Summary
Take-Two Interactive Software, Inc. reported a significant net loss of $110.8 million for the three months ended June 30, 2012, a substantial increase from the $8.7 million loss in the prior year. This widening loss was primarily driven by a sharp decline in net revenue, which fell 32.4% to $226.1 million, largely due to lower sales of previously released titles like 'L.A. Noire' and 'Duke Nukem Forever.' While new releases such as 'Max Payne 3' and 'Spec Ops: The Line' contributed revenue, they did not offset the decline from prior periods. The company's gross profit margin also significantly compressed to 17.4% from 36.8% year-over-year, impacted by higher development costs and a less favorable product mix. Despite the challenging revenue and profitability trends, Take-Two maintained a solid cash position, ending the quarter with $367.1 million in cash and cash equivalents. The company has access to a $100 million revolving credit facility, of which no amounts were drawn as of June 30, 2012, providing a substantial liquidity buffer. However, the increasing operating expenses, particularly in selling and marketing and general and administrative costs (the latter including a significant contractual provision), coupled with the overall net loss, represent key areas of concern for investors. The company has a pipeline of anticipated game releases, including 'Borderlands 2' and 'Grand Theft Auto V,' which will be critical for future revenue generation and profitability.
Financial Highlights
47 data points| Revenue | $226.14M |
| Cost of Revenue | $186.73M |
| Gross Profit | $39.41M |
| Operating Expenses | $140.29M |
| Operating Income | -$100.88M |
| Net Income | -$110.84M |
| EPS (Basic) | $-1.30 |
| EPS (Diluted) | $-1.30 |
| Shares Outstanding (Basic) | 85.01M |
| Shares Outstanding (Diluted) | 85.01M |
Key Highlights
- 1Net loss widened significantly to $110.8 million for the quarter ended June 30, 2012, compared to a $8.7 million net loss in the prior year.
- 2Net revenue decreased by 32.4% to $226.1 million due to lower sales of prior period titles, partially offset by new releases.
- 3Gross profit margin contracted sharply to 17.4% from 36.8% year-over-year, driven by increased costs and a less favorable product mix.
- 4Selling and marketing expenses increased by 5.8% and general and administrative expenses rose by 41.3%, impacting overall operating expenses.
- 5The company ended the quarter with $367.1 million in cash and cash equivalents, indicating a strong liquidity position.
- 6Access to an undrawn $100 million revolving credit facility provides additional financial flexibility.
- 7Upcoming titles like 'Borderlands 2,' 'NBA 2K13,' 'XCOM: Enemy Unknown,' 'BioShock Infinite,' and 'Grand Theft Auto V' are crucial for future performance.