Summary
Take-Two Interactive Software, Inc. (TTWO) reported its financial results for the fiscal second quarter ended September 30, 2018. The company demonstrated significant year-over-year growth in net revenue and a notable shift from a net loss to net income, reflecting improved operational performance. Revenue benefited from strong performance in recurrent consumer spending and digital online sales channels, indicating a successful transition towards these digital delivery models. The company's strategic focus on key franchises like Grand Theft Auto and NBA 2K continues to drive results, with continued strong performance from Grand Theft Auto Online and the NBA 2K franchise contributing to revenue growth. The adoption of the new revenue recognition standard (Topic 606) had a notable impact, accelerating revenue recognition and impacting gross profit margins, but is expected to better reflect the economic substance of the company's revenue streams over time. Management's commentary highlights continued investment in product development and marketing, supporting future growth prospects.
Financial Highlights
52 data points| Revenue | $492.67M |
| Cost of Revenue | $234.88M |
| Gross Profit | $257.79M |
| Operating Expenses | $231.80M |
| Operating Income | $25.99M |
| Net Income | $25.37M |
| EPS (Basic) | $0.22 |
| EPS (Diluted) | $0.22 |
| Shares Outstanding (Basic) | 113.73M |
| Shares Outstanding (Diluted) | 116.09M |
Key Highlights
- 1Net revenue increased by 11.1% to $492.7 million for the three months ended September 30, 2018, compared to $443.6 million in the prior year period.
- 2The company reported a net income of $25.4 million for the quarter, a significant improvement from a net loss of $2.7 million in the same period last year.
- 3Gross profit margin improved substantially to 52.3% from 44.4% year-over-year, driven by revenue recognition changes and lower royalties.
- 4Recurrent consumer spending revenue, comprising virtual currency, add-on content, and in-game purchases, increased by 12.2% to $240.6 million, representing 48.8% of net revenue.
- 5Digital online revenue channels continued to grow, accounting for 72.7% of net revenue, up from 68.3% in the prior year period.
- 6The company repurchased approximately $153.5 million of its common stock during the six months ended September 30, 2018, demonstrating a commitment to returning capital to shareholders.
- 7The adoption of ASC 606, Revenue from Contracts with Customers, had a significant impact, accelerating revenue recognition and impacting reported figures.