Net revenue grew 15% to $476.5 million
Net loss narrowed to $0.33 per diluted
share
Net cash provided by operating activities grew
72% to $291.0 million
Bookings grew 51% to $719.0 million
Take-Two Interactive Software, Inc. (NASDAQ:TTWO) today reported
strong results for its fiscal third quarter 2017, ended December
31, 2016. In addition, the Company provided its initial financial
outlook for its fiscal fourth quarter ending March 31, 2017, and
updated its financial outlook for its fiscal year ending March 31,
2017.
Fiscal Third Quarter 2017 GAAP
Financial Highlights
Net revenue grew 15% to $476.5 million, as compared to $414.2
million in last year’s fiscal third quarter. The largest
contributors to net revenue in fiscal third quarter 2017 were Grand
Theft Auto V® and Grand Theft Auto Online, WWE® 2K17, NBA® 2K17,
and Sid Meier’s Civilization® VI.
Digitally-delivered net revenue grew 64% to $240.2 million, as
compared to $146.4 million in last year’s fiscal third quarter.
Recurrent consumer spending (virtual currency, microtransactions
and downloadable add-on content) accounted for 39% of
digitally-delivered net revenue, or 20% of total net revenue. The
largest contributors to digitally-delivered net revenue in fiscal
third quarter 2017 were Grand Theft Auto V and Grand Theft Auto
Online, Sid Meier’s Civilization VI, and NBA 2K17.
Net loss narrowed to $29.8 million, or $0.33 per diluted share,
as compared to $42.4 million, or $0.51 per diluted share, for the
year-ago period.
Net cash provided by operating activities grew 72% to $291.0
million. As of December 31, 2016, the Company had cash and
short-term investments of $1.444 billion.
As previously announced, starting with this quarter’s results,
Take-Two will no longer report Non-GAAP Cost of Goods Sold,
Non-GAAP Gross Profit, Non-GAAP Income from Operations, Non-GAAP
Net Income, and Non-GAAP Net Income Per Share on either a
historical basis or in its financial outlook. The Company will
continue to disclose data, as set forth below, together with its
management reporting tax rate of 22%, that are used internally by
its management and Board of Directors to adjust its GAAP financial
results in order to facilitate comparison of the Company’s
operating performance between periods and to better understand its
core business and future outlook:
Three Months Ended December 31, 2016
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
Net revenue $ 476,473 268,350 Cost of goods sold
311,074 118,126 (6,022 )
Gross profit 165,399 150,224 6,022
Total operating expenses 193,808
(16,067 ) (317 )
Loss from operations
(28,409 ) 150,224 22,089 317
Interest and other, net (3,715 ) 4,922
Loss before income taxes (32,124 )
150,224 22,089 4,922 317 Loss
per share Basic and diluted $ (0.33 )
Take-Two’s basic and diluted net loss per share for fiscal third
quarter 2017 was calculated using the Company’s basic share count
of 90.4 million. For management reporting purposes, the Company
calculates diluted net income per share using its fully diluted
share count of 115.3 million and adds back to net income interest
expense, net of tax, on the convertible notes of $1.2 million.
Operational Metric -
Bookings
Total bookings grew 51% to $719.0 million, as compared to $475.5
million during last year’s fiscal third quarter. The largest
contributors to bookings were Grand Theft Auto V and Grand Theft
Auto Online, Mafia III, NBA 2K17, WWE 2K17 and Sid Meier’s
Civilization VI. Catalog accounted for $261.6 million of bookings
led by Grand Theft Auto. Digitally-delivered bookings grew 66% to
$336.3 million, as compared to $203.0 million in last year’s fiscal
third quarter, led by Grand Theft Auto V and Grand Theft Auto
Online, NBA 2K17, Sid Meier’s Civilization VI and Mafia III.
Bookings from recurrent consumer spending (virtual currency,
microtransactions and downloadable add-on content) grew 55%
year-over-year and accounted for 50% of digitally-delivered
bookings, or 23% of total bookings.
