Take-Two Interactive Software, Inc. Reports Strong Results for Fiscal First Quarter 2023
Take-Two Interactive Software (TTWO) reported a strong first quarter for fiscal year 2023, with GAAP net revenue rising 36% to $1.1 billion. However, the company experienced a GAAP net loss of $104 million or $0.76 per share. Net bookings grew by 41% to $1 billion, driven by recurrent consumer spending, which increased by 48%. The outlook for fiscal year 2023 has been updated to reflect the acquisition of Zynga, with projected net bookings between $5.8 billion and $5.9 billion. The combination with Zynga is expected to enhance TTWO's mobile presence and shareholder value.
- GAAP net revenue increased 36% to $1.1 billion.
- Net bookings grew by 41% to $1 billion.
- Recurrent consumer spending increased by 48%, representing 75% of total revenue.
- Projections for net bookings in FY2023 are between $5.8 billion and $5.9 billion.
- GAAP net loss of $104 million compared to a net income of $152 million last year.
- Adjusted Unrestricted Operating Cash Flow (Non-GAAP) was $(14.4) million.
The Company completed its combination with Zynga on
GAAP net revenue increased
GAAP net loss per share was
GAAP net cash provided by operating activities for the three-months ended
Adjusted Unrestricted Operating Cash Flow (Non-GAAP) for the three-months ended
Net Bookings grew
Company updates outlook to include combination with Zynga from the date of acquisition, including fiscal year 2023 Net Bookings of
First Quarter Fiscal 2023 Financial Highlights
GAAP net revenue increased
GAAP net loss was
During the three-month period ended
New Non-GAAP Financial Measure
Starting in fiscal first quarter 2023, the Company is reporting a Non-GAAP measure of financial performance: EBITDA, which is defined as GAAP net income (loss) excluding interest income (expense), provision for (benefit from) income taxes, depreciation expense, and amortization and impairment of acquired intangibles.
Please see the section below titled “Non-GAAP Financial Measures” for additional information.
The following data, together with a management reporting tax rate of
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Three Months Ended |
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Financial Data |
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GAAP |
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Statement of Operations |
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Change in deferred net revenue and related cost of revenue |
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Stock-based compensation |
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Amortization of acquired intangibles |
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Business acquisition |
Total net revenue |
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(99.9) |
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Cost of revenue |
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435.7 |
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(1.8) |
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33.4 |
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(96.4) |
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Gross profit |
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666.7 |
|
(98.0) |
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(33.4) |
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96.4 |
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Operating expenses |
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704.1 |
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(77.4) |
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(20.1) |
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(116.7) |
(Loss) income from operations |
|
(37.4) |
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(98.0) |
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44.0 |
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116.5 |
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116.7 |
Interest and other, net |
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(29.3) |
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1.6 |
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8.5 |
(Loss) gain on fair value adjustments, net |
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(39.6) |
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39.6 |
(Loss) income before income taxes |
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(106.3) |
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(96.5) |
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44.0 |
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116.5 |
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164.8 |
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Non-GAAP |
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EBITDA |
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52.2 |
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(96.5) |
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44.0 |
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155.9 |
In order to calculate net income per diluted share for management reporting purposes, the Company uses its fully diluted share count of 141.0 million.
Operational Metric – Net Bookings
Net Bookings is defined as the net amount of products and services sold digitally or sold-in physically during the period, and includes licensing fees, merchandise, in-game advertising, strategy guides and publisher incentives.
During fiscal first quarter 2023, total Net Bookings grew
Catalog accounted for
Management Comments
“Our Fiscal 2023 is off to a strong start, as demonstrated by our first quarter Net Bookings of
“We remain exceedingly optimistic about the long-term growth potential for the mobile industry, as well as our ability to create greater shareholder value as a combined entity with Zynga. Our creative teams are actively discussing potential new projects and we remain committed to delivering over
“For Fiscal Year 2023, we now expect to deliver Net Bookings of
COVID-19 Update
At Take-Two, our number one priority has remained the health and safety of our employees and their families. The majority of our global offices have reopened. However, given the evolving dynamics of the COVID-19 pandemic, we are strictly following protocols from local governments and health officials to ensure that we are adhering to their safety standards.
Business and Product Highlights
Since
Take-Two:
-
On
May 23rd , Take-Two announced the completion of its combination with Zynga Inc. (“Zynga”). Under the terms of the merger agreement, Zynga stockholders received$3.50
-
Throughout the period,
Rockstar Games continued to support Grand Theft Auto Online with new gameplay additions and vehicles, as well as weekly rewards, bonuses, and special seasonal events. -
On
July 26 th, releasedThe Criminal Enterprises , a sweeping update bringing new business prospects for Criminal Careers, elaborate new Contact Missions, vehicle enhancements and other upgrades. Players are now able to conduct Source and Sell missions at their own pace or with their friends within invite-only lobbies and other highly-requested experience improvements. Payouts were also increased across a range of gameplay, giving players more freedom and choice in how they climb the criminal ranks. - Through the GTA+ membership program, enrolled members enjoyed new and exclusive benefits, including free vehicles, discounts, bonus Shark Card cash, and more.
