GAAP Net Revenue Grew 31% to $1.414 Billion
Non-GAAP Net Revenue was $1.561 Billion
GAAP Net Loss Narrowed to $0.10 Per Diluted
Share
Non-GAAP Net Income Was $1.96 Per Diluted
Share
Take-Two Interactive Software, Inc. (NASDAQ:TTWO) today reported
stronger-than-expected financial results for its fourth quarter and
fiscal year 2016, ended March 31, 2016, and provided its initial
financial outlook for its first quarter and fiscal year 2017.
Fiscal Fourth Quarter
2016
GAAP Financial Results
For fiscal fourth quarter 2016, GAAP net revenue grew to $377.2
million, as compared to $300.1 million for fiscal fourth quarter
2015. GAAP net income increased to $46.4 million, or $0.48 per
diluted share, as compared to GAAP net loss of $242.8 million, or
$2.99 per diluted share, for the year-ago period. GAAP net income
for fiscal fourth quarter 2016 reflects $14.2 million in tax
benefits related to video game development costs. GAAP net revenue
from digitally-delivered content grew 35% year-over-year to $194.8
million.
During fiscal fourth quarter 2016, the Company’s cash and
short-term investments balance increased to $1.270 billion as of
March 31, 2016, up from $1.215 billion as of December 31, 2015.
Non-GAAP Financial Results
For fiscal fourth quarter 2016, Non-GAAP net revenue was $342.5
million, as compared to $427.7 million for fiscal fourth quarter
2015, which had benefited from the launch of Evolve™ and ongoing
sales from the Company’s more extensive holiday 2014 release slate.
Non-GAAP net income was $51.7 million, or $0.46 per diluted share,
as compared to $54.3 million, or $0.49 per diluted share, for the
year-ago period. Non-GAAP net income for fiscal fourth quarter 2016
reflects $5.4 million in tax benefits related to video game
development costs.
The largest contributors to Non-GAAP net revenue in fiscal
fourth quarter 2016 were Grand Theft Auto V® and Grand Theft Auto
Online, NBA® 2K16, XCOM® 2 and WWE® 2K16. Non-GAAP net revenue from
digitally-delivered content grew 12% year-over-year to $226.6
million, led by Grand Theft Auto, NBA 2K, XCOM 2, and WWE 2K.
Revenue from recurrent consumer spending (virtual currency,
downloadable add-on content and online games) grew 15%
year-over-year and accounted for 55% of Non-GAAP net revenue from
digitally-delivered content, or 37% of total Non-GAAP net revenue.
Catalog sales accounted for $211.3 million of Non-GAAP net revenue
led by the Grand Theft Auto and Borderlands series.
Fiscal Year 2016
GAAP Financial Results
For fiscal year 2016, GAAP net revenue increased to $1.414
billion, as compared to $1.083 billion for fiscal year 2015. GAAP
net loss narrowed to $8.3 million, or $0.10 per diluted share, as
compared to $279.5 million, or $3.48 per diluted share, for the
prior fiscal year. GAAP net loss for fiscal year 2016 reflects
business reorganization charges of $71.3 million, partially offset
by $37.8 million in tax benefits related to video game development
costs. GAAP net revenue from digitally-delivered content grew 53%
year-over-year to a record $697.7 million
Non-GAAP Financial Results
For fiscal year 2016, Non-GAAP net revenue was $1.561 billion,
as compared to $1.669 billion for fiscal year 2015, which had
benefited from a more extensive release slate. Non-GAAP net income
was $218.3 million, or $1.96 per diluted share, as compared to
$219.2 million, or $1.98 per diluted share, for the prior fiscal
year. Non-GAAP net income for fiscal year 2016 reflects $37.6
million in tax benefits related to video game development
costs.
The largest contributors to Non-GAAP net revenue in fiscal year
2016 were Grand Theft Auto V and Grand Theft Auto Online, NBA 2K16,
WWE 2K16, NBA 2K15, and XCOM 2. Non-GAAP net revenue from
digitally-delivered content grew 36% year-over-year to a record
$835.2 million, led by Grand Theft Auto, NBA 2K, Borderlands, XCOM
2 and WWE 2K. Revenue from recurrent consumer spending grew 33%
year-over-year and accounted for 48% of Non-GAAP net revenue from
digitally-delivered content, or 26% of total Non-GAAP net
revenue.
Management Comments
“Fiscal 2016 marked the third consecutive year of
stronger-than-expected Non-GAAP revenues and profits for Take-Two,”
said Strauss Zelnick, Chairman and CEO of Take-Two. “Our results
were driven by the continued extraordinary performance of Grand
Theft Auto V, ongoing momentum in our NBA 2K and WWE 2K series, the
successful launch of XCOM 2, and our highest-ever revenue from
recurrent consumer spending.
