Summary
Take-Two Interactive Software, Inc. (TTWO) reported its financial results for the second quarter and first half of fiscal year 2017, ending September 30, 2016. The company demonstrated strong revenue growth driven by key franchises, notably the NBA 2K series, and new releases like BioShock: The Collection and XCOM 2. While overall net revenue increased significantly year-over-year, the six-month period showed a net loss, an improvement from the prior year's larger loss, indicating progress in operational efficiency and product cycle management. The company continues to navigate a dynamic industry, with a growing reliance on digital distribution channels and recurrent consumer spending. Management highlighted ongoing investments in research and development to fuel future growth, alongside a robust product pipeline including the highly anticipated Red Dead Redemption 2. Despite some revenue pressures from older titles like Grand Theft Auto V, the strategic focus on major franchises and new releases positions TTWO for continued engagement with its global player base.
Financial Highlights
51 data points| Revenue | $420.17M |
| Cost of Revenue | $205.60M |
| Gross Profit | $214.56M |
| Operating Expenses | $167.37M |
| Operating Income | $47.19M |
| Interest Expense | $8.67M |
| Net Income | $36.43M |
| EPS (Basic) | $0.42 |
| EPS (Diluted) | $0.39 |
| Shares Outstanding (Basic) | 87.18M |
| Shares Outstanding (Diluted) | 115.20M |
Key Highlights
- 1Total net revenue increased by 21.1% for the three months ended September 30, 2016, to $420.2 million, and by 17.6% for the six months ended September 30, 2016, to $731.7 million.
- 2The company reported net income of $36.4 million for the three months ended September 30, 2016, a decrease from $54.7 million in the prior year, but a net loss of $2.1 million for the six months ended September 30, 2016, an improvement from a loss of $12.3 million in the prior year.
- 3Console gaming remains the dominant platform, accounting for 84.0% of net revenue in the third quarter and 83.0% in the first half of fiscal year 2017.
- 4Digital online revenue continues to be a significant channel, representing 54.9% of net revenue for the three months and 55.1% for the six months ended September 30, 2016.
- 5Recurrent consumer spending (add-on content, microtransactions, online play) decreased as a percentage of digital online revenue compared to the prior year, but increased in absolute terms for the six-month period.
- 6Selling and marketing expenses increased significantly, particularly for the six-month period, reflecting investments in advertising for new and upcoming titles.
- 7The company ended the period with $770.0 million in cash and cash equivalents, a slight decrease from the prior fiscal year-end, but maintained a strong liquidity position.