Summary
Take-Two Interactive Software, Inc. reported solid financial performance for the quarter ended June 30, 2019, driven by strong sales from its major franchises, including Red Dead Redemption 2 and the NBA 2K series. Net revenue increased by a significant 39.3% year-over-year to $540.5 million, bolstered by a robust digital distribution channel which now accounts for over 79% of net revenue. The company also saw growth in recurrent consumer spending, indicating continued player engagement and monetization of its titles. Despite a notable increase in operating expenses, particularly in selling and marketing, and research and development, the company maintained profitability. Gross profit margin experienced a decrease compared to the prior year due to higher amortization of capitalized software costs. Management highlighted the continued strength of its key franchises and a promising product pipeline, including upcoming releases for Borderlands 3 and The Outer Worlds, suggesting a positive outlook for future revenue generation. The company's liquidity remains strong, supported by a substantial cash balance and an available credit facility.
Financial Highlights
53 data points| Revenue | $540.46M |
| Cost of Revenue | $241.47M |
| Gross Profit | $298.99M |
| Operating Expenses | $247.26M |
| Operating Income | $51.73M |
| Interest Expense | $0 |
| Net Income | $46.28M |
| EPS (Basic) | $0.41 |
| EPS (Diluted) | $0.41 |
| Shares Outstanding (Basic) | 112.62M |
| Shares Outstanding (Diluted) | 113.73M |
Key Highlights
- 1Net revenue surged by 39.3% to $540.5 million, driven by strong performance of Red Dead Redemption 2, NBA 2K franchise, and Borderlands.
- 2Digital online channels continued to be the dominant distribution method, accounting for 79.2% of net revenue.
- 3Recurrent consumer spending, representing in-game purchases and add-on content, grew significantly, making up 58.3% of net revenue.
- 4Operating expenses increased, with selling and marketing up 57.5% and R&D up 36.0%, reflecting investments in future growth.
- 5Gross profit margin decreased to 55.3% from 66.1% year-over-year, primarily due to higher amortization of capitalized software costs.
- 6The company has a strong liquidity position with $1.61 billion in cash, cash equivalents, and restricted cash.
- 7Several key titles are planned for release in late 2019 and fiscal year 2020, including Borderlands 3, The Outer Worlds, and NBA 2K20, supporting future revenue expectations.