“Fiscal 2017 is poised to be another strong year for Take-Two,
with anticipated Non-GAAP earnings in excess of $1.00 per share.
Our diverse lineup includes the new intellectual property
Battleborn, which we released earlier this month, and the eagerly
anticipated upcoming launches of Mafia III, Sid Meier’s
Civilization VI, NBA 2K17 and WWE 2K17. We plan to support these
titles with innovative offerings designed to promote ongoing
engagement and drive recurrent consumer spending. Looking ahead, we
expect to grow Non-GAAP revenues and earnings in fiscal 2018, based
on our robust development plan that extends well beyond the current
fiscal year. Rockstar Games is of course hard at work on some
exciting future projects that will be revealed soon.”
Business and Product
Highlights
Since January 1, 2016:
Rockstar Games:
- Released new free content updates for
Grand Theft Auto Online, including:
- A May 3, 2016 update featuring the new
‘In & Out’ Adversary Mode and more.
- GTA Online Lowriders: Custom Classics,
featuring two new upgradeable muscle cars plus an additional
upgrade style for an existing lowrider, new weapons, clothing and
tattoos, as well as the “Sumo” Adversary Mode.
- Grand Theft Auto Online: Be My
Valentine, featuring an updated Albany Roosevelt classic car, new
clothes and accessories, the couples-based “Till Death Do Us Part”
Adversary Mode, along with the return of all content from the
previous Valentine's Day update.
- A January 28, 2016 update featuring the
new “Drop Zone” Adversary Mode, two new high-end vehicles and
additional improvements to Grand Theft Auto Online.
- Released Grand Theft Auto: Liberty City
Stories for Android devices. Originally designed with mobile
gameplay in mind, Grand Theft Auto: Liberty City Stories is also
available for select iOS devices.
- Rockstar Games also is hard at work on
some exciting future projects that will be revealed soon.
2K:
- Entered into a new multi-year
partnership agreement with WWE granting 2K the exclusive worldwide
rights to develop and publish WWE video game properties across all
major platforms and distribution channels.
- Launched Battleborn™, a groundbreaking
new title from the creators of Borderlands at Gearbox Software, on
PlayStation 4, Xbox One and PC. Battleborn is being supported with
a rich array of both free and paid additional content, including a
Season Pass, as well as the free-to-play Battleborn Tap companion
App, which mirrors the game’s progression and loot system.
- Launched the physical release of Tales
from the Borderlands, the critically acclaimed and award-winning
episodic adventure game from Telltale Games, on PlayStation 4,
PlayStation 3, Xbox One, Xbox 360 and PC.
- Released WWE 2K16 on Windows PC.
Developed collaboratively by Yukes and Visual Concepts, WWE 2K16 is
being supported with downloadable add-on content, including a
Season Pass, and is also available on Xbox One, Xbox 360,
PlayStation 4 and PlayStation 3.
- Launched XCOM 2, the sequel to the Game
of the Year award-winning strategy title XCOM: Enemy Unknown, for
PC. Developed by Firaxis Games, XCOM 2 received outstanding review
scores, with IGN awarding it a 9.3 out of 10 and saying, “XCOM
2 is an amazing game”, along with PC Gamer writing, “We’ll
play this forever,” and awarding it a 94% out of 100%. Game
Informer Magazine also wrote that XCOM 2 is “one of
the deepest and most rewarding strategy games on the market” and
awarded it a 9.5 out of 10. XCOM 2 is being supported with an array
of downloadable add-on content, including the now available
Anarchy’s Children and Alien Hunters packs, adding even more
customization options and replayability.
- Announced that Sid Meier’s Civilization
VI, the next entry in the award-winning turn-based strategy
franchise that has sold-in over 34 million units, is currently in
development for PC at Firaxis Games and planned for launch on
October 21, 2016. Sid Meier’s Civilization VI will offer players
new ways to engage with their world, advance their culture, expand
their empire across the map, and play amongst history’s greatest
leaders to build a civilization that will stand the test of
time.
- Announced that Mafia® III, the next
installment in 2K’s successful organized crime series that is
currently in development at Hangar 13, is planned for launch on
October 7, 2016 for Xbox One, PlayStation 4 and PC. Collector’s,
deluxe and standard editions of Mafia III will be available for all
three platforms, and those who pre-order any edition of Mafia
III will receive the Family Kick-Back, which includes three
exclusive vehicles and weapons available to players at launch.
