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GAAP net revenue increased 2% to $858.2 million
GAAP net income per diluted share was $0.09
GAAP net cash provided by operating activities for the six-months ended September 30, 2021 was $283.7 million
Adjusted Unrestricted Operating Cash Flow (Non-GAAP) for the six-months ended September 30, 2021 was $56.1 million
Net Bookings increased 3% to $984.9 million
Company raises its Net Bookings outlook for fiscal year 2022 to $3.3 to $3.4 billion
Company repurchased 1.26 million shares of common stock for approximately $200 million at an average share price of $158.67
NEW YORK–(BUSINESS WIRE)–Take-Two Interactive Software, Inc. (NASDAQ:TTWO) today reported strong results for the second quarter of its fiscal year 2022, ending September 30, 2021. In addition, the Company raised its outlook for the fiscal year 2022, ending March 31, 2022, and provided its initial outlook for the third quarter of its fiscal year 2022, ending December 31, 2021. For further information, please see the second quarter fiscal 2022 results slide deck posted to the Company’s investor relations website at http://ir.take2games.com.
Second Quarter Fiscal 2022 Financial Highlights
GAAP net revenue increased 2% to $858.2 million, as compared to $841.1 million in last year’s fiscal second quarter. Recurrent consumer spending (which is generated from ongoing consumer engagement and includes virtual currency, add-on content and in-game purchases) increased 8% and accounted for 66% of total GAAP net revenue. Digitally-delivered GAAP net revenue increased 7% to $779.1 million, as compared to $725.7 million in last year’s fiscal second quarter, and accounted for 91% of total GAAP net revenue. The largest contributors to GAAP net revenue were NBA® 2K22 and NBA 2K21; Grand Theft Auto® Online and Grand Theft Auto V; Red Dead Redemption 2 and Red Dead Online; Borderlands® 3; Two Dots®; Sid Meier’s Civilization® VI; and Dragon City®.
GAAP net income was $10.3 million, or $0.09 per diluted share, as compared to $99.3 million, or $0.86 per diluted share, for the comparable period last year. Cost of goods sold included a $53 million impairment charge related to the Company’s decision not to proceed with further development of an unannounced title in its pipeline.
During the six month-period ended September 30, 2021, GAAP net cash provided by operating activities was $283.7 million, as compared to $626.7 million in the same period last year. During the six month-period ended September 30, 2021, Adjusted Unrestricted Operating Cash Flow (Non-GAAP), which is defined as GAAP net cash from operating activities, adjusted for changes in restricted cash, was $56.1 million, as compared to $536.2 million in the same period last year (please see the section below titled “Non-GAAP Financial Measure” for additional information). As of September 30, 2021, the Company had cash and short-term investments of $2.3 billion.
The following data, together with a management reporting tax rate of 16%, are used internally by the Company’s management and Board of Directors to adjust the Company’s GAAP financial results in order to facilitate comparison of its operating performance between periods and to better understand its core business and future outlook:
|
|
Three Months Ended September 30, 2021 |
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|
|
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Financial Data |
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|
|
Statement of |
|
Change in |
|
Stock-based |
|
Impact of |
|
Amortization |
|
Business |
|
Gain (loss) |
Net revenue |
|
$858,198 |
|
126,654 |
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
|
456,682 |
|
8,606 |
|
(10,366) |
|
|
|
(13,985) |
|
|
|
|
Gross profit |
|
401,516 |
|
118,048 |
|
10,366 |
|
|
|
13,985 |
|
|
|
|
Operating expenses |
|
381,365 |
|
|
|
(36,810) |
|
(326) |
|
(3,811) |
|
(23,368) |
|
|
Income from operations |
|
20,151 |
|
118,048 |
|
47,176 |
|
326 |
|
17,796 |
|
23,368 |
|
|
Interest and other, net |
|
(572) |
|
935 |
|
|
|
|
|
|
|
|
|
|
Gain (loss) on long-term investments, net |
|
395 |
|
|
|
|
|
|
|
|
|
|
|
(395) |
Income before income taxes |
|
19,974 |
|
118,983 |
|
47,176 |
|
326 |
|
17,796 |
|
23,368 |
|
(395) |
In order to calculate net income per diluted share for management reporting purposes, the Company uses its fully diluted share count of 116.8 million.
Operational Metric – Net Bookings
Net Bookings is defined as the net amount of products and services sold digitally or sold-in physically during the period, and includes licensing fees, merchandise, in-game advertising, strategy guides and publisher incentives.
