NEW YORK–(BUSINESS WIRE)–Take-Two Interactive Software, Inc. (NASDAQ:TTWO) today reported results for its fiscal third quarter 2020 ended December 31, 2019. In addition, the Company provided its initial outlook for its fiscal fourth quarter ending March 31, 2020 and adjusted its outlook for the fiscal year 2020, ending March 31, 2020. For additional information, please see the fiscal third quarter 2020 results slide deck posted to the Company’s investor relations website at http://ir.take2games.com.
Fiscal Third Quarter 2020 Financial Highlights
GAAP net revenue was $930.1 million, as compared to $1.249 billion in last year’s fiscal third quarter. Recurrent consumer spending (which is generated from ongoing consumer engagement and includes virtual currency, add-on content and in-game purchases) increased 15% and accounted for 37% of total GAAP net revenue. The largest contributors to GAAP net revenue in fiscal third quarter 2020 were NBA(R) 2K20 and NBA 2K19; Grand Theft Auto(R) Online and Grand Theft Auto V; Red Dead Redemption 2 and Red Dead Online; The Outer Worlds; Borderlands(R) 3; WWE(R) 2K20 and WWE SuperCard; Sid Meier’s Civilization VI; and Social Point’s mobile offerings.
Digitally-delivered GAAP net revenue increased to $700.3 million, as compared to $594.7 million in last year’s fiscal third quarter, and accounted for 75% of total GAAP net revenue. The largest contributors to GAAP digitally-delivered net revenue in fiscal third quarter 2020 were NBA 2K20 and NBA 2K19; Grand Theft Auto Online and Grand Theft Auto V; The Outer Worlds; Red Dead Redemption 2 and Red Dead Online; Borderlands 3; Sid Meier’s Civilization VI; Social Point’s mobile offerings; and WWE SuperCard and WWE 2K20.
GAAP net income was $163.6 million, or $1.43 per diluted share, as compared to $179.9 million, or $1.57 per diluted share, for the comparable period last year.
During the nine-month period ended December 31, 2019, GAAP net cash provided by operating activities increased to $440.0 million, as compared to $390.2 million in the same period last year. During the nine-month period ended December 31, 2019, Adjusted Unrestricted Operating Cash Flow (Non-GAAP), which is defined as GAAP net cash from operating activities, adjusted for changes in restricted cash, was $547.9 million, as compared to $587.0 million in the same period last year (please see the section below titled “Non-GAAP Financial Measure” for additional information). As of December 31, 2019, the Company had cash and short-term investments of $1.984 billion.
The following data, together with a management reporting tax rate of 17%, are used internally by the Company’s management and Board of Directors to adjust the Company’s GAAP financial results in order to facilitate comparison of its operating performance between periods and to better understand its core business and future outlook:
Three Months Ended December 31, 2019
Financial Data
$ in thousands
Statement of
operationsChange in deferred
net revenue and
related cost of
goods soldStock-based
compensation
Impact of
business
reorganizationAmortization
& impairment
of acquired
intangible
assets
Net revenue
$930,129
(41,950
)
Cost of goods sold
437,093
(9,980
)
(33,048
)
(3,295
)
Gross Profit
493,036
(31,970
)
33,048
3,295
Operating expenses
316,203
(30,351
)
246
(1,657
)
Income from operations
176,833
(31,970
)
63,399
(246
)
4,952
Interest and other, net
11,943
(1,192
)
Income before income taxes
188,776
(33,162
)
63,399
(246
)
4,952
In order to calculate net income per diluted share for management reporting purposes, the Company uses its fully diluted share count of 114.25 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 third quarter 2020, total Net Bookings were $888.2 million, as compared to $1.569 billion during last year’s fiscal third quarter, which had benefited from the launch of Red Dead Redemption 2. Net Bookings from recurrent consumer spending grew 6% and accounted for 41% of total Net Bookings. The largest contributors to Net Bookings in fiscal third quarter 2020 were Grand Theft Auto Online and Grand Theft Auto V; NBA 2K20; Red Dead Redemption 2 and Red Dead Online; The Outer Worlds; Borderlands 3; WWE 2K20 and WWE SuperCard; Sid Meier’s Civilization VI; and Social Point’s mobile offerings.
