Non-GAAP Net Revenue Grew 169% to $364.9
Million
Non-GAAP Net Income Increased to $0.30 Per
Diluted Share
Company Repurchased Nearly 1 Million Shares for
$26.6 Million
Raises Financial Outlook for Fiscal 2016
Take-Two Interactive Software, Inc. (NASDAQ:TTWO) today reported
stronger-than-expected financial results for fiscal second quarter
2016, ended September 30, 2015. In addition, the Company increased
its financial outlook for the fiscal year ending March 31, 2016,
and provided its initial financial outlook for the fiscal third
quarter 2016, ending December 31, 2015.
GAAP Financial Results
For fiscal second quarter 2016, GAAP net revenue grew 175% to
$347.0 million, as compared to $126.3 million for fiscal second
quarter 2015. GAAP net income increased to $54.7 million, or $0.55
per diluted share, as compared to GAAP net loss of $41.4 million,
or $0.51 per diluted share, for the year-ago period.
As of September 30, 2015, the Company had cash and short-term
investments of $1.065 billion.
Non-GAAP Financial
Results
For fiscal second quarter 2016, Non-GAAP net revenue grew 169%
to $364.9 million, as compared to $135.4 million for the year-ago
period. Non-GAAP net income increased to $32.7 million, or $0.30
per diluted share, as compared to Non-GAAP net loss of $35.4
million, or $0.44 per diluted share, for the year-ago period.
The largest contributors to Non-GAAP net revenue in fiscal
second quarter 2016 were NBA® 2K16, Grand Theft Auto® V and Grand
Theft Auto Online, NBA 2K15, and Borderlands®: The Handsome
Collection. Non-GAAP net revenue from digitally-delivered content
grew 57% year-over-year to $141.0 million. The largest contributors
to Non-GAAP net revenue from digitally-delivered content were the
Grand Theft Auto, NBA 2K, Borderlands and WWE 2K series. Revenue
from recurrent consumer spending (virtual currency, downloadable
add-on content and online games) grew 39% year-over-year and
accounted for 51% of Non-GAAP net revenue from digitally-delivered
content, or 20% of total Non-GAAP net revenue. Catalog sales
accounted for $165.8 million of Non-GAAP net revenue led by the
Grand Theft Auto, NBA 2K and Borderlands series.
Management Comments
“Take-Two once again delivered better-than-expected Non-GAAP
revenue and earnings growth,” said Strauss Zelnick, Chairman and
CEO of Take-Two. “Our second quarter results were anchored by the
series record-breaking launch of NBA 2K16, along with ongoing
demand for Grand Theft Auto V and strong growth in recurrent
consumer spending.
“Our holiday season is off to a great start, including the
successful release of WWE 2K16, and we expect the installed base of
new-gen consoles to expand further and broaden our global audience.
We are raising our fiscal 2016 financial outlook to reflect our
outperformance in the second quarter and positive forecast for the
balance of the year. With our robust development pipeline and
increasing contribution from recurrent consumer spending, Take-Two
is better positioned than ever to generate revenue growth and
margin expansion in future years, and returns for our shareholders
over the long-term.”
Business and Product
Highlights
Since July 1, 2015:
- During the fiscal second quarter,
Take-Two repurchased 953,647 shares of its common stock for $26.6
million.
Rockstar Games:
- Released new free content updates for
Grand Theft Auto Online, including:
- Ill Gotten Gains Part 2, featuring new
vehicles, weapons, outfits and the addition of The Lab radio
station to consoles;
- Freemode Events, the first update
exclusively for PlayStation 4, Xbox One and PC, which seamlessly
integrates dozens of games and challenges directly into the game’s
open world without lobbies or menus, adds two new Adversary Modes,
and brings the Rockstar Editor to consoles with additional new
features;
- Lowriders, which adds new and upgraded
vehicles including specific lowrider customization options such as
hydraulics, new Adversary Modes, new Lowrider-themed Contact
Missions, an array of new clothing, tattoo and accessory options,
as well as upgrades to both Freemode and the Rockstar Editor’s
Director Mode; and
- Halloween Surprise, featuring a new
Halloween-themed adversary mode plus special vehicles, masks and
more.
