TAKE TWO INTERACTIVE SOFTWARE INC
For the period ended Jun 30, 2025. Filed Aug 7, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 7, 2025
TTWO$214.87+0.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-12-31; filed 2025-02-07.
0001628280-25-004308
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-07.
0001628280-25-038963
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 147 previous paragraphs and 100 current paragraphs.
49 unchanged; 42 reworded; 8 added; 40 removed; 16 previous and 1 current paragraphs rearranged.
Tables are not compared: 10 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
For the three months ended June 30, 2025, net revenue increased by $165.6 as compared to the prior year period. The increase was primarily due to increases in net revenue of $76.0 from Color Block Jam, which released in November 2024 and $72.8 from our NBA 2Kfranchise.
Current report
Changes in foreign currency exchange rates increased net revenue by $1.8 and increased gross profit by $10.9 for the three months ended June 30, 2025 as compared to the prior year period.
Current report
Business reorganization decreased by $53.7 for the three months ended June 30, 2025, as compared to the prior year period, primarily due to the completion of the 2024 Plan. Business reorganization was $(4.2) for the three months ended June 30, 2025, primarily due to the recovery of previously incurred costs related to the termination of development of one of our titles in connection with the 2024 Plan.
Current report
On July 4, 2025, the One Big Beautiful Bill Act was signed into law and includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework, accelerated deductions for domestic research expenditures and modifications to tax credits. The legislation has multiple effective dates, with certain provisions effective in fiscal year ending March 31, 2026 and others implemented in future periods. We are currently assessing its impact on our Consolidated Financial Statements
Current report
Accounts Receivable sale program
Current report
On May 19, 2025, we entered into an arrangement to sell designated pools of high credit quality accounts receivable under an uncommitted accounts receivables purchase facility in an initial aggregate amount of up to $215.0 to an unaffiliated financial institution on a true sale basis. As these accounts receivable are sold without recourse, we do not retain the associated risks of lack of payment due to insolvency of the account debtors following the transfer of such accounts receivable to such financial institution. We will continue to collect cash from our account debtors and remit to the financial institution. We will derecognize the carrying value of the financial assets transferred and recognize a net gain or loss on the sale under Interest and other, net on our Consolidated Statements of Operations. The proceeds from these arrangements will be reflected as cash provided by operating activities in the Consolidated Statement of Cash Flows.
Current report
No receivables were sold under this facility during the three months ended June 30, 2025. We may utilize this facility in future periods depending on cash flow needs and market conditions.
Current report
On April 14, 2025, we repaid our 2025 Notes with a principal amount of $600.0.
Removed paragraphs (40)
Previous report
Private Division. In October 2024, we sold our Private Division label, including our rights to substantially all of the label's titles. The label was dedicated to bringing titles from the industry's leading creative talent to market and was the publisher, developer, and owner of Kerbal Space Programand OlliOlli World. Take-Two is continuing to support No Rest for the Wicked, which launched in early access on PC in April 2024.
Previous report
International Expansion
Previous report
The global market for interactive entertainment continues to grow, and we seek to increase our presence internationally, particularly in Asia, the Middle East, and Latin America. We are continuing to execute on our growth initiatives in Asia, where our strategy is to build on our licensing relationships and also broaden the distribution of our existing products and expand our online gaming presence, especially in China. 2K has secured a multi-year license from the NBA to develop an online version of our NBA simulation game in China, Taiwan, Hong Kong, and Macau. Our first such title, NBA 2K Online, a free-to-play NBA simulation game based on the console edition of NBA 2K, which was co-developed by 2K and Tencent, is the top online PC sports game in China with over 65 million registered users. We have released two iterations of NBA 2K Onlineand continue to enhance the title with new features. While we retain title to all intellectual property, in some regions, local publishers, under license agreements, are responsible for localization of software content, distribution, and marketing of the products in their respective local markets.
Previous report
Content Release Highlights
Previous report
During fiscal year 2025, 2K released NFL 2K Playmakers, TopSpin 2K25, and NBA 2K25; Private Division released No Rest for the Wickedfor early access on PC; and Zynga released Star Wars: Huntersand Game of Thrones: Legends.
Previous report
In addition, throughout the year, we expect to continue to deliver new content for our franchises. We will also continue to invest in opportunities that we believe will enhance and scale our business and have the potential to drive growth over the long term.
Previous report
For the nine months ended December 31, 2024, Net Bookings increased as compared to the prior year period. The increase was primarily due to an increase in Net Bookings from Match Factory! and Toon Blast. These increases were partially offset by a decrease in Net Bookings from our Grand Theft Auto franchise, Empires & Puzzles, and our hyper-casual mobile portfolio.
Previous report
For the three months ended December 31, 2024, net revenue decreased by $6.5 as compared to the prior year period. The decrease was primarily due to a decrease in net revenue of (i) $45.0 from our Grand Theft Auto franchise, (ii) $16.8 from our Red Dead Redemption franchise, and (iii) $11.9 from Empires & Puzzles. These decreases were partially offset by an increase in net revenue of $63.1 from Match Factory!, which released in November 2023.
Previous report
Changes in foreign currency exchange rates decreased net revenue by $0.2 and decreased gross profit by $0.4 for the three months ended December 31, 2024 as compared to the prior year period.
Previous report
General and administrative expenses increased by $24.6 for the three months ended December 31, 2024, as compared to the prior year period, due primarily to increases in (i) personnel expenses due to increased headcount, (ii) consulting expense, (iii) rent expense, and (iv) IT-related expenses for cloud-based services and IT infrastructure.
Previous report
General and administrative expenses for the three months ended December 31, 2024 and 2023 included occupancy expense (primarily rent, utilities and office expenses) of $19.8 and $17.8, respectively, related to our development studios.
Previous report
Research and development expenses increased by $8.9 for the three months ended December 31, 2024, as compared to the prior year period, primarily due to increases in personnel expense due to increased headcount, partially offset by lower production and development expenses primarily due to our cost reduction program (refer to Note 15 - Business Reorganization).
Previous report
Business reorganization increased by $22.4 for the three months ended December 31, 2024, as compared to the prior year period, due primarily to losses on our divestitures, employee-related costs, and the cancellation of titles as part of our cost reduction program (refer to Note 15 - Business Reorganization).
Previous report
Gain (loss) on fair value adjustments, net
Previous report
Gain (loss) on fair value adjustments, net was a gain of $0.2 for the three months ended December 31, 2024 as compared to a loss of $0.3 for the prior year period. The change was due primarily to changes in fair value based on the observable price changes of our long-term investments.
Previous report
For the nine months ended December 31, 2024, net revenue increased by $100.9 as compared to the prior year period. The increase was primarily due to an increase in net revenue of (i) $199.9 from Match Factory!, which released in November 2023, and (ii) $76.5 from Toon Blast. These increases were partially offset by a decrease in net revenue of (i) $72.3 from our Grand Theft Auto franchise, (ii) $27.1 from our NBA 2Kfranchise, and (iii) $26.7 from our hyper-casual mobile portfolio.
Previous report
Net revenue from mobile increased by $161.4 and accounted for 54.2% of our total net revenue for nine months ended December 31, 2024, as compared to 51.5% for the prior year period. The increase was primarily due to an increase in net revenue from Match Factory! and Toon Blast. These increases were partially offset by a decrease in net revenue from our Grand Theft Auto franchise, our hyper-casual mobile portfolio, and Merge Dragons!. Net revenue from console games decreased by $90.7 and accounted for 37.2% of our total net revenue for the nine months ended December 31, 2024, as compared to 40.5% for the prior year period. The decrease was primarily due to a decrease in net revenue from our Grand Theft Autoand NBA 2K franchises, and LEGO 2K Drive. These decreases were partially offset by an increase in net revenue from TopSpin 2K25, which released in April 2024. Net revenue from PC and other increased by $30.2 and accounted for 8.6% of our total net revenue for the nine months ended December 31, 2024, as compared to 8.0% for the prior year period. The increase was primarily due to an increase in net revenue from our Risk of Rain franchise, which was acquired in connection with our acquisition of Gearbox in June 2024 (refer to Note 13 - Acquisitions), No Rest for the Wicked, which released for early access in April 2024, and our Grand Theft Auto franchise.
