GAAP net revenue grew to $311.6 million
GAAP net loss narrowed to $0.46 per diluted
share
Non-GAAP net loss narrowed to $0.21 per diluted
share
Take-Two Interactive Software, Inc. (NASDAQ:TTWO) today reported
results for its fiscal first quarter 2017, ended June 30, 2016. In
addition, the Company provided its initial financial outlook for
its fiscal second quarter 2017, ending September 30, 2016. As
previously announced, beginning this quarter, the Company will no
longer adjust its Non-GAAP financial metrics for the net effect
from deferral in net revenue and related cost of goods sold. The
Company has recast its prior year’s first quarter Non-GAAP
financial metrics to conform to its current presentation. In
addition, Take-Two’s financial outlook conforms to the Company’s
new Non-GAAP metrics.
Financial Results
For fiscal first quarter 2017, GAAP net revenue grew 13% to
$311.6 million, as compared to $275.3 million for fiscal first
quarter 2016. The largest contributors to GAAP net revenue in
fiscal first quarter 2017 were Grand Theft Auto V® and Grand Theft
Auto Online, NBA® 2K16 and Battleborn®.
The change in deferred net revenue, which represents revenue
recognized during the current period that was deferred in prior
periods, net of revenue that is being deferred into future periods,
was ($39.0) million in fiscal first quarter 2017 versus $91.1
million in fiscal first quarter 2016.
GAAP digitally-delivered net revenue grew to $172.1 million, as
compared to $154.0 million for fiscal first quarter 2016. Recurrent
consumer spending (virtual currency, downloadable add-on content
and online games) grew 18% year-over-year and accounted for 57% of
GAAP digitally-delivered net revenue, or 31% of total GAAP net
revenue. The largest contributors to GAAP digitally-delivered net
revenue in fiscal first quarter 2017 were Grand Theft Auto V and
Grand Theft Auto Online, and NBA 2K16.
The change in deferred digitally-delivered net revenue was $19.1
million in fiscal first quarter 2017 versus $100.0 million in
fiscal first quarter 2016.
GAAP cost of goods sold was $191.4 million, as compared to
$202.6 million for fiscal first quarter 2016.
Non-GAAP cost of goods sold was $187.0 million, as compared to
$197.9 million for fiscal first quarter 2016.
The change in deferred cost of goods sold, which represents cost
of goods sold recognized during the current period that were
deferred in prior periods, net of cost of goods sold that are being
deferred into future periods, was ($24.6) million in fiscal first
quarter 2017 versus $0.1 million in fiscal first quarter 2016.
GAAP net loss narrowed to $38.6 million, or $0.46 per diluted
share, as compared to GAAP net loss of $67.0 million, or $0.81 per
diluted share, for the year-ago period.
Non-GAAP net loss narrowed to $17.6 million, or $0.21 per
diluted share, as compared to $33.2 million, or $0.40 per diluted
share, for the year-ago period.
The net effect from deferral of net revenue and related cost of
goods sold, which represents the after-tax net effect on net income
(loss) from the change in deferred revenue and the change in
deferred cost of goods sold, was ($11.3) million (including tax
benefit of $3.1 million) in fiscal first quarter 2017 versus $67.4
million (Including tax expense of $23.6 million) in fiscal first
quarter 2016.
On May 18, 2016, Take-Two provided its financial outlook for the
fiscal first quarter ending June 30, 2016, including Non-GAAP net
revenue of $225 to $260 million and Non-GAAP net loss per diluted
share of $0.30 to $0.40. This outlook was based on the Company’s
prior Non-GAAP measures, which were adjusted for the net effect
from deferral in net revenue and related cost of goods sold. If
calculated based on these prior measures, the Company’s fiscal
first quarter results would have included Non-GAAP net revenue of
$272.6 million (based on GAAP net revenue of $311.6 million
adjusted for the change in deferred net revenue of ($39.0) million)
and Non-GAAP net loss of $28.9 million, or $0.34 per diluted share
(based on the Company’s new presentation of Non-GAAP net loss of
$17.6 million, adjusted for the net effect from deferral of net
revenue and related cost of goods sold of ($11.3) million).
As of June 30, 2016, the Company had cash and short-term
investments of $1.189 billion.