2K:
- Launched NBA 2K16 on PlayStation 4,
PlayStation 3, Xbox One, Xbox 360 and PC, as well as on iOS and
Android devices. The title is the highest-rated sports game of 2015
on Xbox One* and set an unprecedented record for the series,
selling-in over four million units worldwide within the first week
of release. According to The NPD Group, adjusting for days in
market, NBA 2K16 had the best launch month of any sports game
during the new console cycle.
- Launched WWE 2K16 on Xbox One, Xbox
360, PlayStation 4 and PlayStation 3. Developed collaboratively by
Yukes and Visual Concepts, the title has received strong reviews
from the gaming press, which reflect its significant improvements
versus last year’s release and are among the best ever received by
the series. IGN scored WWE 2K16 an 8.8 out of 10, stating that the
title is “as close to a fusion of performance and competition as a
wrestling game has ever gotten.” WWE 2K16 is being supported with
downloadable add-on content, including a Season Pass.
- Released Sid Meier’s
Civilization®: Beyond Earth™ – Rising Tide for PC. Developed by
Firaxis Games, Rising Tide is a massive expansion pack for the
2014 turn-based strategy title, Civilization: Beyond
Earth.
- Released WWE
SuperCard – Season 2 for iOS and Android devices. Season
2 updates the content of WWE SuperCard, the renowned collectible
card-battling game that is Take-Two’s most financially successful
free-to-play mobile offering.
- Launched NHL® SuperCard, an
action-packed NHL collectible card-battling game that is available
as a free download for iOS and Android devices.
- Battleborn™, which is currently in
development for PlayStation 4, Xbox One and PC by the creators of
Borderlands at Gearbox Software, is now planned for release on May
3, 2016.
- Announced that XCOM® 2, which is the
sequel to the Game of the Year award-winning strategy title XCOM:
Enemy Unknown and is currently in development at Firaxis Games, is
planned for release on February 5, 2016 for PC.
- Announced that Mafia® III, the next
installment in 2K’s successful organized crime series, is currently
in development for Xbox One, PlayStation 4 and PC at Hangar 13,
2K’s new development studio. Mafia III is planned for release
during calendar 2016 (fiscal year 2017).
*According to Metacritic.com.
Financial Outlook for Fiscal
2016
Take-Two is increasing its financial outlook for fiscal year
2016 to reflect its better-than-expected fiscal second quarter
results, strong forecast for the balance of the fiscal year and an
expected tax benefit, partially offset by the impact of moving the
planned launches of Battleborn to May 3, 2016, and XCOM 2 to
February 5, 2016. In addition, the Company is providing its initial
financial outlook for the fiscal third quarter ending December 31,
2015 as follows:
Third Quarter
Fiscal Year
Ending 12/31/2015
Ending 3/31/2016
Non-GAAP net revenue
$400 to $450 Million
$1.325 to $1.425 Billion
Non-GAAP net income per diluted
share (1)
$0.40 to $0.50
$1.00 to $1.15
GAAP to Non-GAAP
Reconciling Items (2):
Net effect from deferral in net revenues
and related cost of goods sold
$0.52 $0.22
Stock-based compensation expense (3)
$0.11 $0.43
Business reorganization, restructuring and
related expenses
$0.03 $0.04
Non-cash amortization of discount on
convertible notes
$0.04 $0.15
Non-cash tax expense
$0.00 $0.02
(Income) related to gain on sale of
long-term investment
($0.02) ($0.02)
1)
For the fiscal third quarter ending
December 31, 2015 and fiscal year ending March 31, 2016, our
Non-GAAP net income per diluted share outlook is calculated using
the “if-converted” method as a result of the issuances of our 1.75%
Convertible Notes in November 2011 and 1.00% Convertible Notes in
June 2013, and Non-GAAP diluted net income for the third quarter
and fiscal year is adjusted by adding-back $1.4 million and $5.5
million, respectively, related to coupon interest and debt issuance
costs, net of tax. Shares used to calculate our Non-GAAP net income
per diluted share outlook are as follows:
Weighted average basic shares
83.5 Million
83.5 Million
Add: Weighted average participating
shares
3.0 Million
4.0 Million
Add: Potential Dilution from convertible
notes
26.5 Million
26.5 Million
Total weighted average diluted
shares
113.0 Million
114.0 Million
2)
All GAAP to Non-GAAP reconciling items are
net of tax and per share.
