Summary
Take-Two Interactive Software, Inc. (TTWO) filed a Transition Report on Form 10-KT for the five-month period ending March 31, 2010, covering a transition in their fiscal year end. The company operates as a global publisher and developer of interactive entertainment software, with key labels Rockstar Games and 2K. During this period, TTWO faced a challenging economic environment impacting consumer spending, although net revenue saw an increase compared to the prior year's comparable period, driven by strong performances from titles like BioShock 2 and Borderlands, partially offset by decreased sales of the Grand Theft Auto franchise. The company is strategically focused on developing premium quality games and successful franchises, emphasizing internally owned intellectual property. They are also leveraging emerging technologies like downloadable content and expanding into international markets, particularly Asia. Despite revenue growth in this transition period, TTWO reported a net loss, reflecting ongoing investments in development and marketing, as well as the impact of a discontinued distribution business. Investors should note the company's reliance on 'hit' titles, the competitive nature of the industry, and risks associated with product development cycles and platform dependence.
Financial Highlights
50 data points| Revenue | $762.94M |
| Cost of Revenue | $494.58M |
| Gross Profit | $268.36M |
| R&D Expenses | $57.89M |
| Operating Expenses | $344.48M |
| Operating Income | -$76.12M |
| Net Income | -$123.00M |
| EPS (Basic) | $-1.58 |
| EPS (Diluted) | $-1.58 |
| Shares Outstanding (Basic) | 77.86M |
| Shares Outstanding (Diluted) | 77.86M |
Key Highlights
- 1The company has shifted its fiscal year end to March 31, making this filing a Transition Report for the period November 1, 2009, to March 31, 2010.
- 2Net revenue for the transition period increased by 20.8% compared to the prior year's comparable period, reaching $359.2 million, driven by new releases and franchise performance.
- 3Despite revenue growth, the company reported a net loss of $28.8 million for the transition period, an improvement from the $46.3 million loss in the prior year's comparable period.
- 4Key franchises like Grand Theft Auto continued to be significant revenue drivers, though sales decreased year-over-year, while new titles like BioShock 2 and Borderlands showed strong performance.
- 5TTWO continues to focus on developing internally owned intellectual property and leveraging emerging technologies such as downloadable content and expanding its presence in international markets, especially in Asia.
- 6The company sold its Jack of all Games third-party distribution business in February 2010, with results classified as discontinued operations.
- 7The company faces significant risks including dependence on 'hit' titles, industry competition, product development cycles, and reliance on major hardware platforms and a limited number of key customers.