Financial Outlook for Fiscal
2017
Take-Two is providing its initial financial outlook for its
fiscal first quarter ending June 30, 2016 and fiscal year ending
March 31, 2017 as follows:
First Quarter
Fiscal Year
Ending 6/30/2016
Ending 3/31/2017
Non-GAAP net revenue
$225 to $260 Million
$1.5 to $1.6 Billion
Non-GAAP net income (loss) per diluted
share (1)
($0.40) to ($0.30)
$1.00 to $1.25
GAAP to Non-GAAP
Reconciling Items (2):
Net effect from deferral in net revenues
and related cost of goods sold
($1.39) ($3.64)
Stock-based compensation expense (3)
$0.14 $0.43
Non-cash amortization of discount on
convertible notes
$0.05
$0.14
Non-cash tax expense
$0.01 $0.00
1)
For the fiscal year ending March 31, 2017,
our Non-GAAP net income per diluted share outlook is calculated
using the “if-converted” method as a result of the issuances of our
1.75% Convertible Notes in November 2011 and 1.00% Convertible
Notes in June 2013, and Non-GAAP diluted net income for the fiscal
year is adjusted by adding-back $4.4 million related to coupon
interest and debt issuance costs, net of tax. Shares used to
calculate our Non-GAAP net income per diluted share outlook are as
follows:
Weighted average basic shares
86.5 Million
92.5 Million
Add: Weighted average participating
shares
-
2.5 Million
Add: Potential Dilution from convertible
notes
-
22.0 Million
Total weighted average diluted
shares
86.5 Million
117.0 Million
2)
All GAAP to Non-GAAP reconciling items are
net of tax and per share.
3)
The Company's stock-based compensation
expense for the periods above includes the cost of approximately
0.9 million restricted stock units previously granted to
ZelnickMedia that are subject to variable accounting. Actual
expense to be recorded in connection with these shares is dependent
upon several factors, including future changes in Take-Two's stock
price.
Key assumptions and dependencies underlying the Company’s
financial outlook include: the timely delivery of the titles
included in this financial outlook; continued consumer acceptance
of the Xbox One and PlayStation 4; the ability to develop and
publish products that capture market share for these new-generation
systems while continuing to leverage opportunities on the Xbox 360,
PlayStation 3 and PC; and stable foreign exchange rates. See also
“Cautionary Note Regarding Forward Looking Statements” below.
Product Releases
The following titles were released since January 1, 2016:
Label
Title
Platforms
Release Date
2K
WWE 2K16: Future Stars Pack (DLC)
Xbox 360, Xbox One, PS3, PS4 January
26, 2016 2K
XCOM 2
PC, Mac, Linux February 5, 2016 Rockstar Games
Grand Theft Auto: Liberty City Stories
Android February 11, 2016 2K
WWE 2K16: 2015 Hall of Fame Showcase
(DLC)
Xbox 360, Xbox One, PS3, PS4 February 23, 2016 2K
WWE 2K16
PC March 11, 2016 2K
XCOM 2: Anarchy’s Children (DLC)
PC, Mac, Linux March 17, 2016 2K
XCOM: Enemy Unknown Plus
PlayStation Vita March 22, 2016 2K
Civilization Revolution 2 Plus
PlayStation Vita March 29, 2016 2K
Tales from the Borderlands
Xbox 360, Xbox One, PS3, PS4, PC April 26, 2016 2K
Battleborn
Xbox One, PS4, PC
May 3, 2016
2K
Battleborn Tap
iOS, Android May 3, 2016 2K
XCOM 2: Alien Hunters (DLC)
PC May 12, 2016
Take-Two's lineup of future titles
announced to date includes:
Label
Title
Platforms
Release Date
2K
NBA 2K17
Xbox 360, Xbox One, PS3, PS4, PC
September 2016
2K
Mafia III
Xbox One, PS4, PC
October 7, 2016
2K
Sid Meier’s Civilization VI
PC
October 21, 2016
2K
WWE 2K17
TBA
October 2016
Conference Call
Take-Two will host a conference call today at 4:30 p.m. Eastern
Time to review these results and discuss other topics. The call can
be accessed by dialing (877) 407-0984 or (201) 689-8577. A live
listen-only webcast of the call will be available by visiting
http://ir.take2games.com and a replay will be available following
the call at the same location.
