Take-Two 10-Q — Q3 FY2021 (February 2021)

Take‑Two Interactive Software experienced a robust Q3 FY2021, reporting net revenue of $860.9 million—an 8% increase from the prior year—and gross profit of $514.6 million, driven by strong sales across its flagship franchises such as NBA 2K, Grand Theft Auto Online, and Mafia. Operating income rose to $176.1 million, while net income reached $182.2 million, reflecting modest declines in interest expense but higher operating costs. Cash and cash equivalents climbed to $1,649.8 million, underpinning continued investment in development, acquisitions, and share‑repurchase activity.

The company’s equity balance grew to $3.16 billion from $2.18 billion a year earlier, supported by net income and stock‑based compensation. Revenue composition remained highly concentrated: Grand Theft Auto titles accounted for 28.9% of net revenue, and five large customers represented over 70% of gross receivables. Digital sales dominated the mix, with 85.5% of net revenue derived from online channels and a 22.4% rise in nine‑month net bookings.

Operating expenses increased modestly, with selling‑and‑marketing costs falling 10.6% and general‑administrative expenses rising 23.8%, largely due to higher personnel costs and charitable contributions. Research & development expenses grew by 2.7%, driven by headcount expansion and cloud services. Net income for the nine months ended December 31, 2020 reached $370.1 million, yielding diluted EPS of $3.20.

Cash‑flow analysis showed operating activities generated $787.7 million, while investing and financing outflows of $240.9 million and $46.4 million, respectively, resulted in a net increase of $519.4 million, bringing year‑end cash and equivalents to $2.51 billion. The company completed a share‑repurchase program of 10.4 million shares, leaving 3.8 million shares available for future repurchases.

Overall, Take‑Two’s FY2021 performance reflected solid franchise revenue growth, disciplined cost management, and a strong liquidity position, while noting risks from COVID‑19 economic uncertainty and potential hardware transitions.