GAAP net revenue grew 39% to $540.5 million
GAAP net income per diluted share was $0.41
GAAP net cash provided by operating activities
increased to $108.5 million
Adjusted Operating Cash Flow (Non-GAAP)
increased to $46.6 million
Net Bookings grew 46% to $422.2 million
Company raises outlook for fiscal year 2020
Take-Two Interactive Software, Inc. (NASDAQ:TTWO) today reported
strong results for its fiscal first quarter 2020 ended June 30,
2019. In addition, the Company provided its initial outlook for its
fiscal second quarter ending September 30, 2019, and raised its
outlook for its fiscal year ending March 31, 2020. For additional
information, please see the fiscal first quarter 2020 results slide
deck posted to the Company’s investor relations website at
http://ir.take2games.com.
Fiscal First Quarter 2020 Financial
Highlights
GAAP Net revenue grew 39% to $540.5 million, as compared to
$388.0 million in last year’s fiscal first quarter. Recurrent
consumer spending (which is generated from ongoing consumer
engagement and includes virtual currency, add-on content and
in-game purchases) increased 31% and accounted for 58% of total
GAAP net revenue. The largest contributors to GAAP net revenue in
fiscal first quarter 2020 were NBA® 2K19, Grand Theft Auto® Online
and Grand Theft Auto V, Red Dead Redemption 2 and Red Dead Online,
the Borderlands franchise, Social Point’s mobile offerings, WWE®
SuperCard and WWE 2K19, and Sid Meier’s Civilization® VI.
Digitally-delivered GAAP net revenue grew 36% to $427.8 million,
as compared to $315.0 million in last year’s fiscal first quarter,
and accounted for 79% of total GAAP net revenue. The largest
contributors to GAAP digitally-delivered net revenue in fiscal
first quarter 2020 were NBA 2K19, Grand Theft Auto Online and Grand
Theft Auto V, Red Dead Redemption 2 and Red Dead Online, the
Borderlands franchise, Social Point’s mobile offerings, and Sid
Meier’s Civilization VI.
GAAP net income was $46.3 million, or $0.41 per diluted share,
as compared to $71.7 million, or $0.62 per diluted share, for the
comparable period last year.
During the 3-month period ended June 30, 2019, GAAP net cash
provided by (used in) operating activities increased to $108.5
million, as compared to ($11.2) million in the same period last
year. During the 3-month period ended June 30, 2019, Adjusted
Operating Cash Flow (Non-GAAP), which is defined as GAAP net cash
from operating activities, adjusted for changes in restricted cash,
increased to $46.6 million, as compared to ($83.2) million in the
same period last year (please see the section below titled
“Non-GAAP Financial Measure” for additional information). As of
June 30, 2019, the Company had cash and short-term investments of
$1.542 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 June 30,
2019
Financial Data
$ in thousands
Statement of
operations
Change in deferred net revenue
and related cost of goods sold
Stock-based
compensation
Impact of business
reorganization
Business acquisition
Amortization & impairment
of acquired intangible assets
Net revenue
$540,459
(118,220
)
Cost of goods sold
241,469
(29,597
)
(30,798
)
(3,705
)
Gross Profit
298,990
(88,623
)
30,798
3,705
Operating expenses
247,260
(26,634
)
(386
)
(326
)
(1,683
)
Income from operations
51,730
(88,623
)
57,432
386
326
5,388
Interest and other, net
10,425
(494
)
Income before income taxes
62,155
(89,117
)
57,432
386
326
5,388
In order to calculate net income per diluted share for
management reporting purposes, the Company uses its fully diluted
share count of 113.7 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 2020, total Net Bookings grew 46% to
$422.2 million, as compared to $288.3 million during last year’s
fiscal first quarter. Net Bookings from recurrent consumer spending
grew 55% and accounted for 67% of total Net Bookings. The largest
contributors to Net Bookings in fiscal first quarter 2020 were
Grand Theft Auto Online and Grand Theft Auto V, NBA 2K19, the
Borderlands franchise, Red Dead Redemption 2 and Red Dead Online,
Social Point’s mobile offerings, WWE SuperCard and WWE 2K19, and
Sid Meier’s Civilization VI.
Catalog accounted for $394.7 million of Net Bookings led by
Grand Theft Auto, NBA 2K, Borderlands, and Social Point’s mobile
offerings.