Non-GAAP Financial
Measures
In addition to reporting financial results in accordance with
U.S. generally accepted accounting principles (GAAP), the Company
uses Non-GAAP measures of financial performance. The Company
believes that these Non-GAAP financial measures, when taken into
consideration with the corresponding GAAP financial measures, are
important in gaining an understanding of the Company’s ongoing
business. These Non-GAAP financial measures also provide for
comparative results from period to period. Therefore, the Company
believes it is appropriate to exclude the following Non-GAAP items,
net of applicable taxes, as discussed below:
- Net effect from deferral in net
revenues and related cost of goods sold – the Company defers
revenue and related costs from the sale of certain titles when our
post-contract customer support obligations are determined to be
significant and we cannot establish fair value for that
deliverable. The Company also defers revenue from the sale of
virtual currency. These amounts are deferred over the estimated
remaining life of the game to which they pertain. As there is no
impact to the Company’s operating cash flow, management excludes
the impact of deferred net revenue and related costs from its
Non-GAAP financial measures when evaluating the Company's operating
performance, when planning, forecasting and analyzing future
periods, and when assessing the performance of its management team.
In addition, we believe that these Non-GAAP financial measures
provide a more timely indication of trends in our business, provide
comparability with the way our business is measured by analysts,
and provide consistency with industry data sources.
- Stock-based compensation – the Company
does not consider stock-based compensation charges when evaluating
business performance and management does not contemplate
stock-based compensation expense in its short- and long-term
operating plans. As a result, the Company has excluded such
expenses from its Non-GAAP financial measures.
- Business reorganization – although the
Company has incurred business reorganization expenses in the past,
each charge relates to a discrete event based on a unique set of
business objectives. Management does not believe these charges
reflect the Company's primary business, ongoing operating results
or future outlook. As such, the Company believes it is appropriate
to exclude these expenses and related charges from its Non- GAAP
financial measures.
- Non-cash amortization of discount on
convertible notes – the Company records non-cash amortization of
discount on convertible notes as interest expense in addition to
the interest expense already recorded for coupon payments. The
Company excludes the non-cash portion of the interest expense from
its Non-GAAP financial measures because these amounts are unrelated
to its ongoing business operations.
- Non-cash tax expense for the impact of
deferred tax liabilities associated with tax deductible
amortization of goodwill – due to the nature of the adjustment as
well as the expectation that it will not have any cash impact in
the foreseeable future, the Company believes it is appropriate to
exclude this expense from its Non-GAAP financial measures.
- Gain on long-term investment, net –
from time to time, the Company makes strategic investments. The
Company excludes the impact of any gains and losses on such
investments from its Non-GAAP financial measures.
These Non-GAAP financial measures are not intended to be
considered in isolation from, as a substitute for, or superior to,
GAAP results. These Non-GAAP financial measures may be different
from similarly titled measures used by other companies. In the
future, Take-Two may also consider whether other items should also
be excluded in calculating the Non-GAAP financial measures used by
the Company. Management believes that the presentation of these
Non-GAAP financial measures provides investors with additional
useful information to measure Take-Two's financial and operating
performance. In particular, the measures facilitate comparison of
operating performance between periods and help investors to better
understand the operating results of Take-Two by excluding certain
items that may not be indicative of the Company's core business,
operating results or future outlook. Internally, management may use
these Non-GAAP financial measures in assessing the company's
operating results and in planning and forecasting. In addition to
the Non-GAAP financial measures provided in this press release, see
the Company’s website for additional information regarding our
non-GAAP results.
Final Results
The financial results discussed herein are presented on a
preliminary basis; final data will be included in Take-Two’s Annual
Report on Form 10-K for the fiscal year ended March 31, 2016.
About Take-Two Interactive
Software
Headquartered in New York City, Take-Two Interactive
Software, Inc. is a leading developer, publisher and marketer
of interactive entertainment for consumers around the globe. The
Company develops and publishes products through its two
wholly-owned labels Rockstar Games and 2K. Our products are
designed for console systems and personal computers, including
smartphones and tablets, and are delivered through physical retail,
digital download, online platforms and cloud streaming services.
The Company’s common stock is publicly traded on NASDAQ under the
symbol TTWO. For more corporate and product information please
visit our website at http://www.take2games.com.
All trademarks and copyrights contained herein are the property
of their respective holders.
Cautionary Note Regarding
Forward-Looking Statements
The statements contained herein which are not historical facts
are considered forward-looking statements under federal securities
laws and may be identified by words such as "anticipates,"
"believes," "estimates," "expects," "intends," "plans,"
"potential," "predicts," "projects," "seeks," "will," or words of
similar meaning and include, but are not limited to, statements
regarding the outlook for the Company's future business and
financial performance. Such forward-looking statements are based on
the current beliefs of our management as well as assumptions made
by and information currently available to them, which are subject
to inherent uncertainties, risks and changes in circumstances that
are difficult to predict. Actual outcomes and results may vary
materially from these forward-looking statements based on a variety
of risks and uncertainties including: our dependence on key
management and product development personnel, our dependence on our
Grand Theft Auto products and our ability to develop other hit
titles, the timely release and significant market acceptance of our
games, the ability to maintain acceptable pricing levels on our
games, and risks associated with international operations. Other
important factors and information are contained in the Company's
most recent Annual Report on Form 10-K, including the risks
summarized in the section entitled "Risk Factors," the Company’s
most recent Quarterly Report on Form 10-Q, and the Company's other
periodic filings with the SEC, which can be accessed at
www.take2games.com. All forward-looking statements are qualified by
these cautionary statements and apply only as of the date they are
made. The Company undertakes no obligation to update any
forward-looking statement, whether as a result of new information,
future events or otherwise.
