Take-Two Interactive Software(US:TTWO)2024-08-08 21:58Revenue Performance - Take-Two's revenue for the three months ended June 30, 2024, was significantly driven by Grand Theft Auto products, which accounted for 13.1% of net revenue[107] - Total net revenue for the same period was $1,338.2 million, representing a $53.5 million increase or 4.2% from $1,284.7 million in the previous year[120] - Net Bookings for the three months ended June 30, 2024, were $1,218.1 million, an increase of $16.6 million or 1.4% compared to $1,201.5 million in the prior year[118] - Mobile revenue accounted for 54.0% of total net revenue, increasing by $42.5 million compared to the prior year period[122] - Digital online channels comprised 96.8% of net revenue for the three months ended June 30, 2024, indicating a strong shift towards online delivery of games[111] - Digital online revenue increased by $55.5 million, accounting for 96.8% of total net revenue, up from 96.5% in the previous year[124] - 38.7% of net revenue for the three months ended June 30, 2024, was earned outside the United States, compared to 37.4% in the prior year[152] - 38.7% of the company's revenue for the three months ended June 30, 2024, was generated outside the United States[159] Profitability and Expenses - Gross profit increased to $771.1 million, which is 57.6% of net revenue, up from 52.9% in the prior year[125] - Total operating expenses rose to $956.0 million, which is 71.3% of net revenue, compared to 68.8% in the prior year[126] - Selling and marketing expenses increased by $32.0 million, primarily due to higher marketing expenses for Match Factory![128] - Research and development expenses decreased by $18.8 million for the three months ended June 30, 2024, compared to the prior year period[129] - General and administrative expenses increased by $12.6 million for the three months ended June 30, 2024, primarily due to professional fees related to the Gearbox acquisition and increased IT-related expenses[130] - Business reorganization expenses surged to $49.5 million, a significant increase of 587.5% compared to $7.2 million in the prior year[126] - Business reorganization costs increased by $42.3 million for the three months ended June 30, 2024, due to the cancellation of titles and employee-related costs[131] - The net loss for the three months ended June 30, 2024, was $262.0 million, compared to a net loss of $206.0 million in the prior year[120] - Net loss for the three months ended June 30, 2024, was $262.0 million, compared to a net loss of $206.0 million in the prior year period, with a basic and diluted loss per share of $1.52[140] Future Outlook and Investments - Rockstar Games plans to release Grand Theft Auto VI in Fall 2025, following the successful sales of Grand Theft Auto V, which has sold over 200 million units worldwide[102] - The company continues to invest in new content and franchises, with 2K releasing NBA 2K25 and Private Division releasing No Rest for the Wicked in fiscal year 2025[115] - Capital expenditures for the three months ended June 30, 2024, were $35.1 million, with anticipated capital expenditures for fiscal year 2025 estimated at approximately $145.0 million[151] Market and Economic Factors - The economic environment and geopolitical factors, such as the conflict in Ukraine, have impacted sales, particularly in Russia and Belarus[108] - A hypothetical 10% increase in the value of the U.S. dollar against all currencies would decrease revenues by 3.9%[159] - Fluctuations in interest rates have historically not had a significant effect on the company's operating results[155] User Engagement and Reach - The NBA 2K Online game in China has over 60 million registered users, highlighting the success of the company's international expansion efforts[106] - Zynga's games have been downloaded more than six billion times, showcasing the extensive reach of its mobile gaming portfolio[105] Financial Position - As of June 30, 2024, the company had $1,471.9 million in cash and cash equivalents, an increase from $1,102.0 million at March 31, 2024[150] - As of June 30, 2024, the company had $15.4 million in short-term investments and $3,650.0 million in Senior Notes outstanding[142] - The company had no borrowings under its 2022 Credit Agreement as of June 30, 2024[156] - The company does not currently use derivative financial instruments in its short-term investment portfolio[154] Tax and Currency Adjustments - The effective tax rate for the three months ended June 30, 2024, was (23.5)%, primarily due to tax expense related to an increase in valuation allowance[134] - For the three months ended June 30, 2024, the foreign currency translation adjustment resulted in a loss of $5.4 million, compared to a gain of $26.0 million for the same period in 2023[157] - The company recorded a gain of $3.5 million related to foreign currency forward contracts for the three months ended June 30, 2024[158] - The company has $247.2 million of forward contracts outstanding to sell foreign currencies in exchange for U.S. dollars as of June 30, 2024[158] Seasonal Trends - The company’s full game product sales are seasonal, with peak demand typically occurring in the fourth calendar quarter[153]