Digitally-delivered Net Bookings grew 51% to $382.5 million, as
compared to $252.8 million in last year’s fiscal first quarter, and
accounted for 91% of total Net Bookings. The largest contributors
to digitally-delivered Net Bookings in fiscal first quarter 2020
were NBA 2K19, Grand Theft Auto Online and Grand Theft Auto V, the
Borderlands franchise, Red Dead Redemption 2 and Red Dead Online,
Social Point’s mobile offerings, and Sid Meier’s Civilization
VI.
Management Comments
“Fiscal 2020 is off to a terrific start with first quarter
operating results that beat our expectations,” said Strauss
Zelnick, Chairman and CEO of Take-Two. “We delivered significant
Net Bookings and cash flow growth driven by the performance of
Grand Theft Auto Online and Grand Theft Auto V, NBA 2K19, the
Borderlands franchise, and Red Dead Redemption 2 and Red Dead
Online.
“As a result of our better-than-expected first quarter operating
results and increased forecast for the balance of the year, we are
raising our outlook for fiscal 2020, which is anticipated to be
another great year for our organization. We aim to build on this
strong start by delivering a robust array of titles throughout the
year, including Ancestors: The Humankind Odyssey, NBA 2K20,
Borderlands 3, WWE 2K20 and The Outer Worlds, as well as new and
innovative ways for consumers to remain engaged with their favorite
entertainment experiences.
“Looking ahead, Take-Two has the strongest development pipeline
in its history, including sequels from our biggest franchises as
well as exciting new IP. We are exceedingly well positioned to
capitalize on the positive trends in our industry, and to generate
significant growth and margin expansion over the long-term.”
Business and Product
Highlights
Since April 1, 2019:
Rockstar Games:
- Red Dead Online exited the Beta phase on May 14, 2019 with a
massive update that brought a host of new gameplay including new
cooperative story missions, Free Roam activities and the addition
of Poker, along with a range of updates and improvements that
strengthen and stabilize the foundational world of the Red Dead
Online experience. In addition, throughout the period, Rockstar
Games released additional content and gameplay for Red Dead Online
as follows:
- Showdown Modes, including Sport of Kings, Head for the Hills,
Plunder, Up in Smoke, and Spoils of War. These player-versus-player
modes are tight, dramatic competitive matches that allow for quick
structured gameplay sessions;
- Numerous new Weapons, Clothing, Emotes and more.
Starting this summer, players will be able to
take on the first three of a series of new roles: track down wanted
criminals as a bounty hunter; search the world for treasure and
other exotic items to sell as a collector; or build a business at
camp as a trader and more.
- Released new free content updates for Grand Theft Auto Online,
including:
- The Diamond Casino & Resort, which enables players to try
their luck at a variety of casino games or just stay in the most
luxurious residence in all of Los Santos. More than just a place to
let go of your inhibitions, The Diamond is the one-stop destination
for quality entertainment, high-end living and a range of
experiences you won’t find anywhere else. The Diamond Casino &
Resort update was Grand Theft Auto Online’s biggest launch ever,
delivering record player engagement in daily active users, weekly
active users and monthly active users.
- Numerous new missions, vehicles, weapons and other
content.
- Announced an exciting new program through which Rockstar Games
Social Club members and Twitch Prime subscribers receive free
in-game rewards, bonuses and exclusive discounts in both Grand
Theft Auto Online and Red Dead Online simply by linking their
Twitch Prime and Social Club accounts. Benefits continue for months
to come and include special in-game benefits for both Red Dead
Online and Grand Theft Auto Online.
2K:
- Launched the Borderlands: Game of the Year Edition on
PlayStation 4, Xbox One, and Windows PC. This brand new definitive
version of the original game boasts ultra HD remastered graphics,
significant quality-of-life content updates, and includes all
add-on content. In addition, Gearbox Software and 2K released an
Ultra HD Texture Pack that increases the visual fidelity of
Borderlands: The Handsome Collection on consoles, and provides a
visual upgrade for Borderlands 2, Borderlands: The Pre-Sequel, and
all the game add-ons for both titles on PC.
- Released the Sid Meier’s Civilization VI: Rise and Fall
expansion pack for iOS through Aspyr. Developed by Firaxis Games,
Rise and Fall was originally released for PC in February 2018. 2K
also announced that they will bring all of the previously released
add-on content for Civilization VI to both iOS and Nintendo Switch
later this year.
- Released NBA 2K Mobile as a free download for Android devices.
Previously launched on iOS phones and tablets, NBA 2K Mobile
enables players to experience console quality graphics on the go
while they collect their favorite NBA players, build dream teams,
and step onto the court in lifelike 5v5 match-ups.