Previous report
Net revenue from RCS increased by $160.7 and accounted for 80.6% of net revenue for the nine months ended December 31, 2024, as compared to 78.6% of net revenue for the prior year period. The increase was primarily due to an increase in net revenue from Match Factory! and Toon Blast. These increases were partially offset by a decrease in net revenue from our Grand Theft Auto franchise, our hyper-casual mobile portfolio, Merge Dragons!, and Golf Rival. Net revenue from full game and other decreased by $59.8 and accounted for 19.4% of net revenue for the nine months ended December 31, 2024 as compared to 21.4% of net revenue for the prior year period. The decrease was primarily due to a decrease in net revenue from our Grand Theft Auto and NBA 2Kfranchise.
Previous report
Net revenue from digital online channels increased by $129.2 and accounted for 96.4% of our total net revenue for the nine months ended December 31, 2024, as compared to 95.6% for the prior year period. The increase was primarily due to an increase in net revenue from Match Factory! and Toon Blast. These increases were partially offset by a decrease in net revenue from our Grand Theft Auto franchise and our hyper-casual mobile portfolio. Net revenue from physical retail and other channels decreased by $28.3 and accounted for 3.6% of our total net revenue for the nine months ended December 31, 2024, as compared to 4.4% for the same period in the prior year period. The decrease in net revenue from physical retail and other channels was due primarily to a decrease in net revenue from our NBA 2Kand Red Dead Redemption franchises, and LEGO 2K Drive.
Previous report
Gross profit as a percentage of net revenue for the nine months ended December 31, 2024 was 55.7% as compared to 44.9% for the prior year period. The increase in gross profit as a percentage of net revenue was primarily due to lower amortization of intangible assets due primarily to impairment charges in the prior year for acquisition-related intangible assets.
Previous report
Changes in foreign currency exchange rates decreased net revenue by $0.9 and decreased gross profit by $0.7 for the nine months ended December 31, 2024 as compared to the prior year period.
Previous report
Operating Expenses
Previous report
Selling and marketing
Previous report
Selling and marketing expenses increased by $180.3 for the nine months ended December 31, 2024, as compared to the prior year period, due primarily to higher overall marketing expenses for Match Factory!, which released in November 2023.
Previous report
Research and development
Previous report
General and administrative
Previous report
General and administrative expenses for the nine months ended December 31, 2024 and 2023 included occupancy expense (primarily rent, utilities and office expenses) of $56.2 and $51.4, respectively, related to our development studios.
Previous report
Depreciation and amortization
Previous report
Goodwill impairment
Previous report
Goodwill impairment expenses decreased by $165.4 for the nine months ended December 31, 2024, as compared to the prior year period, due to a partial impairment recognized related to one of our reporting units in the prior year (refer to Note 14 - Goodwill and Intangible Assets, Net).
Previous report
Business reorganization
Previous report
Business reorganization increased by $78.1 for the nine months ended December 31, 2024, as compared to the prior year period, due primarily to employee-related costs, the cancellation of titles, and losses on our divestitures as part of our cost reduction program (refer to Note 15 - Business Reorganization).
Previous report
Interest and other, net
Previous report
Interest and other, net was expense of $71.1 for the nine months ended December 31, 2024, as compared to $79.0 for the prior year period. The net decrease in expense was due primarily to an increase in interest income primarily due to increases in interest rates and cash balances. These decreases in net expense were partially offset by increases in foreign currency losses, interest expense related to our debt transactions (refer to Note 9 - Debt) and a gain on debt extinguishment recognized in the prior year on the partial repayment of our 2024 Notes.
Previous report
Gain (loss) on fair value adjustments, net
Previous report
Gain (loss) on fair value adjustments, net was a loss of $4.1 for the nine months ended December 31, 2024 as compared to a loss of $1.7 for the prior year period. The change was due primarily to changes in fair value based on the observable price changes of our long-term investments.
Previous report
Provision for Income Taxes
Previous report
When compared to the statutory rate of 21%, the effective tax rate of (9.2)% for the nine months ended December 31, 2024 was due primarily to a tax expense of $220.5 related to an increase in the U.S. and international valuation allowances and tax expense of $25.2 related to geographic mix of earnings, offset by tax benefits of $18.2 related to divestitures and tax benefits of $38.8 from tax credits.
Previous report
In the prior year period, when compared to the statutory rate of 21.0%, the effective tax rate of 12.2% for the nine months ended December 31, 2023 was due primarily to tax expense of $86.5 related to an increase in the U.S. valuation allowance, tax expense of $33.5 related to the impairment of nondeductible goodwill, tax expense of $7.0 related to geographic mix of earnings, offset by tax benefits of $46.5 from tax credits and tax benefits of $40.0 related to the changes in unrecognized tax benefits from a lapse in statutes of limitation.
Previous report
The change in the effective tax rate, when compared to the prior year period's effective tax rate, is due primarily to increased tax expense from changes in the US and international valuation allowance, decreased tax benefits related to changes in unrecognized tax benefits, increased tax expense related to geographic mix of earnings, offset by decreased tax expense related to the impairment of nondeductible goodwill, increased tax benefits related to divestitures, and increased tax benefits from employee stock-based compensation.
Reworded paragraphs (42)
Previous wording
The statements contained herein, which are not historical facts, including statements relating to Take-Two Interactive Software, Inc.'s ("Take-Two," the "Company," "we," "us," or similar pronouns) outlook, 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 our 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 risks relating to our combination with Zynga Inc. (the "Zynga Acquisition"); the risks of conducting business internationally, including as a result of unforeseen geopolitical events; the impact of changes in interest rates by the Federal Reserve and other central banks, including on our short-term investment portfolio; the impact of inflation; volatility in foreign currency exchange rates; our dependence on key management and product development personnel; our dependence on our NBA 2K and Grand Theft Auto products and our ability to develop other hit titles; our ability to leverage opportunities on PlayStation®5 and Xbox Series X|S; factors affecting our mobile business, such as player acquisition costs; the timely release and significant market acceptance of our games; the ability to maintain acceptable pricing levels on our games; and other risks included herein; as well as, but not limited to, the risks and uncertainties discussed under the heading "Risk Factors" included in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended March 31, 2024; and our other periodic filings with the Securities and Exchange Commission. All forward-looking statements are qualified by these cautionary statements and speak only as of the date they are made. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise.
Current wording
The statements contained herein, which are not historical facts, including statements relating to Take-Two Interactive Software, Inc.'s ("Take-Two," the "Company," "we," "us," or similar pronouns) outlook, 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 our 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 risks relating to the timely release and significant market acceptance of our games; the risks of conducting business internationally, including as a result of unforeseen geopolitical events; the impact of changes in interest rates by the Federal Reserve and other central banks, including on our short-term investment portfolio; the impact of inflation; volatility in foreign currency exchange rates; our dependence on key management and product development personnel; our dependence on our NBA 2K and Grand Theft Auto products and our ability to develop other hit titles; our ability to leverage opportunities on PlayStation®5 and Xbox Series X|S; factors affecting our mobile business, such as player acquisition costs; and the ability to maintain acceptable pricing levels on our games; and other risks included herein; as well as, but not limited to, the risks and uncertainties discussed under the heading "Risk Factors" included in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended March 31, 2025; and our other periodic filings with the Securities and Exchange Commission. All forward-looking statements are qualified by these cautionary statements and speak only as of the date they are made. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise.