-
Rockstar Games continued to support Red Dead Online with a range of outfits, bonuses, and rewards. -
To mark the 10-year anniversary of
Max Payne 3, onMay 13 th,Rockstar Games announcedMax Payne 3 – The Official Soundtrack (Anniversary Edition), a new version of the iconic soundtrack coming later this year to digital streaming platforms and limited-edition vinyl. Featuring the evocative music of L.A. noise band HEALTH,Max Payne 3 – The Official Soundtrack (Anniversary Edition) also debuts previously unreleased tracks from the game.
2K:
-
On
July 7 th, 2K unveiled the full roster of cover athletes for NBA 2K23, the latest iteration of the top-rated and top-selling NBA video game simulation series of the past 21 years.Phoenix Suns' shooting guard, three-time NBA All-Star, and 2021-22 Kia All-NBA First Team selection,Devin Booker , is featured on this year's Standard Edition and cross-gen Digital Deluxe Edition. The iconicMichael Jordan – a six-time NBA Champion and five-time Kia NBA Most Valuable Player known as one of the greatest basketball players of all time – appears on the NBA 2K23 Michael Jordan Edition and the brand-new NBA 2K23 Championship Edition retailing for$149.99 U.S. andCanada , players can purchase the NBA 2K23 WNBA Edition, which featuresPhoenix Mercury's two-time Kia WNBA Finals MVP, three-time WNBA Champion,WNBA all-time leading scorer, and five-time Olympic gold medalistDiana Taurasi , along withSeattle Storm's four-time WNBA Champion, 13-time WNBA All-Star,WNBA all-time assists leader, and five-time Olympic gold medalist,Sue Bird . This marks the second cover in which NBA 2K celebratesWNBA athletes. - Continued to drive engagement throughout the quarter for NBA 2K22 with the launch of new seasons that feature brand new themes, rewards, and Signature Challenges to complete.
-
In support of the highly successful launch of WWE 2K22, 2K launched five DLC packs to further engage its player base, including the Banzai Pack (launched
April 26 th); the Most Wanted Pack (launchedMay 17 th); the Stand Back Pack (launchedJune 7 th); the Clowning Around Pack (launchedJune 28 th); and the WholeDam Pack (launchedJuly 19 th) . -
WWE SuperCard offered new content updates, including Season 8 and the SummerSlam '22 card tier, which launched on
July 30 th. -
Throughout the quarter, 2K and
Gearbox Software continued to support their successful new franchise,Tiny Tina's Wonderlands:-
Released its first three DLC packs for the title, including Coiled Captors on
April 21 st; the Glutton's Gamble onMay 19 th; and Molten Mirrors onJune 23 rd; which are all available for individual purchase or through owning theSeason Pass . There is a fourth and final DLC pack planned to release later this year. -
On
June 23 rd, 2K andGearbox Software releasedTiny Tina's Wonderlands on Steam, where it has consistently been one of the most wishlisted titles.
-
Released its first three DLC packs for the title, including Coiled Captors on
-
On
April 21 st, Gearbox confirmed that a new game from the Tales from the Borderlands series will be releasing this fiscal year. Developed by Gearbox and published by 2K, the title will feature all new characters and stories set in the Borderlands universe. -
On
April 21 st, Firaxis released XCOM 2 Collection onEpic Games Store . The XCOM 2 Collection includes the award-winning strategy game XCOM 2, the War of the Chosen expansion, and DLC packs (Resistance Warrior Pack, Anarchy's Children, Alien Hunters, Shen's Last Gift and Tactical Legacy Pack) for a bundled discount. -
On
June 10 th, 2K andSupermassive Games launched The Quarry, a horror narrative game from the award-winning team behind Until Dawn. OnJuly 7 th, a major new patch for the game calledWolf Pack was released, which allows the host to invite other players to help shape the story as a collective group. In addition, all six episodes of the Bizarre Yet Bonafide podcast featured in The Quarry became available in-game in their entirety.
Private Division:
-
On
June 2 nd, Private Division and Roll7 announced that Rollerdrome will launch onAugust 16, 2022 . In this single-player, third-person shooter, players experience the thrill of fusing fluid movements and stylish tricking mechanics with adrenaline-pumping combat action. Rollerdrome introduces a distinct retro-futuristic universe with a unique identity, featuring an all-new and fully original soundtrack. The title is being developed by Roll7, the creators of the critically acclaimedOlliOlli World and masterminds of flow state gaming. -
On
June 15 th, Private Division and Roll7 announced thatOlliOlli World : VOID Riders, the first of two expansions to the critically acclaimed skateboarding action-platformerOlliOlli World , launched digitally for PlayStation5, PlayStation4, Xbox Series XIS, Xbox One consoles,Nintendo Switch and Windows PC .OlliOlli World : VOID Riders is available individually or as part of the OlliOlli World Rad Edition and theExpansion Pass .
