Take-Two Interactive Software, Inc. Reports Strong Results for Fiscal Year 2018

GAAP Net revenue grew to $1.793 billion

GAAP Net income more than doubled to $1.54 per diluted share

Net cash provided by operating activities grew 19% to $393.9 million

Net Bookings grew 5% to $1.991 billion

Company repurchased 3.11 million shares of its common stock for $308.3 million during fiscal year 2018 and fiscal first quarter 2019 to date

NEW YORK--(BUSINESS WIRE)--May 16, 2018-- Take-Two Interactive Software, Inc. (NASDAQ:TTWO) today reported results for its fourth quarter and fiscal year 2018, ended March 31, 2018, and provided its initial financial outlook for its fiscal first quarter 2019, ending June 30, 2018, and fiscal year 2019, ending March 31, 2019.

Fiscal Fourth Quarter 2018 GAAP Financial Highlights

Net revenue was $450.3 million, as compared to $571.6 million in last year’s fiscal fourth quarter. Recurrent consumer spending (virtual currency, add-on content and in-game purchases) grew 42% year-over-year and accounted for 44% of total net revenue. The largest contributors to net revenue in fiscal fourth quarter 2018 were Grand Theft Auto® Online and Grand Theft Auto V, NBA® 2K18, Sid Meier’s Civilization VI, WWE® 2K18 and WWE SuperCard, and Dragon City and Monster Legends.

Digitally-delivered net revenue grew 8% to $301.4 million, as compared to $278.7 million in last year’s fiscal fourth quarter. The largest contributors to digitally-delivered net revenue in fiscal fourth quarter 2018 were Grand Theft Auto Online and Grand Theft Auto V, NBA 2K18, Sid Meier’s Civilization VI, and WWE 2K18 and WWE SuperCard.

Net income was $90.9 million, or $0.77 per diluted share, as compared to $99.3 million, or $0.89 per diluted share, for the year-ago period.

The following data, together with a management reporting tax rate of 22%, 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 March 31, 2018

				Financial Data
$ in thousands	Statement of operations			Change in deferred net revenue and related cost of goods sold		Stock-based compensation		Non-cash amounts related to convertible notes	Acquisition related expenses		Amortization & impairment of acquired intangible assets		Business reorganization

Net revenue	$	450,274		(38,905	)
Cost of goods sold		189,211		(24,661	)	(1,325	)				(5,292	)

Gross profit		261,063		(14,244	)	1,325					5,292

Operating expenses		173,238				(18,912	)		142		(2,691	)	(1,727	)

Income from operations		87,825		(14,244	)	20,237			(142	)	7,983		1,727
Interest and other, net		(3,451	)					193
Income before income taxes		91,276		(14,244	)	20,237		193	(142	)	7,983		1,727

In order to calculate net income per diluted share for management reporting purposes, the Company uses its fully diluted share count of 118.7 million and adds back to net income the interest expense, net of tax, on its convertible notes of $0.01 million.

Fiscal Fourth Quarter Operational Metric – Net Bookings

Total Net Bookings grew to $411.4 million, as compared to $407.1 million during last year’s fiscal fourth quarter. Net Bookings from recurrent consumer spending grew 15% year-over-year and accounted for 58% of total Net Bookings. The largest contributors to Net Bookings were Grand Theft Auto Online and Grand Theft Auto V, NBA 2K18, Dragon City and Monster Legends, WWE 2K18 and WWE SuperCard, and Sid Meier’s Civilization VI.

Catalog accounted for $293.1 million of Net Bookings led by Grand Theft Auto, Dragon City and Monster Legends, and Sid Meier’s Civilization VI.

Digitally-delivered Net Bookings grew 12% to $333.1 million, as compared to $298.5 million in last year’s fiscal fourth quarter. The largest contributors to digitally-delivered Net Bookings in fiscal fourth quarter 2018 were Grand Theft Auto Online and Grand Theft Auto V, NBA 2K18, Sid Meier’s Civilization VI, Monster Legends and Dragon City, and WWE SuperCard and WWE 2K18.

Fiscal Year 2018 GAAP Financial Highlights

Net revenue grew to $1.793 billion, as compared to $1.780 billion in fiscal year 2017. Recurrent consumer spending grew 63% and accounted for 42% of total net revenue. The largest contributors to net revenue in fiscal year 2018 were Grand Theft Auto V and Grand Theft Auto Online, NBA 2K17 and NBA 2K18, WWE 2K18 and WWE SuperCard, Sid Meier’s Civilization VI, and Dragon City and Monster Legends.