Management Comments
“Take-Two had a highly-successful holiday quarter,” said Strauss
Zelnick, Chairman and CEO of Take-Two. “Consumer demand for our new
releases and catalog titles was strong throughout the period, and
players continued to engage significantly with our games after
purchase. As a result, we delivered better-than-expected bookings,
including our best-ever quarter for recurrent consumer spending,
along with double-digit growth in both net revenue and net cash
provided by operating activities.
“Last week, we deployed a portion of our Company’s cash on hand
to acquire Social Point, a highly-successful free-to-play mobile
game developer that has a proven track record of growing revenues
and delivering multiple hits. We are incredibly excited about this
acquisition, which reflects our strategy to deploy our capital
resources prudently and to take measured risks that provide
immediately accretive opportunities for our business and the
potential for long-term growth.
“Looking ahead, our Company has a robust long-term development
pipeline and is better positioned for success than at any time in
its history. We expect to grow both bookings and net cash provided
by operating activities in fiscal 2018, driven by our release slate
led by Rockstar Games’ highly anticipated launch of Red Dead
Redemption 2.”
Business and Product
Highlights
Since October 1, 2016:
Take-Two:
- 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 immediately accretive to net revenue and net cash
provided by operating activities, and 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:
- Bikers, which allows players to form
underground Motorcycle Clubs and run illicit business alongside a
range of all new competitive and co-operative gameplay, as well as
new modes, vehicles, weapons, clothing and much more.
- Deadline, which allows players to turn
the streets of Los Santos into a stylish electronic video game
battle to the death with futuristic Nagasaki Shotaro
motorcycles.
- Import/Export, which introduces a whole
new series of criminal pursuits as CEOs and their organizations
steal, modify and resell the most wanted vehicles in the city for
big profits.
- Festive Surprise 2016, which featured
holiday-themed items in stores across Los Santos, as well as the
return of favorite items from past holiday seasons and more.
- Released Bully: Anniversary Edition for
iOS and Android devices. Bully: Anniversary Edition comes complete
with everything from the original release and from Bully:
Scholarship Edition. The game features enhanced high resolution
graphics, improved lighting, textures and character models,
controls redesigned for touch gameplay, physical controller support
and more.
- Announced that the highly-anticipated
Red Dead Redemption 2® is planned for release worldwide in Fall
2017 for PlayStation4 and Xbox One. Developed by the creators of
Grand Theft Auto V and Red Dead Redemption, Red Dead Redemption
2 is an epic tale of life in America’s unforgiving heartland.
The game's vast and atmospheric open world will also provide the
foundation for a brand new online multiplayer experience.
2K:
- Launched Sid Meier’s Civilization VI
for PC. Developed by Firaxis Games, Sid Meier’s Civilization VI is
the next entry in the award-winning turn-based strategy franchise
that has sold-in nearly 40 million units. Sid Meier’s Civilization
VI received stellar reviews and is fastest-selling release in the
history of the series, with sell-in already surpassing 1.5 million
units. Sid Meier’s Civilization VI is being supported with free and
paid downloadable add-on content.
- Launched WWE 2K17 for PlayStation 4,
PlayStation 3, Xbox One and Xbox 360. In addition, WWE 2K17 was
released today for PC. Developed collaboratively by Yuke's and
Visual Concepts, WWE 2K17 is being supported with downloadable
add-on content, including a Season Pass.
- Launched Mafia III, the next
installment in 2K’s successful organized crime series, for Xbox
One, PlayStation 4 and PC. Developed by Hangar 13, Mafia III had
the highest first week sell-in of any title in 2K’s history, and to
date has sold-in approximately 5 million units. Mafia III is being
supported with downloadable add-on content, including a Season
Pass, as well as a free-to-play mobile battle RPG game, Mafia III
Rivals, for iOS and Android devices.
- Released NBA2KVR Experience for HTC
Vive™, PlayStation®VR and Oculus Rift. NBA2KVR Experience is the
first virtual reality basketball game immersing players in a new,
entertaining NBA environment filled with the sights and sounds of
fun mini-games and challenges.
