Take-Two 10-Q — Q2 FY2024 (August 2024)

Take‑Two reported a net loss of $262 million for the three months ended June 30, 2024, an increase from a $206 million loss in the same period last year. Net revenue rose to $1.34 billion, driven by a $121.5 million increase in advertising revenue, while game revenue fell slightly to $1.22 billion. Operating expenses climbed mainly due to higher selling‑and‑marketing and R&D costs, resulting in a loss from operations of $184.9 million versus $204.3 million previously. Gross profit margin improved to 57.6% from 52.9%, aided by lower development royalties and amortization, but operating expenses increased by $72.5 million, including a $49.5 million business‑reorganization charge.

The company’s liquidity position remains robust, with cash and equivalents at $599 million and short‑term investments of $15.4 million, supported by a net inflow of $596 million from financing activities. Take‑Two’s debt profile shows modest growth in long‑term debt, with convertible notes totaling $25.9 million and senior notes maturing through 2034; short‑term debt remains below $1 million. A $350 million unsecured term loan was used to fund part of Zynga’s convertible note repurchase, and subsequent repayments were financed through new notes. The company retains $747.8 million of available borrowing capacity under its amended 2022 Credit Agreement.

In June, Take‑Two completed the acquisition of Gearbox for $440.7 million in common‑stock consideration, creating goodwill of $285.2 million and a net asset gain that includes $84.1 million in developed game technology. Gearbox contributed $1.6 million in net revenue and a $4.5 million loss to consolidated results, while the company anticipates additional intangible amortization of $552.5 million in FY 2025 and $709.6 million in FY 2026. The acquisition is integrated into internal‑control assessments and will influence future financial reporting.

Foreign‑currency translation losses narrowed to $2.8 million from $13.8 million the prior year, and gains on forward contracts were modest ($3.5 M vs $3.8 M). The company maintains a net forward‑contract position of roughly $122 million to hedge non‑functional currency balances, with fair values deemed immaterial and counterparty risk judged low. Overall, Take‑Two’s Q2 FY2024 results reflect continued revenue growth from mobile and console titles, higher operating costs, and strategic debt management amid a significant acquisition that expands its intellectual property portfolio.