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in
thousands, except per share amounts)
Three months ended March 31, Twelve months ended
March 31, 2016 2015
2016 2015
Net revenue
$ 377,206 $ 300,089
$ 1,413,698 $ 1,082,938 Cost of
goods sold: Internal royalties
72,552 271,907
328,610
306,717 Software development costs and royalties
71,352
86,752
223,512 231,615 Product costs
46,554 39,389
200,206 178,810 Licenses
18,999
12,634
61,545 77,725
Total cost of goods sold
209,457
410,682
813,873 794,867
Gross profit (loss)
167,749 (110,593 )
599,825
288,071 Selling and marketing
38,020 52,467
198,309 235,341 General and administrative
44,395
38,202
192,452 175,093 Research and development
33,308 35,157
119,807 115,043 Business reorganization
113 -
71,285 - Depreciation and amortization
7,338 5,934
28,800
21,057 Total operating expenses
123,174
131,760
610,653
546,534 Income (loss) from operations
44,575 (242,353
)
(10,828 ) (258,463 ) Interest and other, net
(6,257 ) (7,204 )
(30,205 ) (31,893 )
Gain on long-term investments, net
2,683
-
2,683 17,476
Income (loss) from operations before income taxes
41,001
(249,557 )
(38,350 ) (272,880 ) (Benefit from)
provision for income taxes
(5,398 )
(6,766 )
(30,048 ) 6,590 Net
income (loss)
$ 46,399 $ (242,791 )
$
(8,302 ) $ (279,470 ) Earnings (loss) per
share: Basic earnings (loss) per share
$ 0.54
$ (2.99 )
$ (0.10 ) $ (3.48 ) Diluted
earnings (loss) per share
$ 0.48 $ (2.99 )
(0.10 ) $ (3.48 ) Weighted average
shares outstanding: Basic
86,375
81,085
83,417 80,367 Diluted
114,496
81,085
83,417 80,367
Computation of Basic EPS: Net income (loss)
$ 46,399 $ (242,791 )
$ (8,302 )
$ (279,470 ) Less: net income allocated to participating securities
(1,447 ) -
-
- Net income (loss) for basic EPS calculation
$ 44,952 $ (242,791 )
$ (8,302
) $ (279,470 ) Weighted average shares outstanding -
basic
86,375 81,085
$ 83,417 80,367 Less:
weighted average participating shares outstanding
(2,694 ) -
-
- Weighted average common shares outstanding - basic
83,681 81,085
$
83,417 80,367
Basic EPS
$ 0.54 $ (2.99 )
$
(0.10 ) $ (3.48 )
Computation of Diluted
EPS: Net income (loss)
$ 46,399 $ (242,791 )
$ (8,302 ) $ (279,470 ) Less: net income
allocated to participating securities
(1,092 ) -
- - Add: interest expense, net of tax, on Convertible Notes
8,172 -
-
- Net income (loss) for diluted EPS calculation
$ 53,479 $ (242,791 )
$ (8,302
) $ (279,470 ) Weighted average common shares
outstanding - basic
83,681 81,085
83,417 80,367 Add:
dilutive effect of common stock equivalents
28,121
-
- -
Weighted average common shares outstanding - diluted
111,802 81,085
83,417
80,367 Diluted EPS
$ 0.48 $ (2.99 )
$ (0.10
) $ (3.48 )
TAKE-TWO INTERACTIVE SOFTWARE,
INC. and SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in
thousands, except per share amounts) March
31, March 31, 2016
2015 ASSETS Current assets: Cash and
cash equivalents
$ 798,742 $ 911,120 Short-term
investments
470,820 186,929 Restricted cash
261,169
169,678 Accounts receivable, net of allowances of $45,552 and
$70,471 at March 31, 2016 and 2015, respectively
168,527
217,860 Inventory
15,888 20,051 Software development costs
and licenses
178,387 163,385 Deferred cost of goods sold
98,474 56,779 Prepaid expenses and other
53,269 54,057 Total current assets
2,045,276 1,779,859 Fixed
assets, net
77,127 69,792 Software development costs and
licenses, net of current portion
214,831 124,329 Deferred
cost of goods sold, net of current portion
17,915 19,869
Goodwill
217,080 217,288 Other intangibles, net
4,609
4,769 Other assets
13,439 12,167
Total assets
$ 2,590,277 $ 2,228,073
LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities: Accounts payable
$ 30,448 $ 38,789
Accrued expenses and other current liabilities
607,479
444,738 Deferred revenue