Digitally-delivered net revenue grew 23% to $1.131 billion, as compared to $921.7 million in fiscal year 2017. The largest contributors to digitally-delivered net revenue in fiscal year 2018 were Grand Theft Auto Online and Grand Theft Auto V, NBA 2K17 and NBA 2K18, WWE 2K18 and WWE SuperCard, and Sid Meier’s Civilization VI.

Net income increased 158% to $173.5 million, or $1.54 per diluted share, as compared to $67.3 million, or $0.72 per diluted share, in fiscal year 2017.

Net cash provided by operating activities grew 19% to $393.9 million, as compared to $331.4 million in fiscal year 2017. As of March 31, 2018, the Company had cash and short-term investments of $1.424 billion.

Twelve Months Ended March 31, 2018

Financial Data

$ in thousands

Statement of operations

Change in deferred net revenue and related cost of goods sold

Stock-based compensation

Non-cash amounts related to convertible notes

Acquisition related expenses

Amortization & impairment of acquired intangible assets

Business reorganization

Net revenue

1,792,892

197,710

Cost of goods sold

898,311

(32,063

)

(24,610

)

19,344

Gross profit

894,581

229,773

24,610

(19,344

)

Operating expenses

759,004

(91,739

)

7,080

(26,368

)

(12,318

)

Income from operations

135,577

229,773

116,349

(7,080

)

7,024

12,318

Interest and other, net

1,048

10,762

Income before income taxes

136,625

229,773

116,349

10,762

(7,080

)

7,024

12,318

In order to calculate net income per diluted share for management reporting purposes, the Company uses its fully diluted share count of 117.6 million and adds back to net income the interest expense, net of tax, on its convertible notes of $0.83 million.

Fiscal Year 2018 Operational Metric – Net Bookings

Total Net Bookings grew 5% to $1.991 billion, as compared to $1.904 billion in fiscal year 2017. Net Bookings from recurrent consumer spending grew 48% and accounted for 48% of total Net Bookings. The largest contributors to Net Bookings were Grand Theft Auto Online and Grand Theft Auto V, NBA 2K18 and NBA 2K17, WWE 2K18 and WWE SuperCard, Dragon City and Monster Legends, and Sid Meier’s Civilization VI.

Digitally-delivered Net Bookings grew 25% to $1.350 billion, as compared to $1.081 billion in fiscal year 2017. The largest contributors to digitally-delivered Net Bookings in fiscal year 2018 were Grand Theft Auto Online and Grand Theft Auto V, NBA 2K18 and NBA 2K17, Monster Legends and Dragon City, and WWE SuperCard and WWE 2K18.

Management Comments

“During the fourth quarter, Take-Two delivered Net Bookings growth driven by increased recurrent consumer spending – including better-than-expected results from Grand Theft Auto Online,” said Strauss Zelnick, Chairman and CEO of Take-Two. “Our solid performance marked the completion of another outstanding year for our Company, highlighted by growth in Net Bookings, earnings and net cash provided by operating activities, along with margin expansion. Grand Theft Auto Online and NBA 2K generated record results, exceeding our original expectations, and we benefited from strong ongoing sales of Grand Theft Auto V and other catalog titles.

“We expect fiscal 2019 to be another year of profitable growth for Take-Two, including both record Net Bookings and record net cash provided by operating activities, led by the launch of Red Dead Redemption 2 along with new annual releases from NBA 2K and WWE 2K. We will also continue to support our titles with offerings designed to drive engagement and recurrent consumer spending. The highly-anticipated title from one of 2K’s biggest franchises, which had been planned for release during the current fiscal year, is now planned for launch during fiscal 2020 to allow for additional development time. We remain as excited as ever about this title, and expect it to enhance our results next fiscal year.

“This year is the 25^th anniversary of Take-Two and, over that time, we have built our Company into a diversified and profitable enterprise. Take-Two is exceedingly well-positioned – creatively, strategically and financially – for continued growth and returns for our shareholders over the long-term.”

Business and Product Highlights

Since January 1, 2018:

Take-Two:

During fiscal year 2018, the Company repurchased 1.51 million shares of its common stock for $154.8 million. During fiscal first quarter 2019 to date, the Company has repurchased 1.60 million shares of its common stock for $153.5 million.
Effective March 19, 2018, Take-Two was added to the S&P 500® index.

