Summary
Take-Two Interactive Software, Inc. reported its financial results for the nine months ended December 31, 2019, and the third quarter of fiscal year 2020. The company saw a significant increase in Net Revenue, driven by strong performance in recurrent consumer spending and new title releases like Borderlands 3 and The Outer Worlds, partially offset by a decline in revenue from Red Dead Redemption 2. The company also experienced a notable improvement in gross profit margin due to a favorable shift towards digital distribution and higher-margin recurrent spending. Operationally, the company continued to invest heavily in research and development and selling and marketing, reflecting its strategy of developing new intellectual property and supporting its existing franchises. Despite an increase in operating expenses, the company demonstrated improved profitability from operations, benefiting from increased revenue and improved gross margins. The balance sheet shows a healthy cash position and increased assets, including the recognition of right-of-use assets due to the adoption of new lease accounting standards.
Financial Highlights
52 data points| Revenue | $930.13M |
| Cost of Revenue | $437.09M |
| Gross Profit | $493.04M |
| Operating Expenses | $316.20M |
| Operating Income | $176.83M |
| Net Income | $163.64M |
| EPS (Basic) | $1.44 |
| EPS (Diluted) | $1.43 |
| Shares Outstanding (Basic) | 113.25M |
| Shares Outstanding (Diluted) | 114.25M |
Key Highlights
- 1Net revenue increased by 9.3% to $2.33 billion for the nine months ended December 31, 2019, compared to the prior year, driven by new releases and recurrent consumer spending.
- 2Gross profit margin improved significantly to 50.7% for the nine months ended December 31, 2019, from 40.6% in the prior year, due to a shift towards digital sales and higher-margin offerings.
- 3Recurrent consumer spending revenue increased by 25.1% to $973.8 million for the nine months ended December 31, 2019, indicating strong ongoing player engagement.
- 4Operating expenses increased by 22.7% to $878.2 million for the nine months, largely due to increased investments in selling & marketing and R&D for new titles.
- 5Net income for the nine months remained strong at $281.7 million, a slight increase from $277.0 million in the prior year, with diluted EPS at $2.47.
- 6The company maintained a strong liquidity position with $1.74 billion in cash, cash equivalents, and restricted cash as of December 31, 2019.
- 7The company adopted new lease accounting standards (ASC 842) in April 2019, resulting in the recognition of right-of-use assets and lease liabilities on the balance sheet.