Non-GAAP Net Revenue Grew to a Record $1.27 Billion
Non-GAAP Net Income Increased to a Record $2.49 Per Diluted Share
Increases Financial Outlook for Fiscal Year 2014
NEW YORK--(BUSINESS WIRE)--October 29, 2013--
Take-Two Interactive Software, Inc. (NASDAQ:TTWO) today reported strong financial results for fiscal second quarter 2014, ended September 30, 2013. In addition, the Company increased its financial outlook for fiscal year 2014, ending March 31, 2014, and provided its initial financial outlook for fiscal third quarter 2014, ending December 31, 2013.
GAAP Financial Results
GAAP results for fiscal second quarter 2014 exclude net revenue and cost of goods sold related to sell-in of the Grand Theft Auto V(R) game during the fiscal second quarter as Grand Theft Auto Online, a free game available with every copy of Grand Theft Auto V, launched during fiscal third quarter 2014. For fiscal second quarter 2014, GAAP net revenue was $148.8 million, as compared to $273.1 million for fiscal second quarter 2013. GAAP net loss from continuing operations was $124.1 million, or $1.40 per diluted share, as compared to $12.4 million, or $0.15 per diluted share, for the year-ago period. As of September 30, 2013, the Company had cash and cash equivalents of $661.9 million.
Non-GAAP Financial Results
For fiscal second quarter 2014, Non-GAAP net revenue, which includes sell-in of Grand Theft Auto V, grew to $1.27 billion, as compared to $288.0 million for the year-ago period. Non-GAAP net income increased to $325.6 million, or $2.49 per diluted share, as compared to $10.2 million, or $0.11 per diluted share, for the year-ago period.
The largest contributor to Non-GAAP net revenue in fiscal second quarter 2014 was Grand Theft Auto V. Catalog sales contributed $118.9 million in net revenue led by Grand Theft Auto IV, and offerings for Borderlands(R) 2, Sid Meier's Civilization(R) V, NBA(R) 2K13 and Red Dead Redemption(R). Non-GAAP net revenue from digitally-delivered content grew 85% year-over-year to $105.5 million, driven by the Grand Theft Auto series (particularly digital sales of Grand Theft Auto V), and offerings for Borderlands 2, Sid Meier's Civilization V and BioShock(R) Infinite.
"During the fiscal second quarter, we delivered record Non-GAAP results driven by the unprecedented success of Rockstar Games' Grand Theft Auto V," said Strauss Zelnick, Chairman and CEO of Take-Two. "The title received stellar reviews, shattered entertainment industry records, and has already sold-in nearly 29 million units to date. The extraordinary success of Grand Theft Auto V illustrates the positive momentum in our business and consumers' enduring appetite for the highest-quality interactive entertainment.
"Take-Two has an extensive development pipeline of groundbreaking new intellectual properties and exciting titles from our proven franchises, along with digitally-delivered offerings to complement our core business. We currently have more than ten unique titles planned for next-generation consoles, including multiple releases slated for fiscal 2015. As a result, I am confident that we will be able to achieve Non-GAAP profitability in fiscal 2015 and every year for the foreseeable future."
Business and Product Highlights
Since July 1, 2013:
-- Launched Grand Theft Auto V worldwide on the PlayStation(R)3 computer
entertainment system and the Xbox 360 games and entertainment system from
Microsoft. The title received extraordinary reviews, including over 160
perfect scores worldwide, and already has sold-in nearly 29 million units,
exceeding the lifetime sell-in of Grand Theft Auto IV on console in less
than six weeks after launch. We believe Grand Theft Auto V is the
fastest-selling entertainment release in history*, grossing over $800
million in retail sales during the first 24 hours after launch and over
$1 billion in only three days. Grand Theft Auto V became available for
digital download through the PlayStation Network on the day of release
and became the biggest release ever on the platform. In addition, the
Games on Demand release of the title on Xbox LIVE became the highest
grossing day 1 and week 1 release in the platform's history.
-- Launched Grand Theft Auto Online, the dynamic and persistent online game,
which is free with every copy of Grand Theft Auto V.
-- Launched NBA 2K14, the latest installment of our top-selling and
top-rated NBA video game simulation franchise**, on the Xbox 360, PS3(TM)
and PC. Developed by Visual Concepts, the title features the video game
cover debut of 2013 NBA MVP, LeBron James, and will also be Take-Two's
first offering for the next-generation consoles coming in November.
-- Launched WWE 2K14 with cover art featuring WWE superstar Dwayne "The
Rock(R)" Johnson. Developed by Yukes, WWE 2K14 is available for the Xbox
360 and PS3, and is being supported with downloadable add-on content,
including a Season Pass.
-- Released the Borderlands 2 Game of the Year Edition for the Xbox 360, PS3
and PC. The title features over $100 of gameplay content, including the
critically acclaimed Borderlands 2, all of its Season Pass content and
-- Released The Bureau: XCOM Declassified(TM), 2K Marin's third-person
squad-based tactical shooter that explores the origins of the clandestine
XCOM organization, for the Xbox 360, PS3 and PC. The title is being
supported with downloadable add-on content.
-- Released Sid Meier's Civilization V: Brave New World, the second
expansion pack for the award-winning title, and the Sid Meier's
Civilization V: Scrambled Continents map pack for the PC and Mac(R).
-- Announced that XCOM(R): Enemy Within, the expanded experience of Firaxis
Games' "Game Of the Year" award-winning strategy title, XCOM: Enemy
Unknown, will be available in North America on November 12, 2013 and
internationally on November 15, 2013 for Xbox 360, PS3, PC and Mac.
*Source for previous record for video games: Los Angeles Times, http://articles.latimes.com/2012/dec/05/enter...n-20121205. Source for previous record for feature films: Filmonic.com, http://filmonic.com/international-box-office-...-1-billion.
** According to 2008-2012 Metacritic.com and The NPD Group estimates of U.S. retail video game sales through September 2013.
Redemption of 4.375% Convertible Senior Notes Due 2014
In August 2013, Take-Two settled its $138.0 million aggregate principal amount of 4.375% convertible senior notes due 2014 (the "4.375% Notes") for approximately $166.0 million in cash and 3.2 million shares of the Company's common stock. In conjunction with the redemption of the 4.375% Notes, the Company received approximately $29 million in cash from the settlement of the convertible hedge instruments associated with the 4.375% Notes.
Financial Outlook for Fiscal 2014
Take-Two is increasing its financial outlook for fiscal year 2014 to reflect its strong fiscal second quarter results and positive outlook for the remainder of the year.