3)
The Company's stock-based compensation
expense for the periods above includes the cost of approximately
1.1 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.
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 July 1, 2015:
Label
Title
Platforms
Release Date
2K
WWE SuperCard - Season 2
iOS and Android Devices August 20, 2015
2K
NBA 2K16
Xbox 360, Xbox One, PS3, PS4, PC September 29, 2015 2K
My NBA 2K16
iOS and Android Devices October 1, 2015 2K
NHL SuperCard
iOS and Android Devices October 8, 2015 2K
Sid Meier’s Civilization Beyond Earth –
Rising Tide (expansion pack)
PC October 9, 2015 2K
NBA 2K16
iOS and Android Devices October 15, 2015 2K
WWE 2K16
Xbox 360, Xbox One, PS3, PS4 October 27, 2015* 2K
Evolve Ultimate Edition
Xbox One, PS4 November 3, 2015
*North American release date;
international release date followed three days after.
Take-Two's lineup of future titles announced to date
includes:
Label
Title
Platforms
Release Date
2K
Borderlands Triple Pack
Xbox 360, PS3 November 17, 2015 2K
Civilization® Revolution™ 2 Plus
PlayStation Vita December 3, 2015 2K
WWE 2K16: Accelerator (DLC)
Xbox 360, Xbox One, PS3, PS4 TBA 2K
WWE 2K16: MyPlayer Kickstart (DLC)
Xbox One, PS4 TBA 2K
WWE 2K16: Legends Pack (DLC)
Xbox 360, Xbox One, PS3, PS4 TBA 2K
WWE 2K16: 2015 Hall of Fame Showcase
(DLC)
Xbox 360, Xbox One, PS3, PS4 TBA 2K
WWE 2K16: New Moves Pack (DLC)
Xbox 360, Xbox One, PS3, PS4 TBA 2K
WWE 2K16: Future Stars Pack (DLC)
Xbox 360, Xbox One, PS3, PS4 TBA 2K
XCOM 2
PC, Mac, Linux February 5, 2016 2K
Battleborn
Xbox One, PS4, PC May 3, 2016 2K
Mafia III
Xbox One, PS4, PC Fiscal Year 2017
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.
Non-GAAP Financial
Measures
In addition to reporting financial results in accordance with
U.S. generally accepted accounting principles (GAAP), the Company
uses Non-GAAP measures of financial performance. The Company
believes that these Non-GAAP financial measures, when taken into
consideration with the corresponding GAAP financial measures, are
important in gaining an understanding of the Company’s ongoing
business. These Non-GAAP financial measures also provide for
comparative results from period to period. Therefore, the Company
believes it is appropriate to exclude the following Non-GAAP items,
net of applicable taxes, as discussed below:
- Net effect from deferral in net
revenues and related cost of goods sold - the Company defers
revenue and related costs from the sale of certain titles that have
undelivered elements upon the sale of the game and recognizes that
revenue upon the delivery of the undelivered elements. The Company
also defers revenue and related costs for certain sales generated
from certain titles for which we have or expect to provide certain
additional add-on content. These amounts are deferred over the
estimated remaining life of the game to which they pertain. As
there is no impact to the Company’s operating cash flow, management
excludes the impact of deferred net revenue and related costs from
its Non-GAAP financial measures when evaluating the Company's
operating performance, when planning, forecasting and analyzing
future periods, and when assessing the performance of its
management team. In addition, we believe that these Non-GAAP
financial measures provide a more timely indication of trends in
our business, provide comparability with the way our business is
measured by analysts, and provide consistency with industry data
sources.