Previous wording
We are a leading developer, publisher, and marketer of interactive entertainment for consumers around the globe. We develop, operate, and publish products principally through Rockstar Games, 2K, and Zynga. Our products are currently designed for console gaming systems, PC, and mobile, including smartphones and tablets. We deliver our products through physical retail, digital download, online platforms, and cloud streaming services.
Current wording
We are a leading developer, publisher, and marketer of interactive entertainment for consumers around the globe. We develop, operate, and publish products principally through Rockstar Games, 2K, and Zynga. Our products are currently designed for console gaming systems, mobile, including smartphones and tablets, and PC. We deliver our products through physical retail, digital download, online platforms, and cloud streaming services.
Previous wording
Our strategy is to be the most creative, innovative, and efficient company in the evolving interactive entertainment industry. With our diverse portfolio that spans all key platforms and numerous genres, we strive to create the highest quality, most engaging interactive entertainment franchises that captivate our global audience. Most of our intellectual property is internally owned and developed, which we believe best positions us financially and competitively. We have established a portfolio of proprietary software content for the major hardware and mobile platforms in a wide range of genres, including action, adventure, family/casual, hyper-casual, role-playing, shooter, social casino, sports, and strategy, which we distribute worldwide. We believe that our player-first approach and commitment to creativity and innovation are distinguishing strengths, enabling us to differentiate our products in the marketplace by combining advanced technology with compelling storylines and characters that provide unique gameplay experiences. We have created, acquired, or licensed a group of highly recognizable brands to match the broad consumer demographics that we serve, ranging from adults to children and game enthusiasts to casual gamers. Another cornerstone of our strategy is to support the success of our products in the marketplace through innovative marketing programs and global distribution on platforms and through channels that are relevant to our target audience.
Current wording
Our teams have established a portfolio of proprietary software content for the major hardware and mobile platforms, and we aim to be at the forefront of technological innovation. We have a diverse portfolio that spans all key platforms and numerous genres, including action, adventure, family, casual, hyper-casual, role-playing, shooter, social casino, sports, and strategy. This enables us to appeal to a wide array of consumers and demographic groups worldwide, ranging from game enthusiasts to casual gamers. Most of our intellectual property is internally owned and developed, which we believe best positions us financially and competitively. In addition, we license selectively some highly recognizable renowned brands, especially in sports entertainment. We support our products with innovative marketing programs created by our internal global marketing teams.
Previous wording
We derive substantially all of our revenue from the sale of our interactive entertainment content, which includes the sale of internally developed software titles and software titles developed by third parties, the sale of in-game virtual items and advertising, and live services on console, PC, and mobile. Operating margins are dependent in part upon our ability to release new, commercially successful software products and to manage effectively their development and marketing costs. We have internal development studios located in Australia, Canada, China, Czech Republic, Finland, Germany, Hungary, India, Serbia, South Korea, Spain, Turkey, the United Kingdom (U.K.), and the United States (U.S.).
Current wording
We derive substantially all of our revenue from the sale of our interactive entertainment content, which includes the sale of internally developed software titles and software titles developed by third parties, the sale of in-game virtual items and advertising, and live services on console, mobile, and PC. Operating margins are dependent in part upon our ability to release new, commercially successful software products and to manage effectively their development and marketing costs. We have internal development studios located in Australia, Canada, China, Czech Republic, Finland, Germany, Hungary, India, Serbia, South Korea, Spain, Turkey, the United Kingdom ("U.K."), and the United States ("U.S.").
Previous wording
Rockstar Games. Rockstar Games' strategy is to develop a limited number of titles that are known for their quality and longevity in the market for which they can create sequels and incremental revenue opportunities through virtual currency, add-on content, and in-game purchases. Software titles published by our Rockstar Games label are primarily internally developed. We expect Rockstar Games, our wholly-owned publisher of the Grand Theft Auto, LA Noire, Max Payne, Midnight Club, Red Dead Redemption, and other popular franchises, to continue to be a leader in the action/adventure product category and to create groundbreaking entertainment. We believe that Rockstar Games has established a uniquely original, popular, cultural phenomenon with its Grand Theft Auto series, which is the interactive entertainment industry's most iconic and critically acclaimed brand and has sold-in over 440 million units worldwide. Our most recent installment, Grand Theft Auto V, which was released in 2013, has sold-in over 210 million units worldwide and includes access to Grand Theft Auto Online. Rockstar Games offers its GTA+ membership program, which engages its player community with an array of rotating benefits, including access to classic Rockstar titles. Rockstar Games continues to invest in the franchise and plans to release Grand Theft Auto VIin the fall of calendar year 2025. The label released its first trailer for the title in December 2023 and will share more details in the coming months. Red Dead Redemption 2, which has been a critical and commercial success that set numerous entertainment industry records, has sold-in more than 65 million units worldwide to date. Rockstar Games continues to expand on its established series by developing sequels, offering downloadable episodes, and providing additional content. Rockstar Games' titles are published across all key platforms, including mobile.
Current wording
Rockstar Games. Rockstar Games' strategy is to develop a limited number of titles that are known for their quality and longevity in the market for which they can create sequels and incremental revenue opportunities through virtual currency, add-on content, and in-game purchases. Software titles published by our Rockstar Games label are primarily internally developed. We expect Rockstar Games, our wholly-owned publisher of the Grand Theft Auto, L.A. Noire, Max Payne, Midnight Club, Red Dead Redemption, and other popular franchises, to continue to be a leader in the action/adventure product category and to create groundbreaking entertainment. We believe that Rockstar Games has established a uniquely original, popular, cultural phenomenon with its Grand Theft Auto series, which is the interactive entertainment industry's most iconic and critically acclaimed brand and has sold-in over 450 million units worldwide. Our most recent installment, Grand Theft Auto V, which was released in 2013, has sold-in over 215 million units worldwide and includes access to Grand Theft Auto Online. Rockstar Games offers its GTA+ membership program, which engages its player community with an array of rotating benefits, including access to classic Rockstar Games titles. Rockstar Games continues to invest in the franchise and announced that Grand Theft Auto VI is planned for release on May 26, 2026, during our fiscal year 2027. The label released its first trailer for the title in December 2023 and the second in May 2025, and will share more details in the future. Red Dead Redemption 2, which has been a critical and commercial success that set numerous entertainment industry records, has sold-in more than 75 million units worldwide to date. Rockstar Games continues to expand on its established series by developing sequels, offering downloadable episodes, and providing additional content. Rockstar Games' titles are published across all key platforms, including mobile.
Previous wording
2K. Our 2K label has published a variety of popular entertainment properties across all key platforms and across a range of genres including shooter, action, role-playing, strategy, sports, and family/casual entertainment. In recent years, 2K has expanded its offerings to include several new franchises that are expected to enhance and diversify its slate of games and provide opportunities for sequels and additional content. We expect 2K to continue to develop new, successful franchises in the future. 2K's internally owned and developed franchises include the critically acclaimed, multi-million unit selling BioShock, Mafia, Sid Meier's Civilization, and XCOM franchises, as well as the Borderlandsand Tiny Tina's Wonderlands franchises, which are now owned by us following our June 2024 acquisition of Gearbox. 2K's realistic sports simulation titles include our flagship NBA 2K series, which continues to be the top-ranked NBA basketball video game, the WWE 2K professional wrestling series, PGA TOUR 2K, and TopSpin 2K. 2K also publishes mobile titles, including WWE SuperCard and NFL 2K Playmakers. In 2018, we expanded our relationship with the NBA through the NBA 2K League.