Zynga:
-
On
April 19 th,Harry Potter : Puzzles & Spells featured an in-game event to celebrate the cinematic release of “Fantastic Beasts: The Secrets of Dumbledore” featuring the Niffler as a permanent creature in the game for the first time. -
On
April 21 st, Empires & Puzzles introduced the game’s fifth season, Dynasty of Dunes. The new season takes place in Kemyth, a majestic land of pyramids and dunes that’s being torn apart by an enigmatic evil influence. Players are invited to team up with its troubled residents and embark on an investigation to get to the bottom of the mystery. -
On
June 10 th, Zynga Poker released theOmaha update, giving players a new way to enjoy the popular game. -
On
June 23 rd, Words With Friends introduced Clubs, a new feature that expands the game’s social experience by offering shared spaces that players can enjoy together. -
Rollic launched 11 games in the quarter, and Colors Runners! reached the #1 top free downloaded games position in the
U.S. App Store onJune 21 st.
Outlook for Fiscal 2023
Take-Two is revising its outlook for the fiscal year ending
Fiscal Year Ending
-
GAAP net revenue is expected to range from
$5.73 $5.83 billion -
GAAP net loss is expected to range from
$438 $398 million -
GAAP net loss per share is expected to range from
$2.75 $2.50 - Share count used to calculate GAAP net loss per share is expected to be 159.2 million
- Share count used to calculate management reporting diluted net income per share is expected to be 161.0 million(1)
-
Net cash provided by operating activities is expected to be over
$710 million -
Adjusted Unrestricted Operating Cash Flow (Non-GAAP) is expected to be over
$700 million -
Capital expenditures are expected to be approximately
$135 million -
Net Bookings (operational metric) are expected to range from
$5.8 $5.9 billion -
EBITDA (Non-GAAP) is expected to range from
$499 $548 million
The Company is also providing selected data and its management reporting tax rate of
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Twelve Months Ending |
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Financial Data |
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Outlook (3) |
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Change in deferred net revenue and related cost of revenue |
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Stock-based compensation |
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Amortization of acquired intangibles |
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Business acquisition |
GAAP |
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Operating expenses |
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Interest and other, net |
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(Loss) gain on fair value adjustments, net |
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(Loss) income before income taxes |
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Non-GAAP |
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EBITDA |
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Second Quarter Ending
-
GAAP net revenue is expected to range from
$1.37 $1.42 billion -
GAAP net loss is expected to range from
$160 $144 million -
GAAP net loss per share is expected to range from
$0.96 $0.86 - Share count used to calculate GAAP net loss per share is expected to be 166.4 million
- Share count used to calculate management reporting diluted net income per share is expected to be 167.5 million(4)
-
Net Bookings (operational metric) are expected to range from
$1.5 $1.55 billion -
EBITDA (Non-GAAP) is expected to range from
$84 $105 million
The Company is also providing selected data and its management reporting tax rate of
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Three Months Ending |
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Financial Data |
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$ in millions |
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Outlook (3) |
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Change in deferred net revenue and related cost of revenue |
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Stock-based compensation |
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Amortization of intangible assets |
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Business acquisition |
GAAP |
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Total net revenue |
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Operating expenses |
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Interest and other, net |
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(Loss) income before income taxes |
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Non-GAAP |
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EBITDA |
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1) |
Includes 159.2 million basic shares, 1.8 million shares representing the potential dilution from unvested employee stock grants and the potential dilution from convertible notes. |
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2) |
Adjusted for changes in restricted cash |
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3) |
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. |
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4) |
Includes 166.4 million basic shares, 1.1 million shares representing the potential dilution from unvested employee stock grants and the potential dilution from convertible notes. |
Key assumptions and dependencies underlying the Company’s outlook include: the timely delivery of the titles included in this financial outlook; continued consumer acceptance of Xbox One and PlayStation 4, as well as continued growth in the installed base of PlayStation 5 and Xbox Series X|S; the ability to develop and publish products that capture market share for these current generation systems while also leveraging opportunities on PC, mobile and other platforms; factors affecting our performance on mobile, such as player acquisition costs; and stable foreign exchange rates. See also “Cautionary Note Regarding Forward Looking Statements” below.
