
PC February 7, 2017
2K
WWE 2K17: Hall of Fame Showcase (DLC)
PS4, PS3, Xbox One, Xbox 360 February 21, 2017
2K
Sid Meier’s Civilization VI: Australia
Civilization & Scenario Pack (DLC)
PC February 23, 2017
2K
Sid Meier’s Civilization VI: Persia &
Macedon Civilization & Scenario Pack (DLC)
PC March 23, 2017
2K
Mafia III: Faster Baby! (DLC)
PS4, Xbox One, PC March 28, 2017
Take-Two's lineup of future titles announced to date
includes:
Label
Title
Platforms
Release Date
2K
Mafia III: Stones Unturned (DLC)
PS4, Xbox One, PC May 30, 2017 2K
Mafia III: Sign of the Times (DLC)
PS4, Xbox One, PC Summer 2017 2K
NBA 2K18
PS4, PS3, Xbox One, Xbox 360, Switch, PC September 19, 2017 2K
WWE 2K18
TBA Fall 2017 Rockstar Games
Red Dead Redemption 2
PS4, Xbox One Spring 2018
Conference Call
Take-Two will host a conference call today at 8:00 a.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, 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 March 31, Twelve months ended March 31,
2017 2016
2017 2016 Net
revenue
$ 571,556 $ 377,206
$
1,779,748 $ 1,413,698 Cost of goods
sold: Internal royalties
90,071 72,552
330,782
328,610 Software development costs and royalties
116,922
71,352
335,675 223,512 Product costs
85,787 46,554
255,914 200,206 Licenses
22,120
18,999
100,588 61,545
Total cost of goods sold
314,900
209,457
1,022,959 813,873
Gross profit
256,656 167,749
756,789 599,825
Selling and marketing
38,312 38,020
285,453
198,309 General and administrative
62,042 44,395
211,409 192,452 Research and development
36,421
33,308
137,915 119,807 Business reorganization
- 113
- 71,285 Depreciation and amortization
8,378
7,338
30,707
28,800 Total operating expenses
145,153
123,174
665,484 610,653
Income (loss) from operations
111,503 44,575
91,305 (10,828 ) Interest and other, net
(392
) (6,257 )
(15,690 ) (30,205 ) Gain on
long-term investments, net
- 2,683
1,350 2,683 Income (loss)
before income taxes
111,111 41,001
76,965 (38,350 )
Provision for (benefit from) income taxes
11,831 (5,398 )
9,662
(30,048 ) Net income (loss)
$ 99,280 $
46,399
$ 67,303 $ (8,302 )
Earnings (loss) per share: Basic
earnings (loss) per share
$ 0.97 $ 0.54
$ 0.73 $ (0.10 ) Diluted earnings
(loss) per share
$ 0.89 $ 0.48
0.72 $ (0.10 ) Weighted average shares
outstanding: Basic
100,490
86,375
90,180 83,417 Diluted
117,245
114,496
94,073 83,417
Computation of Basic and Diluted EPS: Net
income (loss)
$ 99,280 $ 46,399
$
67,303 $ (8,302 ) Less: net income allocated to
participating securities
(1,370 )
(1,447 )
(1,275 ) - Net loss for
basic and diluted EPS calculation
$ 97,910 $
44,952
$ 66,028 $ (8,302 )
Weighted average shares outstanding - basic
101,896 86,375
$ 91,921 83,417 Less: weighted average participating
shares outstanding
(1,406 ) (2,694 )
(1,741 ) - Weighted average
common shares outstanding - basic
100,490
83,681
90,180 83,417
Basic earnings (loss) per share
$ 0.97 $ 0.54
$ 0.73
$ (0.10 )
Computation of Diluted EPS: Net
income (loss)
$ 99,280 $ 46,399
$
67,303 $ (8,302 ) Less: net income allocated to
participating securities
(1,191 ) (1,092 )
(1,246 ) - Add: interest expense, net of tax, on
Convertible Notes
4,980 8,172
- - Net income (loss) for
diluted EPS calculation
$ 103,069 $ 53,479
$ 66,057 $ (8,302 ) Weighted
average common shares outstanding - basic
101,896 86,375
91,921 83,417 Add: dilutive effect of common stock
equivalents
15,349 28,121
2,152 - Total weighted average shares
outstanding - diluted
117,245 114,496
94,073 83,417
Less: weighted average participating shares outstanding
(1,406 ) (2,694 )
(1,741
) - Weighted average common shares outstanding