- Released WWE SuperCard - Season 3 for
iOS and Android devices. Developed by Cat Daddy Games, WWE
SuperCard Season 3 is a free update to the popular WWE collectible
card-battling game that has been downloaded more than 13 million
times, featuring new modes of play, Superstars and more. WWE
SuperCard is the highest grossing and most downloaded mobile game
in 2K history.
- Released Carnival Games® VR for HTC
Vive, PlayStationVR and Oculus Rift. Developed by Cat Daddy Games,
Carnival Games VR is 2K’s first virtual reality offering and was
named one of the top VR titles of 2016 by the Official PlayStation
Blog.
- Released NHL SuperCard 2K17 for iOS and
Android devices. Developed by Cat Daddy Games, NHL SuperCard 2K17
is a free-to-play NHL collectible card-battling game.
- Announced that NBA 2K18 will be
available for the Nintendo Switch in Fall 2017 when the title also
launches for the PlayStation 4, PlayStation 3, Xbox One, Xbox 360,
PC, and iOS and Android devices.
Financial Outlook for Fiscal
2017
Take-Two is providing its initial financial outlook for its
fiscal fourth quarter ending March 31, 2017 and is updating its
financial outlook for its fiscal year ending March 31, 2017:
Fourth Quarter Ending March 31, 2017
- GAAP net revenue is expected to range
from $542 to $592 million
- GAAP net income is expected to range
from $139 to $148 million
- GAAP diluted net income per share is
expected to range from $1.23 to $1.31
- Share count used to calculate GAAP
diluted net income per share is expected to be 116.4 million
(1)
- Bookings (operational metric) are
expected to range from $295 to $345 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 its GAAP financial
outlook in order to facilitate comparison of the Company’s
operating performance between periods and to better understand its
core business and future outlook:
Three Months Ending March 31,
2017
$ 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
Acquisition related
expenses
Net revenue $542 to
$592 ($225) Cost of goods sold $248 to
$278 ($120) ($1) ($3) Operating
Expenses $140 to $150 ($17) ($2)
($1) Interest and other, net $3
($3) Income (loss) before income taxes $151
to $161 ($105) $18 $3 $5 $1
Fiscal Year Ending March 31, 2017
- GAAP net revenue is expected to range
from $1.75 to $1.80 billion
- GAAP net income is expected to range
from $108 to $117 million
- GAAP diluted net income per share is
expected to range from $1.15 to $1.25
- Share count used to calculate GAAP
diluted net income per share is expected to be 93.6 million
(4)
- Net cash provided by operating
activities is expected to be approximately $350 million
- Capital expenditures are expected to be
approximately $35 million
- Bookings (operational metric) are
expected to range from $1.72 to $1.77 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 its GAAP financial
outlook in order to facilitate comparison of the Company’s
operating performance between periods and to better understand its
core business and future outlook:
Twelve Months Ending March 31,
2017
$ 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
Gain on Long-Term
Investment
Amortization of Intangible
Assets
Acquisition related
expenses
Net revenue
$1,750 to $1,800 $65 Cost of goods sold
$956 to $986 $0 ($17) ($3)
Operating Expenses $660 to $670 ($57)
($2) ($1.5) Interest and other, net
$17 ($21) $2 Income (loss) before
income taxes $117 to $127 $65 $74
$21 ($2) $5 $1.5
1) Includes 102.0 million basic shares, 1.4
million participating shares and 13.0 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) For the fiscal year
ending March 31, 2017, the Company’s fully diluted share count used
for management reporting purposes is expected to be 115.5 million,
which includes 92.0 million basic shares, 1.6 million participating
shares and 21.9 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
$4.8 million. Take-Two’s GAAP net income per diluted share outlook
is calculated using a diluted share count of 93.6 million (basic
shares plus participating shares), because using the “if-converted”
method and the Company’s fully diluted share count of 115.5 million
would have been anti-dilutive.
