01—Abstract
Summary
Summary of the 10-K filed May 19, 2016. Cited figures are marked; the original filing is the authoritative source.
Take-Two Interactive Software, Inc. (TTWO) reported its annual results for the fiscal year ended March 31, 2016, showcasing a significant revenue increase of 30.5% to $1.41 billiona, largely driven by the enduring success of its Grand Theft Auto franchise, particularly Grand Theft Auto V and its online component.
Despite the revenue growth, the company reported a net loss of $8.3 millionb, an improvement from the prior year's net loss of $279.5 million. This indicates a shift towards profitability, although the company is still navigating development costs and market dynamics. The company's strategy remains focused on developing and publishing high-quality, internally-owned franchises through its Rockstar Games and 2K labels.
A key trend highlighted is the increasing importance of digital distribution and recurrent consumer spending, which now accounts for a substantial portion of revenue. International markets also continue to be a significant contributor, representing 47.4%c of net revenue. Management acknowledges the inherent seasonality and reliance on 'hit' titles, with Grand Theft Auto alone contributing over 54% of revenue, underscoring both its strength and a potential area of risk.
02—Key points
Key Highlights
- Revenue increased by 30.5% to $1.41 billion for the fiscal year ended March 31, 2016, driven by strong performance from the Grand Theft Auto franchise.
- Reported a net loss of $8.3 million, a significant improvement from a net loss of $279.5 million in the prior fiscal year.
- Digital online channels accounted for 49.3% of net revenue, indicating a growing shift towards digital distribution and recurrent consumer spending.
- The Grand Theft Auto franchise remains a critical revenue driver, contributing 54.5% of total net revenue for the fiscal year.
- International sales represented 47.4% of total net revenue, highlighting the company's global market presence.
- The company continues to invest in its core franchises like Grand Theft Auto and NBA 2K, and has a pipeline of upcoming titles including Mafia III and Civilization VI.
- Significant investments in software development and licenses are ongoing, reflecting a commitment to future product pipelines.
03—One dollar
Follow one dollar
For each $1.00 of revenue in FY2016, Take Two Interactive Software Inc lost $0.01.
- Revenue$1.41B100.0%
- Cost of revenue−$813.9M57.6%
- Gross profit$599.8M42.4%
- Operating costs−$610.7M43.2%
- Operating income−$10.8M0.8%
- Interest, other & tax$2.5M0.2%
- Net income−$8.3M0.6%
04—Financials
Financial Highlights
Figures from 10-KFY2016filed May 19, 2016Financial Statements
FY2016 against FY2015
| Line item | FY2016FY2015 | Change |
|---|---|---|
| Revenue | $1.41B$1.08B | +30.5% |
| Cost of Revenue | $813.87M$794.87M | +2.4% |
| Gross Profit | $599.83M$288.07M | +108.2% |
| Operating Expenses | $610.65M$546.53M | +11.7% |
| Operating Income | -$10.83M-$258.46M | +95.8% |
| Net Income | -$8.30M-$279.47M | +97.0% |
| EPS (Basic) | $-0.10$-3.48 | +97.1% |
| EPS (Diluted) | $-0.10$-3.48 | +97.1% |
| Shares Outstanding (Basic) | 83.42M80.37M | +3.8% |
| Shares Outstanding (Diluted) | 83.42M80.37M | +3.8% |
05—Questions
Frequently Asked Questions
What was Take-Two Interactive's financial performance for the fiscal year ended March 31, 2016?
For the fiscal year ended March 31, 2016, Take-Two Interactive reported a net revenue of $1.41 billion, a 30.5% increase year-over-year, primarily driven by the Grand Theft Auto franchise. The company also reported a net loss of $8.3 million, a substantial improvement compared to the $279.5 million net loss in the previous year.
How significant is the Grand Theft Auto franchise to Take-Two's revenue?
The Grand Theft Auto franchise is a critical revenue source for Take-Two. For the fiscal year ended March 31, 2016, it accounted for 54.5% of the company's total net revenue. This highlights the franchise's immense popularity and its central role in the company's financial performance.
What is the company's strategy regarding digital distribution and recurring revenue streams?
Take-Two is increasingly focused on digital distribution and recurring consumer spending. For the fiscal year ended March 31, 2016, digital online channels represented 49.3% of net revenue. The company aims to generate incremental revenue through downloadable content, microtransactions, and online play, particularly for its established franchises.
What are the key risks highlighted in the filing for investors?
Key risks identified include a heavy reliance on the success of 'hit' titles like Grand Theft Auto, potential delays in product development and releases, intense competition, dependence on a few large customers for sales, and risks associated with evolving technologies and digital distribution channels. The company also acknowledges the impact of economic conditions on consumer spending and the potential for market risk from currency fluctuations.
06—Continue