Rockstar Games:

Released Grand Theft Auto V: Premium Online Edition for PlayStation 4, Xbox One and PC. The Premium Online Edition includes the complete Grand Theft Auto V story experience, the ever-evolving world of Grand Theft Auto Online, and all existing gameplay upgrades and content. Purchasers also receive the Criminal Enterprise Starter Pack that gives players access to a huge range of content including properties, vehicles, weapons and more valued at over GTA$10,000,000 plus GTA$1,000,000 Bonus Cash.
Released LA Noire: The VR Case Files, featuring seven select cases from the original game rebuilt specifically for a virtual reality experience, for Oculus Rift. LA Noire: The VR Case Files is also available for the HTC VIVE™ system.
Released new free content updates for Grand Theft Auto Online, including:
- The Southern San Andreas Super Sport Series, which introduced two new racing modes – Hot Ring Circuit and Target Assault, additional Transform races and Special Vehicle races, two new Adversary modes: The Vespucci Job and Trap Door, 13 new vehicles, and new tools for the Race Creator.
- The Air Quota and Hardest Target Adversary Modes.
- Numerous all-new vehicles and aircraft.
Announced that Red Dead Redemption 2 will launch for PlayStation 4 and Xbox One on October 26, 2018.

2K:

NBA 2K18 became our highest-selling sports title ever, with sell-in to date of over 9 million units.
Released the Sid Meier’s Civilization VI: Rise and Fall expansion pack for PC. This expansion builds upon the critically acclaimed gameplay experience of Civilization VI giving players new choices, strategies, and challenges as they guide a civilization through the ages. The expansion introduces new Golden Ages and Dark Ages, a new city Loyalty system, and Governors who can be stationed in players’ cities. Civilization VI: Rise and Fall also adds nine new leaders and eight new civilizations from across the world, giving players even more variety and diversity in how they play Civilization VI.
Announced that it is working in partnership with Tencent to co-develop NBA 2K Online 2 in China. The title currently is in closed Beta testing and planned for commercial release this fall. NBA 2K Online 2 is based on the console edition of NBA 2K and features 2K’s legendary gameplay, 27 customizable position types, new player trading systems, eSports-optimized features, localized commentary and more.
Announced that Hangar 13 – the critically acclaimed storytellers and developer of Mafia III – has expanded with the opening of a new location in Brighton, United Kingdom, furthering the studio’s efforts to tap into the world’s most talented development pools and build a globally diverse team. Hangar 13 is currently working on an unannounced AAA project for 2K and will continue to scale in both the U.S. and Europe at a pace consistent with the development of the game.

Private Division:

Released Kerbal Space Program Enhanced Edition, the new console version of the beloved space simulation game, for digital download on PlayStation 4 and Xbox One. Kerbal Space Program Enhanced Edition is built from the ground up to include re-worked and console-optimized UI, a new control scheme exclusively for consoles, and more ways to enjoy launching spaceships into orbit.
Released Kerbal Space Program: Making History Expansion for PC. This first expansion for the critically acclaimed space simulation adds a wealth of new and exciting content to the game, including a robust Mission Builder that lets players create and share their own scenarios, and a History Pack containing missions inspired by historical moments in space exploration.
Announced that Kerbal Space Program will be released on Tencent’s WeGame distribution platform as a premium PC game at a date to be determined.

Financial Outlook for Fiscal 2019

Take-Two is providing its initial financial outlook for its fiscal first quarter ending June 30, 2018 and its fiscal year ending March 31, 2019.

First Quarter Ending June 30, 2018

GAAP net revenue is expected to range from $345 to $395 million
GAAP net income is expected to range from $62 to $74 million
GAAP diluted net income per share is expected to range from $0.53 to $0.63
Share count used to calculate GAAP diluted net income per share is expected to be 116.7 million ⁽¹⁾
Net Bookings (operational metric) are expected to range from $215 to $265 million

The Company is also providing selected data and its updated management reporting tax rate of 20% that 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 Ending June 30, 2018

Financial Data

$ in millions

GAAP outlook⁽²⁾

Change in deferred net revenue and related cost of goods sold

Stock-based compensation⁽³⁾

Amortization of acquired intangible assets

Net revenue

$345 to $395

($130)

Cost of goods sold

$83 to $109

($8)

($6)

($4)

Operating Expenses

$190 to $200

($30)

($2)

Interest and other, net

($1)

Income before income taxes

$73 to 87

($122)