Operational Metric -
Bookings
During fiscal first quarter 2017, total bookings, which
represents the total amount billed by the Company from sales of
physical product sold-in to retail and available to consumers, net
of allowances, plus product digitally-delivered to consumers during
the period, were $253.4 million, as compared to $353.8 million
during fiscal first quarter 2016, which had benefitted from the
launch of Grand Theft Auto V for PC. The largest contributors to
bookings were Grand Theft Auto V and Grand Theft Auto Online, NBA
2K16 and Battleborn. Catalog accounted for $208.7 million of
bookings led by Grand Theft Auto and NBA 2K. Digitally-delivered
bookings were $172.7 million, as compared to $245.1 million in last
year’s fiscal first quarter, led by Grand Theft Auto, NBA 2K, and
Battleborn. Bookings from recurrent consumer spending (virtual
currency, downloadable add-on content and online games) grew 22%
year-over-year and accounted for 60% of digitally-delivered
bookings, or 41% of total bookings.
Management Comments
“Fiscal 2017 is off to a solid start, with first quarter net
revenue up 13% year-over-year,” said Strauss Zelnick, Chairman and
CEO of Take-Two. “Our results were driven by the continued strong
performance of Grand Theft Auto V and NBA 2K, coupled with growth
in revenue and bookings from recurrent consumer spending, including
record bookings from Grand Theft Auto Online.
“We anticipate a robust holiday season for Take-Two, anchored by
the upcoming launches of Mafia III, Sid Meier’s Civilization VI,
NBA 2K17 and WWE 2K17. We plan to continue to support our titles
with an array of innovative offerings designed to promote ongoing
engagement and drive recurrent consumer spending, including
additional free content for Grand Theft Auto Online. Looking ahead,
our exciting development pipeline extends well beyond the current
fiscal year, and we expect to grow bookings and cash flow from
operations in fiscal 2018.”
Business and Product
Highlights
Since April 1, 2016:
Rockstar Games:
- Released new free content updates for
Grand Theft Auto Online, including:
- Cunning Stunts, which features a total
of 27 brand-new, high-octane Stunt Races utilizing ramps, loops,
wall rides, tubes, raised tracks and dynamic objects for a radical
new take on Grand Theft Auto Online racing, along with 19 new
vehicles, clothing and the launch of the Stunt Race Creator tools,
which allow the community to make and share their own custom stunt
races. Also added on August 2, 2016 was the Entourage Adversary
Mode.
- Further Adventures in Finance and
Felony – one of the game’s biggest and deepest updates yet, which
expands the VIP experience of the Executives and Other Criminals
update to give players the opportunity to become CEO of their own
Criminal Enterprise. Further Adventures in Finance and Felony
combines all new gameplay with a host of special new vehicles,
exciting new features and much more.
- A May 3, 2016 update featuring the new
‘In & Out’ Adversary Mode and more.
- Made Red Dead Redemption available as
part of Microsoft’s Xbox One Backward Compatibility program,
enabling owners of the Xbox 360 versions of Red Dead Redemption,
Red Dead Redemption Undead Nightmare, and Red Dead Redemption: Game
of the Year Edition to play the game on Xbox One. In addition, Red
Dead Redemption is now available for purchase through digital
download from the Games Store on Xbox One.
- Rockstar Games also is hard at work on
some exciting future projects that will be revealed soon.
2K:
- 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 the BETA version of Evolve™
Stage 2, enabling consumers to play Evolve for free on PC via
Steam. More than 1 million new players joined the hunt in the first
week.
- XCOM® 2 is now planned for release on
PlayStation 4 and Xbox One on September 27, 2016 in North America
and September 30, 2016 internationally. Players who pre-order XCOM
2 or XCOM 2 Digital Deluxe Edition will receive the Resistance
Warrior Pack.
- Announced that BioShock®: The
Collection, which includes BioShock, BioShock 2, and BioShock
Infinite completely remastered for new-generation consoles in full
high resolution with up to 60 frames per second, will be released
for PlayStation 4, Xbox One, and PC* on September 13, 2016 in North
America, September 15, 2016 in Australia, and September 16, 2016
internationally. BioShock: The Collection brings the three titles
together for the first time, complete with all single-player DLC
and a never-before-seen video series, “Director’s Commentary:
Imagining BioShock,” which includes insights from series creator
Ken Levine.
- Announced that Indiana
Pacers All-Star shooting guard Paul George will be
the cover athlete for NBA 2K17, which will launch on
September 20, 2016 for PlayStation 4, PlayStation 3, Xbox One, Xbox
360 and PC. 2K also revealed the return
of NBA 2K Early Tip-Off Weekend, enabling fans who
pre-order NBA 2K17 at participating North American
retail and online vendors to receive their copy beginning
on Friday, September 16, 2016, four days ahead of the game’s
official street date, along with bonus in-game digital
content. In addition, 2K will release the NBA 2K17 Kobe
Bryant Legend Edition, celebrating the storied career of the
recently retired Lakers icon, on PlayStation 4 and
Xbox One.