582,484
482,733 Total current liabilities
1,220,411
966,260 Long-term debt
497,935
473,030 Non-current deferred revenue
216,319 164,618 Other
long-term liabilities
74,227 61,077
Total liabilities
2,008,892
1,664,985 Commitments and contingencies Stockholders'
equity: Preferred stock, $.01 par value, 5,000 shares authorized
- - Common stock, $.01 par value, 200,000 shares authorized;
103,765 and 104,594 shares issued and 86,573 and 88,356 outstanding
at March 31, 2016 and 2015, respectively
1,038 1,046
Additional paid-in capital
1,088,628 1,028,197 Treasury
stock, at cost; 17,192 and 16,238 common shares at March 31, 2016
and 2015, respectively
(303,388 ) (276,836 )
Accumulated deficit
(166,997 ) (158,695 ) Accumulated
other comprehensive loss
(37,896 )
(30,624 ) Total stockholders' equity
581,385
563,088 Total liabilities and stockholders' equity
$ 2,590,277 $ 2,228,073
TAKE-TWO INTERACTIVE SOFTWARE, INC. and
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Twelve months ended March 31, 2016
2015
Operating activities:
Net loss
$ (8,302 ) $ (279,470 )
Adjustments to reconcile net loss to net cash provided by operating
activities: Amortization and impairment of software development
costs and licenses
134,472 133,453 Depreciation and
amortization
28,800 21,057 Amortization and impairment of
intellectual property
160 344 Stock-based compensation
69,996 65,246 Deferred income taxes
(270 )
2,279 Amortization of discount on Convertible Notes
23,457
22,026 Amortization of debt issuance costs
1,567 1,663 Gain
on of long-term investments, net
(2,683 ) (17,476 )
Other, net
2,588 2,068 Changes in assets and liabilities:
Restricted cash
(91,491 ) 24,161 Accounts receivable
49,348 (164,717 ) Inventory
3,809 9,729 Software
development costs and licenses
(219,217 ) (188,772 )
Prepaid expenses, other current and other non-current assets
(12,272 ) 5,398 Deferred revenue
152,325
568,028 Deferred cost of goods sold
(41,144 ) (70,788
) Accounts payable, accrued expenses and other liabilities
170,162 78,585 Net cash provided by
operating activities
261,305 212,814
Investing activities:
Change in bank time deposits
(182,383 ) (87,500 )
Purchase of fixed assets
(37,280 ) (49,501 ) Sale and
maturities of available for sale securities
43,314 -
Purchase of available for sale securities
(150,501 )
(100,116 ) Cash received from the sale of long-term investment
2,683 21,976 Purchase of long-term investment
-
(5,000 ) Other
(349 ) - Net cash
used in investing activities
(324,516 )
(220,141 )
Financing activities:
Excess tax benefit from stock-based compensation
1,421 928
Tax payment related to net share settlements on restricted stock
awards
(22,916 ) - Repurchase of common stock
(26,552 ) - Net cash (used in) provided
by financing activities
(48,047 ) 928
Effects of foreign exchange rates on cash and cash
equivalents
(1,120 ) (17,881 )
Net decrease in cash and cash equivalents
(112,378 )
(24,280 ) Cash and cash equivalents, beginning of year
911,120 935,400 Cash and cash
equivalents, end of period
$ 798,742 $ 911,120
TAKE-TWO INTERACTIVE SOFTWARE, INC. and
SUBSIDIARIES RECONCILIATION OF GAAP TO Non-GAAP MEASURES
(Unaudited) (in thousands, except per
share amounts) Three
months ended March 31, Twelve months ended March 31,
2016 2015
2016 2015 Net Revenues
GAAP Net Revenues $ 377,206 $ 300,089
$
1,413,698 $ 1,082,938 Net effect from deferral in net
revenues
(34,694 ) 127,647
146,928 585,827
Non-GAAP Net
Revenues $ 342,512 $ 427,736
1,560,626 $ 1,668,765
Digital Online
Revenues (included in Net Revenues above) GAAP Digital
Online Revenues $ 194,798 $ 144,612
$
697,658 $ 455,299 Net effect from deferral in digital online
revenues
31,829 57,920
137,563 160,675
Non-GAAP Digital
Online Revenues $ 226,627 $ 202,532
$ 835,221 $ 615,974
Gross
