falsedesktopTTWO2020-12-31000162828021001632{"tbl_sim": "https://q10k.com/tbl-sim", "search": "https://q10k.com/search"}{"q10k_tbl_0": "PART I.\tFINANCIAL INFORMATION\t2\nItem 1.\tFinancial Statements (Unaudited)\t2\n\tCondensed Consolidated Balance Sheets\t2\n\tCondensed Consolidated Statements of Operations\t3\n\tCondensed Consolidated Statements of Comprehensive Income\t4\n\tCondensed Consolidated Statements of Cash Flows\t5\n\tCondensed Consolidated Statements of Stockholder's Equity\t6\n\tNotes to Condensed Consolidated Financial Statements\t8\nItem 2.\tManagement's Discussion and Analysis of Financial Condition and Results of Operations\t22\nItem 3.\tQuantitative and Qualitative Disclosures About Market Risk\t36\nItem 4.\tControls and Procedures\t37\nPART II.\tOTHER INFORMATION\t38\nItem 1.\tLegal Proceedings\t38\nItem 1A.\tRisk Factors\t38\nItem 2.\tUnregistered Sales of Equity Securities and Use of Proceeds\t38\nItem 6.\tExhibits\t39\n\tSignatures\t40\n", "q10k_tbl_1": "\tDecember 31 2020\tMarch 31 2020\n\t(Unaudited)\t\nASSETS\t\t\nCurrent assets:\t\t\nCash and cash equivalents\t1649832\t1357664\nShort-term investments\t772683\t644003\nRestricted cash and cash equivalents\t764419\t546604\nAccounts receivable net of allowances of $350 and $443 at December 31 2020 and March 31 2020 respectively\t581136\t592555\nInventory\t26733\t19108\nSoftware development costs and licenses\t48784\t40316\nDeferred cost of goods sold\t19854\t19598\nPrepaid expenses and other\t296518\t273503\nTotal current assets\t4159959\t3493351\nFixed assets net\t135257\t131888\nRight-of-use assets\t161750\t154284\nSoftware development costs and licenses net of current portion\t436702\t401778\nGoodwill\t534535\t386494\nOther intangibles net\t117618\t51260\nDeferred tax assets\t127312\t116676\nLong-term restricted cash and cash equivalents\t98538\t89124\nOther assets\t194428\t123977\nTotal assets\t5966099\t4948832\nLIABILITIES AND STOCKHOLDERS' EQUITY\t\t\nCurrent liabilities:\t\t\nAccounts payable\t100159\t65684\nAccrued expenses and other current liabilities\t1219614\t1169884\nDeferred revenue\t991476\t777784\nLease liabilities\t30540\t25187\nTotal current liabilities\t2341789\t2038539\nNon-current deferred revenue\t31813\t28339\nNon-current lease liabilities\t156835\t152059\nNon-current software development royalties\t108667\t104417\nOther long-term liabilities\t171704\t86234\nTotal liabilities\t2810808\t2409588\nCommitments and contingencies (See Note 13)\t\t\nStockholders' equity:\t\t\nPreferred stock $.01 par value 5000 shares authorized; no shares issued and outstanding at December 31 2020 and March 31 2020\t0\t0\nCommon stock $.01 par value 200000 shares authorized; 137504 and 135927 shares issued and 115083 and 113506 outstanding at December 31 2020 and March 31 2020 respectively\t1375\t1359\nAdditional paid-in capital\t2327913\t2134748\nTreasury stock at cost; 22421 common shares at December 31 2020 and March 31 2020\t(820572)\t(820572)\nRetained earnings\t1652159\t1282085\nAccumulated other comprehensive loss\t(5584)\t(58376)\nTotal stockholders' equity\t3155291\t2539244\nTotal liabilities and stockholders' equity\t5966099\t4948832\n", "q10k_tbl_2": "\tThree Months Ended December 31\t\tNine Months Ended December 31\t\n\t2020\t2019\t2020\t2019\nNet revenue\t860889\t930129\t2533341\t2328429\nCost of goods sold\t346244\t437093\t1255438\t1146810\nGross profit\t514645\t493036\t1277903\t1181619\nSelling and marketing\t139906\t137068\t338376\t378455\nGeneral and