Current wording
2K. Our 2K label publishes a variety of popular entertainment properties across all key platforms and across a range of genres including shooter, action, role-playing, strategy, sports, and family/casual entertainment. In recent years, 2K has expanded its offerings to include several new franchises that are expected to enhance and diversify its slate of games and provide opportunities for sequels and additional content. We expect 2K to continue to develop new, successful franchises in the future. 2K's internally owned and developed franchises include the critically acclaimed, multi-million unit selling BioShock, Mafia, Sid Meier's Civilization, and XCOM franchises, as well as the Borderlandsand Tiny Tina's Wonderlands franchises, which we now own following our June 2024 acquisition of Gearbox Entertainment. 2K's realistic sports simulation titles include our flagship NBA 2K series, which continues to be the top-ranked NBA basketball video game, the WWE 2K professional wrestling series, PGA TOUR 2K, and TopSpin 2K. 2K also publishes mobile titles, including WWE SuperCard and NBA 2K All-Stars.
Previous wording
Zynga. Our Zynga label publishes popular free-to-play mobile games that deliver high quality, deeply engaging entertainment experiences and generates revenue from in-game sales and in-game advertising. Zynga's strategy is to have numerous games in concept development and to determine which titles are best suited for soft launch and worldwide launch based on the achievement of various milestones and KPI thresholds. Zynga's diverse portfolio of popular game franchises has been downloaded more than six billion times, including CSR Racing, Dragon City, Empires & Puzzles, FarmVille, Game of Thrones: Legends, Golf Rival, Harry Potter: Puzzles & Spells, Match Factory!, Merge Dragons!, Merge Magic!, Monster Legends, Star Wars: Hunters, Toon Blast, Top Eleven, Top Troops, Toy Blast, Two Dots, Words With Friends, Zynga Poker, and a high volume of hyper-casual mobile titles, including Fill the Fridge!, Parking Jam 3D, Power Slap, Pull the Pin, Screw Jam, Twisted Tangle, and Tangled Snakes.
Current wording
Zynga. Our Zynga label publishes popular free-to-play mobile games that deliver high quality, deeply engaging entertainment experiences and generates revenue from in-game sales and in-game advertising. Zynga's strategy is to have numerous games in concept development and to determine which titles are best suited for soft and worldwide launch based on the achievement of various milestones and key performance indicator (KPI) thresholds. Zynga's diverse portfolio of popular game franchises has been downloaded more than six billion times, including CSR Racing, Dragon City, Empires & Puzzles, FarmVille, Game of Thrones: Legends, Golf Rival, Harry Potter: Puzzles & Spells, Match Factory!, Merge Dragons!, Merge Magic!, Monster Legends, Toon Blast, Top Eleven, Toy Blast, Two Dots, Words With Friends, Zynga Poker, and a high volume of hyper-and hybrid-casual mobile titles, including Color Block Jam, Fill the Fridge!, Power Slap, Pull the Pin, Screw Jam, and Twisted Tangle.
Previous wording
Additionally, our Grand Theft Auto products in particular have historically accounted for a significant portion of our revenue. Sales of Grand Theft Auto products generated 13% of our net revenue for the nine months ended December 31, 2024. The timing of our Grand Theft Auto product releases may affect our financial performance on a quarterly and annual basis.
Current wording
Product Release Schedule. Our financial results are affected by the timing of our product releases and the commercial success of our titles. Generally, a significant portion of our revenue has been derived from a few popular franchises, particularly around new releases within those franchises, some of which have annual or biennial releases. Additionally, our Grand Theft Auto products in particular have historically accounted for a significant portion of our revenue. Sales of Grand Theft Auto products generated 14.7% of our net revenue for the three months ended June 30, 2025. The timing of our Grand Theft Auto product releases may affect our financial performance on a quarterly and annual basis. Rockstar plans to release Grand Theft Auto VI on May 26, 2026.
Previous wording
To date we have announced that, during the remainder of fiscal year 2025, 2K plans to release Sid Meier's Civilization VII, PGA TOUR 2K25, and WWE 2K25. Rockstar Games plans to release Grand Theft Auto VI in the fall of calendar year 2025.
Current wording
To date we have announced that, during the remainder of fiscal year 2026, 2K plans to release Mafia: The Old Country, NBA 2K26, Borderlands 4, and WWE 2K26.
Previous wording
Economic Environment and Retailer Performance. We continue to monitor various macroeconomic and geopolitical factors that may affect our business in several areas, including consumer demand, inflation, pricing pressure on our products, credit quality of our receivables, and foreign currency exchange rates. Actions we have taken to date and other potential actions we may take in the future in response to these factors could result in negative impacts in future periods.
Current wording
Economic Environment and Retailer Performance. We continue to monitor various macroeconomic and geopolitical factors, such as global tariff policies, that may affect our business in several areas, including consumer demand, inflation, pricing pressure on our products, credit quality of our receivables, and foreign currency exchange rates. Actions we have taken to date and other potential actions we may take in the future in response to these factors could result in negative impacts in future periods.
Previous wording
The economic environment has affected our customers in the past and may do so in the future. There has been increased consolidation in our industry, as larger, better capitalized competitors will be in a stronger position to withstand prolonged periods of economic downturn and sustain their business through the financial volatility. Also, bankruptcies or consolidations of our large retail customers could seriously hurt our business, due to uncollectible accounts receivable and the concentration of purchasing power among the remaining large retailers.
Current wording
The economic environment has affected our customers in the past and may do so in the future. There has been increased consolidation in our industry, which is extremely competitive, and larger, better capitalized competitors will be in a stronger position to withstand prolonged periods of economic downturn and sustain their business through periods of financial volatility. Also, bankruptcies or consolidations of our large retail customers could hurt our business, due to uncollectible accounts receivable and the concentration of purchasing power among the remaining large retailers.
Previous wording
Hardware Platforms. We derive a substantial portion of our revenue from the sale of products made for video game consoles manufactured by third parties. Such console revenue comprised 37.2% of our net revenue for the nine months ended December 31, 2024. The success of our business is dependent upon consumer acceptance of these platforms and the continued growth in the installed base of these platforms. When new hardware platforms are introduced, demand for interactive entertainment developed for older platforms typically declines, which may negatively affect our business during the market transition to the new consoles. The latest Sony and Microsoft consoles provide "backwards compatibility" (i.e., the ability to play games for the previous generation of consoles). The inclusion of such features on new consoles could mitigate the risk of such a decline. However, we cannot be certain how backwards compatibility will affect demand for our products. Further, events beyond our control may impact the availability of these new consoles, which may also affect demand. We manage our product delivery on each current and future platform in a manner we believe to be most effective to maximize our revenue opportunities and achieve the desired return on our investments in product development. Accordingly, our strategy for these platforms is to focus our development efforts on a select number of the highest quality titles.
Current wording
Hardware Platforms. We derive a substantial portion of our revenue from the sale of products made for video game consoles manufactured by third parties. Such console revenue comprised 36.6% of our net revenue for the three months ended June 30, 2025. The success of our business is dependent upon consumer acceptance of these platforms and the continued growth in the installed base of these platforms, which could be impacted by global economic factors, including global tariff policies. When new hardware platforms are introduced, demand for interactive entertainment developed for older platforms typically declines, which may negatively affect our business during the market transition to the new consoles. The latest Sony and Microsoft consoles provide "backwards compatibility" (i.e., the ability to play games for the previous generation of consoles). The inclusion of such features on new consoles could mitigate the risk of such a decline. However, we cannot be certain how backwards compatibility will affect demand for our products. Further, events beyond our control may impact the availability of these new consoles, which may also affect demand for our products. We manage our product delivery on each current and future platform in a manner we believe to be most effective to maximize our revenue opportunities and achieve the desired return on our investments in product development. Accordingly, our strategy for these platforms is to focus our development efforts on a select number of the highest quality titles.