Product Releases
The following have been released since
Label |
Product |
Platforms |
Release Date |
2K |
|
PS4, PS5, Xbox One, Xbox Series X|S, PC |
|
2K |
WWE 2K22: Banzai Pack (DLC) |
PS4, PS5, Xbox One, Xbox Series X|S, PC |
|
2K |
WWE 2K22: Most Wanted Pack (DLC) |
PS4, PS5, Xbox One, Xbox Series X|S, PC |
|
2K |
|
PS4, PS5, Xbox One, Xbox Series X|S, PC |
|
2K |
WWE 2K22: Stand Back Pack (DLC) |
PS4, PS5, Xbox One, Xbox Series X|S, PC |
|
2K |
The Quarry |
PS4, PS5, Xbox One, Xbox Series X|S, PC (Steam) |
|
Private Division |
|
PS4, PS5, Xbox One, Xbox Series X|S, PC, Switch (digital only) |
|
2K |
|
Steam |
|
2K |
|
PS4, PS5, Xbox One, Xbox Series X|S, PC |
|
2K |
WWE 2K22: Clowning Around Pack (DLC) |
PS4, PS5, Xbox One, Xbox Series X|S, PC |
|
2K |
WWE 2K22: The Whole |
PS4, PS5, Xbox One, Xbox Series X|S, PC |
|
|
|
PS4, PS5, Xbox One, Xbox Series X|S, PC |
|
2K |
WWE SuperCard SummerSlam '22 Update |
iOS, Android, Facebook Gaming |
|
Take-Two's future lineup announced to-date includes:
Label |
Product |
Platforms |
Release Date |
Private Division |
Rollerdrome |
PS4, PS5, PC (Steam) (digital only) |
|
2K |
NBA 2K23 |
PS4, PS5, Xbox One, Xbox Series X|S, PC |
|
2K |
Marvel's Midnight Suns |
PS5, Xbox Series X|S, PC |
Fiscal 2023 |
2K |
WWE 2K23 |
TBA |
Fiscal 2023 |
2K |
|
TBA |
Fiscal 2023 |
2K |
|
PS4, PS5, Xbox One, Xbox Series X|S, PC |
Fiscal 2023 |
|
Grand Theft Auto: The Trilogy - The Definitive Edition (mobile release) |
iOS, Android |
Fiscal 2023 |
Private Division |
Kerbal Space Program 2 |
PC |
Fiscal 2023 |
Private Division |
|
PS4, PS5, Xbox One, Xbox Series X|S, PC (digital only), Switch |
Calendar 2023 |
2K |
Marvel's Midnight Suns |
PS4, Xbox One, Switch |
TBA |
Zynga |
Star Wars Hunters |
TBA |
TBA |
Conference Call
Take-Two will host a conference call today at
Non-GAAP Financial Measures
In addition to reporting financial results in accordance with
The Company’s management believes it is important to consider Adjusted Unrestricted Operating Cash Flow, in addition to net cash from operating activities, as it provides more transparency into current business trends without regard to the timing of payments from restricted cash, which is primarily related to a dedicated account limited to the payment of certain internal royalty obligations.
The Company’s management believes it is important to consider EBITDA, in addition to net income, as it removes the effect of certain non-cash expenses, debt-related charges, and income taxes. The Company has chosen to report EBITDA in light of the recent closing of the Zynga acquisition, including the related debt financing. Management believes that, when considered together with reported amounts, EBITDA is useful to investors and management in understanding the Company’s ongoing operations and in analysis of ongoing operating trends and provides useful additional information relating to the Company’s operations and financial condition.
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 these 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, these measures facilitate comparison of our operating performance between periods and may help investors to understand better the operating results of Take-Two. Internally, management uses these Non-GAAP financial measures in assessing the Company's operating results and in planning and forecasting. A reconciliation of these Non-GAAP financial measures to the most comparable GAAP measure is contained in the financial tables to this press release.
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
About
Headquartered in
All trademarks and copyrights contained herein are the property of their respective holders.
Cautionary Note Regarding Forward-Looking Statements
