Summary
Take-Two Interactive Software, Inc. (TTWO) reported its third-quarter and nine-month results for the period ending December 31, 2011. The company saw a significant year-over-year decrease in net revenue for both the quarter and the nine-month period, primarily attributed to lower sales of established titles like "Red Dead Redemption" and the "Grand Theft Auto" franchise, partially offset by newer releases such as "L.A. Noire." Financially, the company experienced a net loss for the nine-month period, contrasting with a net profit in the prior year. This shift was influenced by lower revenues and increased operating expenses, particularly in general and administrative costs driven by stock-based compensation related to a management agreement. Despite the operational challenges, Take-Two significantly bolstered its cash position through the issuance of $250 million in 1.75% Convertible Notes in November 2011. The company maintained a strong liquidity position with over $453 million in cash and cash equivalents at the end of the period.
Financial Highlights
49 data points| Revenue | $236.32M |
| Cost of Revenue | $126.47M |
| Gross Profit | $109.86M |
| Operating Expenses | $89.61M |
| Operating Income | $20.25M |
| Net Income | $14.10M |
| EPS (Basic) | $0.16 |
| EPS (Diluted) | $0.16 |
| Shares Outstanding (Basic) | 83.56M |
| Shares Outstanding (Diluted) | 83.56M |
Key Highlights
- 1Net revenue declined significantly year-over-year for both the three and nine months ended December 31, 2011, impacted by a difficult comparison to strong prior-year releases like 'Red Dead Redemption'.
- 2The company reported a net loss of $41.98 million for the nine months ended December 31, 2011, a reversal from a net income of $70.51 million in the same period last year.
- 3Cash and cash equivalents increased substantially to $453.3 million as of December 31, 2011, up from $280.4 million at March 31, 2011, largely due to the issuance of $250 million in 1.75% Convertible Notes.
- 4Operating expenses saw a modest increase for the nine-month period, driven by higher general and administrative costs, including increased stock-based compensation.
- 5Key upcoming releases mentioned include 'Max Payne 3', 'BioShock Infinite', 'XCOM: Enemy Unknown', and the highly anticipated 'Grand Theft Auto V'.
- 6The company continued to manage its debt obligations, with both the 4.375% Convertible Notes due 2014 and the newly issued 1.75% Convertible Notes due 2016 in compliance with their respective covenants.
- 7International revenue remained a significant portion of total revenue, though it saw a slight decrease as a percentage for the quarter compared to the prior year.