Previous wording
Online Content and Digital Distribution. We provide a variety of online delivered products, including direct digital downloads of our titles, and access to additional offerings through virtual currency, add-on content, and in-game purchases, which drive ongoing engagement and incremental revenue from recurrent consumer spending on our titles. Net revenue from digital online channels comprised 96.4% of our net revenue for the nine months ended December 31, 2024. We expect online delivery of games and game offerings to continue to be the primary part of our business over the long term.
Current wording
Online Content and Digital Distribution. We provide a variety of online delivered products, including direct digital downloads of our titles, and access to additional offerings through virtual currency, add-on content, in-game purchases, and in-game advertising, which drive ongoing engagement and incremental revenue from recurrent consumer spending on our titles. Net revenue from digital online channels comprised 98.2% of our net revenue for the three months ended June 30, 2025. We expect online delivery of games and game offerings to continue to be the primary part of our business over the long term.
Previous wording
A significant portion of our mobile titles are distributed, marketed, and promoted through third parties, primarily Apple’s App Store and the Google Play Store. Virtual items for our mobile games are purchased through the payment processing systems of these platform providers. We generate a significant portion of our net revenue through the Apple and Google platforms and expect to continue to do so for the foreseeable future. Apple and Google generally have the discretion to set the amounts of their platform fees and change their platforms’ terms of service and other policies with respect to us or other developers at their sole discretion, and those changes may be unfavorable to us. These platform fees are recorded as cost of revenue as incurred. Further, as a result of the platform fees associated with online game sales, our mobile net revenue generally generates a lower gross margin percentage than our Console or PC revenue. Accordingly, the overall product mix between mobile and other game sales may affect our gross margin percentage. We are also continuing to expand our direct-to-consumer efforts more meaningfully across our mobile portfolio to enhance profitability.
Current wording
A significant portion of our mobile titles are distributed, marketed, and promoted through third parties, primarily Apple’s App Store and the Google Play Store. Virtual items for our mobile games are purchased principally through the payment processing systems of these platform providers, as well as our direct-to-consumer commerce platform. We generate a significant portion of our net revenue through the Apple and Google platforms and expect to continue to do so for the foreseeable future. Apple and Google generally have the discretion to set the amounts of their platform fees and change their platforms’ terms of service and other policies with respect to us or other developers at their sole discretion, and those changes may be unfavorable to us. These platform fees are recorded as cost of revenue as incurred. Further, as a result of the platform fees associated with online game sales, our mobile net revenue generally generates a lower gross margin percentage than our Console or PC revenue. Accordingly, the overall product mix between mobile and other game sales may affect our gross margin percentage. We are also continuing to expand our direct-to-consumer efforts more meaningfully across our mobile portfolio to enhance profitability.
Previous wording
Player acquisition costs. Principally for our mobile titles, we use advertising and other forms of player acquisition and retention to grow and retain our player audience. These expenditures, which are recorded within Sales and marketing in our Condensed Consolidated Statements of Operations, generally relate to the promotion of new game launches and ongoing performance-based programs to drive new player acquisition and lapsed player reactivation. Over time, the effectiveness or cost of these acquisition and retention-related programs may change, affecting our operating results.
Current wording
Player acquisition costs. Principally for our mobile titles, we use advertising and other forms of player acquisition and retention to grow and retain our player audience. These expenditures, which are recorded within Selling and marketing in our Condensed Consolidated Statements of Operations, generally relate to the promotion of new game launches and ongoing performance-based programs to drive new player acquisition and lapsed player reactivation. Over time, the effectiveness or cost of these acquisition and retention-related programs may change, affecting our operating results.
Previous wording
For the three months ended December 31, 2024, Net Bookings increased as compared to the prior year period. The increase was primarily due to an increase in Net Bookings from our NBA 2Kfranchise and Match Factory!, which released in November 2023. These increases were partially offset by a decrease in Net Bookings from our Grand Theft Auto franchise, Empires & Puzzles, and our Red Dead Redemption franchise.
Current wording
For the three months ended June 30, 2025, Net Bookings increased as compared to the prior year period. The increase was primarily due to an increase in Net Bookings from our NBA 2Kfranchise and Color Block Jam, which released in November 2024.
Previous wording
(1) Includes $2.6 and $6.3 of stock-based compensation expense in 2024 and 2023, respectively, in software development costs and royalties.
Current wording
(1) Includes $(41.0) and $2.9 of stock-based compensation expense in 2025 and 2024, respectively, in software development costs and royalties.
Previous wording
Net revenue from mobile increased by $24.9 and accounted for 53.8% of our total net revenue for the three months ended December 31, 2024, as compared to 51.7% for the prior year period. The increase was primarily due to an increase in net revenue from Match Factory!. The increase was partially offset by a decrease in net revenue from our Grand Theft Auto franchise and Empires & Puzzles. Net revenue from console games decreased by $39.7 and accounted for 37.4% of our total net revenue for the three months ended December 31, 2024, as compared to 40.1% for the prior year period. The decrease in net revenue from console games was due to a decrease in net revenue from our Red Dead Redemptionand Grand Theft Auto franchises, and LEGO 2K Drive. These decreases were partially offset by an increase in net revenue from our WWE 2Kfranchise. Net revenue from PC and other increased by $8.3 and accounted for 8.8% of our total net revenue for the three months ended December 31, 2024, as compared to 8.2% for the prior year period. The increase in net revenue from PC and other was primarily due to an increase in net revenue from our NBA 2K franchise.
Current wording
Net revenue from mobile increased by $79.2 and accounted for 53.3% of our total net revenue for the three months ended June 30, 2025, as compared to 54.0% for the prior year period. The increase was primarily due to an increase in net revenue from Color Block Jam. Net revenue from console games increased by $41.7 and accounted for 36.6% of our total net revenue for the three months ended June 30, 2025, as compared to 38.0% for the prior year period. The increase in net revenue from console games was primarily due to an increase in net revenue from our NBA 2Kfranchise. Net revenue from PC and other increased by $44.7 and accounted for 10.1% of our total net revenue for the three months ended June 30, 2025, as compared to 8.0% for the prior year period. The increase in net revenue from PC and other was primarily due to an increase in net revenue from our Grand Theft Autoand NBA 2K franchises.
Previous wording
Recurrent consumer spending ("RCS") is generated from ongoing consumer engagement and includes revenue from virtual currency, add-on content, in-game purchases, and in-game advertising. Net revenue from RCS increased by $52.8 and accounted for 80.0% of net revenue for the three months ended December 31, 2024, as compared to 75.7% of net revenue for the prior year period. The increase in net revenue from RCS was primarily due to an increase in net revenue from Match Factory! and our NBA 2Kfranchise. These increases were partially offset by a decrease in net revenue from Empires & Puzzlesand our Grand Theft Auto franchise. Net revenue from full game and other decreased by $59.3 and accounted for 20.0% of net revenue for the three months ended December 31, 2024 as compared to 24.3% of net revenue for the prior year period. The decrease in net revenue from full game and other was due primarily to a decrease in net revenue from our Grand Theft Autoand Red Dead Redemption franchises, and LEGO 2K Drive. These decreases were partially offset by an increase in net revenue from our WWE 2Kfranchise.
Current wording
Recurrent consumer spending ("RCS") is generated from ongoing consumer engagement and includes revenue from virtual currency, add-on content, in-game purchases, and in-game advertising. Net revenue from RCS increased by $158.4 and accounted for 83.5% of net revenue for the three months ended June 30, 2025, as compared to 82.0% of net revenue for the prior year period. The increase in net revenue from RCS was primarily due to an increase in net revenue from Color Block Jamand our NBA 2Kfranchise. Net revenue from full game and other increased by $7.2 and accounted for 16.5% of net revenue for the three months ended June 30, 2025 as compared to 18.0% of net revenue for the prior year period. The increase in net revenue from full game and other was primarily due to an increase in net revenue from our Grand Theft Auto franchise. The increase was partially offset by a decrease in net revenue from TopSpin 2K25, which released in April 2024,.