Catalog accounted for $359.7 million of Net Bookings led by Grand Theft Auto, Red Dead Redemption, and Social Point’s mobile offerings.
Digitally-delivered Net Bookings were $690.6 million, as compared to $703.8 million in last year’s fiscal third quarter, and accounted for 78% of total Net Bookings. The largest contributors to digitally-delivered Net Bookings in fiscal third quarter 2020 were Grand Theft Auto Online and Grand Theft Auto V; NBA 2K20; Red Dead Redemption 2 and Red Dead Online; The Outer Worlds; Borderlands 3; Sid Meier’s Civilization VI; WWE 2K20 and WWE SuperCard; and Social Point’s mobile offerings.
Management Comments
“Throughout the 2019 holiday season, we experienced robust demand for our offerings that drove third quarter operating results solidly within our increased outlook,” said Strauss Zelnick, Chairman and CEO of Take-Two. “Highlights included the performance of Grand Theft Auto Online and Grand Theft Auto V, NBA 2K20, Red Dead Redemption 2 and Red Dead Online, The Outer Worlds and Borderlands 3, reflecting our ability to deliver some of the most captivating experiences in the entertainment industry. Fiscal 2020 is shaping up to be another terrific year for Take-Two.
“Take-Two’s development pipeline over the coming years is the largest and most diverse in our history, including releases from our largest franchises, new IP and a broad mix of gameplay experiences, all designed to captivate and engage audiences well beyond initial release. In addition, we are actively investing in emerging markets, platforms and business models that have the potential to enhance growth. Take-Two is exceedingly well positioned to capitalize on the many positive trends in our industry and to generate growth and margin expansion over the long-term.”
Business and Product Highlights
Since October 1, 2019:
Rockstar Games:
- Launched Red Dead Redemption 2 for PC. The first game in the Red Dead Redemption series to be offered on PC, the title features a range of graphical and technical enhancements for increased immersion along with new Bounty Hunting Missions, Gang Hideouts, Weapons, a fully featured Photo Mode and more. Red Dead Redemption 2 for PC also includes free access to the shared living world of Red Dead Online, featuring all previously released improvements and the latest content updates for the complete online experience. In addition, Red Dead Redemption 2 was released as a launch title for Google Stadia(TM).
- Released new free content updates for Grand Theft Auto Online, including:
- The Diamond Casino Heist – an all-new approach to Heist architecture and execution with different scenarios unfolding in response to player’s choices as they prepare to execute a takedown of the most secure building in all of Los Santos – featuring new weapons and vehicles, plus an Arcade property featuring playable retro arcade games and more.
- Numerous new missions, vehicles, weapons and other content.
- Released new free content updates for Red Dead Online, including:
- Moonshiners – the latest Frontier Pursuit that enables players to team up with an infamous distiller to start their own Moonshining business and run it out of the new Shack property -featuring new story missions; role-specific weapons, clothing and other items; the ability to run an underground bar; and more.
2K:
- Announced the founding of Cloud Chamber(TM), the newest wholly-owned game development studio under the Company’s publishing label. A collective of storytellers eager to push the frontlines of interactive entertainment by making unique, entertaining and thoughtful experiences that engage the world, Cloud Chamber will build its team at two locations: 2K’s San Francisco Bay Area headquarters in Novato, California, as well as in Montreal, Quebec, which marks the first-ever Canadian office for a 2K studio. In addition, 2K announced that Cloud Chamber has started to work on the next iteration of the globally acclaimed BioShock(R) franchise, which will be in development for the next several years.
- Launched Sid Meier’s Civilization VI for Xbox One and PlayStation 4. Developed by Firaxis Games, and winner of The Game Awards’ Best Strategy Game and DICE Awards’ Best Strategy Game in 2016, Civilization VI is the first Civilization game since 2008 that has been available on Xbox or PlayStation consoles.
- Launched WWE 2K20, the newest release in our WWE video game franchise that is now developed exclusively by Visual Concepts, for PlayStation 4, Xbox One and PC.