- Announced that current Raw® Women’s Champion Becky Lynch® and
WWE Superstar Roman Reigns™ will be the cover Superstars for WWE
2K20, the forthcoming release in our flagship WWE video game
franchise. WWE 2K20 is scheduled for worldwide release on October
22, 2019 for PlayStation 4, Xbox One and PC.
- Announced the cover athletes for NBA 2K20, the next iteration
of the top-rated and top-selling NBA video game simulation series*.
Six-time NBA All-Star, three-time All-NBA First Team, three-time
NBA All-Defensive Team and 2012 Olympic gold medalist Anthony Davis
returns as cover star for the Standard and Deluxe Editions.
Three-time NBA Champion, 13-time NBA All-Star, 2008 Olympic gold
medalist and 2006 NBA Finals MVP Dwyane Wade will grace the cover
of the Legend Edition. NBA 2K20 will be available worldwide on
PlayStation 4, Xbox One, Nintendo Switch and PC on September 6,
2019. NBA 2K20 will also be available on Google Stadia when it
launches later this year.
- Announced that Borderlands® 3, the next installment in the
critically acclaimed shooter-looter series from Gearbox Software,
will launch worldwide on September 13, 2019 for PlayStation 4, Xbox
One and Windows PC. At launch, Borderlands 3 will be available for
PC exclusively through the Epic Games store and will be available
on additional PC digital storefronts in April 2020. Borderlands 3
will also be available on Google Stadia when it launches later this
year.
Private Division:
- Released the Kerbal Space Program: Breaking Ground Expansion
for PC. Developed by Squad, Kerbal Space Program: Breaking Ground
Expansion is the second expansion for the critically acclaimed
space simulation game.
- Announced Disintegration, an upcoming sci-fi, first-person
shooter that will be fully unveiled later this month at gamescom
2019. Disintegration is the debut title from V1 Interactive, the
independent development studio co-founded in 2014 by Marcus Lehto,
former creative director at Bungie and co-creator of Halo.
Disintegration will be available in calendar 2020 (fiscal year
2021).
- Announced that The Outer Worlds will launch on October 25, 2019
for Xbox One, PlayStation 4 and PC, and will come to Nintendo
Switch following the release on the other platforms. 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 Outer Worlds will be available
on PC through the Epic Games Store and Microsoft Windows Store for
the first year, at which point it will come to additional digital
PC retailers.
- Announced that Ancestors: The Humankind Odyssey will launch
digitally for PC on August 27, 2019, and digitally on PlayStation4
and Xbox One in December of 2019. Ancestors: The Humankind Odyssey
is the debut title from Panache Digital Games, the studio
co-founded in 2014 by Patrice Désilets, the original creative
director of the Assassin’s Creed franchise. The title will be
available for PC exclusively through the Epic Games Store for the
first year, at which point it will come to additional digital PC
retailers.
Social Point:
- Launched Word Life, our latest free-to-play mobile offering,
for iOS and Android devices. The game brings a new dimension to
traditional word puzzle games, boasting a multiplayer mode where
players can battle with words in exciting match-offs to see who is
the most-skilled competitor.
* According to 2000 - 2019 Metacritic.com and
Gamerankings.com.