Previous wording
Net revenue from digital online channels increased by $13.4 and accounted for 96.4% of our total net revenue for the three months ended December 31, 2024, as compared to 94.9% for the prior year period. The increase was primarily due to an increase in net revenue from Match Factory! and our NBA 2Kfranchise. These increases were partially offset by a decrease in net revenue from our Grand Theft Auto franchise and Empires & Puzzles. Net revenue from physical retail and other channels decreased by $19.9 and accounted for 3.6% of our total net revenue for the three months ended December 31, 2024, as compared to 5.1% for the same period in the prior year period. The decrease in net revenue from physical retail and other channels was due primarily to a decrease in net revenue from our Red Dead Redemptionand Grand Theft Auto franchises and LEGO 2K Drive.
Current wording
Net revenue from digital online channels increased by $181.1 and accounted for 98.2% of our total net revenue for the three months ended June 30, 2025, as compared to 96.8% for the prior year period. The increase was primarily due to an increase in net revenue from our NBA 2Kfranchise and Color Block Jam. Net revenue from physical retail and other channels decreased by $15.5 and accounted for 1.8% of our total net revenue for the three months ended June 30, 2025, as compared to 3.2% for the same period in the prior year period. The decrease in net revenue from physical retail and other channels was primarily due to a decrease in net revenue from TopSpin 2K25; and our NBA 2K and WWE 2Kfranchises.
Previous wording
Gross profit as a percentage of net revenue for the three months ended December 31, 2024 was 55.9% as compared to 49.7% for the prior year period. The increase in gross profit as a percentage of net revenue was primarily due to (i) lower amortization of intangibles assets due primarily to impairment charges in the prior year for acquisition-related intangible assets and (ii) lower internal royalties due to the timing of when royalties are earned.
Current wording
Gross profit as a percentage of net revenue for the three months ended June 30, 2025 was 62.9% as compared to 57.6% for the prior year period. The increase in gross profit as a percentage of net revenue was primarily due to (i) the reversal of expense related to the forfeiture of awards (refer to Note 10 - Loss Per Share) and (ii) lower amortization of intangibles assets primarily due to divestitures and impairments in the prior year, partially offset by the acquisition of Gearbox (refer to Note 13 - Acquisitions).
Previous wording
Changes in foreign currency exchange rates increased total operating expenses by $1.4 for the three months ended December 31, 2024, as compared to the prior year period.
Current wording
Changes in foreign currency exchange rates increased total operating expenses by $12.0 for the three months ended June 30, 2025, as compared to the prior year period.
Previous wording
Selling and marketing expenses increased by $21.6 for the three months ended December 31, 2024, as compared to the prior year period, due primarily to (i) higher overall marketing expenses due primarily to Match Factory!, which released in November 2023, partially offset by lower marketing expenses for our hyper-casual mobile portfolio and our Grand Theft Auto franchise, and (ii) higher personnel expense due to increased headcount.
Current wording
Selling and marketing expenses decreased by $22.6 for the three months ended June 30, 2025, as compared to the prior year period, primarily due to lower overall marketing expenses for Match Factory!, Screw Jam, Star Wars: Hunters, and Twisted Tangle, partially offset by (i) higher marketing expenses for Color Block Jam, with no corresponding expense in the prior year, and (ii) higher personnel expense due to increased headcount.
Previous wording
Research and development expenses increased by $4.7 for the nine months ended December 31, 2024, as compared to the prior year period, due primarily to increases in (i) personnel expense due to increased headcount and (ii) IT-related expenses for cloud-based services and IT infrastructure, partially offset by the timing of tax related credits for certain titles.
Current wording
Research and development expenses increased by $41.6 for the three months ended June 30, 2025, as compared to the prior year period, primarily due to increases due to (i) the timing of tax related credits related to certain titles and (ii) higher personnel expense due to the acquisition of Gearbox in June 2024 (refer to Note 13 - Acquisitions).
Previous wording
General and administrative expenses increased by $111.9 for the nine months ended December 31, 2024, as compared to the prior year period, due to increases in (i) legal fees and contingencies related to the IBM case against Zynga, (ii) personnel expense due to increased headcount, and (iii) IT-related expenses for cloud-based services and IT infrastructure.
Current wording
General and administrative expenses decreased by $3.5 for the three months ended June 30, 2025, as compared to the prior year period, primarily due to decreases in transaction costs related to our Gearbox acquisition (refer to Note 13 - Acquisitions) and legal and settlement fees related to the IBM case against Zynga in the prior year, partially offset by higher personnel expense.
Previous wording
Depreciation and amortization expenses increased by $6.9 for the three months ended December 31, 2024, as compared to the prior year period, due primarily to increases in IT infrastructure expense and leasehold improvements for office buildouts.
Current wording
Depreciation and amortization expenses increased by $5.6 for the three months ended June 30, 2025, as compared to the prior year period, primarily due to increases in IT infrastructure expense and leasehold improvements for office buildouts.
Previous wording
Interest and other, net was expense of $21.0 for the three months ended December 31, 2024, as compared to expense of $22.5 for the prior year period. The net decrease in expense was due primarily to an increase in interest income primarily due to increases in cash balances and a decrease in foreign currency losses. These decreases in net expense were partially offset by an increase in interest expense related to our debt transactions (refer to Note 9 - Debt).
Current wording
Interest and other, net was expense of $35.4 for the three months ended June 30, 2025, as compared to expense of $27.3 for the prior year period. The net increase in expense was primarily due to an increase in foreign currency losses.
Previous wording
The benefit from income taxes for the three months ended December 31, 2024 is based on our projected annual effective tax rate for fiscal year 2025, adjusted for specific items that are required to be recognized in the period in which they are incurred. The benefit from income taxes was $27.7 for the three months ended December 31, 2024, as compared to the benefit from income taxes of $60.7 for the prior year period.
Current wording
The benefit from income taxes for the three months ended June 30, 2025 is based on our projected annual effective tax rate for fiscal year 2026, adjusted for specific items that are required to be recognized in the period in which they are incurred. The benefit from income taxes was $1.9 for the three months ended June 30, 2025, as compared to the provision for income taxes of $49.8 for the prior year period.
Previous wording
When compared to the statutory rate of 21%, the effective tax rate of 18.1% for the three months ended December 31, 2024 was due primarily to tax benefits of $18.2 related to divestitures, tax benefits of $6.4 from employee stock-based compensation, tax benefits of $3.9 from tax credits, offset by tax expense of $18.7 related to an increase in the U.S. and international valuation allowances and tax expense of $7.1 related to geographic mix of earnings.
Current wording
When compared to the statutory rate of 21%, the effective tax rate of 13.8% for the three months ended June 30, 2025 was primarily due to tax expense of $5.6 related to an increase in the U.S. and international valuation allowances and $2.9 by geographic mix of earnings and changes in reserves, offset by tax benefits of $4.9 from employee stock-based compensation, tax benefits of $2.6 from tax credits.
Previous wording
In the prior year period, when compared to the statutory rate of 21.0%, the effective tax rate of 39.9% for the three months ended December 31, 2023 was due primarily to a tax benefit of $40.0 related to the changes in unrecognized tax benefits from a lapse in statutes of limitation, tax benefits of $4.5 from tax credits, offset by tax expense of $6.8 related to geographic mix of earnings and tax expense of $4.9 related to an increase in the U.S. valuation allowance.
Current wording
In the prior year period, when compared to the statutory rate of 21.0%, the effective tax rate of (23.5)% for the three months ended June 30, 2024 was primarily due to a tax expense of $96.8 related to an increase in valuation allowance and tax expense of $8.2 related to geographic mix of earnings offset by benefits of $17.7 from tax credits.