$36

Fiscal Year Ending March 31, 2019

GAAP net revenue is expected to range from $2.50 to $2.60 billion
GAAP net income is expected to range from $180 to $211 million
GAAP diluted net income per share is expected to range from $1.53 to $1.80
Share count used to calculate GAAP diluted net income per share is expected to be 117.2 million ⁽⁴⁾
Net cash provided by operating activities is expected to be approximately $710 million
Capital expenditures are expected to be approximately $60 million
Net Bookings (operational metric) are expected to range from $2.67 to $2.77 billion

Twelve Months Ending March 31, 2019

Financial Data

$ in millions

GAAP outlook⁽²⁾

Change in deferred net revenue and related cost of goods sold

Stock-based compensation⁽³⁾

Amortization of acquired intangible assets

Net revenue

$2,500 to $2,600

$170

Cost of goods sold

$1,411 to $1,434

$100

($176)

($4)

Operating Expenses

$885 to $925

($122)

($2)

Interest and other, net

($7)

Income before income taxes

$211 to 248

$70

$298

			1)		For the fiscal first quarter ending June 30, 2018, the Company’s diluted share count used for management reporting purposes is expected to be 116.3 million, which includes 112.8 million basic shares and 3.5 million shares representing the potential dilution from unvested employee stock grants, because using the “if converted” method and the Company’s fully-diluted share count of 116.7 million, which includes 0.4 million shares representing the potential dilution from convertible notes, would be anti-dilutive.
			2)		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.
			3)		The Company's stock-based compensation expense for the periods above includes the cost of approximately 0.6 million restricted stock units previously granted to ZelnickMedia that are subject to variable accounting. Actual expense to be recorded in connection with these shares is dependent upon several factors, including future changes in Take-Two's stock price.
			4)		For the fiscal year ending March 31, 2019, the Company’s fully diluted share count used for both GAAP and management reporting purposes is expected to be 117.2 million, which includes 113.6 million basic shares and 3.6 million shares representing the potential dilution from unvested employee stock grants. The interest expense, net of tax, on the convertible notes, which is added back to net income to calculate diluted net income per share for management reporting purposes is $0.03 million.

Key assumptions and dependencies underlying the Company’s financial outlook include: the timely delivery of the titles included in this financial outlook; continued consumer acceptance of Xbox One and PlayStation 4; the ability to develop and publish products that capture market share for these new-generation systems while also leveraging opportunities on Nintendo Switch, Xbox 360, PlayStation 3, PC and mobile platforms; and stable foreign exchange rates. See also “Cautionary Note Regarding Forward Looking Statements” below.

Product Releases

The following titles were released since January 1, 2018:

Label

Title

Platforms

Release Date

Private Division

Kerbal Space Program Enhanced Edition

PS4, Xbox One

January 16, 2018

WWE 2K18: Enduring Icons Pack (DLC)

PS4, Xbox One, PC

January 16, 2018

XCOM 2 Collection

February 1, 2018

Sid Meier’s Civilization VI: Rise and Fall (DLC)

February 8, 2018

XCOM 2 Collection

PS4, Xbox One

February 21, 2018

Private Division

Kerbal Space Program: Making History Expansion (DLC)

March 13, 2018

Rockstar Games

L.A. Noire: The VR Case Files

Oculus Rift

March 29, 2018

Rockstar Games

Grand Theft Auto V: Premium Online Edition

PS4, Xbox One, PC

April 20, 2018

Take-Two's lineup of future titles announced to date includes:

Label

Title

Platforms

Release Date

Rockstar Games

Red Dead Redemption 2

PS4, Xbox One

October 26, 2018

NBA 2K19

TBA

Fall 2018

WWE 2K19

TBA

Fall 2018

Conference Call

Take-Two will host a conference call today at 4:30 p.m. Eastern Time to review these results and discuss other topics. The call can be accessed by dialing (877) 407-0984 or (201) 689-8577. A live listen-only webcast of the call will be available by visiting http://ir.take2games.com and a replay will be available following the call at the same location.

Final Results

The financial results discussed herein are presented on a preliminary basis; final data will be included in Take-Two’s Annual Report on Form 10-K for the period ended March 31, 2018.

