01—Abstract
Summary
Summary of the 10-Q filed February 7, 2025. Cited figures are marked; the original filing is the authoritative source.
Take-Two Interactive Software, Inc. (TTWO) reported its financial results for the quarter ending December 31, 2024.
The company experienced a slight decrease in total net revenue for the quarter, down 0.5% year-over-year to $1,359.8 milliona. However, this was accompanied by a significant improvement in gross profit margin, which rose to 55.9% from 49.7% in the prior year period. This margin expansion was primarily driven by lower amortization of intangible assets and reduced internal royalties.
Despite the revenue dip, the company saw growth in its Recurrent Consumer Spending (RCS) segment, which now represents 80.0%b of net revenue. Mobile revenue also showed an increase, contributing 53.8% to total net revenue.
Management highlighted the upcoming release of Grand Theft Auto VI in the fall of calendar year 2025 as a key future driver. While the company incurred a net loss of $125.2 millionc for the quarter, an increase from the previous year's loss of $91.6 million, the company ended the period with a solid cash position and available borrowing capacity, indicating a stable liquidity outlook.
02—Key points
Key Highlights
- Total net revenue for the third quarter of fiscal year 2025 was $1,359.8 million, a slight decrease of 0.5% compared to the prior year period.
- Gross profit margin significantly improved to 55.9% from 49.7% in the prior year quarter, primarily due to lower amortization of intangibles and internal royalties.
- Recurrent Consumer Spending (RCS) continued to grow, representing 80.0% of net revenue, up from 75.7% in the prior year quarter.
- Mobile revenue increased by $24.9 million, accounting for 53.8% of total net revenue for the quarter.
- The company incurred a net loss of $125.2 million ($0.71 per share) for the quarter, compared to a net loss of $91.6 million ($0.54 per share) in the prior year period.
- As of December 31, 2024, the company had $1,308.9 million in cash, cash equivalents, and restricted cash, with $747.8 million available under its credit facility.
- Key upcoming releases include Grand Theft Auto VI in the fall of calendar year 2025 and Sid Meier's Civilization VII.
03—One dollar
Follow one dollar
For each $1.00 of revenue in Q3 FY2025, Take Two Interactive Software Inc lost $0.09.
- Revenue$1.36B100.0%
- Cost of revenue−$599.9M44.1%
- Gross profit$759.9M55.9%
- Operating costs−$892.0M65.6%
- Operating income−$132.1M9.7%
- Interest, other & tax$6.9M0.5%
- Net income−$125.2M9.2%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2025filed February 7, 2025Financial Statements
Q3 FY2025 against Q3 FY2024
| Line item | Q3 FY2025Q3 FY2024 | Change |
|---|---|---|
| Revenue | $1.36B$1.37B | −0.5% |
| Cost of Revenue | $599.90M$688.20M | −12.8% |
| Gross Profit | $759.90M$678.10M | +12.1% |
| Operating Expenses | $892.00M$807.60M | +10.5% |
| Operating Income | -$132.10M-$129.50M | −2.0% |
| Interest Expense | $41.00M$31.10M | +31.8% |
| Net Income | -$125.20M-$91.60M | −36.7% |
| EPS (Basic) | $-0.71$-0.54 | −31.5% |
| EPS (Diluted) | $-0.71$-0.54 | −31.5% |
| Shares Outstanding (Basic) | 176.00M170.30M | +3.3% |
05—Questions
Frequently Asked Questions
What is the company's revenue performance for the quarter?
For the three months ended December 31, 2024, Take-Two Interactive reported total net revenue of $1,359.8 million, a slight decrease of 0.5% compared to $1,366.3 million in the same period last year. While overall revenue saw a small dip, Recurrent Consumer Spending (RCS) grew to 80.0% of net revenue, indicating continued engagement from existing titles and services.
How did the company's profitability change?
The company demonstrated a significant improvement in profitability at the gross profit level. Gross profit margin increased to 55.9% from 49.7% in the prior year quarter. This was largely attributed to lower amortization of intangible assets, including a reduction in impairment charges from prior periods, and lower internal royalties.
What is the outlook for upcoming releases?
The company has a strong pipeline of upcoming titles. Notably, Rockstar Games plans to release Grand Theft Auto VI in the fall of calendar year 2025. Additionally, 2K is scheduled to release Sid Meier's Civilization VII, PGA TOUR 2K25, and WWE 2K25. These releases are expected to be significant drivers of future revenue.
What is the company's current financial health and liquidity situation?
Take-Two Interactive maintains a healthy liquidity position. As of December 31, 2024, the company had $1,308.9 million in cash, cash equivalents, and restricted cash. Furthermore, it has $747.8 million available under its credit facility, providing substantial financial flexibility for ongoing operations, development, and potential strategic initiatives.
06—Continue