- diluted
115,839 111,802
92,332 83,417
Diluted earnings (loss) per share
$ 0.89
$ 0.48
$ 0.72 $ (0.10 )
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (in thousands, except per
share amounts) March 31, March 31,
2017 2016
ASSETS Current assets: Cash and cash equivalents
$
943,396 $ 798,742 Short-term investments
448,932
470,820 Restricted cash
337,818 261,169
Accounts receivable, net of allowances of
$66,483 and $45,552 at March 31, 2017 and 2016, respectively
219,558 168,527 Inventory
16,323 15,888 Software
development costs and licenses
41,721 178,387 Deferred cost
of goods sold
127,901 98,474 Prepaid expenses and other
59,593 53,269 Total current
assets
2,195,242 2,045,276
Fixed assets, net
67,300 77,127 Software development
costs and licenses, net of current portion
381,910 214,831
Deferred cost of goods sold, net of current portion
- 17,915
Goodwill
359,115 217,080 Other intangibles, net
110,262 4,609 Other assets
35,325
13,439 Total assets
$ 3,149,154
$ 2,590,277
LIABILITIES AND STOCKHOLDERS'
EQUITY Current liabilities: Accounts payable
$
31,892 $ 30,448 Accrued expenses and other current
liabilities
750,875 607,479 Deferred revenue
903,125 582,484 Total current
liabilities
1,685,892 1,220,411
Long-term debt
251,929 497,935 Non-current deferred
revenue
10,406 216,319 Other long-term liabilities
197,199 74,227 Total liabilities
2,145,426 2,008,892
Stockholders' equity: Preferred stock, $.01 par value, 5,000 shares
authorized
- - Common stock, $.01 par value, 200,000 shares
authorized; 119,813 and 103,765 shares issued and 102,621 and
86,573 outstanding at March 31, 2017 and 2016, respectively
1,198 1,038 Additional paid-in capital
1,452,754
1,088,628 Treasury stock, at cost; 17,192 common shares at March
31, 2017 and 2016, respectively
(303,388 ) (303,388 )
Accumulated deficit
(99,694 ) (166,997 ) Accumulated
other comprehensive loss
(47,142 )
(37,896 ) Total stockholders' equity
1,003,728
581,385 Total liabilities and stockholders' equity
$ 3,149,154 $ 2,590,277
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
Twelve months ended March 31,
2017 2016
Operating activities: Net income (loss)
$
67,303 $ (8,302 ) Adjustments to reconcile net loss
to net cash provided by operating activities: Amortization and
impairment of software development costs and licenses
221,911 134,472 Depreciation and amortization
30,707
28,800 Amortization and impairment of intellectual property
6,738 160 Stock-based compensation
81,879 69,996
Deferred income taxes
3,020 (270 ) Amortization of discount
on Convertible Notes
21,222 23,457 Amortization of debt
issuance costs
1,227 1,567 Gain on of long-term investments,
net
(1,350 ) (2,683 ) Other, net
(3,410
) 2,588 Changes in assets and liabilities: Restricted cash
(76,474 ) (91,491 ) Accounts receivable
(41,956 ) 49,348 Inventory
(4,942 )
3,809 Software development costs and licenses
(252,951
) (219,217 ) Prepaid expenses, other current and other
non-current assets
(22,155 ) (12,272 ) Deferred
revenue
126,285 152,325 Deferred cost of goods sold
(14,969 ) (41,144 ) Accounts payable, accrued
expenses and other liabilities
189,344
170,162 Net cash provided by operating activities
331,429 261,305
Investing
activities: Change in bank time deposits
89,076 (182,383
) Proceeds from available-for-sale securities
155,936 43,314
Purchases of available-for-sale securities
(195,733 )
(150,501 ) Purchases of commercial paper
(25,938 ) -
Business acquisitions, net of cash acquired
(130,669
) - Purchases of fixed assets
(21,167 )
(37,280 ) Proceeds from sale of long-term investments