- Released Borderlands 3 and NBA 2K20 for Google Stadia.
- Launched Moxxi’s Heist of The Handsome Jackpot, the first campaign add-on for Borderlands 3, for PC, PlayStation 4 and Xbox One. Moxxi’s Heist of The Handsome Jackpot is one of four paid campaign add-ons that are included with the Borderlands 3 Super Deluxe Edition and Season Pass, or for purchase separately. Moxxi’s Heist of the Handsome Jackpot will be coming to Google Stadia early in 2020.
Private Division:
- Launched The Outer Worlds for Xbox One, PlayStation 4 and PC. Created by the renowned RPG developer, Obsidian Entertainment, The Outer Worlds is a dark and witty player-driven story set in a colony at the farthest reaches of the galaxy. The title will also be available for Nintendo Switch, which is now planned for fiscal year 2021.
- Launched Ancestors: The Humankind Odyssey for digital download on PlayStation 4 and Xbox One. Ancestors: The Humankind Odyssey is the debut title from Panache Digital Games, the studio co-founded by Patrice Desilets, the original creative director of the Assassin’s Creed franchise. The title was previously released in August 2019 for digital download on PC.
- Released the Kerbal Space Program Enhanced Edition: Breaking Ground Expansion for PlayStation 4 and Xbox One. The fan-favorite expansion Kerbal Space Program: Breaking Ground previously launched on PC in May 2019.
- Announced that Disintegration, an upcoming sci-fi, first-person shooter, will launch digitally for PlayStation4, Xbox One and PC in calendar 2020, during our fiscal year 2021. Disintegration is the debut title from V1 Interactive, the independent development studio co-founded by Marcus Lehto, former creative director at Bungie and co-creator of Halo.
- Announced that Kerbal Space Program 2, the sequel to the beloved original space sim, is in development and is now planned for launch during our fiscal year 2021. The original Kerbal Space Program has sold-in nearly 4 million units worldwide, and earned a Metacritic rating of 88 and a Steam user score of 91%.
Outlook for Fiscal 2020
Take-Two is providing its initial outlook for its fiscal fourth quarter ending March 31, 2020 and is adjusting its outlook for the fiscal year ending March 31, 2020:
Fourth Quarter Ending March 31, 2020
- GAAP net revenue is expected to range from $635 to $685 million
- GAAP net income is expected to range from $105 to $128 million
- GAAP diluted net income per share is expected to range from $0.92 to $1.12
- Share count used to calculate both GAAP and management reporting diluted net income per share is expected to be 114.6 million (1)
- Net Bookings (operational metric) are expected to range from $540 to $590 million
The Company is also providing selected data and its management reporting tax rate of 17%, which are used internally by its management and Board of Directors to adjust the Company’s GAAP financial outlook in order to facilitate comparison of its operating performance between periods and to better understand its core business and future outlook:
Three Months Ending March 31, 2020
Financial Data
$ in millions
GAAP outlook (2)
Change in
deferred net
revenue and
related cost of
goods soldStock-based
compensationAmortization of
acquired
intangible
assetsNet revenue
$635 to $685
($95)
Cost of goods sold
$274 to $286
($24)
($18)
($2)
Operating Expenses
$247 to $257
($22)
($2)
Interest and other, net
($9)
Income before income taxes
$123 to $151
($71)
$40
$4
Fiscal Year Ending March 31, 2020
- GAAP net revenue is expected to range from $2.96 to $3.01 billion
- GAAP net income is expected to range from $387 to $409 million
- GAAP diluted net income per share is expected to range from $3.38 to $3.58
- Share count used to calculate both GAAP and management reporting diluted net income per share is expected to be 114.6 million (3)
- Net cash provided by operating activities is expected to be over $575 million
- Adjusted Unrestricted Operating Cash Flow (Non-GAAP) is expected to be over $500 million (4)
- Capital expenditures are expected to be approximately $60 million
- Net Bookings (operational metric) are expected to range from $2.80 to $2.85 billion
The Company is also providing selected data and its management reporting tax rate of 17%, which are used internally by its management and Board of Directors to adjust the Company’s GAAP financial outlook in order to facilitate comparison of its operating performance between periods and to better understand its core business and future outlook:
Twelve Months Ending March 31, 2020
Financial Data
$ in millions
GAAP outlook (3)
Change in
deferred net
revenue and
related cost of
goods soldStock-based
compensationAmortization
of acquired
intangible
assets
Reorganization
& acquisition
Net revenue
$2,963 to $3,013
($162)
Cost of goods sold
$1,420 to $1,433
($112)
($91)
($10)
Operating Expenses
$1,125 to $1,135
($106)
($7)
($1)
Interest and other, net
($39)
Income before income taxes
$457 to $484
($50)
$197
$17
$1
1)
Includes 113.4 million basic shares and 1.2 million shares representing the potential dilution from unvested employee stock grants.
