TAKE TWO INTERACTIVE SOFTWARE INC Quarterly Report for Q3 Ended Dec 31, 2013

Summary

Take-Two Interactive Software, Inc. reported a significant surge in revenue and net income for the three and nine months ended December 31, 2013, primarily driven by the highly successful launch of "Grand Theft Auto V." The company's balance sheet saw a substantial increase in cash and cash equivalents, growing from $402.5 million to $972.2 million, reflecting strong operational cash flow. Despite this positive performance, the company also engaged in significant financing activities, including the issuance of new convertible notes and substantial share repurchases, notably a large buyback from the Icahn Group. Investors should note the significant reliance on the "Grand Theft Auto" franchise for revenue, as well as the company's ongoing investments in research and development and the transition to new gaming console platforms.

Key Highlights

• 1Net revenue for the three months ended December 31, 2013, dramatically increased to $1.86 billion from $415.8 million in the prior year, largely due to Grand Theft Auto V.
• 2Net income for the three months ended December 31, 2013, was $578.4 million, a substantial improvement from $71.4 million in the same period last year.
• 3Cash and cash equivalents surged to $972.2 million as of December 31, 2013, up from $402.5 million at the end of the prior fiscal quarter.
• 4The company repurchased approximately 12 million shares from the Icahn Group for $203.5 million in November 2013, alongside other open market repurchases.
• 5Significant debt financing activities included the issuance of $287.5 million in 1.00% Convertible Notes due 2018.
• 6Console game sales accounted for 96.7% of revenue in the most recent quarter, highlighting the industry's shift and the company's focus on major platforms.
• 7The company expects continued investment in R&D and is navigating the transition to new console hardware (PS4 and Xbox One).

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