Take-Two Interactive Software(TTWO) - 2025 Q3 - Quarterly Report

Revenue Generation - Take-Two's Grand Theft Auto products generated 13% of net revenue for the nine months ended December 31, 2024[129]. - Net revenue from digital online channels comprised 96.4% of net revenue for the nine months ended December 31, 2024[133]. - The NBA 2K Online game in China has over 65 million registered users, making it the top online PC sports game in the region[127]. - The company derives a substantial portion of its revenue from console products, which comprised 37.2% of net revenue for the nine months ended December 31, 2024[132]. - Net revenue from mobile increased by $161.4 million, accounting for 54.2% of total net revenue, up from 51.5% in the prior year period[176]. - Net revenue from digital online channels increased to$ 1,310.7 million, accounting for 96.4% of total net revenue, compared to 94.9% in the prior year[149]. - The five largest customers accounted for 81.8% of net revenue during the nine months ended December 31, 2024, indicating a high concentration of revenue from major clients[209]. Future Releases - Rockstar Games plans to release Grand Theft Auto VI in the fall of calendar year 2025[123]. - The company expects to continue to deliver new content for its franchises throughout the year[138]. - 2K plans to release Sid Meier's Civilization VII, PGA TOUR 2K25, and WWE 2K25 during the remainder of fiscal year 2025[137]. Financial Performance - Net Bookings for the three months ended December 31, 2024, were $1,373.4 million, an increase of 2.7% compared to$ 1,337.8 million in the prior year[141]. - Total net revenue for the three months ended December 31, 2024, was $1,359.8 million, a slight decrease of 0.5% from$ 1,366.3 million in the same period last year[144]. - Gross profit for the three months ended December 31, 2024, was $759.9 million, representing 55.9% of net revenue, up from 49.7% in the prior year[150]. - The company reported a net loss of$ 125.2 million for the three months ended December 31, 2024, compared to a net loss of $91.6 million in the prior year[144]. - For the nine months ended December 31, 2024, total net revenue was$ 4,051.1 million, representing a 2.6% increase from $3,950.2 million in the prior year period[175]. - Net loss for the three months ended December 31, 2024, was$ 125.2 million, compared to a net loss of $91.6 million in the prior year period[174]. - Net loss for the nine months ended December 31, 2024, was$ 752.7 million, an improvement from a net loss of $841.2 million in the prior year, with a basic and diluted loss per share of$ 4.31[201]. Operating Expenses - Total operating expenses for the three months ended December 31, 2024, were $892.0 million, representing 65.5% of net revenue, an increase from 59.1% in the prior year[152]. - Selling and marketing expenses increased by$ 21.6 million for the three months ended December 31, 2024, mainly due to higher marketing expenses for Match Factory![156]. - General and administrative expenses increased by $24.6 million for the three months ended December 31, 2024, driven by higher personnel and consulting expenses[157]. - Total operating expenses for the nine months ended December 31, 2024, were$ 2,873.1 million, representing 70.9% of net revenue, an increase of $222.9 million or 8.4% compared to the prior year[181]. - Selling and marketing expenses increased by$ 180.3 million to $1,281.6 million, accounting for 31.6% of net revenue, primarily due to higher marketing expenses for the Match Factory! release[182]. - Research and development expenses increased by$ 8.9 million for the three months ended December 31, 2024, primarily due to increased headcount[159]. - General and administrative expenses increased by $111.9 million to$ 653.1 million, or 16.1% of net revenue, due to higher legal fees, personnel expenses, and IT-related costs[184]. Cash and Liquidity - As of December 31, 2024, the company had $1,308.9 million in cash and cash equivalents, an increase from$ 1,102.0 million at March 31, 2024, primarily due to net cash provided by financing activities[214]. - Cash and cash equivalents held outside of the U.S. by foreign subsidiaries amounted to $804.9 million, supporting the liquidity needs of the company's international operations[212]. - For the nine months ended December 31, 2024, net cash used in operating activities was$ (324.2) million, compared to $(7.2) million for the same period in 2023[214]. - As of December 31, 2024, the company had$ 3,650.0 million of Senior Notes outstanding and $747.8 million available for additional borrowings under the 2022 Credit Agreement[204][205]. Economic Factors - The company continues to monitor macroeconomic factors that may affect consumer demand and pricing pressure on products[130]. - The company anticipates fluctuations in quarterly operating results due to various factors, including the timing of new title introductions and seasonal demand[219]. - A hypothetical 10% increase in the value of the U.S. dollar against all currencies would decrease revenues by 3.9%, while a 10% decrease would increase revenues by 3.9%[229]. Currency and Foreign Operations - The company recorded a foreign currency translation adjustment loss of$ 104.3 million for the three months ended December 31, 2024, compared to a gain of $66.3 million for the same period in 2023[226]. - The company had$ 270.3 million of forward contracts outstanding to sell foreign currencies in exchange for U.S. dollars as of December 31, 2024[228]. - For the three months ended December 31, 2024, 39.3% of the company's net revenue was generated outside the United States, compared to 40.1% for the same period in 2023[217]. Taxation - The effective tax rate for the three months ended December 31, 2024, was 18.1%, down from 39.9% in the prior year period, primarily due to decreased tax benefits related to unrecognized tax benefits[165].