About Take-Two Interactive Software

Headquartered in New York City, Take-Two Interactive Software, Inc. is a leading developer, publisher and marketer of interactive entertainment for consumers around the globe. The Company develops and publishes products principally through its wholly-owned labels Rockstar Games and 2K, as well as its new Private Division label and Social Point, a leading developer of mobile games. Our products are designed for console systems and personal computers, including smartphones and tablets, and are delivered through physical retail, digital download, online platforms and cloud streaming services. The Company’s common stock is publicly traded on NASDAQ under the symbol TTWO. For more corporate and product information please visit our website at http://www.take2games.com.

All trademarks and copyrights contained herein are the property of their respective holders.

Cautionary Note Regarding Forward-Looking Statements

The statements contained herein which are not historical facts are considered forward-looking statements under federal securities laws and may be identified by words such as "anticipates," "believes," "estimates," "expects," "intends," "plans," "potential," "predicts," "projects," "seeks," “should,” "will," or words of similar meaning and include, but are not limited to, statements regarding the outlook for the Company's future business and financial performance. Such forward-looking statements are based on the current beliefs of our management as well as assumptions made by and information currently available to them, which are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Actual outcomes and results may vary materially from these forward-looking statements based on a variety of risks and uncertainties including: our dependence on key management and product development personnel, our dependence on our Grand Theft Auto products and our ability to develop other hit titles, the timely release and significant market acceptance of our games, the ability to maintain acceptable pricing levels on our games, and risks associated with international operations. Other important factors and information are contained in the Company's most recent Annual Report on Form 10-K, including the risks summarized in the section entitled "Risk Factors," the Company’s most recent Quarterly Report on Form 10-Q, and the Company's other periodic filings with the SEC, which can be accessed at www.take2games.com. All forward-looking statements are qualified by these cautionary statements and apply only as of the date they are made. The Company undertakes no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.


TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)

	Three months ended March 31,						Twelve Months Ended March 31,
		2018			2017			2018			2017


Net revenue	$	450,274		$	571,556		$	1,792,892		$	1,779,748

Cost of goods sold:
Internal royalties		88,271			90,071			383,020			330,782
Product costs		47,177			85,787			203,301			255,914
Software development costs and royalties		26,981			116,922			191,400			335,675
Licenses		26,782			22,120			120,590			100,588
Total cost of goods sold		189,211			314,900			898,311			1,022,959

Gross profit		261,063			256,656			894,581			756,789

Selling and marketing		47,451			38,312			256,092			285,453
General and administrative		60,450			62,042			247,828			211,409
Research and development		54,128			36,421			196,373			137,915
Depreciation and amortization		9,479			8,378			43,969			30,707
Business reorganization		1,730			-			14,742			-
Total operating expenses		173,238			145,153			759,004			665,484
Income from operations		87,825			111,503			135,577			91,305
Interest and other, net		3,451			(392	)		1,048			(15,690	)
Gain on long-term investments, net		-			-			-			1,350
Income before income taxes		91,276			111,111			136,625			76,965
(Benefit from) provision for income taxes		423			11,831			(36,908	)		9,662
Net income	$	90,853		$	99,280		$	173,533		$	67,303

Earnings per share:
Basic earnings per share	$	0.80		$	0.97		$	1.57		$	0.73
Diluted earnings per share	$	0.77		$	0.89		$	1.54		$	0.72

Weighted average shares outstanding:
Basic		113,330			100,490			110,210			90,180
Diluted		118,675			117,245			112,864			94,073

Computation of Basic EPS:
Net income	$	90,853		$	99,280		$	173,533		$	67,303
Less: net income allocated to participating securities		(82	)		(1,370	)		(159	)		(1,275	)
Net loss for basic and diluted EPS calculation	$	90,771		$	97,910		$	173,374		$	66,028

Weighted average shares outstanding - basic		113,330			101,896			110,210			91,921
Less: weighted average participating shares outstanding		(102	)		(1,406	)		(101	)		(1,741	)
Weighted average common shares outstanding - basic		113,228			100,490			110,109			90,180

Basic earnings per share	$	0.80		$	0.97		$	1.57		$	0.73

Computation of Diluted EPS:
Net income	$	90,853		$	99,280		$	173,533		$	67,303
Less: net income allocated to participating securities		(78	)		(1,191	)		(155	)		(1,246	)
Add: interest expense, net of tax, on Convertible Notes		249			4,980			-			-
Net income for diluted EPS calculation	$	91,024		$	103,069		$	173,378		$	66,057