During fiscal second quarter 2022, total Net Bookings increased 3% to $984.9 million, as compared to $957.5 million during last year’s fiscal second quarter. Net Bookings from recurrent consumer spending increased 7% and accounted for 69% of total Net Bookings. Digitally-delivered Net Bookings increased 9% to $876.1 million, as compared to $806.1 million in last year’s fiscal second quarter, and accounted for 89% of total Net Bookings. The largest contributors to Net Bookings were NBA 2K22 and NBA 2K21; Grand Theft Auto Online and Grand Theft Auto V; Red Dead Redemption 2 and Red Dead Online; Borderlands 3; Top Eleven; Sid Meier’s Civilization VI; and Dragon City.
Catalog accounted for $629.2 million of Net Bookings led by Grand Theft Auto, NBA 2K, Red Dead Redemption, Borderlands, Top Eleven, Sid Meier’s Civilization and Dragon City.
Management Comments
“Our second quarter results were outstanding, highlighted by Net Bookings of $985 million, which greatly exceeded our expectations and increased 3% as compared to last year,” said Strauss Zelnick, Chairman and CEO of Take-Two. “We experienced consistently strong engagement trends across our key franchises, underscoring the durability of our offerings and the deep relationships that we have established with new, existing, and returning players.”
“As a result of our better-than-expected second quarter operating results, along with our updated forecast for the balance of the year, we are raising our Net Bookings guidance for the year to $3.3 to $3.4 billion.”
“We remain highly optimistic about our ability to capitalize further on the positive trends of our industry. As we continue to harness and enhance our competitive advantages – our incredible creative talent, best-in-class marketing and technology, and strong balance sheet – we will introduce new entertainment experiences that we believe have vast commercial potential and the ability to drive long-term engagement and recurrent consumer spending. We also expect to continue to attract the very best creators who share in our vision to set new benchmarks and captivate audiences throughout the world.”
COVID-19 Update
At Take-Two, our number one priority has remained the health and safety of our employees and their families. We are taking a prudent approach relating to our return to office cadence and planning. Some of our offices are open, and we plan for the majority of our offices to reopen in the coming months. Given the evolving dynamics of the COVID-19 pandemic, we are strictly following protocols from local governments and health officials to ensure that we are adhering to their safety standards.
Due to the shelter-in-place orders that began last year, we experienced heightened levels of engagement and Net Bookings growth during our fiscal 2021 period. As the return to normalcy continues to unfold, the impact to our business, operations and financial results will depend on numerous evolving factors that we are not able to predict. The key risks to our business are set forth under the heading “Cautionary Note Regarding Forward-Looking Statements” in this release and in Take-Two’s Annual Report on Form 10-K for the fiscal year ended March 31, 2021.
Business and Product Highlights
Since July 1, 2021:
Take-Two:
Rockstar Games:
2K:
Private Division:
T2 Mobile Games:
Outlook for Fiscal 2022
Take-Two is raising its outlook for the fiscal year ending March 31, 2022 and providing its initial outlook for its fiscal third quarter ending December 31, 2021:
Fiscal Year Ending March 31, 2022
The Company is also providing selected data and its management reporting tax rate of 16%, which are used internally by its management and Board of Directors to adjust the Company’s GAAP financial outlook in order to facilitate comparison of its operating performance between periods and to better understand its core business and future outlook:
|
|
Twelve Months Ended March 31, 2022 |
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|
|
|
|
Financial Data |
||||||||
$ in millions |
|
GAAP outlook (2) |
|
Change in |
|
Stock-based |
|
Gain on long- |
|
Amortization and |
|
Reorganization |
Net revenue |
|
$3,350 to $3,450 |
|
$(50) |
|
|
|
|
|
|
|
|
Cost of goods sold |
|
$1,506 to $1,551 |
|
$2 |
|
$(40) |
|
|
|
$(50) |
|
|
Operating expenses |
|
$1,468 to $1,488 |
|
|
|
$(130) |
|
|
|
$(15) |
|
$(23) |
Interest and other, net |
|
$(3) |
|
|
|
|
|
$2 |
|
|
|
|
Income before income taxes |
|
$379 to $414 |
|
$(52) |
|
$170 |
|
$(2) |
|
$65 |
|
$23 |
Third Quarter Ending December 31, 2021
The Company is also providing selected data and its management reporting tax rate of 16%, which are used internally by its management and Board of Directors to adjust the Company’s GAAP financial outlook in order to facilitate comparison of its operating performance between periods and to better understand its core business and future outlook:
|
|
Three Months Ended December 31, 2021 |
||||||
|
|
|
|
Financial Data |
||||
$ in millions |
|
GAAP outlook (3) |
|
Change in deferred |
|
Stock-based |
|
Amortization of |
Net revenue |
|
$840 to $890 |
|
$(40) |
|
|
|
|
Cost of goods sold |
|
$344 to $370 |
|
|
$(9) |
|
$(12) |
|
Operating expenses |
|
$378 to $388 |
|
|
|
$(30) |
|
$(3) |
Interest and other, net |
|
|
|
|
|
|
|
|
Income before income taxes |
|
$118 to $132 |
|
$(40) |
|
$39 |
|
$15 |
1) |
Includes 115.5 million basic shares and 1.1 million shares representing the potential dilution from unvested employee stock grants. |
|
2) |
Adjusted for changes in restricted cash. |
|
3) |
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. |
|
4) |
Includes 115.3 million basic shares and 1.0 million shares representing the potential dilution from unvested employee stock grants. |
Key assumptions and dependencies underlying the Company’s outlook include: the timely delivery of the titles included in this financial outlook; a stable economic environment; continued consumer acceptance of Xbox One and PlayStation 4, as well as continued growth in the installed base of PlayStation 5 and Xbox Series X|S; the ability to develop and publish products that capture market share for these current generation systems while also leveraging opportunities on PC, mobile and other platforms; and stable foreign exchange rates. See also “Cautionary Note Regarding Forward Looking Statements” below.