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 October 1, 2016:
Label
Title
Platforms
Release Date
2K
Mafia III
PS4, Xbox One, PC October 7, 2016 2K
Mafia III Rivals
iOS, Android October 7, 2016 2K
WWE 2K17
PS4, PS3, Xbox One, Xbox 360 October 11, 2016 2K
WWE 2K17: Accelerator (DLC)
PS4, PS3, Xbox One, Xbox 360 October 11, 2016 2K
WWE 2K17: MyPlayer Kickstart (DLC)
PS4, Xbox One October 11, 2016 2K
WWE 2K17: NXT Legacy Pack (DLC)
PS3, Xbox 360 October 11, 2016 2K
NHL SuperCard 2017
iOS, Android October 13, 2016 2K
Sid Meier’s Civilization VI
PC October 21, 2016 2K
Carnival Games VR
HTC Vive, PlayStation VR October 28, 2016 2K
WWE 2K17: NXT Enhancement Pack (DLC)
PS4, Xbox One November 15, 2016 2K
WWE SuperCard - Season 3
iOS, Android November 17, 2016 2K
WWE 2K17: Legends Pack (DLC)
PS4, PS3, Xbox One, Xbox 360 November 22, 2016 2K
NBA 2K VR Experience
HTC Vive, PlayStation VR, Oculus Rift November 22, 2016 2K
Carnival Games VR
Oculus Rift December 6, 2016 Rockstar Games
Bully: Anniversary Edition
iOS, Android December 8, 2016 2K
WWE 2K17: New Moves Pack (DLC)
PS4, PS3, Xbox One, Xbox 360 December 13, 2016 2K
Sid Meier’s Civilization VI: Viking
Scenario Pack (DLC)
PC December 20, 2016 2K
Sid Meier’s Civilization VI: Poland
Civilization & Scenario Pack (DLC)
PC December 20, 2016 2K
WWE 2K17: Future Stars Pack (DLC)
PS4, PS3, Xbox One, Xbox 360 January 17, 2017
Take-Two's lineup of future titles announced to date
includes:
Label
Title
Platforms
Release Date
2K
NBA 2K18
PS4, PS3, Xbox One, Xbox 360, Switch, PC, iOS,
Android Fall 2017 Rockstar Games
Red Dead Redemption 2
PS4, Xbox One Fall 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.
Final Results
The financial results discussed herein are presented on a
preliminary basis; final data will be included in Take-Two’s
Quarterly Report on Form 10-Q for the period ended December 31,
2016.
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," “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 (Unaudited) (in
thousands, except per share amounts) Three
months ended December 31, Nine months ended December
31, 2016 2015
2016 2015
Net revenue
$ 476,473 $ 414,221
$ 1,208,192 $ 1,036,492 Cost of
goods sold: Internal royalties
103,613 95,311
240,711
256,058 Software development costs and royalties
109,900
61,653
218,753 152,160 Product costs
70,089 74,934
170,127 153,652 Licenses
27,472
25,963
78,468 42,546
Total cost of goods sold
311,074
257,861
708,059 604,416
Gross profit
165,399 156,360
500,133 432,076
Selling and marketing
95,820 59,846
247,141
160,289 General and administrative
52,939 49,061
149,367 148,057 Research and development
37,589
27,944
101,494 86,499 Business reorganization
-
71,172
- 71,172 Depreciation and amortization
7,460 7,534
22,329
21,462 Total operating expenses
193,808
215,557
520,331
487,479 Loss from operations
(28,409 ) (59,197
)
(20,198 ) (55,403 ) Interest and other, net
(3,715 ) (8,018 )
(15,298 ) (23,948 )
Gain on long-term investment
- -
1,350 - Loss before income taxes
(32,124 ) (67,215 )
(34,146 ) (79,351 )
Benefit from income taxes
(2,282 )
(24,802 )
(2,169 ) (24,650 ) Net loss
$ (29,842 ) $ (42,413 )
$
(31,977 ) $ (54,701 ) Loss per share:
Basic and diluted loss per share
$
(0.33 ) $ (0.51 )
$ (0.37 ) $
(0.66 ) Weighted average shares outstanding: Basic and Diluted
90,428 83,426
86,796 83,338
Computation of Basic
and Diluted EPS: Net loss for basic
and diluted EPS calculation
$ (29,842 ) $
(42,413 )
$ (31,977 ) $ (54,701 )
Weighted average common shares outstanding -