Weighted average common shares outstanding - basic		113,228			101,896			110,109			91,921
Add: dilutive effect of common stock equivalents		5,447			15,349			2,755			2,152
Total weighted average shares outstanding - diluted		118,675			117,245			112,864			94,073
Less: weighted average participating shares outstanding		(102	)		(1,406	)		(101	)		(1,741	)
Weighted average common shares outstanding - diluted		118,573			115,839			112,763			92,332

Diluted earnings per share	$	0.77		$	0.89		$	1.54		$	0.72


TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)

	March 31,			March 31,
		2018			2017

ASSETS
Current assets:
Cash and cash equivalents	$	808,973		$	943,396
Short-term investments		615,406			448,932
Restricted cash		437,398			337,818
Accounts receivable, net of allowances of $54,290 and $66,483 at March 31, 2018 and 2017, respectively		247,649			219,558
Inventory		15,162			16,323
Software development costs and licenses		33,284			41,721
Deferred cost of goods sold		117,851			127,901
Prepaid expenses and other		133,454			59,593
Total current assets		2,409,177			2,195,242

Fixed assets, net		102,478			67,300
Software development costs and licenses, net of current portion		639,369			381,910
Deferred cost of goods sold, net of current portion		26,719			-
Goodwill		399,530			359,115
Other intangibles, net		103,681			110,262
Other assets		56,887			35,325
Total assets	$	3,737,841		$	3,149,154

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	35,029		$	31,892
Accrued expenses and other current liabilities		914,748			750,875
Deferred revenue		777,152			903,125
Total current liabilities		1,726,929			1,685,892

Long-term debt		8,068			251,929
Non-current deferred revenue		355,589			10,406
Other long-term liabilities		158,285			197,199
Total liabilities		2,248,871			2,145,426

Stockholders' equity:
Preferred stock, $.01 par value, 5,000 shares authorized		-			-
Common stock, $.01 par value, 200,000 shares authorized; 132,743 and 119,813 shares
issued and 114,038 and 102,621 outstanding at March 31, 2018 and 2017, respectively		1,327			1,198
Additional paid-in capital		1,888,039			1,452,754
Treasury stock, at cost; 18,705 and 17,192 common shares at March 31, 2018 and 2017, respectively		(458,180	)		(303,388	)
Retained earnings (accumulated deficit)		73,516			(99,694	)
Accumulated other comprehensive loss		(15,732	)		(47,142	)
Total stockholders' equity		1,488,970			1,003,728
Total liabilities and stockholders' equity	$	3,737,841		$	3,149,154


TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
	Twelve Months Ended March 31,
		2018			2017

Operating activities:
Net income	$	173,533		$	67,303
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization and impairment of software development costs and licenses		77,887			221,911
Depreciation		32,202			30,707
Amortization of intellectual property		34,830			6,738
Impairment of in-process research and development		11,257			-
Stock-based compensation		116,349			81,879
Deferred income taxes		(32,523	)		3,020
Amortization of discount on Convertible Notes		15,662			21,222
Gain on redemption of Convertible Notes		(4,900	)		-
Amortization of debt issuance costs		578			1,227
Gain on long-term investments, net		-			(1,350	)
Other, net		6,375			(3,410	)
Changes in assets and liabilities:
Restricted cash		(99,580	)		(76,474	)
Accounts receivable		(26,998	)		(41,956	)
Inventory		3,917			(4,942	)
Software development costs and licenses		(225,269	)		(252,951	)
Prepaid expenses and other current and other non-current assets		(74,544	)		(22,155	)
Deferred revenue		198,397			126,285
Deferred cost of goods sold		(11,959	)		(14,969	)
Accounts payable, accrued expenses and other liabilities		198,733			189,344
Net cash provided by operating activities		393,947			331,429

Investing activities:
Change in bank time deposits		(40,918	)		89,076
Proceeds from available-for-sale securities		241,012			155,936
Purchases of available-for-sale securities		(369,998	)		(221,671	)
Purchases of fixed assets		(61,557	)		(21,167	)
Proceeds from sale of long-term investments		-			1,350
Purchase of long-term investments		(5,000	)		(1,885	)
Asset acquisition		(25,965	)		-
Business acquisition, net of cash acquired		(9,401	)		(130,669	)
Net cash used in investing activities		(271,827	)		(129,030	)

Financing activities:
Excess tax benefit from stock-based compensation		-			1,990
Tax payment related to net share settlements on restricted stock awards		(112,884	)		(51,762	)
Repurchase of common stock		(154,792	)		-
Other		(13,791	)		-
Net cash used in financing activities		(281,467	)		(49,772	)