- Announced that Brock Lesnar will be the
cover Superstar for WWE® 2K17, which is scheduled for release on
October 11, 2016 for PlayStation 4, PlayStation 3, Xbox One and
Xbox 360. In addition, Bill Goldberg will make his virtual
return in WWE 2K17 through two playable characters
representing his WCW® and WWE personas. The playable characters,
along with two playable arenas, will be available as bonus content
for those who pre-order the game at participating retailers.
- Announced that Sid Meier’s
Civilization® VI, the next entry in the award-winning turn-based
strategy franchise that has sold-in over 35 million units, is
currently in development for PC at Firaxis Games and planned for
launch on October 21, 2016.
- 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.
* Bioshock: The Collection will only be available for PC through
digital-download.
Financial Outlook for Fiscal
2017
Take-Two is providing its initial financial outlook for its
fiscal second quarter ending September 30, 2016. In addition, the
Company is updating its financial outlook for its fiscal year
ending March 31, 2017, including to conform to the Company’s new
Non-GAAP measures that no longer adjust for the net effect from
deferral in net revenue and related costs of goods sold. Additional
details regarding our financial outlook are available by visiting
http://ir.take2games.com.
Second Quarter
Fiscal Year
Ending 9/30/2016 (1)
Ending 3/31/2017 (1)
Net revenue
$375 to $425 million
$1.75 to $1.85 billion
Net income
$31 to $45 million
$208 to $244 million
Stock-based compensation expense (2)
$11 million $50 million
Non-cash amortization of discount on
convertible notes
$6 million $19 million
Gain on long-term investment, net
- $1 million
Income tax adjustment
($9) to ($11) million ($49) to ($56) million
Non-GAAP net income
$39 to $51 million
$229 to $258 million
Net income per diluted share
$0.32 to $0.44
$1.98 to $2.29
Non-GAAP net income per diluted
share
$0.35 to $0.45
$2.00 to $2.25
Deferred Net
Revenue and Cost of Goods Sold
Change in deferred net revenue ($8) million ($200) million Net
effect from deferral of net revenue and related cost of goods sold
($17) million (3) ($118) million (4)
Operational
Metric
Bookings
$350 to $400 million
$1.5 to $1.6 billion
1)
The individual components of the financial
outlook may not foot to the totals as the Company does not expect
actual results for every component to be at the low end or high end
of the outlook range simultaneously.
2) 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. 3) Includes tax impact of
$6 million. 4) Includes tax impact of $37 million.
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 April 1, 2016:
Label
Title
Platforms
Release Date
2K
Tales from the Borderlands
PS4, PS3, Xbox One, Xbox 360, PC April
26, 2016 2K
Battleborn
PS4, Xbox One, PC May 3, 2016 2K
Battleborn Tap
iOS, Android May 3, 2016 2K
XCOM 2: Alien Hunters (DLC)
PC May 12, 2016 2K
XCOM 2: Shen’s Last Gift (DLC)
PC June 30, 2016 2K
Evolve Stage 2
PC July 7, 2016 Take-Two's lineup of future titles announced
to date includes:
Label
Title
Platforms
Release Date
2K
BioShock: The Collection
PS4, Xbox One, PC September 13, 2016* 2K
NBA 2K17
PS4, PS3, Xbox One, Xbox 360, PC September 20, 2016 2K
XCOM 2
PS4, Xbox One September 27, 2016* 2K
Mafia III
PS4, Xbox One, PC October 7, 2016 2K
WWE 2K17
PS4, PS3, Xbox One, Xbox 360 October 11, 2016 2K
Sid Meier’s Civilization VI
PC October 21, 2016
* North American release date;
international release typically follows three days later.
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. These Non-GAAP
financial measures are not intended to be considered in isolation
from, as a substitute for, or superior to, the corresponding GAAP
financial measures, and may be different from similarly titled
measures used by other companies. Management believes that the
presentation of these Non-GAAP financial measures facilitates
comparison of the Company’s operating performance between periods
and helps 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,
such as stock-based compensation and non-cash amortization of
discount on convertible notes; charges relating to business
reorganizations; and gains on strategic non-core business
investments. Internally, management makes Non-GAAP adjustments to
the Company’s financial measures as set forth below to assess the
company's operating results and in planning and forecasting. The
Non-GAAP adjustments to the Company’s financial measures are as
follows:
- Stock-based compensation – stock-based
compensation is a non-cash expense that is subject to stock price
volatility. 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. In addition, when considering the impact
of equity award grants, the Company places a greater emphasis on
overall shareholder dilution rather than the accounting charges
associates with such grants. 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 and circumstances. 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.