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)
Includes 113.1 million basic shares and 1.5 million shares representing the potential dilution from unvested employee stock grants.
4)
Includes a $75.0 million net increase in restricted cash for fiscal 2020.
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; 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; and stable foreign exchange rates. See also “Cautionary Note Regarding Forward Looking Statements” below.
Product Releases
The following titles were released since October 1, 2019:
Label
Title
Platforms
Release Date
2K
WWE 2K20
PS4, Xbox One, PC
October 22, 2019
Private Division
The Outer Worlds
PS4, Xbox One, PC
October 25, 2019
2K
WWE 2K20 Originals: Bump in the Night (DLC)
PS4, Xbox One, PC
October 28, 2019
Rockstar Games
Red Dead Redemption 2
PC
November 5, 2019
2K
WWE SuperCard Season 6
iOS, Android
November 13,2019
Rockstar Games
Red Dead Redemption 2
Stadia
November 19, 2019
2K
NBA 2K20
Stadia
November 19, 2019
2K
Sid Meier’s Civilization VI
Xbox One, PS4
November 22, 2019
2K
Sid Meier’s Civilization VI Expansion Pack Bundle
Xbox One, PS4
November 22, 2019
Private Division
Kerbal Space Program Enhanced Edition: Breaking Ground Expansion
PS4, Xbox One
December 5, 2019
Private Division
Ancestors: The Humankind Odyssey
PS4, Xbox One (digital only)
December 6, 2019
2K
WWE 2K20 SmackDown 20th Anniversary Pack (DLC)
PS4, Xbox One, PC
December 6, 2019
Rockstar Games
Grand Theft Auto Online: The Diamond Casino Heist
PS4, Xbox One, PC
December 12, 2019
Rockstar Games
Red Dead Online: Moonshiners
PS4, Xbox One, PC. Stadia
December 13, 2019
2K
Borderlands 3
Stadia
December 17, 2019
2K
Borderlands 3: Moxxi’s Heist of The Handsome Jackpot (DLC)
PS4, Xbox One, PC
December 19, 2019
2K
WWE 2K20 Originals: Wasteland Wanderers (DLC)
PS4, Xbox One, PC
December 20, 2019
Take-Two’s lineup of future titles announced to date includes:
Label
Title
Platforms
Release Date
2K
WWE 2K20 Originals: Southpaw Regional Wrestling (DLC)
PS4, Xbox One, PC
February 7, 2020
2K
WWE 2K20 Originals: Empire of Tomorrow (DLC)
PS4, Xbox One, PC
Fiscal 2020
Private Division
The Outer Worlds
Switch
Fiscal 2021
Private Division
Kerbal Space Program 2
PC
Fiscal 2021
Private Division
Disintegration
TBA
2020 (fiscal 2021)
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 Measure
In addition to reporting financial results in accordance with U.S. generally accepted accounting principles (GAAP), the Company uses a Non-GAAP measure of financial performance: Adjusted Unrestricted Operating Cash Flow, which is defined as GAAP net cash from operating activities, adjusted for changes in restricted cash. 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.