Effects of foreign currency exchange rates on cash and cash equivalents		24,924			(7,973	)

Net change in cash and cash equivalents		(134,423	)		144,654
Cash and cash equivalents, beginning of year		943,396			798,742
Cash and cash equivalents, end of period	$	808,973		$	943,396


TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
Net Revenue and Net Bookings by Geographic Region, Distribution Channel, and Platform Mix
(in thousands)

	Three Months Ended March 31, 2018			Three Months Ended March 31, 2017
	Amount		% of Total	Amount		% of Total

Net revenue by geographic region
United States	$	255,710	57%	$	296,040	52%
International		194,564	43%		275,516	48%
Total net revenue	$	450,274	100%	$	571,556	100%

Net bookings by geographic region
United States	$	232,272	56%	$	239,360	59%
International		179,096	44%		167,767	41%
Total net bookings	$	411,368	100%	$	407,127	100%


	Three Months Ended March 31, 2018			Three Months Ended March 31, 2017
	Amount		% of Total	Amount		% of Total

Net revenue by distribution channel
Digital online	$	301,382	67%	$	278,683	49%
Physical retail and other		148,892	33%		292,873	51%
Total net revenue	$	450,274	100%	$	571,556	100%

Net bookings by distribution channel
Digital online	$	333,135	81%	$	298,485	73%
Physical retail and other		78,233	19%		108,642	27%
Total net bookings	$	411,368	100%	$	407,127	100%


	Three Months Ended March 31, 2018			Three Months Ended March 31, 2017
	Amount		% of Total	Amount		% of Total
Net revenue by platform mix
Console	$	363,464	81%	$	479,958	84%
PC and other		86,810	19%		91,598	16%
Total net revenue	$	450,274	100%	$	571,556	100%

Net bookings by platform mix
Console	$	313,368	76%	$	318,648	78%
PC and other		98,000	24%		88,479	22%
Total net bookings	$	411,368	100%	$	407,127	100%


TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
Net Revenue and Net Bookings by Geographic Region, Distribution Channel, and Platform Mix
(in thousands)

	Twelve Months Ended March 31, 2018			Twelve Months Ended March 31, 2017
	Amount		% of Total	Amount		% of Total

Net revenue by geographic region
United States	$	1,052,313	59%	$	999,128	56%
International		740,579	41%		780,620	44%
Total net revenue	$	1,792,892	100%	$	1,779,748	100%

Net bookings by geographic region
United States	$	1,161,502	58%	$	1,077,484	57%
International		829,100	42%		826,462	43%
Total net bookings	$	1,990,602	100%	$	1,903,946	100%

	Twelve Months Ended March 31, 2018			Twelve Months Ended March 31, 2017
	Amount		% of Total	Amount		% of Total

Net revenue by distribution channel
Digital online	$	1,130,946	63%	$	921,734	52%
Physical retail and other		661,946	37%		858,014	48%
Total net revenue	$	1,792,892	100%	$	1,779,748	100%

Net bookings by distribution channel
Digital online	$	1,349,508	68%	$	1,081,262	57%
Physical retail and other		641,094	32%		822,684	43%
Total net bookings	$	1,990,602	100%	$	1,903,946	100%


	Twelve Months Ended March 31, 2018			Twelve Months Ended March 31, 2017
	Amount		% of Total	Amount		% of Total
Net revenue by Platform Mix
Console	$	1,463,307	82%	$	1,440,724	81%
PC and other		329,586	18%		339,024	19%
Total net revenue	$	1,792,892	100%	$	1,779,748	100%

Net bookings by platform mix
Console	$	1,611,625	81%	$	1,554,319	82%
PC and other		378,977	19%		349,627	18%
Total net bookings	$	1,990,602	100%	$	1,903,946	100%


TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
ADDITIONAL DATA
(in thousands)
	Three Months Ended March 31, 2018	Net Revenue			Cost of Goods Sold- Internal Royalties			Cost of Goods Sold- Software Development Costs and Royalties			Cost of Goods Sold- Product Costs			Cost of Goods Sold- Licenses			Selling and Marketing

As reported		$	450,274		$	88,271		$	26,981		$	47,177		$	26,782		$	47,451
	Net effect from deferral and related cost of goods sold		(38,905	)					(3,244	)		(12,397	)		(9,020	)
	Stock-based compensation								(1,325	)								(4,471	)
	Amortization and impairment of acquired intangibles								(5,292	)								(852	)