- Stock-based compensation – the Company
does not consider stock-based compensation charges when evaluating
business performance and management does not contemplate
stock-based compensation expense in its short- and long-term
operating plans. As a result, the Company has excluded such
expenses from its Non-GAAP financial measures.
- Business reorganization, restructuring
and related expenses – although the Company has incurred business
reorganization expenses in the past, each charge relates to a
discrete event based on a unique set of business objectives.
Management does not believe these charges reflect the Company's
primary business, ongoing operating results or future outlook. As
such, the Company believes it is appropriate to exclude these
expenses and related charges from its Non- GAAP financial
measures.
- Non-cash amortization of discount on
convertible notes – the Company records non-cash amortization of
discount on convertible notes as interest expense in addition to
the interest expense already recorded for coupon payments. The
Company excludes the non-cash portion of the interest expense from
its Non-GAAP financial measures because these amounts are unrelated
to its ongoing business operations.
- Non-cash tax expense for the impact of
deferred tax liabilities associated with tax deductible
amortization of goodwill – due to the nature of the adjustment as
well as the expectation that it will not have any cash impact in
the foreseeable future, the Company believes it is appropriate to
exclude this expense from its Non-GAAP financial measures.
- Gain on sale of long-term investment –
from time to time, the Company makes strategic investments. The
Company excludes the impact of any gains and losses on such
investments from its Non-GAAP financial measures.
These Non-GAAP financial measures are not intended to be
considered in isolation from, as a substitute for, or superior to,
GAAP results. These Non-GAAP financial measures may be different
from similarly titled measures used by other companies. In the
future, Take-Two may also consider whether other items should also
be excluded in calculating the Non-GAAP financial measures used by
the Company. Management believes that the presentation of these
Non-GAAP financial measures provides investors with additional
useful information to measure Take-Two's financial and operating
performance. In particular, the measures facilitate comparison of
operating performance between periods and help investors to better
understand the operating results of Take-Two by excluding certain
items that may not be indicative of the Company's core business,
operating results or future outlook. Internally, management may use
these Non-GAAP financial measures in assessing the company's
operating results and in planning and forecasting. In addition to
the Non-GAAP financial measures provided in this press release, see
the Company’s website for additional information regarding our
non-GAAP results.
Final Results
The financial results discussed herein are presented on a
preliminary basis; final data will be included in Take-Two’s
Quarterly Report on Form 10-Q for the period ended September 30,
2015.
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 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," "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, our ability to raise capital if needed and
risks associated with international operations. Other important
factors and information are contained in the Company's Annual
Report on Form 10-K for the fiscal year ended March 31, 2015,
including the risks summarized in the section entitled "Risk
Factors," the Company’s Quarterly Report on Form 10-Q for the
