Take-Two Interactive Software(US:TTWO)2025-08-07 20:47Financial Performance - For the three months ended June 30, 2025, Net Bookings increased to $1,423.1 million, representing a 16.8% increase from $1,218.1 million in the prior year period, primarily driven by the NBA 2K franchise and Color Block Jam[120]. - Total net revenue for the three months ended June 30, 2025, was $1,503.8 million, representing a 12.4% increase from $1,338.2 million in the prior year period[122]. - Gross profit increased to $945.0 million, with a gross profit margin of 62.9%, up from 57.6% in the prior year[126]. - Net revenue from mobile games rose by $79.2 million, accounting for 53.3% of total net revenue, compared to 54.0% in the prior year[123]. - Recurrent consumer spending (RCS) increased by $158.4 million, making up 83.5% of net revenue, compared to 82.0% in the prior year[124]. - Digital online revenue grew by $181.1 million, representing 98.2% of total net revenue, up from 96.8% in the prior year[125]. - Total operating expenses decreased to $923.4 million, representing 61.5% of net revenue, down from 71.3% in the prior year[128]. - For the three months ended June 30, 2025, the net loss was $11.9 million, a significant improvement from a net loss of $262.0 million in the prior year period[144]. - Basic and diluted loss per share for the same period was $0.07, compared to $1.52 in the prior year[144]. Revenue Sources - Sales of Grand Theft Auto products generated 14.7% of net revenue for the three months ended June 30, 2025[108]. - Console revenue comprised 36.6% of net revenue for the three months ended June 30, 2025[113]. - Net revenue from digital online channels accounted for 98.2% of net revenue for the three months ended June 30, 2025[114]. - For the three months ended June 30, 2025, 40.1% of net revenue was earned outside the U.S., compared to 38.7% in the prior year[162]. - The five largest customers accounted for 83.5% of net revenue during the three months ended June 30, 2025[154]. Future Releases - Rockstar Games plans to release Grand Theft Auto VI on May 26, 2026, during fiscal year 2027[105]. - The 2K label plans to release several titles, including Mafia: The Old Country, NBA 2K26, Borderlands 4, and WWE 2K26 during the remainder of fiscal year 2026[109]. Cash and Investments - As of June 30, 2025, cash and cash equivalents totaled $2,116.2 million, up from $1,559.2 million at March 31, 2025, primarily due to net cash provided by financing activities[159]. - Net cash used in operating activities for the three months ended June 30, 2025, was $44.7 million, an improvement from $191.0 million in the prior year[159]. - Capital expenditures during the three months ended June 30, 2025, were $25.1 million, with anticipated capital expenditures for fiscal year 2026 projected at approximately $140.0 million[161]. - As of June 30, 2025, the company had $10.1 million in short-term investments, primarily consisting of bank time deposits[148]. Foreign Currency Impact - Changes in foreign currency exchange rates positively impacted net revenue by $1.8 million and gross profit by $10.9 million[127]. - For the three months ended June 30, 2025, the foreign currency translation adjustment was a gain of $82.9 million, compared to a loss of $5.4 million for the same period in 2024[170]. - The company recognized a foreign currency exchange transaction loss of $8.5 million for the three months ended June 30, 2025, compared to a loss of $2.8 million in 2024[170]. - As of June 30, 2025, the company had $276.7 million of forward contracts outstanding to sell foreign currencies in exchange for U.S. dollars[174]. - For the three months ended June 30, 2025, the company recorded a loss of $12.4 million related to foreign currency forward contracts, compared to a gain of $3.5 million in 2024[174]. - A hypothetical 10% increase in the value of the U.S. dollar against all currencies would decrease revenues by 4.0%, while a 10% decrease would increase revenues by 4.0%[175]. - The fair value of outstanding forward contracts is estimated based on prevailing exchange rates and is included in accrued expenses or prepaid expenses depending on the position[174]. - The company uses foreign currency forward contracts to mitigate foreign currency exchange rate risk associated with non-functional currency denominated cash balances and intercompany funding loans[171]. - The hedging programs are designed to reduce, but not entirely eliminate, the effect of currency exchange rate movements[175]. - The risk of counterparty nonperformance related to foreign currency forward contracts is considered not material[175]. Operational Challenges - The economic environment and retailer performance may impact consumer demand and pricing pressure on products[110]. - Player acquisition costs for mobile titles are recorded within Selling and marketing expenses, affecting operating results over time[116]. - Research and development expenses increased by $41.6 million, primarily due to the acquisition of Gearbox and related personnel costs[130]. - Interest and other expenses increased to $35.4 million, compared to $27.3 million in the prior year, mainly due to higher foreign currency losses[134]. - The benefit from income taxes was $1.9 million for the three months ended June 30, 2025, compared to a provision of $49.8 million in the prior year[135].