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

Take‑Two Interactive reported a modest increase in net revenue for the quarter ended September 30, 2021, reaching $858 million versus $841 million a year earlier. Gross profit fell slightly to $402 million, and net income dropped sharply to $10.3 million from $99.3 million in the same quarter of 2020, largely due to higher operating expenses and a $1.6 million loss on long‑term investments. The balance sheet remained solid, with total assets of $6.62 billion and shareholders’ equity at $3.47 billion, while cash and equivalents stood near $857 million.

Revenue composition shifted toward high‑margin digital and mobile titles, with 90.8 % of six‑month revenue generated through digital online channels and recurring consumer spending accounting for 65.7 % of total sales. Mobile revenue grew by $53.9 million (13.4 % YoY) and digital‑online revenue rose by $53.4 million (90.8 % YoY), driven by franchises such as NBA 2K, Two Dots, and Top Eleven. In contrast, full‑game sales from flagship titles—Red Dead Redemption 2, Borderlands 3, and GTA V—declined, contributing to a 46.8 % gross profit margin for the quarter.

Operating expenses increased by 30 % year‑over‑year, reflecting higher marketing and general‑administrative costs. The company’s liquidity position remained robust, with $1.7 billion in cash and equivalents at year‑end after significant outflows for acquisitions, fixed‑asset purchases, share repurchases, and tax payments. A $289.8 million acquisition of Nordeus (including a contingent earn‑out) added new mobile IP and reinforced Take‑Two’s focus on recurring revenue streams.

Overall, the quarter underscored a strategic pivot toward digital‑first offerings and recurring income, while maintaining a strong balance sheet and capital discipline through an active share‑repurchase program.