Summary
Take-Two Interactive Software, Inc. (TTWO) reported its third-quarter fiscal 2016 financial results for the period ending December 31, 2015. The company experienced a significant year-over-year revenue decline, primarily due to the absence of major product releases comparable to the prior year's releases of Grand Theft Auto V for new consoles and Borderlands: The Pre-Sequel. This revenue decrease, coupled with substantial business reorganization expenses of $71.2 million related to studio closures and restructuring, resulted in a net loss for the quarter and the nine-month period. Despite the revenue challenges, the company saw strong performance from its Grand Theft Auto franchise, particularly from ongoing recurrent consumer spending on Grand Theft Auto Online and the PC release of Grand Theft Auto V. Digital distribution channels continue to grow in importance, representing a larger portion of net revenue. The company also has a robust cash position and available credit, which management believes is sufficient to support operations and future initiatives. Investors should monitor the impact of ongoing restructuring efforts and the company's ability to generate substantial revenue from its upcoming product pipeline.
Financial Highlights
51 data points| Revenue | $414.22M |
| Cost of Revenue | $257.86M |
| Gross Profit | $156.36M |
| Operating Expenses | $215.56M |
| Operating Income | -$59.20M |
| Net Income | -$42.41M |
| EPS (Basic) | $-0.51 |
| EPS (Diluted) | $-0.51 |
| Shares Outstanding (Basic) | 83.43M |
| Shares Outstanding (Diluted) | 83.43M |
Key Highlights
- 1Revenue declined by 22.0% to $414.2 million for the three months ended December 31, 2015, compared to $531.1 million in the prior year's period.
- 2Net loss for the three months ended December 31, 2015, was $42.4 million, or ($0.51) per diluted share, compared to a net income of $40.1 million, or $0.42 per diluted share, in the prior year's period.
- 3The company incurred $71.2 million in business reorganization expenses related to closing two development studios and reorganizing another.
- 4Despite the overall revenue decline, net revenue from digital online channels increased to 35.4% of total net revenue for the quarter.
- 5Recurrent consumer spending (add-on content, microtransactions, online play) increased as a percentage of digital online revenue.
- 6The company repurchased $26.6 million of its common stock during the nine months ended December 31, 2015, as part of its share repurchase program.
- 7Cash and cash equivalents stood at $835.2 million as of December 31, 2015, with $379.4 million in short-term investments.