Previous wording
The change in the effective tax rate, when compared to the prior year period's effective tax rate, is due primarily to decreased tax benefits related to changes in unrecognized tax benefits, increased tax expense from changes in the U.S. and international valuation allowance, offset by increased tax benefits related to divestitures and increased tax benefits from employee-stock based compensation.
Current wording
The change in the effective tax rate, when compared to the prior year period's effective tax rate, is primarily due to increased tax benefits from employee stock-based compensation, decreased tax benefits from tax credits, decreased tax expense from changes in the U.S. and international valuation allowance, and decreased tax expense from geographic mix of earnings.
Previous wording
The Inflation Reduction Act of 2022 (the “Inflation Reduction Act”) includes a new corporate alternative minimum tax (CAMT) of 15% on the adjusted financial statement income (AFSI) of corporations with an average AFSI exceeding $1.0 billion over a consecutive three-year period. The CAMT is effective for taxable year ending March 31, 2024. It is possible that the CAMT could result in an additional tax liability over the regular federal corporate tax liability in a particular year based on differences between book and taxable income. We do not estimate any tax liability relating to CAMT for the current fiscal year. We will continue to evaluate the potential impact the Inflation Reduction Act may have on our operations and Consolidated Financial Statements in future periods.
Current wording
The Inflation Reduction Act of 2022 (the “Inflation Reduction Act”) includes a corporate alternative minimum tax (CAMT) of 15% on the adjusted financial statement income (AFSI) of corporations with an average AFSI exceeding $1.0 billion over a consecutive three-year period. It is possible that the CAMT could result in an additional tax liability over the regular federal corporate tax liability in a particular year based on differences between book and taxable income. We do not estimate any tax liability relating to CAMT for the current fiscal year. We will continue to evaluate the potential impact the Inflation Reduction Act may have on our operations and Consolidated Financial Statements in future periods.
Previous wording
The Organization for Economic Co-operation and Development ("OECD") has proposed a global minimum tax of 15% of reported profits, referred to as Pillar Two. Many countries have already implemented or are taking steps to implement Pillar Two. Although the model rules provide a framework for applying the minimum tax, countries may enact Pillar Two slightly differently than the model rules and on different timelines. Many aspects of Pillar Two are effective for the fiscal year ending March 31, 2025. Pillar Two could result in additional tax liability over the regular corporate tax liability in a particular jurisdiction to the extent tax expense is less than a 15% minimum rate. The impact of Pillar Two was not material to the tax provision for the three months ended December 31, 2024. We will continue to evaluate the impact Pillar Two and any additional guidance may have on our operations.
Current wording
The Organization for Economic Co-operation and Development ("OECD") has proposed a global minimum tax of 15% of reported profits, referred to as Pillar Two. Many countries have already implemented or are taking steps to implement Pillar Two. Although the model rules provide a framework for applying the minimum tax, countries may enact Pillar Two slightly differently than the model rules and on different timelines. Pillar Two could result in additional tax liability over the regular corporate tax liability in a particular jurisdiction to the extent tax expense is less than a 15% minimum rate. The impact of Pillar Two was not material to the tax provision for the three months ended June 30, 2025. We will continue to evaluate the impact Pillar Two and any additional guidance may have on our results and operations.
Previous wording
For the three months ended December 31, 2024, net loss was $125.2, as compared to a net loss of $91.6 in the prior year period. Basic and diluted loss per share for the three months ended December 31, 2024 was $0.71, as compared to basic and diluted loss per share of $0.54 in the prior year period. Basic weighted average shares of 176.0 were 5.7 shares higher as compared to the prior year period basic weighted average shares, due primarily to stock issued as consideration for the acquisition of Gearbox, as well as normal stock compensation activity, including vests as well as grants and forfeitures in the prior year being fully outstanding in the current year. See Note 10 - Loss Per Share to our Condensed Consolidated Financial Statements for additional information.
Current wording
For the three months ended June 30, 2025, net loss was $11.9, as compared to a net loss of $262.0 in the prior year period. Basic and diluted loss per share for the three months ended June 30, 2025 was $0.07, as compared to basic and diluted loss per share of $1.52 in the prior year period. Basic weighted average shares of 180.8 were 8.5 shares higher as compared to the prior year period basic weighted average shares, primarily due to our equity issuance, as well as normal stock compensation activity, including vests, grants, and forfeitures in the prior year being fully outstanding in the current year. See Note 10 - Loss Per Share to our Condensed Consolidated Financial Statements for additional information.
Previous wording
As of December 31, 2024, we had $3.3 of short-term investments, which primarily consisted of bank time deposits with maturities greater than 90 days. From time to time, we may make additional short-term investments depending on future market conditions and liquidity needs.
Current wording
As of June 30, 2025, we had $10.1 of short-term investments, which primarily consisted of bank time deposits with maturities greater than 90 days. From time to time, we may make additional short-term investments depending on future market conditions and liquidity needs.
Previous wording
As of December 31, 2024, we had $3,650.0 of Senior Notes outstanding.
Current wording
As of June 30, 2025, we had $3,050.0 of Senior Notes outstanding.
Previous wording
As of December 31, 2024, there were no borrowings under the 2022 Credit Agreement, and we had approximately $747.8 available for additional borrowings.
Current wording
As of June 30, 2025, there were no borrowings under the 2022 Credit Agreement, and we had approximately $997.8 available for additional borrowings.
Previous wording
2024, respectively. We had three customers who accounted for 25.1%, 21.5%, and 14.8% of our gross accounts receivable as of December 31, 2024, and three customers who accounted for 21.8%, 18.1%, and 16.9% of our gross accounts receivable as of March 31, 2024. We did not have any additional customers that exceeded 10% of our gross accounts receivable as of December 31, 2024, and March 31, 2024. Based upon performing ongoing credit evaluations, maintaining trade credit insurance on a majority of our customers who sell our physical products, and our past collection experience, we believe that the receivable balances from these largest customers do not represent a significant credit risk, although we actively monitor each customer's creditworthiness and economic conditions that may affect our customers' business and access to capital. We are monitoring the current global economic conditions, including credit markets and other factors as it relates to our customers in order to manage the risk of uncollectible accounts receivable.
Current wording
A majority of our trade receivables are derived from sales to major retailers, including digital storefronts and platform partners, and distributors. Our five largest customers accounted for 83.5% and 83.1% of net revenue during the three months ended June 30, 2025 and 2024, respectively. We had four customers who accounted for 25%, 23%, 17%, and 13% of our net revenue as of June 30, 2025, and four customers who accounted for 25%, 24%, 19%, and 11% of our net revenue as of March 31, 2025. As of June 30, 2025 and March 31, 2025, five customers accounted for 75.2% and 72.1% of our gross accounts receivable, respectively. Customers that individually accounted for more than 10% of our gross accounts receivable balance comprised 61.0% and 61.0% of such balances at June 30, 2025 and March 31, 2025, respectively. We had three customers who accounted for 25.6%, 22.8%, and 12.6% of our gross accounts receivable as of June 30, 2025, and three customers who accounted for 24.0%, 21.3%, and 15.7% of our gross accounts receivable as of March 31, 2025. We did not have any additional customers that exceeded 10% of our gross accounts receivable as of June 30, 2025, and March 31, 2025. Based upon performing ongoing credit evaluations, maintaining trade credit insurance on a majority of our customers who sell our physical products, and our past collection experience, we believe that the receivable balances from these largest customers do not represent a significant credit risk, although we actively monitor each customer's creditworthiness and economic conditions that may affect our customers' business and access to capital. We are monitoring the current global economic conditions, including credit markets and other factors as it relates to our customers in order to manage the risk of uncollectible accounts receivable.
Previous wording
As of December 31, 2024, the amount of cash and cash equivalents held outside of the U.S. by our foreign subsidiaries was $804.9. These balances are dispersed across various locations around the world. We believe that such dispersion meets the business and liquidity needs of our foreign affiliates. In addition, we expect to have the ability to generate sufficient cash domestically to support ongoing operations for the foreseeable future.