Product Releases
The following have been released since July 1, 2021:
Label |
Product |
Platforms |
Release Date |
Rockstar Games |
Red Dead Redemption Online: Blood Money Update |
PS4, Xbox One, PC |
July 13, 2021 |
Rockstar Games |
Grand Theft Auto Online: Los Santos Tuners Update |
PS4, Xbox One, PC |
July 20, 2021 |
Private Division |
Hades (physical release) |
PS4, PS5, Xbox One, Xbox Series X |
August 13, 2021 |
Private Division |
The Outer Worlds: Murder on Eridanos (DLC) |
Switch |
September 8, 2021 |
2K |
NBA 2K22 |
PS4, PS5, Xbox One, Xbox Series X|S, PC, Switch |
September 10, 2021 |
Private Division |
Kerbal Space Program Enhanced Edition |
PS5, Xbox Series X|S |
September 24, 2021 |
2K |
Mafia III: Definitive Edition |
Stadia |
October 1, 2021 |
Nordeus |
Top Eleven 2022 |
iOs, Android |
October 11, 2021 |
2K |
PGA TOUR 2K21 Baller Edition |
PS4, Xbox One, PC |
October 14, 2021 |
2K |
NBA 2K22 Arcade Edition |
Apple Arcade |
October 19, 2021 |
Take-Two’s future lineup announced to-date includes:
Label |
Product |
Platforms |
Release Date |
Rockstar Games |
Grand Theft Auto: The Trilogy — The Definitive Edition (digital release) |
PS4, PS5, Xbox One, Xbox Series X|S, Switch |
November 11, 2021 |
2K |
Borderlands 3 Ultimate Edition (physical only) |
PS5, Xbox Series X |
November 12, 2021 |
Rockstar Games |
Grand Theft Auto: The Trilogy – The Definitive Edition (physical release) |
PS4, PS5, Xbox One, Xbox Series X, Switch |
December 7, 2021 |
Private Division |
OlliOlli World |
PS4, PS5, Xbox One, Xbox Series X|S, Switch (digital only) |
Q4 Fiscal 2022 |
2K |
Tiny Tina’s Wonderlands |
PS4, PS5, Xbox One, Xbox Series X|S, PC |
March 25, 2022 |
Rockstar Games |
Grand Theft Auto V: Expanded and Enhanced |
PS5, Xbox Series X|S |
March 2022 |
Rockstar Games |
Grand Theft Auto Online – Standalone |
PS4, PS5, Xbox One, Xbox Series X|S, PC |
March 2022 |
2K |
WWE 2K22 |
TBA |
March 2022 |
Rockstar Games |
Grand Theft Auto: The Trilogy — The Definitive Edition (mobile release) |
iOS, Android |
First Half of Calendar 2022 |
2K |
Marvel’s Midnight Suns |
PS4, PS5, Xbox One, Xbox Series X|S, PC |
Second Half of Calendar 2022 (Fiscal 2023) |
Private Division |
Kerbal Space Program 2 |
PS4, PS5, Xbox One, Xbox Series X|S, PC |
Fiscal 2023 |
Share Repurchase Authorization
In November, the Company’s Board of Directors authorized an increase of 7.4 million shares to the number of its shares of common stock that the Company is permitted to repurchase, resulting in an aggregate of 10 million shares remaining available for repurchase as of the date of the additional authorization.
Contacts
(Investor Relations)
Nicole Shevins
Senior Vice President
Investor Relations & Corporate Communications
Take-Two Interactive Software, Inc.
(646) 536-3005
Nicole.Shevins@take2games.com
(Corporate Press)
Alan Lewis
Vice President
Corporate Communications & Public Affairs
Take-Two Interactive Software, Inc.
(646) 536-2983
Alan.Lewis@take2games.com
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