Outlook for Fiscal 2020
Take-Two is providing its initial outlook for its fiscal second
quarter ending September 30, 2019 and is raising its outlook for
the fiscal year ending March 31, 2020:
Second Quarter Ending September 30, 2019
- GAAP net revenue is expected to range from $855 to $905
million
- GAAP net income is expected to range from $118 to $130
million
- GAAP diluted net income per share is expected to range from
$1.04 to $1.14
- Share count used to calculate both GAAP and management
reporting diluted net income per share is expected to be 113.8
million (1)
- Net Bookings (operational metric) are expected to range from
$860 to $910 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 September
30, 2019
Financial Data
$ in millions
GAAP outlook (2)
Change in deferred net revenue
and related cost of goods sold
Stock-based
compensation
Amortization of acquired
intangible assets
Net revenue
$855 to $905
$5
Cost of goods sold
$415 to $442
($10)
($23)
($2)
Operating Expenses
$312 to $322
($20)
($2)
Interest and other, net
($9)
Income before income taxes
$137 to $151
$15
$43
$4
Fiscal Year Ending March 31, 2020
- GAAP net revenue is expected to range from $2.83 to $2.93
billion
- GAAP net income is expected to range from $425 to $454
million
- GAAP diluted net income per share is expected to range from
$3.71 to $3.96
- 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 $430 million
- Adjusted Operating Cash Flow (Non-GAAP) is expected to be over
$450 million (4)
- Capital expenditures are expected to be approximately $90
million
- Net Bookings (operational metric) are expected to range from
$2.6 to $2.7 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 sold
Stock-based
compensation
Amortization of acquired
intangible assets
Reorganization &
acquisition
Net revenue
$2,830 to $2,930
($230)
Cost of goods sold
$1,296 to $1,341
($110)
($90)
($10)
Operating Expenses
$1,072 to $1,092
($84)
($7)
($1)
Interest and other, net
($39)
Income before income taxes
$501 to $536
($120)
$174
$17
$1
1)
Includes 113.1 million basic shares and
0.7 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 $20.0 million net decrease 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 April 1, 2019:
Label
Title
Platforms
Release Date
2K
Borderlands: Game of the Year Edition
PS4, Xbox One, PC
April 3, 2019
2K
NBA 2K Mobile
Android
April 17,2019
Social Point
Word Life
iOS, Android
May 9, 2019
Rockstar Games
Red Dead Online Spring Update
PS4, Xbox One
May 14, 2019
Private Division
Kerbal Space Program: Breaking Ground
(DLC)
PC
May 30, 2019
Rockstar Games
Grand Theft Auto Online: The Diamond
Casino & Resort
PS4, Xbox One, PC
July 23, 2019
2K
Sid Meier’s Civilization VI: Rise and Fall
(Expansion Pack)
iOS
July 23, 2019
Take-Two's lineup of future titles announced to date
includes:
Label
Title
Platforms
Release Date
Private Division
Ancestors: The Humankind Odyssey
PC (digital only)
August 27, 2019
2K
NBA 2K20
PS4, Xbox One, Switch, PC
September 6, 2019
2K
Borderlands 3
PS4, Xbox One, PC
September 13, 2019
2K
WWE 2K20
PS4, Xbox One, PC
October 22, 2019
Private Division
The Outer Worlds
PS4, Xbox One, PC
October 25, 2019
Private Division
The Outer Worlds
Switch
TBA
2K
NBA 2K20
Stadia
November 2019
2K
Borderlands 3
Stadia
November 2019
Private Division
Ancestors: The Humankind Odyssey
PS4, Xbox One (digital only)
December 2019
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
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
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 June 30,
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. The Company develops
and publishes products principally through its wholly-owned labels
Rockstar Games and 2K, as well as its Private Division label and
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 June
30,
2019
2018
Net revenue
$
540,459
$
387,982
Cost of goods sold: Software development costs and royalties
108,441
29,788
Internal royalties
62,889
53,167
Product costs
47,635
38,141
Licenses
22,504
10,269
Total cost of goods sold
241,469
131,365
Gross profit
298,990
256,617
Selling and marketing
91,821
58,306
General and administrative
74,833
67,735
Research and development
68,963
50,712
Depreciation and amortization
11,257
9,260
Business reorganization
386
(242
)
Total operating expenses
247,260
185,771
Income from operations
51,730
70,846
Interest and other, net
10,425
6,601
Income before income taxes
62,155
77,447
Provision for income taxes
15,875
5,754
Net income
$
46,280
$
71,693
Earnings per share: Basic earnings per share
$
0.41
$
0.63