This Non-GAAP financial measure is not intended to be considered in isolation from, as a substitute for, or superior to, GAAP results. This Non-GAAP financial measure 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 this Non-GAAP financial measure used by the Company. Management believes that the presentation of this Non-GAAP financial measure provides investors with additional useful information to measure Take-Two’s financial and operating performance. In particular, this measure facilitates comparison of our operating performance between periods and may help investors to understand better the operating results of Take-Two. Internally, management uses this Non-GAAP financial measure in assessing the Company’s operating results and in planning and forecasting. A reconciliation of this Non-GAAP financial measure 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 December 31, 2019.
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. We develop and publish products through our labels Rockstar Games, 2K, and Private Division, as well as Social Point, a leading developer of mobile games. Our products are designed for console systems and personal computers, including smartphones and tablets, and are delivered through physical retail, digital download, online platforms and cloud streaming services. The Company’s common stock is publicly traded on NASDAQ under the symbol TTWO. For more corporate and product information please visit our website at http://www.take2games.com.
All trademarks and copyrights contained herein are the property of their respective holders.
Cautionary Note Regarding Forward-Looking Statements
The statements contained herein which are not historical facts are considered forward-looking statements under federal securities laws and may be identified by words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “potential,” “predicts,” “projects,” “seeks,” “should,” “will,” or words of similar meaning and include, but are not limited to, statements regarding the outlook for the Company’s future business and financial performance. Such forward-looking statements are based on the current beliefs of our management as well as assumptions made by and information currently available to them, which are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Actual outcomes and results may vary materially from these forward-looking statements based on a variety of risks and uncertainties including: our dependence on key management and product development personnel, our dependence on our Grand Theft Auto products and our ability to develop other hit titles, the timely release and significant market acceptance of our games, the ability to maintain acceptable pricing levels on our games, and risks associated with international operations. Other important factors and information are contained in the Company’s most recent Annual Report on Form 10-K, including the risks summarized in the section entitled “Risk Factors,” the Company’s most recent Quarterly Report on Form 10-Q, and the Company’s other periodic filings with the SEC, which can be accessed at www.take2games.com. All forward-looking statements are qualified by these cautionary statements and apply only as of the date they are made. The Company undertakes no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) Three months ended December 31, Nine months ended December 31,
2019
2018
2019
2018
Net revenue $
930,129
$
1,248,738
$
2,328,429
$
2,129,387
Cost of goods sold: Software development costs and royalties
130,985
265,166
451,422
337,603
Internal royalties
166,432
401,382
339,312
536,662
Product costs
90,959
183,208
225,162
277,234
Licenses
48,717
48,728
130,914
113,231
Total cost of goods sold
437,093
898,484
1,146,810
1,264,730
Gross profit
493,036
350,254
1,181,619
864,657
Selling and marketing
137,068
161,322
378,455
313,793
General and administrative
84,531
70,638
236,023
205,693
Research and development
82,520
62,305
227,680
173,582
Depreciation and amortization
12,330
10,140
35,611
29,151
Business reorganization
(246
)
(5,930
)
467
(6,172
)
Total operating expenses
316,203
298,475
878,236
716,047