basic and diluted
90,428 83,426
86,796 83,338
Basic and diluted loss per share
$
(0.33 ) $ (0.51 )
$ (0.37 ) $
(0.66 )
TAKE-TWO INTERACTIVE SOFTWARE, INC. and
SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in
thousands, except per share amounts) December
31, March 31, 2016
2016 ASSETS (Unaudited) Current
assets: Cash and cash equivalents
$ 1,039,430 $
798,742 Short-term investments
404,523 470,820 Restricted
cash
278,541 261,169
Accounts receivable, net of allowances of
$107,347 and $45,552 at December 31, 2016 and March 31, 2016,
respectively
327,430 168,527 Inventory
26,665 15,888 Software
development costs and licenses
126,185 178,387 Deferred cost
of goods sold
177,946 98,474 Prepaid expenses and other
70,456 53,269 Total current
assets
2,451,176 2,045,276
Fixed assets, net
65,799 77,127 Software development
costs and licenses, net of current portion
327,117 214,831
Deferred cost of goods sold, net of current portion
- 17,915
Goodwill
213,522 217,080 Other intangibles, net
3,211
4,609 Other assets
28,274 13,439
Total assets
$ 3,089,099 $ 2,590,277
LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities: Accounts payable
$ 54,248 $ 30,448
Accrued expenses and other current liabilities
736,176
607,479 Deferred revenue
1,073,393
582,484 Total current liabilities
1,863,817
1,220,411 Long-term debt
258,876
497,935 Non-current deferred revenue
11,255 216,319 Other
long-term liabilities
134,230 74,227
Total liabilities
2,268,178
2,008,892 Stockholders' equity: Preferred
stock, $.01 par value, 5,000 shares authorized
- - Common
stock, $.01 par value, 200,000 shares authorized; 117,990 and
103,765 shares issued and 100,798 and 86,573 outstanding at
December 31, 2016 and March 31, 2016, respectively
1,180
1,038 Additional paid-in capital
1,370,278 1,088,628
Treasury stock, at cost; 17,192 common shares at December 31, 2016
and March 31, 2016, respectively
(303,388 ) (303,388
) Accumulated deficit
(198,974 ) (166,997 )
Accumulated other comprehensive loss
(48,175 )
(37,896 ) Total stockholders' equity
820,921
581,385 Total liabilities and stockholders'
equity
$ 3,089,099 $ 2,590,277
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in
thousands) Nine months ended December 31,
2016 2015
Operating activities: Net loss
$ (31,977
) $ (54,701 ) Adjustments to reconcile net loss to
net cash provided by operating activities: Amortization and
impairment of software development costs and licenses
130,019 83,056 Depreciation and amortization
22,329
21,462 Amortization and impairment of intellectual property
1,398 160 Stock-based compensation
55,421 54,144
Amortization of discount on Convertible Notes
17,870 17,454
Amortization of debt issuance costs
1,078 1,181 Other, net
(3,604 ) 2,573 Changes in assets and liabilities:
Restricted cash
(17,372 ) (34,411 ) Accounts
receivable
(160,095 ) (46,227 ) Inventory
(15,876 ) (374 ) Software development costs and
licenses
(194,422 ) (170,074 ) Prepaid expenses,
other current and other non-current assets
(31,460 )
(6,514 ) Deferred revenue
302,728 184,955 Deferred cost of
goods sold
(66,502 ) (54,418 ) Accounts payable,
accrued expenses and other liabilities
230,067
190,557 Net cash provided by operating activities
239,602 188,823
Investing activities: Change in bank time deposits
66,841 (189,564 ) Proceeds from available-for-sale
securities
101,357 19,014 Purchases of available-for-sale
securities
(104,357 ) (25,768 ) Purchases of fixed
assets
(14,369 ) (28,579 ) Proceeds from sale of
long-term investments
