Summary
Take-Two Interactive Software, Inc. reported a strong performance for the first quarter of fiscal year 2018 (ended June 30, 2017), significantly improving its financial results compared to the prior year. The company achieved net income of $60.3 million, a substantial turnaround from a net loss of $38.6 million in the same period last year, translating to earnings per share of $0.56 on a diluted basis. This improvement was driven by a robust increase in net revenue, up 34.2% to $418.2 million, fueled by strong performance from key franchises like NBA 2K, Grand Theft Auto V (including GTA Online), and Mafia III, as well as contributions from the recently acquired Social Point titles. Digital channel revenue was particularly strong, growing 55.8% and representing 64.1% of total net revenue, highlighting the company's successful shift towards digital distribution and recurring consumer spending. The company also demonstrated improved operational efficiency, with gross profit margin expanding significantly to 53.5% from 38.6% in the prior year, largely due to favorable revenue recognition adjustments and lower amortization costs. While operating expenses increased, this was primarily due to business reorganization costs and R&D for new titles, but was outpaced by revenue growth, leading to a significant increase in operating income. The company maintains a healthy balance sheet with substantial cash and short-term investments, and has access to a credit facility, positioning it well for future growth and investment.
Financial Highlights
52 data points| Revenue | $418.22M |
| Cost of Revenue | $194.57M |
| Gross Profit | $223.65M |
| Operating Expenses | $173.43M |
| Operating Income | $50.22M |
| Interest Expense | $5.75M |
| Net Income | $60.28M |
| EPS (Basic) | $0.57 |
| EPS (Diluted) | $0.56 |
| Shares Outstanding (Basic) | 105.49M |
| Shares Outstanding (Diluted) | 118.78M |
Key Highlights
- 1Reported a net income of $60.3 million, a significant improvement from a net loss of $38.6 million in the prior year period.
- 2Net revenue increased by 34.2% to $418.2 million, driven by strong performance from NBA 2K, Grand Theft Auto V/Online, Mafia III, and Social Point titles.
- 3Gross profit margin expanded significantly to 53.5% from 38.6% in the prior year, aided by favorable revenue recognition and amortization changes.
- 4Digital channel revenue surged by 55.8% and now constitutes 64.1% of total net revenue, indicating a successful shift to digital distribution and in-game spending.
- 5Operating expenses increased by 9.0%, but were outpaced by revenue growth, leading to a substantial increase in operating income.
- 6Maintained a strong liquidity position with $828.1 million in cash and cash equivalents and $452.9 million in short-term investments.
- 7Announced a strategic reorganization, incurring $10.6 million in related expenses for the period.