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: risks relating to our combination with Zynga; the uncertainty of the impact of the COVID-19 pandemic and measures taken in response thereto; the effect that measures taken to mitigate the COVID-19 pandemic have on our operations, including our ability to timely deliver our titles and other products, and on the operations of our counterparties, including retailers and distributors; the effects of the COVID-19 pandemic on both consumer demand and the discretionary spending patterns of our customers as the situation with the pandemic continues to evolve; the risks of conducting business internationally; the impact of changes in interest rates by the
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
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) |
||||||||
(in millions, except per share amounts) |
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Three Months Ended |
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2022 |
|
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|
2021 |
|
Net revenue: |
|
|
|
|
||||
Game |
|
$ |
1,019.2 |
|
|
$ |
796.3 |
|
Advertising |
|
|
83.2 |
|
|
|
17.0 |
|
Total net revenue |
|
|
1,102.4 |
|
|
|
813.3 |
|
Cost of revenue: |
|
|
|
|
||||
Software development costs and royalties |
|
|
165.1 |
|
|
|
87.0 |
|
Product costs |
|
|
116.9 |
|
|
|
46.9 |
|
Internal royalties |
|
|
93.4 |
|
|
|
145.4 |
|
Licenses |
|
|
60.3 |
|
|
|
50.4 |
|
Total cost of revenue |
|
|
435.7 |
|
|
|
329.7 |
|
Gross profit |
|
|
666.7 |
|
|
|
483.6 |
|
Selling and marketing |
|
|
272.1 |
|
|
|
103.9 |
|
General and administrative |
|
|
237.1 |
|
|
|
104.4 |
|
Research and development |
|
|
172.6 |
|
|
|
92.3 |
|
Depreciation and amortization |
|
|
22.3 |
|
|
|
12.5 |
|
Total operating expenses |
|
|
704.1 |
|
|
|
313.1 |
|
(Loss) income from operations |
|
|
(37.4 |
) |
|
|
170.5 |
|
Interest and other, net |
|
|
(29.3 |
) |
|
|
(1.0 |
) |
(Loss) gain on fair value adjustments, net |
|
|
(39.6 |
) |
|
|
2.0 |
|
(Loss) income before income taxes |
|
|
(106.3 |
) |
|
|
171.5 |
|
(Benefit from) provision for income taxes |
|
|
(2.3 |
) |
|
|
19.2 |
|
Net (loss) income |
|
$ |
(104.0 |
) |
|
$ |
152.3 |
|
|
|
|
|
|
||||
(Loss) earnings per share: |
|
|
|
|
||||
Basic (loss) earnings per share |
|
$ |
(0.76 |
) |
|
$ |
1.32 |
|
Diluted (loss) earnings per share |
|
$ |
(0.76 |
) |
|
$ |
1.30 |
|
Weighted average shares outstanding |
|
|
|
|
||||
Basic |
|
|
136.5 |
|
|
|
115.7 |
|
Diluted |
|
|
136.5 |
|
|
|
117.1 |
|
Computation of Basic EPS: |
|
|
|
|
||||
Net (loss) income |
|
$ |
(104.0 |
) |
|
$ |
152.3 |
|
Weighted average shares outstanding - basic |
|
|
136.5 |
|
|
|
115.7 |
|
Basic (loss) earnings per share |
|
$ |
(0.76 |
) |
|
$ |
1.32 |
|
Computation of Diluted EPS: |
|
|
|
|
||||
Net (loss) income |
|
$ |
(104.0 |
) |
|
$ |
152.3 |
|
Weighed average shares outstanding - basic |
|
|
136.5 |
|
|
|
115.7 |
|
Add: dilutive effect of common stock equivalents |
|
|
— |
|
|
|
1.4 |
|
Weighted average common shares outstanding - diluted |
|
|
136.5 |
|
|
|
117.1 |
|
Diluted (loss) earnings per share |
|
$ |
(0.76 |
) |
|
$ |
1.30 |
|
|
|||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||||
(in millions, except per share amounts) |
|||||||
|
|
|
|
||||
|
(Unaudited) |
|
|
||||
ASSETS |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
847.4 |
|
|
$ |
1,732.1 |
|
Short-term investments |
|
459.2 |
|
|
|
820.1 |
|
Restricted cash and cash equivalents |
|
534.8 |
|
|
|
359.8 |
|
Accounts receivable, net of allowances of |
|
633.7 |
|
|
|
579.4 |
|
Software development costs and licenses |
|
63.8 |
|
|
|
81.4 |
|
Capped call receivable |
|
140.1 |
|
|
|
— |
|
Contract assets |
|
101.3 |
|
|
|
104.9 |
|
Prepaid expenses and other |
|
255.7 |
|
|
|
193.4 |
|
Total current assets |
|
3,036.0 |
|
|
|
3,871.1 |
|
Fixed assets, net |
|
300.2 |
|
|
|
242.0 |
|
Right-of-use assets |
|
306.8 |
|
|
|
217.2 |
|
Software development costs and licenses, net of current portion |
|
828.3 |
|
|
|
755.9 |
|
|
|
7,227.2 |
|
|
|
674.6 |
|
Other intangibles, net |
|
5,454.6 |
|
|
|
266.5 |
|
Deferred tax assets |
|
106.6 |
|
|
|
73.8 |
|
Long-term restricted cash and cash equivalents |
|
108.9 |
|
|
|
103.5 |
|
Other assets |
|
376.3 |
|
|
|
341.7 |
|
Total assets |
$ |
17,744.9 |
|
|
$ |
6,546.3 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
199.9 |
|
|
$ |