1,350 - Purchase of long-term
investments
(1,885 ) - Business acquisitions, net of
cash acquired
(750 ) - Net cash
provided by (used in) investing activities
48,187
(224,897 )
Financing activities: Excess
tax benefit from stock-based compensation
1,499 1,509 Tax
payment related to net share settlements on restricted stock awards
(36,734 ) (14,506 ) Repurchase of common stock
- (26,552 ) Net cash used in financing
activities
(35,235 ) (39,549 )
Effects of foreign exchange rates on cash and cash equivalents
(11,866 ) (256 ) Net increase
(decrease) in cash and cash equivalents
240,688 (75,879 )
Cash and cash equivalents, beginning of year
798,742
911,120 Cash and cash equivalents, end of
period
$ 1,039,430 $ 835,241
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
Net Revenue by Geographic Region, Distribution Channel, and
Platform Mix (in thousands)
Three Months Ended
December 31, 2016
Three Months Ended
December 31, 2015
Amount % of Total Amount % of Total
Net Revenues by Geographic Region United States
$ 257,504 54% $ 218,386 53% International
218,969 46% 195,835 47% Total net
revenues
476,473 100% 414,221 100%
Change in Deferred Net Revenues United States
$ 139,410 $ 63,314 International
128,940 9,256 Total changes in deferred net revenues
268,350 72,570
Three Months
Ended
December 31, 2016
Three Months Ended
December 31, 2015
Amount % of Total Amount % of Total
Net Revenues by Distribution Channel Digital online
$ 240,213 50% $ 146,449 35% Physical retail
and other
236,260 50% 267,772 65% Total
net revenues
476,473 100% 414,221 100%
Change in Deferred Net Revenues Digital online
$ 117,222 $ 67,170 Physical retail and other
151,128 5,400 Total changes in deferred net revenues
268,349 72,570
Three Months
Ended
December 31, 2016
Three Months Ended
December 31, 2015
Amount % of Total Amount % of Total
Net Revenues by Platform Mix Console
$ 354,220
74% $ 355,235 86% PC and other
122,253
26% 58,986 14% Total net revenues
476,473 100% 414,221 100%
Change in
Deferred Net Revenues Console
$ 246,223 $ 64,623
PC and other
22,127 7,947 Total changes in
deferred net revenues
268,350 72,570
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
Net Revenue by Geographic Region, Distribution Channel, and
Platform Mix (in thousands)
Nine Months Ended
December 31, 2016
Nine Months Ended
December 31, 2015
Amount % of Total Amount % of Total
Net Revenues by Geographic Region United States
$ 703,088 58% $ 546,926 53% International
505,104 42% 489,566 47% Total net
revenues
1,208,192 100% 1,036,492 100%
Change in Deferred Net Revenues United States
$ 135,035 $ 101,929 International
153,592 79,693 Total changes in deferred net revenues
288,627 181,622
Nine Months
Ended
December 31, 2016
Nine Months Ended
December 31, 2015
Amount % of Total Amount % of Total
Net Revenues by Distribution Channel Digital online
$ 643,051 53% $ 502,860 49% Physical retail
and other
565,141 47% 533,632 51% Total
net revenues
1,208,192 100% 1,036,492
100%
Change in Deferred Net Revenues Digital online
$ 139,726 $ 105,734 Physical retail and other
148,901 75,888 Total changes in deferred net revenues
288,627 181,622
Nine Months
Ended
December 31, 2016
Nine Months Ended
December 31, 2015
Amount % of Total Amount % of Total
Net Revenues by Platform Mix Console
$ 961,285
80% $ 878,838 85% PC and other
246,907
20% 157,654 15% Total net revenues
1,208,192 100% 1,036,492 100%
Change
in Deferred Net Revenues Console
$ 274,386 $
42,940 PC and other
14,241 138,682 Total
changes in deferred net revenues
288,627