Profit GAAP Gross Profit $ 167,749 $
(110,593 )
$ 599,825 $ 288,071 Net effect from
deferral in net revenues and related cost of goods sold
(11,043 ) 309,026
106,531 502,565 Stock-based
compensation
2,388 6,059
15,323 17,121
Non-GAAP Gross
Profit 159,094 $ 204,492
$
721,679 $ 807,757
Income (Loss) from
Operations GAAP Income (Loss) from Operations $
44,575 $ (242,353 )
$ (10,828 ) $
(258,463 ) Net effect from deferral in net revenues and related
cost of goods sold
(11,043 ) 309,026
106,531
502,565 Stock-based compensation
15,852 12,772
69,996
65,246 Impact of business reorganization
113
-
72,513 195
Non-GAAP Income from Operations $ 49,497
$ 79,445
$ 238,212 $ 309,543
Net Income (Loss) GAAP Net Income
(Loss) $ 46,399 $ (242,791 )
$
(8,302 ) $ (279,470 ) Net effect from deferral in net
revenues and related cost of goods sold
(9,529 )
279,554
92,370 451,749 Stock-based compensation
13,109 11,450
48,061 36,206 Gain on long-term
investments, net
(2,683 ) -
(2,683 )
(9,999 ) Impact of business reorganization
113 -
72,513 156 Non-cash amortization of discount on Convertible
Notes
4,061 5,806
15,043 18,933 Non-cash tax expense
245 265
1,296
1,669
Non-GAAP Net Income $
51,715 $ 54,284
$ 218,298
$ 219,244
Diluted Earnings (Loss) Per Share
GAAP earnings (loss) per share
$ 0.48 $ (2.99 )
$ (0.10 ) $ (3.48 ) Non-GAAP earnings per
share
$ 0.46 $ 0.49
$ 1.96 $ 1.98
Number of diluted shares used in computation GAAP
114,496 81,085
83,417 80,367 Non-GAAP
114,496
114,034
114,161 113,951
Computation of
Diluted GAAP EPS: Net income (loss)
$ 46,399 $
(242,791 )
$ (8,302 ) $ (279,470 ) Less: net
income allocated to participating securities
(1,092 )
-
- - Add: interest expense, net of tax, on Convertible
Notes
8,172 -
-
- Net income (loss) for diluted EPS
calculation
$ 53,479 $ (242,791 )
$
(8,302 ) $ (279,470 ) Weighted average shares
outstanding - basic
86,375 81,085
83,417 80,367 Add:
dilutive effect of common stock equivalents
28,121
-
- - Total
weighted average shares outstanding - diluted
114,496 81,085
83,417 80,367 Less: weighted average participating shares
outstanding
(2,694 ) -
- - Weighted average common shares
outstanding - diluted
111,802 81,085
83,417 80,367
Diluted earnings (loss) per share
$ 0.48 $ (2.99 )
$ (0.10
) $ (3.48 )
Computation of Diluted Non-GAAP
EPS: Non-GAAP net income
$ 51,715 $ 54,284
$ 218,298 $ 219,244 Less: net income allocated to
participating securities
(1,217 ) (3,091 )
(7,146 ) (13,716 ) Add: interest expense, net of tax,
on Convertible Notes
1,390 1,375
5,579 5,515 Net income for
diluted earnings per share calculation
$ 51,888
$ 52,568
$ 216,731 $ 211,043
Weighted average shares outstanding - basic
86,375 87,579
87,154 87,496 Add: dilutive effect of
common stock equivalents
28,121 26,455
27,007 26,455 Total
weighted average shares outstanding - diluted
114,496
114,034
114,161 113,951 Less: weighted average participating
shares outstanding
(2,694 ) (6,494 )
(3,737 ) (7,129 ) Weighted average
common shares outstanding - diluted
111,802 107,540
110,424 106,822 Diluted earnings
per share
$ 0.46 $ 0.49
$
1.96 $ 1.98
TAKE-TWO
INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES Net Revenue by
Geographic Region, Distribution Channel, and Platform Mix
(in thousands)
Three Months Ended
March 31, 2016
Three Months Ended
March 31, 2015
Amount % of Total Amount % of Total
GAAP Net Revenues by Geographic Region United States
$ 196,037 52 % $ 164,657 55 %
International
181,169 48 %
135,432 45 % Total GAAP net revenues
377,206
100 % 300,089 100 %
Change in
Deferred Net Revenues United States
$ (4,159
) $ 61,941 International
(30,535 )
65,706 Total changes in deferred net revenues
(34,694 ) 127,647
Non-GAAP Net
Revenues by Geographic Region United States
$
191,878 56 % $ 226,598 53 % International
150,634 44 % 201,138 47 %