- Gain on long-term investment, net –
from time to time, the Company makes strategic non-core business
investments. Because the Company does not exercise significant
control over these investments, it excludes the impact of any gains
and losses on such investments from its Non-GAAP financial
measures.
- Income tax adjustment – the Company
calculates a provision/benefit for income taxes on a standalone,
Non-GAAP basis inclusive of the adjustments noted above. The income
tax adjustment reflects the difference between our GAAP and
Non-GAAP provision/benefit for income taxes.
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.
Final Results
The financial results discussed herein are presented on a
preliminary basis; final data will be included in Take-Two’s
Quarterly Report on Form 10-Q for the period ended June 30,
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 June 30, 2016
2015 Net revenue
$
311,552 $ 275,297 Cost of goods sold:
Software development costs and royalties
63,659 50,493
Internal royalties
59,673 105,829 Product costs
44,979 39,941 Licenses
23,069
6,352 Total cost of goods sold
191,380 202,615 Gross profit
120,172 72,682 Selling and marketing
71,134
45,567 General and administrative
46,743 49,035 Research and
development
33,900 34,142 Depreciation and amortization
7,378 6,575 Total
operating expenses
159,155
135,319 Loss from operations
(38,983 ) (62,637
) Interest and other, net
(4,506 ) (7,534 ) Gain on
long-term investment
1,350 -
Loss before income taxes
(42,139 ) (70,171 )
Benefit from income taxes
(3,572 )
(3,148 ) Net loss
$ (38,567 ) $
(67,023 ) Loss per share: Basic and diluted loss per share
$ (0.46 ) $ (0.81 ) Weighted average shares
outstanding: Basic and Diluted
84,588
82,833
Computation of Basic and Diluted EPS: Net loss
for basic and diluted EPS calculation
$ (38,567
) $ (67,023 )
Weighted average common shares outstanding
- basic and diluted
84,588 82,833 Basic and Diluted
loss per share
$ (0.46 ) $ (0.81 )
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (in thousands, except per
share amounts) June 30, March 31,
2016 2016 ASSETS
(Unaudited) Current assets: Cash and cash equivalents
$ 796,328 $ 798,742 Short-term investments
392,489 470,820 Restricted cash
318,504 261,169
Accounts receivable, net of allowances of
$67,744 and $45,552 at June 30, 2016 and March 31, 2016,
respectively
141,150 168,527 Inventory
12,734 15,888 Software
development costs and licenses
167,218 178,387 Deferred cost
of goods sold
92,515 98,474 Prepaid expenses and other
56,734 53,269 Total current
assets
1,977,672 2,045,276
Fixed assets, net
72,414 77,127 Software development
costs and licenses, net of current portion
247,272 214,831
Deferred cost of goods sold, net of current portion
5,301
17,915 Goodwill
215,622 217,080 Other intangibles, net
4,609 4,609 Other assets
15,837
13,439 Total assets
$ 2,538,727 $
2,590,277
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities: Accounts payable
$ 37,781 $
30,448 Accrued expenses and other current liabilities
619,435 607,479 Deferred revenue
604,411
582,484 Total current liabilities
1,261,627 1,220,411 Long-term
debt
504,385 497,935 Non-current deferred revenue
153,912 216,319 Other long-term liabilities
85,263 74,227 Total liabilities
2,005,187 2,008,892
Stockholders' equity: Preferred stock, $.01 par value, 5,000 shares
authorized
- - Common stock, $.01 par value, 200,000 shares
authorized; 104,599 and 103,765 shares issued and 87,407 and 86,573
outstanding at June 30, 2016 and March 31, 2016, respectively
1,046 1,038 Additional paid-in capital
1,082,765
1,088,628 Treasury stock, at cost; 17,192 common shares at June 30,
2016 and March 31, 2016, respectively
(303,388 )
(303,388 ) Accumulated deficit
(205,564 ) (166,997 )
Accumulated other comprehensive loss
(41,319 )
(37,896 ) Total stockholders' equity