1,350
2,683 Purchase of long-term investments
(1,885 ) -
Other
- (349 ) Net cash used in
investing activities
(129,030 )
(324,516 )
Financing activities: Excess tax benefit
from stock-based compensation
1,990 1,421 Tax payment
related to net share settlements on restricted stock awards
(51,762 ) (22,916 ) Repurchase of common stock
- (26,552 ) Net cash used in financing
activities
(49,772 ) (48,047 )
Effects of foreign exchange rates on cash and cash equivalents
(7,973 ) (1,120 ) Net increase
(decrease) in cash and cash equivalents
144,654 (112,378 )
Cash and cash equivalents, beginning of year
798,742
911,120 Cash and cash equivalents, end of
period
$ 943,396 $ 798,742
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
Net Revenue by Geographic Region, Distribution Channel, and
Platform Mix (in thousands)
Three Months Ended
March 31, 2017
Three Months Ended
March 31, 2016
Amount % of Total Amount % of Total
Net
Revenues by Geographic Region United States
$
296,040 52 % $ 196,037 52 % International
275,516 48 % 181,169
48 % Total net revenues
571,556
100 % 377,206 100 %
Change in
Deferred Net Revenues United States
$ (56,680
) $ (4,159 ) International
(107,749 )
(30,535 ) Total changes in deferred net revenues
(164,429 ) (34,694 )
Three Months
Ended
March 31, 2017
Three Months Ended
March 31, 2016
Amount % of Total Amount % of Total
Net
Revenues by Distribution Channel Digital online
$
278,683 49 % $ 194,798 52 % Physical retail
and other
292,873 51 %
182,408 48 % Total net revenues
571,556
100 % 377,206 100 %
Change in
Deferred Net Revenues Digital online
$ 19,802 $
31,829 Physical retail and other
(184,231 )
(66,523 ) Total changes in deferred net revenues
(164,429 ) (34,694 )
Three Months
Ended
March 31, 2017
Three Months Ended
March 31, 2016
Amount % of Total Amount % of Total
Net Revenues
by Platform Mix Console
$ 479,958 84
% $ 288,785 77 % PC and other
91,598
16 % 88,421 23 % Total net revenues
571,556 100 % 377,206
100 %
Change in Deferred Net Revenues Console
$ (161,310 ) $ (30,253 ) PC and other
(3,119 ) (4,441 ) Total changes in deferred
net revenues
(164,429 ) (34,694 )
TAKE-TWO INTERACTIVE SOFTWARE, INC. and
SUBSIDIARIES Net Revenue by Geographic Region, Distribution
Channel, and Platform Mix (in thousands)
Twelve Months Ended
March 31, 2017
Twelve Months Ended
March 31, 2016
Amount % of Total Amount % of Total
Net
Revenues by Geographic Region United States
$
999,128 56 % $ 742,963 53 % International
780,620 44 % 670,735 47 %
Total net revenues
1,779,748 100
% 1,413,698 100 %
Change in Deferred Net
Revenues United States
$ 78,356 $ 97,770
International
45,842 49,158 Total
changes in deferred net revenues
124,198
146,928
Twelve Months Ended
March 31, 2017
Twelve Months Ended
March 31, 2016
Amount % of Total Amount % of Total
Net
Revenues by Distribution Channel Digital online
$
921,734 52 % $ 697,658 49 % Physical retail
and other
858,014 48 %
716,040 51 % Total net revenues
1,779,748
100 % 1,413,698 100 %
Change in
Deferred Net Revenues Digital online
$ 159,528 $
137,563 Physical retail and other
(35,330 )
9,365 Total changes in deferred net revenues
124,198 146,928
Twelve Months
Ended
March 31, 2017
Twelve Months Ended
March 31, 2016
Amount % of Total Amount % of Total
Net Revenues
by Platform Mix Console
$ 1,440,724 81
% $ 1,167,623 83 % PC and other
339,024
19 % 246,075 17 % Total net revenues
1,779,748 100 % 1,413,698 100 %
Change in Deferred Net Revenues Console
$
113,595 $ 12,687 PC and other
10,603
134,241 Total changes in deferred net revenues
124,198 146,928
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