Diluted earnings per share
$
0.41
$
0.62
Weighted average shares outstanding: Basic
112,621
112,941
Diluted
113,728
115,985
Computation of Basic EPS: Net income
$
46,280
$
71,693
Weighted average shares outstanding - basic
112,621
112,941
Basic earnings per share
$
0.41
$
0.63
Computation of Diluted EPS: Net income
$
46,280
$
71,693
Add: interest expense, net of tax, on Convertible Notes
-
95
Net income for diluted EPS calculation
$
46,280
$
71,788
Weighted average shares outstanding - basic
112,621
112,941
Add: dilutive effect of common stock equivalents
1,107
3,044
Weighted average common shares
outstanding - diluted
113,728
115,985
Diluted earnings per share
$
0.41
$
0.62
TAKE-TWO INTERACTIVE SOFTWARE,
INC. and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (in thousands, except per
share amounts) June 30, March 31,
2019
2019
ASSETS Current assets: Cash and cash equivalents
$
984,625
$
826,525
Short-term investments
557,653
744,485
Restricted cash
627,370
565,461
Accounts receivable, net of allowances of $445 and $995 at June 30,
2019 and March 31, 2019, respectively
352,625
395,729
Inventory
23,847
28,200
Software development costs and licenses
18,070
28,880
Deferred cost of goods sold
36,565
51,867
Prepaid expenses and other
220,324
186,688
Total current assets
2,821,079
2,827,835
Fixed assets, net
126,393
127,882
Right-of-use assets
124,859
-
Software development costs and licenses, net of current portion
633,597
603,436
Deferred cost of goods sold, net of current portion
525
1,028
Goodwill
391,404
381,717
Other intangibles, net
68,008
73,115
Deferred tax assets
108,979
134,732
Other assets
91,378
93,320
Total assets
$
4,366,222
$
4,243,065
LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities: Accounts payable
$
55,379
$
72,797
Accrued expenses and other current liabilities
1,038,748
1,035,695
Deferred revenue
826,085
843,302
Lease liabilities
21,794
Total current liabilities
1,942,006
1,951,794
Non-current deferred revenue
22,097
21,058
Non-current lease liabilities
125,128
-
Other long-term liabilities
190,664
229,633
Total liabilities
2,279,895
2,202,485
Stockholders' equity: Preferred stock, $.01 par
value, 5,000 shares authorized
-
-
Common stock, $.01 par value, 200,000 shares authorized; 135,527
and 134,602 shares issued and 113,106 and 112,181 outstanding at
June 30, 2019 and, March 31, 2019, respectively
1,355
1,346
Additional paid-in capital
2,025,626
2,019,369
Treasury stock, at cost; 22,421 common shares at June 30, 2019 and,
March 31, 2019, respectively
(820,572
)
(820,572
)
Retained earnings
923,906
877,626
Accumulated other comprehensive loss
(43,988
)
(37,189
)
Total stockholders' equity
2,086,327
2,040,580
Total liabilities and stockholders' equity
$
4,366,222
$
4,243,065
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
Three months ended June 30,
2019
2018
Operating activities: Net income
$
46,280
$
71,693
Adjustments to reconcile net income to net cash provided by (used
in) operating activities: Amortization and impairment of software
development costs and licenses
30,498
6,858
Depreciation
11,134
9,130
Amortization of intellectual property
5,560
6,861
Stock-based compensation
57,432
24,598
Other, net
1,321
(2,980
)
Changes in assets and liabilities: Accounts receivable
44,041
61,355
Inventory
4,029
3,692
Software development costs and licenses
(56,968
)
(54,663
)
Prepaid expenses and other current and other non-current assets
(131,121
)
(21,464
)
Deferred revenue
(15,871
)
(95,075
)
Deferred cost of goods sold
15,619
8,409
Accounts payable, accrued expenses and other liabilities
96,581
(29,597
)
Net cash provided by (used in) operating activities
108,535
(11,183
)
Investing activities: Change in bank time deposits
133,303
(29,840
)
Proceeds from available-for-sale securities
82,424
51,388
Purchases of available-for-sale securities
(28,248
)
(44,108
)
Purchases of fixed assets
(9,971
)
(14,289
)
Purchase of long-term investment
(2,000
)
-
Business acquisitions
(8,715
)
(3,149
)
Net cash provided by (used in) investing activities
166,793
(39,998
)
Financing activities: Tax payment related to net
share settlements on restricted stock awards
(52,118
)
(58,403
)
Repurchase of common stock
-
(153,500
)
Net cash used in financing activities
(52,118
)
(211,903
)
Effects of foreign currency exchange rates on cash and cash
equivalents
(3,201
)
(9,103
)
Net change in cash and cash equivalents and restricted cash
220,009
(272,187
)
Cash and cash equivalents and restricted cash, beginning of year
1,391,986
1,246,371
