01—Abstract
Summary
Summary of the 10-K filed May 19, 2021. Cited figures are marked; the original filing is the authoritative source.
Take-Two Interactive Software, Inc. (TTWO) demonstrated robust financial performance in the fiscal year ending March 31, 2021, with net revenue increasing by 9.2% to $3.37 billiona, driven by strong performance in its key franchises like NBA 2K and Grand Theft Auto.
The company continues to benefit from the shift towards digital distribution, with digital online channels accounting for 86.6% of net revenue. Recurrent consumer spending, encompassing virtual currency and in-game purchases, also saw significant growth, comprising 61.5% of net revenue, indicating a successful transition to a more stable revenue model. The company reported a substantial increase in net income to $588.9 millionb, reflecting improved operational efficiency and revenue growth.
Looking ahead, Take-Two is investing in new content for its established franchises and expanding its offerings across various platforms. The acquisition of Playdots further strengthens its mobile gaming segment. While facing industry competition and the ongoing impact of economic conditions, the company appears well-positioned to capitalize on the continued growth in interactive entertainment.
02—Key points
Key Highlights
- Net revenue increased by 9.2% to $3.37 billion for the fiscal year ended March 31, 2021.
- Net income grew to $588.9 million, up from $404.5 million in the prior year.
- Digital online channels accounted for 86.6% of net revenue, highlighting a strong shift towards digital distribution.
- Recurrent consumer spending (virtual currency, add-on content, in-game purchases) represented 61.5% of net revenue, indicating successful monetization of live services.
- The company's top franchises, including NBA 2K, Grand Theft Auto, and Red Dead Redemption, remain key drivers of revenue.
- Acquisition of Playdots strengthens the company's mobile gaming portfolio.
- Significant investment in software development continues, with $490.9 million in capitalized costs at March 31, 2021.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, Take Two Interactive Software Inc kept $0.17.
- Revenue$3.37B100.0%
- Cost of revenue−$1.54B45.5%
- Gross profit$1.84B54.5%
- Operating costs−$1.21B35.8%
- Operating income$629.4M18.7%
- Interest, other & tax−$40.5M1.2%
- Net income$588.9M17.5%
Where FY2021 revenue went
$3.37B- Cost of revenue: $1.54B, 46% of revenue
- Operating costs: $1.21B, 36% of revenue
- Net income: $588.9M, 17% of revenue
- Interest, other & tax: $40.5M, 1.2% of revenue
Kept 17% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2021filed May 19, 2021Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $3.37B$3.09B | +9.2% |
| Cost of Revenue | $1.54B$1.54B | −0.5% |
| Gross Profit | $1.84B$1.55B | +18.8% |
| Operating Expenses | $1.21B$1.12B | +7.8% |
| Operating Income | $629.40M$425.27M | +48.0% |
| Net Income | $588.90M$404.46M | +45.6% |
| EPS (Basic) | $5.14$3.58 | +43.6% |
| EPS (Diluted) | $5.09$3.54 | +43.8% |
| Shares Outstanding (Basic) | 114.60M113.10M | +1.3% |
| Shares Outstanding (Diluted) | 115.70M114.14M | +1.4% |
05—Questions
Frequently Asked Questions
What were the main drivers of Take-Two's revenue growth in the fiscal year ended March 31, 2021?
Take-Two's revenue growth was primarily driven by strong performance from its key franchises, notably the NBA 2K series, Grand Theft Auto V and Online, Red Dead Redemption 2 and Online, Borderlands 3, and PGA TOUR 2K21. The company also saw increased revenue from its mobile titles like Dragon City and its recent acquisition, Two Dots.
How has the shift to digital distribution impacted Take-Two's business?
The shift to digital distribution has been highly beneficial for Take-Two. Digital online channels accounted for a significant 86.6% of net revenue in fiscal year 2021. This trend aligns with the company's strategy to drive recurrent consumer spending through virtual currency, add-on content, and in-game purchases, which now form the largest portion of their revenue at 61.5%.
What is the company's strategy for future growth?
Take-Two's strategy focuses on supporting its world-class creative teams, publishing high-quality titles, leveraging emerging technologies and distribution channels, and expanding its international business. They plan to continue releasing new content for existing franchises and are investing in new intellectual property. The recent acquisition of Playdots also signals a commitment to growing its mobile gaming segment.
What is the company's stance on paying dividends?
Take-Two Interactive Software, Inc. has never declared or paid cash dividends on its common stock. The company currently plans to retain all future earnings to finance business growth and does not anticipate paying cash dividends in the foreseeable future.
06—Continue