Income from operations
176,833
51,779
303,383
148,610
Interest and other, net
11,943
8,071
30,422
19,647
Income before income taxes
188,776
59,850
333,805
168,257
Provision for (benefit from) income taxes
25,134
(120,098
)
52,068
(108,750
)
Net income $
163,642
$
179,948
$
281,737
$
277,007
Earnings per share: Basic earnings per share $
1.44
$
1.59
$
2.49
$
2.44
Diluted earnings per share $
1.43
$
1.57
$
2.47
$
2.41
Weighted average shares outstanding: Basic
113,251
113,433
112,996
113,390
Diluted
114,254
114,737
114,009
114,918
Computation of Basic EPS: Net income $
163,642
$
179,948
$
281,737
$
277,007
Weighted average shares outstanding – basic
113,251
113,433
112,996
113,390
Basic earnings per share $
1.44
$
1.59
$
2.49
$
2.44
Computation of Diluted EPS: Net income $
163,642
$
179,948
$
281,737
$
277,007
Weighted average shares outstanding – basic
113,251
113,433
112,996
113,390
Add: dilutive effect of common stock equivalents
1,003
1,304
1,013
1,528
Weighted average common shares outstanding – diluted
114,254
114,737
114,009
114,918
Diluted earnings per share $
1.43
$
1.57
$
2.47
$
2.41
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except per share amounts) December 31, March 31,
2019
2019
ASSETS (Unaudited) Current assets: Cash and cash equivalents $
1,284,861
$
826,525
Short-term investments
699,269
744,485
Restricted cash
457,573
565,461
Accounts receivable, net of allowances of $443 and $995 at December 31, 2019 and March 31, 2019, respectively
647,460
395,729
Inventory
24,426
28,200
Software development costs and licenses
59,802
28,880
Deferred cost of goods sold
33,079
51,867
Prepaid expenses and other
228,567
186,688
Total current assets
3,435,037
2,827,835
Fixed assets, net
127,417
127,882
Right-of-use assets
153,053
–
Software development costs and licenses, net of current portion
440,752
603,436
Deferred cost of goods sold, net of current portion
912
1,028
Goodwill
391,815
381,717
Other intangibles, net
56,596
73,115
Deferred tax assets
110,831
134,732
Other assets
163,220
93,320
Total assets $
4,879,633
$
4,243,065
LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $
82,491
$
72,797
Accrued expenses and other current liabilities
1,147,918
1,035,695
Deferred revenue
841,814
843,302
Lease liabilities
24,108
–
Total current liabilities
2,096,331
1,951,794
Non-current deferred revenue
32,962
21,058
Non-current lease liabilities
151,400
–
Other long-term liabilities
196,905
229,633
Total liabilities
2,477,598
2,202,485
Stockholders’ equity: Preferred stock, $.01 par value, 5,000 shares authorized
–
–
Common stock, $.01 par value, 200,000 shares authorized; 135,771 and 134,602 shares issued and 113,350 and 112,181 outstanding at December 31, 2019 and, March 31, 2019, respectively
1,358
1,346
Additional paid-in capital
2,100,373
2,019,369
Treasury stock, at cost; 22,421 common shares at December 31, 2019 and, March 31, 2019, respectively
(820,572
)
(820,572
)
Retained earnings
1,159,363
877,626
Accumulated other comprehensive loss
(38,487
)
(37,189
)
Total stockholders’ equity
2,402,035
2,040,580
Total liabilities and stockholders’ equity $
4,879,633
$
4,243,065
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Nine months ended December 31,
2019
2018
Operating activities: Net income $
281,737
$
277,007
Adjustments to reconcile net income to net cash provided by operating activities: Amortization and impairment of software development costs and licenses
115,823
160,167
Depreciation
35,246
28,769
Amortization of intellectual property
15,981
17,785
Stock-based compensation
176,598
178,609
Other, net
1,809
(3,912
)
Changes in assets and liabilities: Accounts receivable
(249,709
)
(525,981
)
Inventory
3,688
(26,352
)
Software development costs and licenses
(18,552
)
(157,710
)
Prepaid expenses and other current and other non-current assets
(215,060
)
(142,918
)
Deferred revenue
11,751
328,325
Deferred cost of goods sold
18,602
(37,281
)
Accounts payable, accrued expenses and other liabilities
262,061
293,691
Net cash provided by operating activities
439,975
390,199
Investing activities: Change in bank time deposits
114,720
64,101
Proceeds from available-for-sale securities