fiscal quarter ended June 30, 2015, 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 (Unaudited) (in
thousands, except per share amounts)
Three months ended September 30, Six months
ended September 30, 2015
2014 2015 2014
Net revenue
$ 346,974 $ 126,277
$ 622,271 $ 251,702 Cost
of goods sold: Internal royalties
54,918 12,413
160,747 20,711 Software development costs and royalties
40,014 16,343
90,507 36,649 Product costs
38,777 18,761
78,718 37,353 Licenses
10,231 4,499
16,583
11,459 Total cost of goods sold
143,940 52,016
346,555
106,172 Gross profit
203,034
74,261
275,716 145,530 Selling and marketing
54,876 49,136
100,443 85,982 General and
administrative
49,961 43,975
98,996 83,327 Research
and development
24,413 24,533
58,555 48,665
Depreciation and amortization
7,353
5,130
13,928 9,278 Total
operating expenses
136,603 122,774
271,922 227,252 Income
(loss) from operations
66,431 (48,513 )
3,794 (81,722
) Interest and other, net
(8,396 ) (7,512 )
(15,930 ) (15,231 ) Gain on long-term investments,
net
- 18,976
-
18,976 Income (loss) from operations before
income taxes
58,035 (37,049 )
(12,136 )
(77,977 ) Provision for (benefit from) for income taxes
3,300 4,320
152
(1,205 ) Net income (loss)
$ 54,735 $
(41,369 )
$ (12,288 ) $ (76,772 )
Earnings (loss) per share: Basic earnings (loss) per share
$
0.63 $ (0.51 )
$ (0.15 ) $ (0.96
) Diluted earnings (loss) per share
$ 0.55
$ (0.51 )
(0.15 ) $ (0.96 )
Weighted average shares outstanding:
Basic
87,560 80,355
83,280 79,862 Diluted
114,015 80,355
83,280
79,862
Computation of Basic EPS:
Net income (loss)
$ 54,735 $ (41,369 )
$
(12,288 ) $ (76,772 ) Less: net income allocated to
participating securities
(2,320 ) -
$ - - Net income (loss)
for basic EPS calculation
$ 52,415 $ (41,369 )
$ (12,288 ) $ (76,772 ) Weighted
average shares outstanding - basic
87,560 80,355
$
83,280 79,862 Less: weighted average participating shares
outstanding
(3,711 ) -
- - Weighted average common shares
outstanding - basic
83,849 80,355
$ 83,280 79,862
Basic EPS
$ 0.63 $ (0.51
)
$ (0.15 ) $ (0.96 )
Computation of
Diluted EPS: Net income (loss)
$ 54,735 $ (41,369
)
$ (12,288 ) $ (76,772 ) Less: net income
allocated to participating securities
(1,782 ) -
- - Add: interest expense, net of tax, on Convertible Notes
7,994 -
-
- Net income (loss) for diluted EPS calculation
$ 60,947 $ (41,369 )
$ (12,288
) $ (76,772 ) Weighted average shares outstanding -
basic
83,849 80,355
83,280 79,862 Add: dilutive
effect of common stock equivalents
30,166
-
- - Total
weighted average shares outstanding - diluted
114,015 80,355
83,280 79,862 Less: weighted average participating shares
outstanding
(3,711 ) -
- - Weighted average common shares
outstanding - diluted
110,304 80,355
83,280 79,862
Diluted EPS
$ 0.55 $
(0.51 )
$ (0.15 ) $ (0.96 )
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (in thousands, except per
share amounts) September 30,
March
31,
2015 2015
ASSETS (Unaudited) Current assets: Cash and cash
equivalents
$ 711,713 $ 911,120 Short-term
investments
352,961 186,929 Restricted cash
215,226
169,678 Accounts receivable, net of allowances of $55,105 and
$70,471 at September 30, 2015 and March 31, 2015, respectively
240,859 217,860 Inventory
24,020 20,051 Software
development costs and licenses
240,329 163,385 Deferred cost
of goods sold
111,885 56,779 Prepaid expenses and other
67,615 55,506 Total current
assets
1,964,608 1,781,308
Fixed assets, net
81,694 69,792 Software development
costs and licenses, net of current portion
128,939 124,329
Deferred cost of goods sold, net of current portion
5,428
19,869 Goodwill
217,731 217,288 Other intangibles, net
4,609 4,769 Other assets
13,490
13,745 Total assets
$ 2,416,499 $