533,540
581,385 Total liabilities and stockholders'
equity
$ 2,538,727 $ 2,590,277
TAKE-TWO INTERACTIVE SOFTWARE, INC. and
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Three months ended June 30, 2016
2015
Operating activities:
Net loss
$ (38,567 ) $ (67,023 ) Adjustments
to reconcile net loss to net cash provided by (used in) operating
activities: Amortization and impairment of software development
costs and licenses
41,034 23,590 Depreciation and
amortization
7,378 6,575 Amortization and impairment of
intellectual property
- 32 Stock-based compensation
15,100 19,086 Amortization of discount on Convertible Notes
6,098 5,727 Amortization of debt issuance costs
381
398 Other, net
(3,171 ) 183 Changes in assets and
liabilities: Restricted cash
(57,335 ) (60,315 )
Accounts receivable
28,226 87,198 Inventory
2,696
8,341 Software development costs and licenses
(62,392
) (43,131 ) Prepaid expenses, other current and other
non-current assets
(3,867 ) (20,693 ) Deferred
revenue
(36,446 ) 91,903 Deferred cost of goods sold
17,223 1,243 Accounts payable, accrued expenses and other
liabilities
36,394 52,368 Net
cash provided by (used in) operating activities
(47,248 ) 105,482
Investing activities:
Change in bank time deposits
78,691 (187,045 ) Proceeds from
available-for-sale securities
29,795 - Purchases of
available-for-sale securities
(30,836 ) (444 )
Purchases of fixed assets
(4,230 ) (18,769 ) Proceeds
from sale of long-term investments
1,350 - Purchase of
long-term investments
(1,885 ) -
Net cash used in investing activities
72,885
(206,258 )
Financing activities:
Excess tax benefit from stock-based compensation
887 8,066
Tax payment related to net share settlements on restricted stock
awards
(25,166 ) (6,541 ) Net cash
provided by (used in) financing activities
(24,279
) 1,525 Effects of foreign exchange
rates on cash and cash equivalents
(3,772 )
3,915 Net decrease in cash and cash
equivalents
(2,414 ) (95,336 ) Cash and cash
equivalents, beginning of year
798,742
911,120 Cash and cash equivalents, end of period
$
796,328 $ 815,784
TAKE-TWO INTERACTIVE SOFTWARE, INC. and
SUBSIDIARIES
RECONCILIATION OF GAAP TO Non-GAAP
MEASURES (Unaudited)
(in thousands, except per share
amounts)
Three months ended June 30, 2016
2015 Gross Profit GAAP
Gross Profit $ 120,172 $ 72,682 Stock-based
compensation
4,386 4,694
Non-GAAP Gross Profit 124,558 $ 77,376
Income (Loss) from Operations GAAP Loss
from Operations $ (38,983 ) $ (62,637 )
Stock-based compensation
15,100 19,086 Business
reorganization, restructuring and related expenses
-
1,228
Non-GAAP Loss from Operations
$ (23,883 ) $ (42,323 )
Net Income
(Loss) GAAP Net Loss $ (38,567 ) $
(67,023 ) Stock-based compensation
15,100 19,086 Business
reorganization, restructuring and related expenses
- 1,228
Non-cash amortization of discount on Convertible Notes
6,099
5,727 Gain on long-term investment
(1,350 ) - Income
tax adjustment
1,133 7,810
Non-GAAP Net Loss $ (17,585 ) $ (33,172
)
Diluted Loss Per Share GAAP loss per share
$
(0.46 ) $ (0.81 ) Non-GAAP earnings loss per share
$ (0.21 ) $ (0.40 ) Number of diluted
shares used in computation GAAP
84,588 82,833 Non-GAAP
84,588 82,833
Computation of Diluted GAAP
EPS: Net loss for diluted EPS calculation
$
(38,567 ) $ (67,023 ) Weighted average common
shares outstanding - diluted
84,588 82,833
Diluted loss per share
$ (0.46 ) $ (0.81 )
Computation of Diluted Non-GAAP EPS: Net loss
for diluted earnings per share calculation
$ (17,585
) $ (33,172 ) Weighted average common shares
outstanding - diluted
84,588 82,833 Diluted
loss per share
$ (0.21 ) $ (0.40 )
TAKE-TWO INTERACTIVE SOFTWARE, INC. and
SUBSIDIARIES
RECONCILIATION OF Non-GAAP TO Non-GAAP
AS PREVIOUSLY DEFINED MEASURES (Unaudited)
(in thousands)
Three Months Ended June 30,
2016 2015 GAAP
Net Revenues $ 311,552 $ 275,297