Cash and cash equivalents and restricted cash, end of period
$
1,611,995
$
974,184
TAKE-TWO INTERACTIVE SOFTWARE, INC. and
SUBSIDIARIES Net Revenue and Net Bookings by Geographic
Region, Distribution Channel, and Platform Mix (in
thousands) Three Months EndedJune 30, 2019 Three
Months EndedJune 30, 2018
Amount % of Total Amount %
of Total
Net revenue by geographic region United
States
$
330,479
61
%
$
221,411
57
%
International
209,980
39
%
166,571
43
%
Total net revenue
$
540,459
100
%
$
387,982
100
%
Net bookings by geographic region United States
$
259,235
61
%
$
156,648
54
%
International
163,005
39
%
131,677
46
%
Total net bookings
$
422,240
100
%
$
288,325
100
%
Three Months EndedJune 30, 2019 Three Months
EndedJune 30, 2018
Amount % of Total Amount % of
Total
Net revenue by distribution channel Digital
online
$
427,781
79
%
$
315,047
81
%
Physical retail and other
112,678
21
%
72,935
19
%
Total net revenue
$
540,459
100
%
$
387,982
100
%
Net bookings by distribution channel Digital online
$
382,478
91
%
$
252,761
88
%
Physical retail and other
39,762
9
%
35,564
12
%
Total net bookings
$
422,240
100
%
$
288,325
100
%
Three Months EndedJune 30, 2019 Three Months
EndedJune 30, 2018
Amount % of Total Amount % of
Total
Net revenue by platform mix Console
$
434,814
80
%
$
294,730
76
%
PC and other
105,645
20
%
93,252
24
%
Total net revenue
$
540,459
100
%
$
387,982
100
%
Net bookings by platform mix Console
$
312,631
74
%
$
199,921
69
%
PC and other
109,609
26
%
88,404
31
%
Total net bookings
$
422,240
100
%
$
288,325
100
%
TAKE-TWO INTERACTIVE SOFTWARE, INC. and
SUBSIDIARIES ADDITIONAL DATA (in thousands)
Three Months Ended June 30, 2019 Net revenue Cost
of goods sold-Software developmentcosts and royalties Cost
of goods sold-Internal royalties Cost of goods sold-Product
costs Cost of goods sold-Licenses Selling
andmarketing As reported
$
540,459
$
108,441
$
62,889
$
47,635
$
22,504
$
91,821
Net effect from deferral and related cost of goods sold
(118,220
)
(13,159
)
(15,649
)
(789
)
Stock-based compensation
(30,798
)
(6,476
)
Amortization and impairment of acquired intangibles
(3,705
)
Three Months Ended June 30, 2019 General
andadministrative Research anddevelopment
Depreciation andamortization Business reorganization
Interest and other,net As reported
$
74,833
$
68,963
$
11,257
$
386
$
10,425
Net effect from deferral and related cost of goods sold
(494
)
Stock-based compensation
(13,567
)
(6,591
)
Amortization and impairment of acquired intangibles
(1,560
)
(123
)
Impact of business reorganization
(386
)
Acquisition related expenses
(326
)
Three Months Ended June 30, 2018 Net revenue
Cost of goods sold-Software developmentcosts and royalties
Cost of goods sold-Internal royalties Cost of goods
sold-Product costs Cost of goods sold-Licenses
Selling andmarketing As reported
$
387,982
$
29,788
$
53,167
$
38,141
$
10,269
$
58,306
Net effect from deferral and related cost of goods sold
(99,657
)
(9
)
(8,405
)
Stock-based compensation
(3,969
)
(4,774
)
Amortization and impairment of acquired intangibles
(5,072
)
Acquisition related expenses
Three Months Ended June 30,
2018 General andadministrative Research
anddevelopment Depreciation andamortization Business
reorganization Interest and other,net As
reported
$
67,735
$
50,712
$
9,260
$
(242
)
$
6,601
Net effect from deferral and related cost of goods sold
(595
)
Stock-based compensation
(11,518
)
(4,337
)
Amortization and impairment of acquired intangibles
(1,659
)
(130
)
Non-cash amounts related to convertible notes
91
Impact of business reorganization
242
Acquisition related expenses
(194
)
TAKE-TWO INTERACTIVE SOFTWARE, INC. and
SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP MEASURE
(in thousands) Three months ended June 30,
2019
2018
Net cash from operating activities
$
108,535
$
(11,183
)
Net change in Restricted cash (1)
(61,909
)
(71,982
)
Adjusted Operating Cash Flow
$
46,626
$
(83,165
)
FY 2020 FY 2019 Restricted cash
beginning of period (4/1)
$
565,461
$
437,398
Restricted cash end of period (6/30)
627,370
509,380
(1) Net change in Restricted cash
$
(61,909
)
($
71,982
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190805005545/en/
(Investor Relations) Henry A. Diamond Senior Vice President
Investor Relations & Corporate Communications Take-Two
Interactive Software, Inc. (646) 536-3005
Henry.Diamond@take2games.com (Corporate Press) Alan Lewis Vice
President Corporate Communications & Public Affairs Take-Two
Interactive Software, Inc. (646) 536-2983
Alan.Lewis@take2games.com
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