Take-Two Interactive Software, Inc. — FY2024 Form 10-K
Reporting period: Fiscal year ended March 31, 2024; this is an annual filing, not a standalone Q4 report. Figures are in millions except per-share amounts. Take-Two develops and publishes console, PC, and mobile games through Rockstar Games, 2K, Private Division, and Zynga.
Financial performance
| Metric | FY2024 | FY2023 |
|---|---|---|
| Net revenue | $5,349.6 | $5,349.9 |
| Net bookings | $5,333.0 | $5,283.6 |
| Gross profit / margin | $2,241.8 / 41.9% | $2,285.3 / 42.7% |
| Operating loss | $(3,590.6) | $(1,165.2) |
| Net loss / diluted loss per share | $(3,744.2) / $(22.01) | $(1,124.7) / $(7.03) |
| Cash from operating activities | $(16.1) | $1.1 |
| Cash, cash equivalents, and restricted cash | $1,102.0 | $1,234.6 |
Net revenue was essentially flat. Mobile revenue rose to $2,748.0, or 51.4% of revenue, while console revenue declined to $2,167.3, or 40.5%. Digital online distribution represented 95.6% of revenue, and recurrent consumer spending represented 78.8%.
FY2024 included a $2,342.1 goodwill impairment, a $577.4 impairment of acquired developed-game technology, and $109.9 of impairment of software development costs and licenses. The goodwill charge was the primary reason operating and net losses widened. The company also recorded $104.6 of business reorganization expense. Interest and other, net was an expense of $103.6. Cash used in investing activities was $28.2 and cash used in financing activities was $91.4.
Liquidity, debt, and capital
At March 31, 2024, cash and cash equivalents were $754.0, short-term investments were $22.0, and restricted cash was $348.0. Current assets were $2,259.7 versus current liabilities of $2,406.4. Balance-sheet debt, net, was $3,082.9, including $24.6 of short-term debt and $3,058.3 of long-term debt. The company reported $3,050.0 of senior notes principal and $50.5 fair value of remaining convertible notes; its $500.0 revolving credit facility had no borrowings and approximately $497.7 available at year-end. The facility commitment was increased to $750.0 in May 2024. Management said available cash, investments, operating cash flow, and credit availability are expected to meet liquidity needs. Fiscal 2025 capital expenditures are anticipated to be $140.0.
Changes, outlook, and notable items
- Net bookings increased 0.9%, despite largely unchanged revenue. Zynga and Red Dead Redemption contributed to growth; declines in several prior-period releases and franchises, including NBA 2K and Tiny Tina’s Wonderlands, offset gains.
- Gross margin fell 0.8 percentage points, primarily due to higher acquired-intangible amortization, including the $577.4 impairment, partly offset by lower internal royalties.
- Management’s cost-reduction program includes title cancellations and organizational streamlining. The company estimated total charges of $160.0–$200.0, with completion expected largely by December 31, 2024; $93.3 was incurred under the program in FY2024.
- Take-Two agreed to acquire Gearbox for $460.0 in newly issued Take-Two shares, subject to adjustments and customary closing conditions; closing was anticipated in the first quarter of fiscal 2025. The deal would bring Gearbox’s intellectual property, including Borderlands, in-house.
- Rockstar planned to release Grand Theft Auto VI in fall 2025. The filing provides no broad numerical revenue or earnings guidance. It also notes continuing content releases and investment in long-term growth opportunities.
- Key operating exposures include dependence on hit titles and recurring player spending; five largest customers generated 79.8% of FY2024 revenue. Apple and Google platforms accounted for 95.0% of mobile revenue. International markets contributed 38.7% of revenue.
- Other risks include intense competition, development delays and cost overruns, platform fees and policy changes, player-acquisition costs, cybersecurity and privacy threats, regulation of in-game mechanics, foreign exchange, and macroeconomic pressures. The company cited a September 2022 intrusion affecting Rockstar systems and a separate vendor-platform incident at 2K; costs were described as immaterial, and no cybersecurity threats or incidents materially affected the company during FY2024.
- The independent auditor gave unqualified opinions on the financial statements and internal control over financial reporting; management also concluded disclosure controls were effective.
Most important facts for investors to verify
- Whether forecasts and assumptions supporting the goodwill and game-technology valuations stabilize, or lead to further impairments.
- Progress and remaining charges under the $160.0–$200.0 cost-reduction plan, including any effects on the release pipeline and staffing.
- Gearbox closing terms, share issuance and dilution, integration costs, and expected contribution.
- Grand Theft Auto VI release timing and subsequent evidence of consumer demand and monetization.
- Cash generation, debt maturities and refinancing plans, and the impact of the upcoming $750.0 revolving facility terms.
- Customer and platform concentration, mobile player-acquisition economics, and the sustainability of recurrent consumer spending.