2,231,100
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities: Accounts payable
$ 69,138 $
38,789 Accrued expenses and other current liabilities
467,856 444,738 Deferred revenue
676,891
482,733 Total current liabilities
1,213,885 966,260 Long-term debt
487,601 476,057 Non-current deferred revenue
85,242
164,618 Other long-term liabilities
65,706
61,077 Total liabilities
1,852,434
1,668,012 Commitments and contingencies
Stockholders' equity: Preferred stock, $.01 par value, 5,000 shares
authorized
- - Common stock, $.01 par value, 200,000 shares
authorized; 104,160 and 104,594 shares issued and 86,968 and 88,356
outstanding at September 30, 2015 and March 31, 2015, respectively
1,042 1,046 Additional paid-in capital
1,066,743
1,028,197 Treasury stock, at cost; 17,192 and 16,238 common shares
at September 30, 2015 and March 31, 2015, respectively
(303,388 ) (276,836 ) Accumulated deficit
(170,983 ) (158,695 ) Accumulated other comprehensive
loss
(29,349 ) (30,624 ) Total
stockholders' equity
564,065 563,088
Total liabilities and stockholders' equity
$
2,416,499 $ 2,231,100
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in
thousands) Six months ended September
30, 2015 2014
Operating activities: Net loss
$
(12,288 ) $ (76,772 ) Adjustments to reconcile net
loss to net cash provided by (used in) operating activities:
Amortization and impairment of software development costs and
licenses
40,719 10,136 Depreciation and amortization
13,928 9,278 Amortization and impairment of intellectual
property
160 259 Stock-based compensation
35,406
23,846 Deferred income taxes
68 599 Amortization of discount
on Convertible Notes
11,544 10,840 Amortization of debt
issuance costs
792 853 Gain on of long-term investments, net
- (18,976 ) Other, net
1,102 181 Changes in assets
and liabilities: Restricted cash
(45,548 ) 116,296
Accounts receivable
(22,668 ) 27,716 Inventory
(3,755 ) (26,168 ) Software development costs and
licenses
(117,959 ) (104,492 ) Prepaid expenses,
other current and other non-current assets
(13,250 )
(5,847 ) Deferred revenue
113,042 46,765 Deferred cost of
goods sold
(38,440 ) (1,644 ) Accounts payable,
accrued expenses and other liabilities
57,161
(144,692 ) Net cash provided by (used in) operating
activities
20,014 (131,822 )
Investing activities: Purchase of fixed assets
(25,793 ) (23,054 ) Purchases of short-term
investments, net
(167,388 ) (49,591 ) Cash received
from the sale of long-term investment
-
21,976 Net cash used in investing activities
(193,181 ) (50,669 )
Financing
activities: Excess tax benefit from stock-based compensation
9,529 4,843 Tax payment related to net share settlements on
restricted stock awards
(10,386 ) -
Repurchase of common stock
(26,552 ) - Net cash provided by
(used in) financing activities
(27,409 )
4,843 Effects of foreign exchange rates on
cash and cash equivalents
1,169 (3,342
) Net decrease in cash and cash equivalents
(199,407
) (180,990 ) Cash and cash equivalents, beginning of year
911,120 935,400 Cash and cash
equivalents, end of period
$ 711,713 $ 754,410
TAKE-TWO INTERACTIVE
SOFTWARE, INC. and SUBSIDIARIES RECONCILIATION OF GAAP TO
Non-GAAP MEASURES (Unaudited) (in thousands, except per
share amounts) Three months
ended September 30, Six months ended September
30, 2015 2014
2015 2014 Net Revenues
GAAP Net Revenues $ 346,974 $ 126,277
$
622,271 $ 251,702 Net effect from deferral in net revenues
17,956 9,165
109,051 35,351
Non-GAAP Net
Revenues $ 364,930 $ 135,442
731,322 $ 287,053
Digital Online
Revenues (included in Net Revenues above) GAAP Digital
Online Revenues $ 202,426 $ 80,646
$
356,411 $ 160,847 Net effect from deferral in digital online
revenues
(61,414 ) 9,165