	Three Months Ended March 31, 2018	General and Administrative			Research and Development			Depreciation and Amortization			Business Reorganization			Interest and Other, net

As reported		$	60,450		$	54,128		$	9,479		$	1,730		$	3,451
	Stock-based compensation		(9,408	)		(5,030	)					(3	)
	Non-cash amounts related to convertible notes														193
	Acquisition related expenses		142
	Amortization and impairment of acquired intangibles					(1,705	)		(134	)
	Impact of business reorganization											(1,727	)

	Three Months Ended March 31, 2017	Net Revenue			Cost of Goods Sold- Internal Royalties			Cost of Goods Sold- Software Development Costs and Royalties			Cost of Goods Sold- Product Costs			Cost of Goods Sold- Licenses			Selling and Marketing

As reported		$	571,556		$	90,071		$	116,922		$	85,787		$	22,120		$	38,312
	Net effect from deferral and related cost of goods sold		(164,429	)					(67,678	)		(47,535	)		(3,072	)
	Stock-based compensation								(5,083	)								(2,694	)
	Amortization of intangibles								(2,630	)								(1,497	)

	Three Months Ended March 31, 2017	General and Administrative			Research and Development			Depreciation and Amortization			Interest and Other, net

As reported		$	62,042		$	36,421		$	8,378		$	(392	)
	Stock-based compensation		(16,047	)		(2,634	)
	Non-cash amounts related to convertible notes											3,351
	Acquisition related expenses		(1,598	)
	Amortization of intangibles					(989	)		(78	)



TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
ADDITIONAL DATA
(in thousands)

	Twelve Months Ended March 31, 2018	Net Revenue			Cost of Goods Sold- Internal Royalties			Cost of Goods Sold- Software Development Costs and Royalties			Cost of Goods Sold- Product Costs			Cost of Goods Sold- Licenses			Selling and Marketing

As reported		$	1,792,892		$	383,020		$	191,400		$	203,301		$	120,590		$	256,092
	Net effect from deferral and related cost of goods sold		197,710						(5,812	)		6,912			5,900
	Stock-based compensation								(24,610	)								(13,258	)
	Amortization and impairment of acquired intangibles								(19,719	)								(8,107	)

	Twelve Months Ended March 31, 2018	General and Administrative			Research and Development			Depreciation and Amortization			Business Reorganization			Interest and Other, net

As reported		$	247,828		$	196,373		$	43,969		$	14,742		$	1,048
	Stock-based compensation		(58,037	)		(18,020	)					(2,424	)
	Non-cash amounts related to convertible notes														10,762
	Acquisition related expenses		7,080
	Amortization and impairment of acquired intangibles					(6,494	)		(11,767	)
	Impact of business reorganization											(12,318	)
	Other, net														(93	)

	Twelve Months Ended March 31, 2017	Net Revenue			Cost of Goods Sold- Internal Royalties			Cost of Goods Sold- Software Development Costs and Royalties			Cost of Goods Sold- Product Costs			Cost of Goods Sold- Licenses			Selling and Marketing

As reported		$	1,779,748		$	330,782		$	335,675		$	255,914		$	100,588		$	285,453
	Net effect from deferral and related cost of goods sold		124,198						(6,709	)		2,536			8,167
	Stock-based compensation								(21,056	)								(9,963	)
	Amortization of intangibles								(2,630	)								(1,497	)

	Twelve Months Ended March 31, 2017	General and Administrative			Research and Development			Depreciation and Amortization			Interest and Other, net			Gain on long-term investments

As reported		$	211,409		$	137,915		$	30,707		$	(15,690	)	$	1,350
	Stock-based compensation		(42,908	)		(7,952	)
	Non-cash amounts related to convertible notes											21,254
	Acquisition related expenses		(1,916	)
	Amortization of intangibles					(989	)		(78	)
	Proceeds from sale of long-term investments														(1,350	)

View source version on businesswire.com: https://www.businesswire.com/news/home/20180516006245/en/

Source: Take-Two Interactive

Take-Two Interactive Software, Inc. Investor Relations: Henry A. Diamond, 646-536-3005 Senior Vice President Investor Relations & Corporate Communications Henry.Diamond@take2games.com or Corporate Press: Alan Lewis, 646-536-2983 Vice President Corporate Communications & Public Affairs Alan.Lewis@take2games.com

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Take-Two Interactive Software, Inc. Reports Strong Results for Fiscal Year 2018

Distribution channels: Amusement, Gaming & Casino

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