10-QPeriod: Q3 FY2013

TAKE TWO INTERACTIVE SOFTWARE INC Quarterly Report for Q3 Ended Dec 31, 2012

Filed February 6, 2013For Securities:TTWO

Summary

Take-Two Interactive Software, Inc. (TTWO) reported a significant increase in net revenue for the three months ended December 31, 2012, reaching $415.8 million, a 75.9% increase year-over-year, driven by strong sales from new releases like "Borderlands 2" and "XCOM: Enemy Unknown," as well as continued performance from its "NBA 2K" and "Grand Theft Auto" franchises. Despite the revenue surge, the company reported a net loss of $52.0 million for the nine months ended December 31, 2012, compared to a net loss of $42.0 million in the same period last year, primarily due to increased software development costs and royalties associated with new game development and marketing expenses for upcoming titles. The company ended the nine-month period with $448.7 million in cash and cash equivalents, indicating a healthy liquidity position. Management anticipates current cash, cash flow from operations, and credit facilities will be sufficient to meet its obligations for at least the next 12 months. Key upcoming releases include "Major League Baseball 2K13" and "BioShock Infinite," with "Grand Theft Auto V" slated for September 2013, highlighting a strong product pipeline poised to drive future growth.

Financial Highlights

47 data points
Beta

Revenue

$415.77M

0.5% Gross Margin

Net Income

$71.36M

0.2% Net Margin

EPS (Diluted)

$0.66

Total Assets

$1.19B

Cash & Equivalents

$448.72M

Free Cash Flow

$119.48M

Financial Statements
Beta
Revenue$415.77M
Cost of Revenue$216.30M
Gross Profit$199.47M
Operating Expenses$118.48M
Operating Income$80.99M
Net Income$71.36M
EPS (Basic)$0.76
EPS (Diluted)$0.66
Shares Outstanding (Basic)85.74M
Shares Outstanding (Diluted)111.76M

Key Highlights

  • 1Net revenue for the three months ended December 31, 2012, increased by 75.9% to $415.8 million, compared to $236.3 million in the prior year period.
  • 2Gross profit margin improved to 48.0% for the three months ended December 31, 2012, from 46.5% in the prior year period.
  • 3Despite strong revenue growth in the quarter, the company reported a net loss of $51.96 million for the nine months ended December 31, 2012.
  • 4Selling and marketing expenses increased significantly by 43.1% to $205.6 million for the nine months ended December 31, 2012, largely due to advertising for upcoming major titles.
  • 5The company ended December 31, 2012, with $448.7 million in cash and cash equivalents, showing a solid liquidity position.
  • 6Key future releases include "Grand Theft Auto V" (September 2013) and "BioShock Infinite" (March 2013), indicating a strong product pipeline.
  • 7The company authorized a share repurchase program for up to 7.5 million shares of common stock in January 2013.

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