38,564 35,351
Non-GAAP Digital
Online Revenues $ 141,012 $ 89,811
$ 394,975 $ 196,198
Gross
Profit GAAP Gross Profit $ 203,034 $
74,261
$ 275,716 $ 145,530 Net effect from deferral
in net revenues and related cost of goods sold
(31,075
) 3,831
59,890 19,149 Stock-based compensation
4,110 1,268
8,804
2,739
Non-GAAP Gross Profit
176,069 $ 79,360
$ 344,410
$ 167,418
Income (Loss) from Operations
GAAP Income (Loss) from Operations $ 66,431 $
(48,513 )
$ 3,794 $ (81,722 ) Net effect from
deferral in net revenues and related cost of goods sold
(31,075 ) 3,831
59,890 19,149 Stock-based
compensation
16,321 13,867
35,406 23,846 Business
reorganization, restructuring and related expenses
-
-
1,228 195
Non-GAAP Income (Loss) from Operations $
51,677 $ (30,815 )
$ 100,318 $
(38,532 )
Net Income (Loss) GAAP Net Income
(Loss) $ 54,735 $ (41,369 )
$
(12,288 ) $ (76,772 ) Net effect from deferral in net
revenues and related cost of goods sold
(37,258 )
2,408
47,906 14,165 Stock-based compensation
11,237
10,082
22,564 17,741 Gain on long-term investments, net
- (10,940 )
- (10,940 ) Business reorganization,
restructuring and related expenses
- -
773 156
Non-cash amortization of discount on Convertible Notes
3,660
3,938
7,263 8,065 Non-cash tax expense
326
472
690 945
Non-GAAP Net Income (Loss) $ 32,700 $
(35,409 )
$ 66,908 $ (46,640 )
Diluted Earnings (Loss) Per Share GAAP earnings (loss) per
share
$ 0.55 $ (0.51 )
$ (0.15 )
$ (0.96 ) Non-GAAP earnings (loss) per share
$ 0.30 $
(0.44 )
$ 0.61 $ (0.58 ) Number of diluted
shares used in computation GAAP
114,015 80,355
83,280
79,862 Non-GAAP
114,015 80,355
114,157 79,862
Computation of Diluted GAAP EPS: Net income (loss)
$ 54,735 $ (41,369 )
$ (12,288 )
$ (76,772 ) Less: net income allocated to participating securities
(1,782 ) -
- - Add: interest expense, net of
tax, on Convertible Notes
7,994 -
- - Net income (loss) for
diluted EPS calculation
$ 60,947 $ (41,369 )
$ (12,288 ) $ (76,772 ) Weighted
average shares outstanding - basic
83,849 80,355
83,280 79,862 Add: dilutive effect of common stock
equivalents
30,166 -
- - Total weighted average shares
outstanding - diluted
114,015 80,355
83,280 79,862
Less: weighted average participating shares outstanding
(3,711 ) -
-
- Weighted average common shares outstanding -
diluted
110,304 80,355
83,280 79,862
Diluted earnings (loss) per share
$
0.55 $ (0.51 )
$ (0.15 ) $ (0.96
)
Computation of Diluted Non-GAAP EPS:
Non-GAAP net income (loss)
$ 32,700 $ (35,409 )
$ 66,908 $ (46,640 ) Less: net income (loss)
allocated to participating securities
(1,064 ) -
(2,592 ) - Add: interest expense, net of tax, on
Convertible Notes
1,371 -
2,742 - Net income (loss) for diluted
earnings per share calculation
$ 33,007 $
(35,409 )
$ 67,058 $ (46,640 ) Weighted
average shares outstanding - basic
83,849 80,355
83,280 79,862 Add: dilutive effect of common stock
equivalents
30,166 -
30,877 - Total weighted average shares
outstanding - diluted
114,015 80,355
114,157 79,862
Less: weighted average participating shares outstanding
(3,711 ) -
(4,422
) - Weighted average common shares outstanding
- diluted
110,304 80,355
109,735 79,862
Diluted earnings (loss) per share
$
0.30 $ (0.44 )
$ 0.61 $ (0.58 )
TAKE-TWO INTERACTIVE SOFTWARE, INC. and
SUBSIDIARIES Net Revenue by Geographic Region, Distribution
Channel, and Platform Mix (in thousands)
Three Months Ended
September 30, 2015
Three Months Ended
September 30, 2014
Amount % of Total Amount % of Total
GAAP Net Revenues by Geographic Region United States
$ 185,102 53 % $ 59,322 47 %
International
161,872 47 %
66,955 53 % Total GAAP net revenues
346,974
100 % 126,277 100 %
Change in
Deferred Net Revenues United States
$ 33,740 $
3,436 International