125.9 |
|
Accrued expenses and other current liabilities |
|
1,601.7 |
|
|
|
1,074.9 |
|
Deferred revenue |
|
1,079.7 |
|
|
|
865.3 |
|
Lease liabilities |
|
55.4 |
|
|
|
38.9 |
|
Short-term debt |
|
350.0 |
|
|
|
— |
|
Total current liabilities |
|
3,286.7 |
|
|
|
2,105.0 |
|
Long-term debt, net |
|
2,935.5 |
|
|
|
— |
|
Non-current deferred revenue |
|
21.5 |
|
|
|
70.9 |
|
Non-current lease liabilities |
|
341.2 |
|
|
|
211.3 |
|
Non-current software development royalties |
|
117.4 |
|
|
115.5 |
|
|
Deferred tax liabilities, net |
|
1,093.1 |
|
|
|
21.8 |
|
Other long-term liabilities |
|
287.2 |
|
|
|
212.1 |
|
Total liabilities |
$ |
8,082.6 |
|
|
$ |
2,736.6 |
|
Commitments and contingencies (See Note 12) |
|
|
|
||||
Stockholders' equity: |
|
|
|
||||
Preferred stock, |
|
— |
|
|
|
— |
|
Common stock, |
|
1.9 |
|
|
|
1.4 |
|
Additional paid-in capital |
|
8,616.5 |
|
|
|
2,597.2 |
|
|
|
(1,020.6 |
) |
|
|
(1,020.6 |
) |
Retained earnings |
|
2,185.0 |
|
|
|
2,289.0 |
|
Accumulated other comprehensive loss |
|
(120.5 |
) |
|
|
(57.3 |
) |
Total stockholders' equity |
|
9,662.3 |
|
|
|
3,809.7 |
|
Total liabilities and stockholders' equity |
$ |
17,744.9 |
|
|
$ |
6,546.3 |
|
|
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) |
||||||||
(in millions) |
||||||||
|
|
|
|
|
||||
|
|
Three Months Ended |
||||||
|
|
|
2022 |
|
|
|
2021 |
|
Operating activities: |
|
|
|
|
||||
Net (loss) income |
|
$ |
(104.0 |
) |
|
$ |
152.3 |
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities: |
|
|
|
|
||||
Amortization and impairment of software development costs and licenses |
|
|
47.5 |
|
|
|
24.5 |
|
Stock-based compensation |
|
|
43.9 |
|
|
|
49.1 |
|
Noncash lease expense |
|
|
11.4 |
|
|
|
9.4 |
|
Amortization of intellectual property |
|
|
117.6 |
|
|
|
15.2 |
|
Depreciation |
|
|
17.5 |
|
|
|
12.5 |
|
Impairment of software development costs and licenses |
|
|
19.9 |
|
|
|
9.8 |
|
Amortization of debt issuance costs |
|
|
8.6 |
|
|
|
— |
|
Interest expense |
|
|
20.7 |
|
|
|
— |
|
Fair value adjustments |
|
|
39.6 |
|
|
|
2.0 |
|
Other, net |
|
|
(25.0 |
) |
|
|
1.9 |
|
Changes in assets and liabilities, net of effect from purchases of businesses: |
|
|
|
|
||||
Accounts receivable |
|
|
214.9 |
|
|
|
74.7 |
|
Software development costs and licenses |
|
|
(103.5 |
) |
|
|
(85.9 |
) |
Prepaid expenses and other current and other non-current assets |
|
|
(67.6 |
) |
|
|
19.4 |
|
Deferred revenue |
|
|
(159.5 |
) |
|
|
(94.7 |
) |
Accounts payable, accrued expenses and other liabilities |
|
|
18.8 |
|
|
|
(42.0 |
) |
Net cash provided by operating activities |
|
|
100.8 |
|
|
|
148.2 |
|
Investing activities: |
|
|
|
|
||||
Change in bank time deposits |
|
|
125.6 |
|
|
|
311.9 |
|
Proceeds from available-for-sale securities |
|
|
242.8 |
|
|
|
161.2 |
|
Purchases of available-for-sale securities |
|
|
— |
|
|
|
(302.5 |
) |
Purchases of fixed assets |
|
|
(42.5 |
) |
|
|
(86.4 |
) |
Purchases of long-term investments |
|
|
(5.1 |
) |
|
|
(0.1 |
) |
Business acquisitions |
|
|
(3,128.1 |
) |
|
|
(97.9 |
) |
Net cash used in investing activities |
|
|
(2,807.3 |
) |
|
|
(13.8 |
) |
Financing activities: |
|
|
|
|
||||
Tax payment related to net share settlements on restricted stock awards |
|
|
(53.9 |
) |
|
|
(48.3 |
) |
Issuance of common stock |
|
|
11.4 |
|
|
|
9.2 |
|
Payment for settlement of convertible notes |
|
|
(1,166.8 |
) |
|
|
— |
|
Proceeds from issuance of debt |
|
|
3,248.9 |
|
|
|
— |
|
Cost of debt |
|
|
(22.6 |
) |
|
|
— |
|
Net cash provided by (used in) financing activities |
|
|
2,017.0 |
|
|
|
(39.1 |
) |
Effects of foreign currency exchange rates on cash, cash equivalents, and restricted cash and cash equivalents |
|
|
(14.7 |
) |
|
|
1.8 |
|
Net change in cash, cash equivalents, and restricted cash and cash equivalents |
|
|
(704.2 |
) |
|
|
97.1 |
|
Cash, cash equivalents, and restricted cash and cash equivalents, beginning of year |
|
|
2,195.3 |
|
|
|
2,060.2 |
|
Cash, cash equivalents, and restricted cash and cash equivalents, end of period |
|
$ |
1,491.1 |
|
|
$ |