243,170
184,542
Purchases of available-for-sale securities
(311,995
)
(179,570
)
Purchases of fixed assets
(34,790
)
(43,646
)
Purchases of long-term investments
(26,142
)
–
Business acquisitions
(12,040
)
(3,149
)
Net cash (used in) provided by investing activities
(27,077
)
22,278
Financing activities: Tax payment related to net share settlements on restricted stock awards
(71,260
)
(85,837
)
Issuance of common stock
10,515
–
Repurchase of common stock
–
(262,392
)
Net cash used in financing activities
(60,745
)
(348,230
)
Effects of foreign currency exchange rates on cash, cash equivalents, and restricted cash
(1,705
)
(15,124
)
Net change in cash, cash equivalents, and restricted cash
350,448
49,124
Cash, cash equivalents, and restricted cash, beginning of year
1,391,986
1,246,371
Cash, cash equivalents, and restricted cash, end of period $
1,742,434
$
1,295,495
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES Net Revenue and Net Bookings by Geographic Region, Distribution Channel, and Platform Mix (in thousands) Three Months Ended
December 31, 2019Three Months Ended
December 31, 2018Amount % of Total Amount % of Total Net revenue by geographic region United States $
536,841
58%
$
651,568
52%
International
393,288
42%
597,170
48%
Total net revenue $
930,129
100%
$
1,248,738
100%
Net bookings by geographic region United States $
499,983
56%
$
803,341
51%
International
388,196
44%
765,227
49%
Total net bookings $
888,178
100%
$
1,568,568
100%
Three Months Ended
December 31, 2019Three Months Ended
December 31, 2018Amount % of Total Amount % of Total Net revenue by distribution channel Digital online $
700,321
75%
$
594,722
48%
Physical retail and other
229,808
25%
654,016
52%
Total net revenue $
930,129
100%
$
1,248,738
100%
Net bookings by distribution channel Digital online $
690,558
78%
$
703,777
45%
Physical retail and other
197,621
22%
864,791
55%
Total net bookings $
888,179
100%
$
1,568,568
100%
Three Months Ended
December 31, 2019Three Months Ended
December 31, 2018Amount % of Total Amount % of Total Net revenue by platform mix Console $
679,799
73%
$
1,144,459
92%
PC and other
250,330
27%
104,279
8%
Total net revenue $
930,129
100%
$
1,248,738
100%
Net bookings by platform mix Console $
638,516
72%
$
1,454,394
93%
PC and other
249,663
28%
114,172
7%
Total net bookings $
888,179
100%
$
1,568,568
100%
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES Net Revenue and Net Bookings by Geographic Region, Distribution Channel, and Platform Mix (in thousands) Nine Months Ended
December 31, 2019Nine Months Ended
December 31, 2018Amount % of Total Amount % of Total Net revenue by geographic region United States $
1,361,981
58%
$
1,152,285
54%
International
966,448
42%
977,102
46%
Total net revenue $
2,328,429
100%
$
2,129,387
100%
Net bookings by geographic region United States $
1,326,721
59%
$
1,322,466
54%
International
934,214
41%
1,117,848
46%
Total net bookings $
2,260,935
100%
$
2,440,314
100%
Nine Months Ended
December 31, 2019Nine Months Ended
December 31, 2018Amount % of Total Amount % of Total Net revenue by distribution channel Digital online $
1,743,876
75%
$
1,268,140
60%
Physical retail and other
584,553
25%
861,247
40%
Total net revenue $
2,328,429
100%
$
2,129,387
100%
Net bookings by distribution channel Digital online $
1,768,383
78%
$
1,382,717
57%
Physical retail and other
492,552
22%
1,057,597
43%
Total net bookings $
2,260,935
100%
$
2,440,314
100%
Nine Months Ended
December 31, 2019Nine Months Ended
December 31, 2018Amount % of Total Amount % of Total Net revenue by Platform Mix Console $
1,766,431
76%
$
1,811,429
85%
PC and other
561,998
24%
317,958
15%
Total net revenue $
2,328,429
100%
$
2,129,387
100%
Net bookings by platform mix Console $
1,688,231
75%
$
2,132,285
87%
PC and other
572,704
25%
308,029
13%
Total net bookings $
2,260,935
100%
$
2,440,314
100%
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES ADDITIONAL DATA (in thousands) Three Months Ended December 31, 2019 Net revenue Cost of goods sold-
Software development
costs and royaltiesCost of goods sold-
Internal royaltiesCost of goods sold-
Product costsCost of goods sold-