(15,784 ) 5,729
Total changes in deferred net revenues
17,956
9,165
Non-GAAP Net Revenues by Geographic
Region United States
$ 218,842 60 %
$ 62,758 46 % International
146,088 40
% 72,684 54 % Total non-GAAP net revenues
$
364,930 100 % $ 135,442 100 %
Three Months Ended
September 30, 2015
Three Months Ended
September 30, 2014
Amount % of Total Amount % of Total
GAAP Net Revenues by Distribution Channel Digital
online
$ 202,426 58 % $ 80,646 64 %
Physical retail and other
144,548 42
% 45,631 36 % Total GAAP net revenues
346,974 100 % 126,277 100 %
Change in Deferred Net Revenues Digital online
$ (61,414 ) $ 9,165 Physical retail and other
79,370 - Total changes in deferred net
revenues
17,956 9,165
Non-GAAP Net Revenues by Distribution Channel Digital online
$ 141,012 39 % $ 89,811 66 % Physical
retail and other
223,918 61 %
45,631 34 % Total non-GAAP net revenues
$
364,930 100 % 135,442 100 %
Three Months Ended
September 30, 2015
Three Months Ended
September 30, 2014
Amount % of Total Amount % of Total
GAAP Net Revenues by Platform Mix Console
$
301,029 87 % $ 93,684 74 % PC and other
45,945 13 % 32,593 26 % Total
GAAP net revenues
346,974 100 %
126,277 100 %
Change in Deferred Net Revenues
Console
$ 15,621 $ 6,901 PC and other
2,335 2,264 Total changes in deferred net
revenues
17,956 9,165
Non-GAAP Net Revenues by Platform Mix Console
$
316,650 87 % $ 100,585 74 % PC and other
48,280 13 % 34,857 26 %
Total non-GAAP net revenues
$ 364,930
100 % 135,442 100 %
TAKE-TWO
INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES Net Revenue by
Geographic Region, Distribution Channel, and Platform Mix
(in thousands) Six
Months Ended
September 30, 2015
Six Months Ended
September 30, 2014
Amount % of Total Amount % of Total
GAAP Net Revenues by Geographic Region United States
$ 328,540 53 % $ 124,166 49 %
International
293,731 47 %
127,536 51 % Total GAAP net revenues
622,271
100 % 251,702 100 %
Change in
Deferred Net Revenues United States
$ 41,658 $
19,170 International
67,393 16,181
Total changes in deferred net revenues
109,051
35,351
Non-GAAP Net Revenues by Geographic
Region United States
$ 370,198 51 %
$ 143,336 50 % International
361,124 49
% 143,717 50 % Total non-GAAP net revenues
$
731,322 100 % $ 287,053 100 %
Six Months Ended
September 30, 2015
Six Months Ended
September 30, 2014
Amount % of Total Amount % of Total
GAAP Net Revenues by Distribution Channel Digital
online
$ 356,411 57 % $ 160,847 64 %
Physical retail and other
265,860 43
% 90,855 36 % Total GAAP net revenues
622,271 100 % 251,702 100 %
Change in Deferred Net Revenues Digital online
$ 38,564 $ 35,351 Physical retail and other
70,487 - Total changes in deferred net
revenues
109,051 35,351
Non-GAAP Net Revenues by Distribution Channel Digital online
$ 394,975 54 % $ 196,198 68 % Physical
retail and other
336,347 46 %
90,855 32 % Total non-GAAP net revenues
$
731,322 100 % $ 287,053 100 %
Six Months Ended
September 30, 2015
Six Months Ended
September 30, 2014
Amount % of Total Amount % of Total
GAAP Net Revenues by Platform Mix Console
$
523,603 84 % $ 177,454 71 % PC and other
98,668 16 % 74,248 29 %
Total GAAP net revenues
622,271 100
% 251,702 100 %
Change in Deferred Net
Revenues Console
$ (21,684 ) $ 31,317 PC
and other
130,735 4,034 Total changes
in deferred net revenues
109,051 35,351
Non-GAAP Net Revenues by Platform Mix Console
$ 501,919 69 % $ 208,771 73 % PC and
other
229,403 31 % 78,282
27 % Total non-GAAP net revenues
$ 731,322
100 % 287,053 100 %
View source
version on businesswire.com: http://www.businesswire.com/news/home/20151105006576/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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