2,157.3 |
|
|
|
|
||||||||||
Net Revenue and Net Bookings by |
||||||||||||
(in millions) |
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||
|
|
Three Months Ended
|
|
Three Months Ended
|
||||||||
|
|
Amount |
|
% of total |
|
Amount |
|
% of total |
||||
Net revenue by geographic region |
|
|
|
|
|
|
|
|
||||
|
|
$ |
682.9 |
|
62 |
% |
|
$ |
493.2 |
|
61 |
% |
International |
|
|
419.5 |
|
38 |
% |
|
|
320.1 |
|
39 |
% |
Total net revenue |
|
$ |
1,102.4 |
|
100 |
% |
|
$ |
813.3 |
|
100 |
% |
|
|
|
|
|
|
|
|
|
||||
Net Bookings by geographic region |
|
|
|
|
|
|
|
|
||||
|
|
$ |
622.8 |
|
62 |
% |
|
$ |
418.8 |
|
59 |
% |
International |
|
|
379.7 |
|
38 |
% |
|
|
292.6 |
|
41 |
% |
Total Net Bookings |
|
$ |
1,002.5 |
|
100 |
% |
|
$ |
711.4 |
|
100 |
% |
|
|
|
|
|
|
|
||||||
|
|
Three Months Ended
|
|
Three Months Ended
|
||||||||
|
|
Amount |
|
% of total |
|
Amount |
|
% of total |
||||
Net revenue by distribution channel |
|
|
|
|
|
|
|
|
||||
Digital online |
|
$ |
1,037.8 |
|
94 |
% |
|
$ |
740.8 |
|
91 |
% |
Physical retail and other |
|
|
64.6 |
|
6 |
% |
|
|
72.5 |
|
9 |
% |
Total net revenue |
|
$ |
1,102.4 |
|
100 |
% |
|
$ |
813.3 |
|
100 |
% |
|
|
|
|
|
|
|
|
|
||||
Net Bookings by distribution channel |
|
|
|
|
|
|
|
|
||||
Digital online |
|
$ |
956.0 |
|
95 |
% |
|
$ |
680.4 |
|
96 |
% |
Physical retail and other |
|
|
46.5 |
|
5 |
% |
|
|
31.0 |
|
4 |
% |
Total Net Bookings |
|
$ |
1,002.5 |
|
100 |
% |
|
$ |
711.4 |
|
100 |
% |
|
|
|
|
|
|
|
||||||
|
|
Three Months Ended
|
|
Three Months Ended
|
||||||||
|
|
Amount |
|
% of total |
|
Amount |
|
% of total |
||||
Net revenue by platform mix |
|
|
|
|
|
|
|
|
||||
Console |
|
$ |
607.2 |
|
55 |
% |
|
$ |
602.4 |
|
74 |
% |
Mobile |
|
|
369.6 |
|
34 |
% |
|
|
82.3 |
|
10 |
% |
PC and other |
|
|
125.6 |
|
11 |
% |
|
|
128.6 |
|
16 |
% |
Total net revenue |
|
$ |
1,102.4 |
|
100 |
% |
|
$ |
813.3 |
|
100 |
% |
|
|
|
|
|
|
|
|
|
||||
Net Bookings by platform mix |
|
|
|
|
|
|
|
|
||||
Console |
|
$ |
503.8 |
|
50 |
% |
|
$ |
491.5 |
|
69 |
% |
Mobile |
|
|
369.7 |
|
37 |
% |
|
|
89.8 |
|
13 |
% |
PC and other |
|
|
129.0 |
|
13 |
% |
|
|
130.1 |
|
18 |
% |
Total Net Bookings |
|
$ |
1,002.5 |
|
100.0 |
% |
|
$ |
711.4 |
|
100 |
% |
|
|
|
|
|
|
|
|
|
|||||||||||||||
ADDITIONAL DATA |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(in millions) |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Three Months Ended |
Net revenue |
|
Cost of goods sold- Software development costs and royalties |
|
Cost of goods sold- Product costs |
|
Cost of goods sold- Internal royalties |
|
Cost of goods sold- Licenses |
|
|
||||||||||||
As reported |
$ |
1,102.4 |
|
|
$ |
165.1 |
|
|
$ |
116.9 |
|
|
$ |
93.4 |
|
|
$ |
60.3 |
|
|
|
||
Net effect from deferred revenue and related cost of goods sold |
|
(99.9 |
) |
|
|
1.5 |
|
|
|
(3.4 |
) |
|
|
|
|
— |
|
|
|
||||
Stock-based compensation |
|
|
|
33.4 |
|
|
|
|
|
|
|
|
|
||||||||||
Amortization and impairment of acquired intangibles |
|
|
|
(96.4 |
) |
|
|
|
|
|
|
|
|
||||||||||
Acquisition related expenses |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Three Months Ended |
Selling and marketing |
|
General and administrative |
|
Research and development |
|
Depreciation and amortization |
|
Interest and other, net |
|
Loss on fair value adjustments, net |
||||||||||||
As reported |
$ |
272.1 |
|
|
$ |
237.1 |
|
|
$ |
172.6 |
|
|
$ |
22.3 |
|
|
$ |
(29.3 |
) |
|
$ |
(39.6 |
) |
Net effect from deferred revenue and related cost of goods sold |
|
|
|
|
|
|
|
|
|
1.6 |
|
|
|
||||||||||
Stock-based compensation |
|
(35.7 |
) |
|
|
(20.5 |
) |
|
|
(21.1 |
) |
|
|
|
|
|
|
||||||
Amortization and impairment of acquired intangibles |
|
(14.9 |
) |
|
|
|
|
|
|
(5.1 |
) |
|
|
|
|
||||||||
Acquisition related expenses |
|
|
|
(101.7 |
) |
|
|
(9.4 |
) |
|
|
|
8.5 |
|
|
39.6 |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Three Months Ended |
Net revenue |
|
Cost of goods sold- Software development costs and royalties |
|
Cost of goods sold- Product costs |
|
Cost of goods sold- Internal royalties |