LicensesSelling and
marketingAs reported $
930,129
$
130,985
$
166,432
$
90,959
$
48,717
$
137,068
Net effect from deferral and related cost of goods sold
(41,950
)
(6,990
)
(3,031
)
41
Stock-based compensation
(33,048
)
(4,113
)
Amortization and impairment of acquired intangibles
(3,295
)
Three Months Ended December 31, 2019 General and
administrativeResearch and
developmentDepreciation and
amortizationBusiness reorganization Interest and other,
netAs reported $
84,531
$
82,520
$
12,330
$
(246
)
$
11,943
Net effect from deferral and related cost of goods sold
(1,192
)
Stock-based compensation
(14,911
)
(11,327
)
Amortization and impairment of acquired intangibles
(1,536
)
(121
)
Impact of business reorganization
246
Three Months Ended December 31, 2018 Net revenue Cost of goods sold-
Software development
costs and royaltiesCost of goods sold-
Internal royaltiesCost of goods sold-
Product costsCost of goods sold-
LicensesSelling and
marketingAs reported $
1,248,738
$
265,166
$
401,382
$
183,208
$
48,728
$
161,322
Net effect from deferral and related cost of goods sold
319,829
42,914
43,948
139
Stock-based compensation
(96,082
)
(6,673
)
Amortization and impairment of acquired intangibles
(3,630
)
Three Months Ended December 31, 2018 General and
administrativeResearch and
developmentDepreciation and
amortizationBusiness reorganization Interest and other,
netAs reported $
70,638
$
62,305
$
10,140
$
(5,930
)
$
8,071
Net effect from deferral and related cost of goods sold
(313
)
Stock-based compensation
(13,790
)
(7,123
)
Amortization and impairment of acquired intangibles
(1,585
)
(125
)
Impact of business reorganization
5,930
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES ADDITIONAL DATA (in thousands) Nine Months Ended December 31, 2019 Net revenue Cost of goods sold-
Software development
costs and royaltiesCost of goods sold-
Internal royaltiesCost of goods sold-
Product costsCost of goods sold-
LicensesSelling and
marketingAs reported $
2,328,429
$
451,422
$
339,312
$
225,162
$
130,914
$
378,455
Net effect from deferral and related cost of goods sold
(67,494
)
(46,310
)
(20,584
)
385
Stock-based compensation
(91,678
)
(14,333
)
Amortization and impairment of acquired intangibles
(10,310
)
Nine Months Ended December 31, 2019 General and
administrativeResearch and
developmentDepreciation and
amortizationBusiness reorganization Interest and other,
netAs reported $
236,023
$
227,680
$
35,611
$
467
$
30,422
Net effect from deferral and related cost of goods sold
(381
)
Stock-based compensation
(42,054
)
(28,533
)
Acquisition related expenses
(367
)
Amortization and impairment of acquired intangibles
(4,642
)
(365
)
Impact of business reorganization
(467
)
Nine Months Ended December 31, 2018 Net revenue Cost of goods sold-
Software development
costs and royaltiesCost of goods sold-
Internal royaltiesCost of goods sold-
Product costsCost of goods sold-
LicensesSelling and marketing As reported $
2,129,387
$
337,603
$
536,662
$
277,234
$
113,231
$
313,793
Net effect from deferral and related cost of goods sold
310,927
46,396
37,087
735
Stock-based compensation
(107,740
)
(16,321
)
Amortization and impairment of acquired intangibles
(12,371
)
Nine Months Ended December 31, 2018 General and
administrativeResearch and
developmentDepreciation and
amortizationBusiness reorganization Interest and other,
netAs reported $
205,693
$
173,582
$
29,151
($
6,172
)
$
19,647
Net effect from deferral and related cost of goods sold
(911
)
Stock-based compensation
(38,234
)
(16,314
)
Non-cash amounts related to convertible notes
91
Amortization and impairment of acquired intangibles
(4,859
)
(382
)
Impact of business reorganization
6,172
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP MEASURE (in thousands) Nine months ended December 31, 2019
2018
Net cash from operating activities $
439,975
$
390,199
Net change in Restricted cash (1)
107,888
196,814
Adjusted Unrestricted Operating Cash Flow $
547,863
$
587,013
FY 2020 FY 2019 Restricted cash beginning of period (4/1) $
565,461
$
437,398
Restricted cash end of period (12/31)
457,573
240,584
(1) Net change in Restricted cash $
107,888
$
196,814