Change in deferred net revenues
(38,996 )
91,095 Non-GAAP (As Previously Defined) Net
Revenues 272,556 366,392
GAAP Digital Online Revenues $
172,078 $ 153,985 Net effect from deferral in
digital online revenues
19,086
99,978 Non-GAAP (As Previously Defined) Digital
Online Revenues $ 191,164 $
253,963 Non- GAAP Gross Profit
$ 124,558 $ 77,376 Change in deferred
net revenues
(38,996 ) 91,095 Change in
deferred cost of goods sold
24,623
(130 ) Non-GAAP (As Previously Defined) Gross
Profit $ 110,185 $ 168,341
Non-GAAP Loss from Operations $
(23,883 ) $ (42,323 ) Change in
deferred net revenues
(38,996 ) 91,095 Change
in deferred cost of goods sold
24,623
(130 ) Non-GAAP (As Previously Defined) (Loss)
Income from Operations $ (38,256 )
$ 48,642 Non-GAAP Net
Loss $ (17,585 ) $ (33,172
) Net effect from deferral of net revenue and related cost
of goods sold, net of taxes (1)
(11,310 )
67,380 Non-GAAP (As Previously Defined) Net
(Loss) Income $ (28,895 ) $
34,208 1) Includes a tax benefit of $3,063 and
tax expense of $23,585 for June 30, 2016 and June 30, 2015,
respectively
Diluted Loss Per Share Non-GAAP diluted
loss per share
$ (0.21 ) $ (0.40 ) Non-GAAP,
as previously defined diluted (loss) earnings per share
$
(0.34 ) $ 0.31 Number of diluted shares used
in computation Non-GAAP
84,588 82,833
Non-GAAP, as previously defined
84,588 114,442
Computation of Diluted
Non-GAAP EPS: Net loss for diluted EPS calculation
$
(17,585 ) $ (33,172 ) Weighted average shares
outstanding - basic and diluted
84,588 82,833
Diluted loss per share
$ (0.21 ) $ (0.40 )
Computation of Diluted Non-GAAP, as previously
defined EPS: Non-GAAP net (loss) income
$ (28,895
) $ 34,208 Less: net income (loss) allocated to
participating securities
- (1,541 ) Add: interest expense,
net of tax, on Convertible Notes
-
1,372 Net (loss) income for diluted earnings per share
calculation
$ (28,895 ) $ 34,039
Weighted average shares outstanding - basic and diluted
84,588 82,833 Add: dilutive effect of common stock
equivalents
- 31,609 Total
weighted average shares outstanding - diluted
84,588 114,442
Less: weighted average participating shares outstanding
- (5,154 ) Weighted average common shares
outstanding - diluted
84,588 109,288 Diluted
(loss) earnings per share
$ (0.34 ) $ 0.31
TAKE-TWO INTERACTIVE
SOFTWARE, INC. and SUBSIDIARIES Net Revenue by Geographic
Region, Distribution Channel, and Platform Mix (in
thousands) Three Months
Ended
June 30, 2016
Three Months Ended
June 30, 2015
Amount % of Total Amount % of Total
Net Revenues by Geographic Region United States
$ 193,101 62 % $ 143,438 52 %
International
118,451 38 %
131,859 48 % Total net revenues
311,552
100 % 275,297 100 %
Change in Deferred Net Revenues United States
$
(49,861 ) $ 7,457 International
10,865
83,638 Total changes in deferred net revenues
(38,996 ) 91,095
Three
Months Ended
June 30, 2016
Three Months Ended
June 30, 2015
Amount % of Total Amount % of Total
Net Revenues by Distribution Channel Digital online
$ 172,078 55 % $ 153,985 56 % Physical
retail and other
139,474 45 %
121,312 44 % Total net revenues
311,552
100 % 275,297 100 %
Change in Deferred Net Revenues Digital online
$
19,086 $ 99,978 Physical retail and other
(58,082 ) (8,883 ) Total changes in deferred
net revenues
(38,996 ) 91,095
Three Months Ended
June 30, 2016
Three Months Ended
June 30, 2015
Amount % of Total Amount % of Total
Net Revenues by Platform Mix Console
$ 254,026
82 % $ 222,574 81 % PC and other
57,526
18 % 52,723 19 % Total net
revenues
311,552 100 %
275,297 100 %
Change in Deferred Net Revenues
Console
$ (40,181 ) $ (37,211 ) PC and other
1,185 128,306 Total changes in
deferred net revenues
(38,996 ) 91,095
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160804006245/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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