ADDITIONAL DATA (in thousands) Cost of Goods
Sold- Software Cost of Goods Cost of Goods
Sold- Development Costs Sold- Product Cost of
Goods Selling and Three Months Ended March 31,
2017 Net Revenues
Internal Royalties and Royalties
Costs Sold- Licenses
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 )
General and Research and Depreciation and
Interest and Gain on long-term Three Months Ended
March 31, 2017 Administrative
Development Amortization
Other, net investments
As reported $ 62,042 $ 36,421 $ 8,378 $ (392 ) $ -
Stock-based compensation (16,047 ) (2,634 ) Non-cash amortization
of discount on Convertible Notes 3,351 Acquisition related expenses
(1,598 ) Amortization of intangibles (989 ) (78 ) Proceeds from
sale of long-term investments
Cost of Goods
Sold- Software Cost of Goods Cost of Goods
Sold- Development Costs Sold- Product Cost of
Goods Selling and Three Months Ended March 31,
2016 Net Revenues
Internal Royalties and Royalties
Costs Sold- Licenses
Marketing As reported $ 377,206 $
72,552 $ 71,352 $ 46,554 $ 18,999 $ 38,020 Net effect from deferral
and related cost of goods sold (34,694 ) (9,601 ) (10,682 ) (3,370
) (2,566 ) Stock-based compensation (2,388 )
Gain on
long- General and Research and Business
Depreciation and Interest and term Three
Months Ended March 31, 2016 Administrative
Development
Reorganization Amortization
Other,net investments
As reported $ 44,395 $ 33,308 $ 113 $ 7,338 $ (6,257 ) $
2,683 Stock-based compensation (8,998 ) (1,900 ) Non-cash
amortization of discount on Convertible Notes 6,003 Impact of
business reorganization (113 ) Proceeds from sale of long-term
investments (2,683 )
TAKE-TWO INTERACTIVE
SOFTWARE, INC. and SUBSIDIARIES ADDITIONAL DATA (in
thousands) Cost of Goods Sold- Software Cost
of Goods Cost of Goods Sold- Development Costs
Sold- Product Cost of Goods Selling and
Twelve Months Ended March 31, 2017 Net
Revenues Internal Royalties
and Royalties Costs
Sold- Licenses 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 )
General and Research and Depreciation
and Interest and Gain on long-term
Twelve Months Ended March 31,
2017
Administrative
Development Amortization
Other, net investments As
reported $ 211,409 $ 137,915 $ 30,707 $ (15,690 ) $ 1,350
Stock-based compensation (42,908 ) (7,952 ) Non-cash amortization
of discount on Convertible Notes 21,254 Acquisition related
expenses (1,916 ) Amortization of intangibles (989 ) (78 ) Proceeds
from sale of long-term investments (1,350 )
Cost
of Goods Sold- Software Cost of Goods Cost of
Goods Sold- Development Costs Sold- Product
Cost of Goods Selling and Twelve Months Ended
March 31, 2016 Net Revenues
Internal Royalties and Royalties
Costs Sold- Licenses
Marketing As reported $ 1,413,698 $
328,610 $ 223,512 $ 200,206 $ 61,545 $ 198,309 Net effect from
deferral and related cost of goods sold 146,928 (1,237 ) 11,622
30,012 (9,425 ) Stock-based compensation (15,323 )
Gain on long- General and Research and
Business Depreciation and Interest and
term Twelve Months Ended March 31, 2016
Administrative Development
Reorganization Amortization
Other, net investments
As reported $ 192,452 $ 119,807 $ 71,285 $ 28,800 $
(30,205 ) $ 2,683 Stock-based compensation (40,323 ) (4,926 )
Non-cash amortization of discount on Convertible Notes 23,457
Impact of business reorganization (1,228 ) (71,285 ) Proceeds from
sale of long-term investments (2,683 )
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170523005265/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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