181,622
TAKE-TWO INTERACTIVE SOFTWARE, INC. and
SUBSIDIARIES SELECTED DATA
(in thousands) Three
Months Ended December 31, 2016 Net Revenues
Cost of Goods Sold- Internal
Royalties
Cost of Goods Sold- Software
Development Costs and Royalties
Cost of Goods Sold- Product
Costs
Cost of Goods Sold-
Licenses
As reported $ 476,473 $ 103,613 $
109,900 $ 70,089 $ 27,472 Net effect from deferral and related cost
of goods sold 268,350 - 58,902 47,271 11,953 Stock-based
compensation (6,022 )
Three Months Ended December 31,
2016
Selling and Marketing
General and
Administrative
Research and Development
Depreciation and
Amortization
Interest and Other, net
As reported $ 95,820 $ 52,939 $ 37,589
$ 7,460 $ (3,715 ) Stock-based compensation (2,441 ) (10,382 )
(3,244 ) Non-cash amortization of discount on Convertible Notes
4,922 Acquisition related expenses (317 )
Three Months
Ended December 31, 2015 Net Revenues
Cost of Goods Sold- Internal
Royalties
Cost of Goods Sold- Software
Development Costs and Royalties
Cost of Goods Sold- Product
Costs
Cost of Goods Sold-
Licenses
As reported $ 414,221 $ 95,311 $ 61,653
$ 74,934 $ 25,963 Net effect from deferral and related cost of
goods sold 72,570 (1,864 ) 6,186 10,564 Stock-based compensation
(4,131 )
Three Months Ended December 31, 2015
Selling and Marketing
General and
Administrative
Research and Development
Business Reorganization
Depreciation and
Amortization
Interest and Other, net
As reported $ 59,846 $ 49,061 $ 27,944 $ 71,172 $
7,534 $ (8,018 ) Stock-based compensation (2,363 ) (11,761 ) (482 )
Non-cash amortization of discount on Convertible Notes 5,910 Impact
of business reorganization (71,172 )
TAKE-TWO
INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES SELECTED
DATA (in thousands) Nine Months Ended December
31, 2016 Net Revenues
Cost of Goods Sold- Internal
Royalties
Cost of Goods Sold- Software
Development Costs and Royalties
Cost of Goods Sold- Product
Costs
Cost of Goods Sold-
Licenses
As reported $ 1,208,192 $ 240,711 $
218,753 $ 170,127 $ 78,468 Net effect from deferral and related
cost of goods sold 288,627 - 60,971 50,071 11,239 Stock-based
compensation (15,974 )
Nine Months Ended December 31,
2016
Selling and Marketing
General and
Administrative
Research and Development
Depreciation and
Amortization
Interest and Other, net
As reported $ 247,141 $ 149,367 $
101,494 $ 22,329 $ (15,298 ) Stock-based compensation (7,269 )
(26,851 ) (5,317 ) Non-cash amortization of discount on Convertible
Notes 17,903 Acquisition related expenses (317 )
Nine
Months Ended December 31, 2015 Net Revenues
Cost of Goods Sold- Internal
Royalties
Cost of Goods Sold- Software
Development Costs and Royalties
Cost of Goods Sold- Product
Costs
Cost of Goods Sold-
Licenses
As reported $ 1,036,492 $ 256,058 $
152,160 $ 153,652 $ 42,546 Net effect from deferral and related
cost of goods sold 181,622 8,364 22,302 33,382 Stock-based
compensation (12,935 )
Nine Months Ended December 31,
2015
Selling and Marketing
General and
Administrative
Research and Development
Business Reorganization
Depreciation and
Amortization
Interest and Other, net
As reported $ 160,289 $ 148,057 $ 86,499 $ 71,172 $
21,462 ($ 23,948 ) Stock-based compensation (6,859 ) (31,324 )
(3,026 ) Non-cash amortization of discount on Convertible Notes
17,454 Impact of business reorganization (1,228 ) (71,172 )
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170207006273/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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