Take-Two Interactive Software(US:TTWO)2025-11-06 22:32Financial Performance - Net Bookings for the three months ended September 30, 2025, were $1,474.9 million, a decrease of 32.9% compared to $1,960.5 million in the prior year[127] - For the six months ended September 30, 2025, Net Bookings increased to $3,383.6 million, up 25.6% from $2,693.1 million in the prior year[127] - Total net revenue for the three months ended September 30, 2025, was $1,773.8 million, a 31.1% increase from $1,353.1 million in the prior year period[130] - For the six months ended September 30, 2025, total net revenue increased by $586.3 million, or 21.8%, to $3,277.6 million compared to $2,691.3 million in the prior year period[155] - Net loss for the three months ended September 30, 2025 was $133.9 million, a decrease from a net loss of $365.5 million in the prior year period, resulting in a basic and diluted loss per share of $0.73 compared to $2.08[153] - For the six months ended September 30, 2025, the net loss was $145.8 million, a significant improvement from a net loss of $627.5 million in the prior year period[179] - Basic and diluted loss per share for the same period was $0.80, compared to $3.61 in the prior year[179] Revenue Sources - Sales of Grand Theft Auto products generated 12.0% of net revenue for the six months ended September 30, 2025[115] - The latest installment of the Borderlands franchise, Borderlands 4, was released in September 2025, contributing to higher Net Bookings[127] - The NBA 2K franchise was a significant driver of Net Bookings growth for both the three and six months ended September 30, 2025[127] - Digital online channels accounted for 96.7% of net revenue for the six months ended September 30, 2025[121] - Console revenue comprised 38.8% of net revenue for the six months ended September 30, 2025[120] - Net revenue from mobile increased by $81.4 million, accounting for 46.3% of total net revenue, compared to 54.7% in the prior year[131] - Net revenue from console games increased by $228.9 million, accounting for 40.6% of total net revenue, compared to 36.3% in the prior year[131] - Net revenue from mobile games increased by $160.6 million, accounting for 49.5% of total net revenue for the six months ended September 30, 2025, down from 54.3% in the prior year period[156] - Net revenue from digital online channels increased by $574.2 million, accounting for 96.7% of total net revenue for the six months ended September 30, 2025, compared to 96.4% in the prior year period[158] Operating Expenses - Total operating expenses for the three months ended September 30, 2025, were $1,078.5 million, which is 60.9% of net revenue, compared to 74.5% in the prior year[136] - Total operating expenses for the six months ended September 30, 2025 were $2,001.9 million, representing 61.1% of net revenue, a decrease from 73.6% in the prior year period[161] - Selling and marketing expenses increased by $75.3 million, primarily due to higher marketing expenses for the Borderlands franchise and Color Block Jam[137] - Selling and marketing expenses increased by $52.7 million, or 5.9%, for the six months ended September 30, 2025, driven by higher performance-based compensation and marketing expenses for new titles[162] - Research and development expenses increased by $62.9 million, or 13.5%, for the six months ended September 30, 2025, primarily due to higher personnel expenses from the acquisition of Gearbox[163] Tax and Interest - The provision for income taxes was $18.4 million for the three months ended September 30, 2025, down from $41.2 million in the prior year[143] - The provision for income taxes for the six months ended September 30, 2025 was $16.5 million, a decrease from $91.0 million in the prior year period[168] - The effective tax rate for the six months ended September 30, 2025 was (12.8)%, compared to (17.0)% in the prior year period, primarily driven by changes in valuation allowances and geographic mix of earnings[169] - Interest and other net expenses decreased to $17.5 million from $27.1 million in the prior year, driven by lower interest expenses and foreign currency gains[142] Cash and Investments - As of September 30, 2025, cash and cash equivalents totaled $1,961.0 million, an increase from $1,559.2 million at March 31, 2025, primarily due to net cash provided by financing activities[193] - Net cash provided by operating activities for the six months ended September 30, 2025, was $83.7 million, compared to a net cash used of $319.4 million in the prior year[193] - Capital expenditures for the six months ended September 30, 2025, were $57.0 million, with anticipated capital expenditures for fiscal year 2026 expected to be approximately $180.0 million[195] - The company had $246.4 million in short-term investments as of September 30, 2025, primarily consisting of bank time deposits[183] - The company entered into an arrangement to sell designated pools of high credit quality accounts receivable for up to $215.0 million[181] - The company expects to rely on cash and cash equivalents, short-term investments, and funds from operating activities to satisfy working capital needs[180] - As of September 30, 2025, the company had $3,050.0 million of Senior Notes outstanding[184] Foreign Currency Impact - For the three months ended September 30, 2025, the foreign currency translation adjustment resulted in a loss of $38.0 million, compared to a gain of $71.6 million for the same period in 2024[205] - The company recognized a foreign currency exchange transaction gain of $1.9 million for the three months ended September 30, 2025, compared to a loss of $3.4 million in 2024[205] - As of September 30, 2025, the company had $425.9 million of forward contracts outstanding to sell foreign currencies in exchange for U.S. dollars[207] - For the six months ended September 30, 2025, the company recorded a loss of $13.0 million related to foreign currency forward contracts, compared to a gain of $0.2 million in 2024[207] - A hypothetical 10% increase in the value of the U.S. dollar against all currencies would decrease revenues by 4.2%, while a 10% decrease would increase revenues by 4.2%[208] - The company uses foreign currency forward contracts to mitigate foreign currency exchange rate risk, which are accounted for as derivatives[206] - The fair value of outstanding forward contracts is estimated based on prevailing exchange rates and is reported as either assets or liabilities on the balance sheet[206] - The company believes that the counterparties to its foreign currency forward contracts are creditworthy, minimizing the risk of counterparty nonperformance[208] Customer Concentration - The five largest customers accounted for 81.5% of net revenue during the six months ended September 30, 2025[189]