10-QPeriod: Q3 FY2025

TAKE TWO INTERACTIVE SOFTWARE INC Quarterly Report for Q3 Ended Dec 31, 2024

Filed February 7, 2025For Securities:TTWO

Summary

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 million. 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% 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 million 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.

Financial Highlights

53 data points
Beta

Revenue

$1.36B

55.9% Gross Margin

Net Income

-$125.20M

-9.2% Net Margin

EPS (Diluted)

$-0.71

Total Assets

$12.68B

Cash & Equivalents

$1.21B

Free Cash Flow

-$48.20M

Financial Statements
Beta
Revenue$1.36B
Cost of Revenue$599.90M
Gross Profit$759.90M
Operating Expenses$892.00M
Operating Income-$132.10M
Interest Expense$41.00M
Net Income-$125.20M
EPS (Basic)$-0.71
EPS (Diluted)$-0.71
Shares Outstanding (Basic)176.00M

Key Highlights

  • 1Total 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.
  • 2Gross 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.
  • 3Recurrent Consumer Spending (RCS) continued to grow, representing 80.0% of net revenue, up from 75.7% in the prior year quarter.
  • 4Mobile revenue increased by $24.9 million, accounting for 53.8% of total net revenue for the quarter.
  • 5The 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.
  • 6As 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.
  • 7Key upcoming releases include Grand Theft Auto VI in the fall of calendar year 2025 and Sid Meier's Civilization VII.

Frequently Asked Questions

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.

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.

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.

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.