Current wording
As of June 30, 2025, the amount of cash and cash equivalents held outside of the U.S. by our foreign subsidiaries was $1,056.1. These balances are dispersed across various locations around the world. We believe that such dispersion meets the business and liquidity needs of our foreign affiliates. In addition, we expect to have the ability to generate sufficient cash domestically to support ongoing operations for the foreseeable future.
Previous wording
At December 31, 2024, we had $1,308.9 of cash and cash equivalents and restricted cash and cash equivalents, compared to $1,102.0 at March 31, 2024. The increase was primarily due to Net cash provided by financing activities, primarily related to proceeds from the issuance of our 2029 Notes and 2034 Notes (refer to Note 9 - Debt). This increase was partially offset by the decrease in (i) Net cash used in operating activities, which was due primarily to investments in software development and licenses, partially offset by sales of our products and (ii) Net cash used in investing activities which was due primarily to the purchase of fixed assets.
Current wording
At June 30, 2025, we had $2,116.2 of cash and cash equivalents and restricted cash and cash equivalents, compared to $1,559.2 at March 31, 2025. The increase was primarily due to Net cash provided by financing activities, primarily related to proceeds from our equity issuance of our common stock (refer to Note 10 -Loss Per Share), partially offset by the repayment of our 2025 Notes (refer to Note 9 - Debt). This net increase was partially offset by the decrease in (i) Net cash used in operating activities, which was primarily due to investments in software development and licenses, partially offset by sales of our products and (ii) Net cash used in investing activities which was primarily due to the purchase of fixed assets.
Showing the first 40 of 42 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Our strategy is to create hit entertainment experiences, delivered on every platform relevant to our audience through a variety of sound business models. Our pillars - creativity, innovation, and efficiency - guide us as we strive to create the highest quality, most captivating experiences for our consumers. We believe that our player-first approach and commitment to creativity and innovation are distinguishing strengths, enabling us to differentiate our products in the marketplace by combining advanced technology with compelling gameplay that provide unique, deeply engaging experiences.
Rearranged previous paragraphs (16)
Previous report — wording carried elsewhere
Product Release Schedule. Our financial results are affected by the timing of our product releases and the commercial success of our titles. Generally, a significant portion of our revenue has been derived from a few popular franchises, particularly around new releases within those franchises, some of which have annual or biennial releases.
Previous report — wording carried elsewhere
In addition, we aim to drive ongoing engagement and incremental revenue from recurrent consumer spending on our titles through virtual currency, add-on content, in-game purchases, and in-game advertising, all of which are typically delivered digitally.
Previous report — wording carried elsewhere
Nine Months Ended December 31, 2024 Compared to December 31, 2023
Previous report — wording carried elsewhere
(1) Includes $8.6 and $20.5 of stock-based compensation expense in 2024 and 2023, respectively, in software development costs and royalties.
Previous report — wording carried elsewhere
(1) Includes stock-based compensation expense, which was allocated as follows:
Previous report — wording carried elsewhere
Changes in foreign currency exchange rates increased total operating expenses by $0.8 for the nine months ended December 31, 2024, as compared to the prior year period.
Previous report — wording carried elsewhere
Depreciation and amortization expenses increased by $13.3 for the nine months ended December 31, 2024, as compared to the prior year period, due primarily to increases in IT infrastructure expense and leasehold improvements for office buildouts.
Previous report — wording carried elsewhere
The provision for income taxes for the nine months ended December 31, 2024 is based on our projected annual effective tax rate for fiscal year 2025, adjusted for specific items that are required to be recognized in the period in which they are incurred. The provision for income taxes was $63.3 for the nine months ended December 31, 2024, as compared to the benefit from income taxes of $117.0 for the prior year period.
Previous report — wording carried elsewhere
The accounting for share-based compensation will increase or decrease our effective tax rate based upon the difference between our share-based compensation expense and the deductions taken on our tax return, which depends on the stock price at the time of the employee award vesting.
Previous report — wording carried elsewhere
We anticipate that additional excess tax benefits or shortfalls from employee stock compensation, tax credits, and changes in our geographic mix of earnings could have a significant impact on our effective tax rate in the future. In addition, we are regularly examined by domestic and foreign taxing authorities. Examinations may result in tax assessments in excess of amounts claimed and the payment of additional taxes. We believe our tax positions comply with applicable tax law, and that we have adequately provided for reasonably foreseeable tax assessments. It is possible that settlement of audits or the expiration of the statute of limitations could have an impact on our effective tax rate in future periods.
Previous report — wording carried elsewhere
The American Rescue Plan Act of 2021 (the “ARPA”), among other things, includes provisions to expand the IRC Section 162(m) disallowance for deduction of certain compensation paid by publicly held corporations. Effective for tax years starting after December 31, 2026 (April 1, 2027 for the Company), the ARPA expands the limitation to cover the next five most highly compensated employees. The ARPA did not have a material impact on our Condensed Consolidated Financial Statements for the nine months ended December 31, 2024. We continue to evaluate the potential impact the ARPA may have on our operations and Consolidated Financial Statements in future periods.
Previous report — wording carried elsewhere
The Inflation Reduction Act of 2022 (the “Inflation Reduction Act”) includes a new corporate alternative minimum tax (CAMT) of 15% on the adjusted financial statement income (AFSI) of corporations with an average AFSI exceeding $1.0 billion over a consecutive three-year period. The CAMT is effective for taxable year ending March 31, 2024. It is possible that the CAMT could result in an additional tax liability over the regular federal corporate tax liability in a particular year based on differences between book and taxable income. We do not estimate any tax liability relating to CAMT for the current fiscal year. We will continue to evaluate the potential impact the Inflation Reduction Act may have on our operations and Consolidated Financial Statements in future periods.
Previous report — wording carried elsewhere
The Organization for Economic Co-operation and Development ("OECD") has proposed a global minimum tax of 15% of reported profits, referred to as Pillar Two. Many countries have already implemented or are taking steps to implement Pillar Two. Although the model rules provide a framework for applying the minimum tax, countries may enact Pillar Two slightly differently than the model rules and on different timelines. Many aspects of Pillar Two are effective for the fiscal year ending March 31, 2025. Pillar Two could result in additional tax liability over the regular corporate tax liability in a particular jurisdiction to the extent tax expense is less than a 15% minimum rate. The impact of Pillar Two was not material to the tax provision for the nine months ended December 31, 2024. We will continue to evaluate the impact Pillar Two and any additional guidance may have on our operations.
Previous report — wording carried elsewhere
Net loss and loss per share
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For the nine months ended December 31, 2024, net loss was $752.7, as compared to net loss of $841.2 in the prior year period. For the nine months ended December 31, 2024, basic and diluted loss per share was $4.31 as compared to basic and diluted loss per share of $4.95 in the prior year period. Basic weighted average shares of 174.5 were 4.6 shares higher as compared to the prior year period basic weighted average shares, due primarily to stock issued as consideration for the acquisition of Gearbox, as well as normal stock compensation activity, including vests as well as grants and forfeitures in the prior year being fully outstanding in the current year. See Note 10 - Loss Per Share to our Condensed Consolidated Financial Statements for additional information.
Previous report — wording carried elsewhere
A majority of our trade receivables are derived from sales to major retailers, including digital storefronts and platform partners, and distributors. Our five largest customers accounted for 81.8% and 79.2% of net revenue during the nine months ended December 31, 2024 and 2023, respectively. As of December 31, 2024 and March 31, 2024, five customers accounted for 74.6% and 69.9% of our gross accounts receivable, respectively. Customers that individually accounted for more than 10% of our gross accounts receivable balance comprised 61.4% and 57.7% of such balances at December 31, 2024 and March 31,