Summary
Take-Two Interactive Software, Inc. reported a net loss of $8.7 million for the three months ended June 30, 2011, a significant shift from a net income of $26.3 million in the prior year period. This downturn was primarily driven by a decrease in net revenue, down 10.9% to $334.4 million, largely attributed to lower sales of key franchises like Grand Theft Auto and the absence of a major title release comparable to Red Dead Redemption in the prior year. While gross profit margin saw a slight improvement due to lower royalty expenses, operating expenses increased significantly, particularly in selling and marketing, impacting overall profitability. Despite the quarterly loss, the company ended the period with a solid cash position of $248.8 million. Long-term debt remains substantial, with $138 million in convertible senior notes outstanding. The company has several highly anticipated titles slated for release in the upcoming fiscal year, including NBA 2K12, BioShock Infinite, and Borderlands 2, which are expected to drive future revenue growth. Management believes current liquidity and available credit are sufficient to meet operational needs for at least the next 12 months.
Financial Highlights
49 data points| Revenue | $334.38M |
| Cost of Revenue | $211.22M |
| Gross Profit | $123.16M |
| Operating Expenses | $125.02M |
| Operating Income | -$1.86M |
| Net Income | -$8.71M |
| EPS (Basic) | $-0.11 |
| EPS (Diluted) | $-0.11 |
| Shares Outstanding (Basic) | 82.50M |
| Shares Outstanding (Diluted) | 82.50M |
Key Highlights
- 1Net loss of $8.7 million for the quarter, a reversal from a $26.3 million profit in the prior year.
- 2Net revenue decreased by 10.9% to $334.4 million, driven by lower sales of Grand Theft Auto and the absence of a major title like Red Dead Redemption.
- 3Gross profit margin improved slightly to 36.8% due to lower internal royalty expense.
- 4Operating expenses increased by 30.3% to $125.0 million, mainly due to higher selling and marketing costs for new releases.
- 5Cash and cash equivalents stood at $248.8 million at quarter-end, a decrease from $280.4 million at the prior quarter-end.
- 6The company has $138 million in 4.375% convertible senior notes due 2014.
- 7Several key titles are slated for release in the upcoming fiscal year, including NBA 2K12, The Darkness II, XCOM, BioShock Infinite, and Borderlands 2.