|
Cost of goods sold- Licenses |
|
|
||||||||||||
As reported |
$ |
813.3 |
|
|
$ |
87.0 |
|
|
$ |
46.9 |
|
|
$ |
145.4 |
|
|
$ |
50.4 |
|
|
|
||
Net effect from deferred revenue and related cost of goods sold |
|
(101.9 |
) |
|
|
(2.9 |
) |
|
|
(5.1 |
) |
|
|
|
|
(0.1 |
) |
|
|
||||
Stock-based compensation |
|
|
|
(12.1 |
) |
|
|
|
|
|
|
|
|
||||||||||
Amortization and impairment of acquired intangibles |
|
|
|
(11.1 |
) |
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Three Months Ended |
Selling and marketing |
|
General and administrative |
|
Research and development |
|
Depreciation and amortization |
|
Interest and other, net |
|
Gain on fair value adjustments, net |
||||||||||||
As reported |
$ |
103.9 |
|
|
$ |
104.4 |
|
|
$ |
92.3 |
|
|
$ |
12.5 |
|
|
$ |
(1.0 |
) |
|
$ |
2.0 |
|
Net effect from deferred revenue and related cost of goods sold |
|
|
|
|
|
|
|
|
|
(0.6 |
) |
|
|
||||||||||
Stock-based compensation |
|
(8.0 |
) |
|
|
(17.2 |
) |
|
|
(11.8 |
) |
|
|
|
|
|
|
||||||
Amortization and impairment of acquired intangibles |
|
(1.8 |
) |
|
|
|
|
(1.7 |
) |
|
|
(0.4 |
) |
|
|
|
|
||||||
Impact of business reorganization |
|
|
|
(0.1 |
) |
|
|
|
|
|
|
|
|
||||||||||
Acquisition related expenses |
|
|
|
(3.4 |
) |
|
|
|
|
|
|
|
|
||||||||||
Gain on fair value adjustments, net |
|
|
|
|
|
|
|
|
|
|
|
(2.0 |
) |
||||||||||
|
|
|
|
|
||||
RECONCILIATION OF GAAP TO NON-GAAP MEASURE |
|
|
|
|
||||
(in millions) |
|
|
|
|
||||
|
|
|
|
|
||||
|
|
Three Months Ended |
||||||
|
|
|
2022 |
|
|
|
2021 |
|
Net cash from operating activities |
|
$ |
100.8 |
|
|
$ |
148.2 |
|
Net change in Restricted cash (1) |
|
|
(115.2 |
) |
|
|
(119.1 |
) |
Adjusted Unrestricted Operating Cash Flow |
|
$ |
(14.4 |
) |
|
$ |
29.1 |
|
|
|
|
|
|
||||
|
|
Three Months Ended |
||||||
|
|
|
2022 |
|
|
|
2021 |
|
Restricted cash beginning of period |
|
$ |
463.3 |
|
|
$ |
637.4 |
|
Restricted cash end of period |
|
|
643.7 |
|
|
|
756.5 |
|
Restricted cash related to acquisitions |
|
|
(65.2 |
) |
|
|
— |
|
(1) Net change in Restricted cash |
|
$ |
(115.2 |
) |
|
$ |
(119.1 |
) |
|
|
|
|
|
||||
RECONCILIATION OF GAAP TO NON-GAAP MEASURE |
|
|
|
|
||||
(in millions) |
|
|
|
|
||||
|
|
|
|
|
||||
|
|
Three Months Ended |
||||||
|
|
|
2022 |
|
|
|
2021 |
|
Net (loss) income |
|
$ |
(104.0 |
) |
|
$ |
152.3 |
|
(Benefit from) provision for income taxes |
|
|
(2.3 |
) |
|
$ |
19.2 |
|
Interest expense (income) |
|
|
24.9 |
|
|
$ |
(1.5 |
) |
Depreciation and amortization |
|
|
22.3 |
|
|
|
12.5 |
|
Amortization of acquired intangibles |
|
|
111.4 |
|
|
|
14.6 |
|
EBITDA |
|
$ |
52.2 |
|
|
$ |
197.1 |
|
Outlook |
|
|
|
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Twelve Months Ending |
Net loss |
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Benefit from income taxes |
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Interest expense |
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Depreciation |
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Amortization of acquired intangibles |
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EBITDA |
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Outlook |
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Three Months Ending |
Net loss |
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Benefit from income taxes |
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Interest expense |
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Depreciation |
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Amortization of acquired intangibles |
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EBITDA |
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View source version on businesswire.com: https://www.businesswire.com/news/home/20220808005557/en/
CONTACT:
(Investor Relations)
Senior Vice President
Investor Relations & Corporate Communications
(646) 536-3005
Nicole.Shevins@take2games.com
(
Vice President
(646) 536-2983
Alan.Lewis@take2games.com
Source: Take-Two Interactive
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