Total non-GAAP net revenues
$ 342,512
100 % $ 427,736 100 %
Three Months
Ended
March 31, 2016
Three Months Ended
March 31, 2015
Amount % of Total Amount % of Total
GAAP Net Revenues by Distribution Channel Physical
retail and other
$ 182,408 48 % $
155,477 52 % Digital online
194,798 52
% 144,612 48 % Total GAAP net revenues
377,206 100 % 300,089 100 %
Change in Deferred Net Revenues Physical retail and
other
$ (66,523 ) $ 69,727 Digital online
31,829 57,920 Total changes in deferred
net revenues
(34,694 ) 127,647
Non-GAAP Net Revenues by Distribution Channel Physical
retail and other
$ 115,885 34 % $
225,204 53 % Digital online
226,627 66
% 202,532 47 % Total non-GAAP net revenues
$
342,512 100 % $ 427,736 100 %
Three Months Ended
March 31, 2016
Three Months Ended
March 31, 2015
Amount % of Total Amount % of Total
GAAP Net Revenues by Platform Mix Console
$
288,785 77 % $ 260,969 87 % PC and other
88,421 23 % 39,120 13 %
Total GAAP net revenues
377,206 100
% 300,089 100 %
Change in Deferred Net
Revenues Console
$ (30,253 ) $ 114,171 PC
and other
(4,441 ) 13,476 Total changes
in deferred net revenues
(34,694 )
127,647
Non-GAAP Net Revenues by Platform Mix Console
$ 258,532 75 % $ 375,140 88 % PC and
other
83,980 25 % 52,596
12 % Total non-GAAP net revenues
$ 342,512
100 % $ 427,736 100 %
TAKE-TWO
INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES Net Revenue by
Geographic Region, Distribution Channel, and Platform Mix
(in thousands)
Twelve Months Ended
March 31, 2016
Twelve Months Ended
March 31, 2015
Amount % of Total Amount % of Total
GAAP Net Revenues by Geographic Region United States
$ 742,963 53 % $ 623,080 58 %
International
670,735 47 %
459,858 42 % Total GAAP net revenues
1,413,698
100 % 1,082,938 100 %
Change in
Deferred Net Revenues United States
$ 97,770 $
269,349 International
49,158 316,478 Total
changes in deferred net revenues
146,928
585,827
Non-GAAP Net Revenues by Geographic Region
United States
$ 840,733 54 % $ 892,429
53 % International
719,893 46 %
776,336 47 % Total non-GAAP net revenues
$ 1,560,626
100 % $ 1,668,765 100 %
Twelve
Months Ended
March 31, 2016
Twelve Months Ended
March 31, 2015
Amount % of Total Amount % of Total
GAAP Net Revenues by Distribution Channel Physical
retail and other
$ 716,040 51 % $
627,639 58 % Digital online
697,658 49
% 455,299 42 % Total GAAP net revenues
1,413,698 100 % 1,082,938 100 %
Change in Deferred Net Revenues Physical retail and other
$ 9,365 $ 425,152 Digital online
137,563 160,675 Total changes in deferred net
revenues
146,928 585,827
Non-GAAP
Net Revenues by Distribution Channel Physical retail and other
$ 725,405 46 % $ 1,052,791 63 % Digital
online
835,221 54 % 615,974 37 %
Total non-GAAP net revenues
$ 1,560,626 100
% $ 1,668,765 100 %
Twelve Months Ended
March 31, 2016
Twelve Months Ended
March 31, 2015
Amount % of Total Amount % of Total
GAAP Net Revenues by Platform Mix Console
$
1,167,623 83 % $ 881,516 81 % PC and other
246,075 17 % 201,422 19 % Total
GAAP net revenues
1,413,698 100 %
1,082,938 100 %
Change in Deferred Net
Revenues Console
$ 12,687 $ 564,794 PC and other
134,241 21,033 Total changes in deferred net
revenues
146,928 585,827
Non-GAAP
Net Revenues by Platform Mix Console
$ 1,180,310
76 % $ 1,446,310 87 % PC and other
380,316 24 % 222,455 13 % Total
non-GAAP net revenues
$ 1,560,626 100 %
$ 1,668,765 100 %
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160518006179/en/
Take-Two Interactive Software, Inc.Investor
Relations:Henry A. Diamond, 646-536-3005Senior Vice
PresidentInvestor Relations & Corporate
CommunicationsHenry.Diamond@take2games.comorCorporate Press:Alan
Lewis, 646-536-2983Vice PresidentCorporate Communications &
Public AffairsAlan.Lewis@take2games.com
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