administrative\t98624\t84531\t292230\t236023\nResearch and development\t86428\t82520\t233752\t227680\nDepreciation and amortization\t14007\t12330\t40116\t35611\nBusiness reorganization\t(377)\t(246)\t(138)\t467\nTotal operating expenses\t338588\t316203\t904336\t878236\nIncome from operations\t176057\t176833\t373567\t303383\nInterest and other net\t1098\t11943\t12022\t30422\nGain on long-term investments net\t39291\t0\t38636\t0\nIncome before income taxes\t216446\t188776\t424225\t333805\nProvision for income taxes\t34198\t25134\t54151\t52068\nNet income\t182248\t163642\t370074\t281737\nEarnings per share:\t\t\t\t\nBasic earnings per share\t1.58\t1.44\t3.23\t2.49\nDiluted earnings per share\t1.57\t1.43\t3.20\t2.47\n", "q10k_tbl_3": "\tThree Months Ended December 31\t\tNine Months Ended December 31\t\n\t2020\t2019\t2020\t2019\nNet income\t182248\t163642\t370074\t281737\nOther comprehensive income (loss):\t\t\t\t\nForeign currency translation adjustment\t30135\t18172\t53697\t(3192)\nCash flow hedges:\t\t\t\t\nChange in unrealized gains\t0\t(3728)\t(3817)\t2297\nReclassification to earnings\t(600)\t2184\t(1933)\t(1157)\nTax effect on effective cash flow hedges\t0\t(386)\t845\t301\nChange in fair value of effective cash flow hedge\t(600)\t(1930)\t(4905)\t1441\nChange in fair value of available for sale securities\t(295)\t(267)\t4000\t453\nOther comprehensive income (loss)\t29240\t15975\t52792\t(1298)\nComprehensive income\t211488\t179617\t422866\t280439\n", "q10k_tbl_4": "\tNine Months Ended December 31\t\n\t2020\t2019\nOperating activities:\t\t\nNet income\t370074\t281737\nAdjustments to reconcile net income to net cash provided by operating activities:\t\t\nAmortization and impairment of software development costs and licenses\t113392\t115823\nDepreciation\t40790\t35246\nAmortization and impairment of intellectual property\t22006\t15981\nStock-based compensation\t139835\t176598\nGain on long-term investments\t(40588)\t0\nOther net\t(89)\t1809\nChanges in assets and liabilities:\t\t\nAccounts receivable\t19544\t(249709)\nInventory\t(6452)\t3688\nSoftware development costs and licenses\t(144951)\t(18552)\nPrepaid expenses and other assets\t(49321)\t(215060)\nDeferred revenue\t208182\t11751\nDeferred cost of goods sold\t463\t18602\nAccounts payable accrued expenses and other liabilities\t114776\t262061\nNet cash provided by operating activities\t787661\t439975\nInvesting activities:\t\t\nChange in bank time deposits\t73000\t114720\nProceeds from available-for-sale securities\t363628\t243170\nPurchases of available-for-sale securities\t(563815)\t(311995)\nPurchases of fixed assets\t(40207)\t(34790)\nProceeds from sale of long-term investment\t22472\t0\nPurchases of long-term investments\t(16452)\t(26142)\nBusiness acquisitions\t(79525)\t(12040)\nNet cash used in investing activities\t(240899)\t(27077)\nFinancing activities:\t\t\nTax payment related to net share settlements on restricted stock awards\t(60586)\t(71260)\nIssuance of common stock\t14215\t10515\nNet cash used in financing activities\t(46371)\t(60745)\nEffects of foreign currency exchange rates on cash cash equivalents and restricted cash and cash equivalents\t19006\t(1705)\nNet change in cash cash equivalents and restricted cash and cash equivalents\t519397\t350448\nCash cash equivalents and restricted cash and cash equivalents beginning of year\t1993392\t1391986\nCash cash equivalents and restricted cash and cash equivalents end of period\t2512789\t1742434\n", "q10k_tbl_5": "\tThree Months Ended December 31 2020\t\t\t\t\t\t\t\t\t\n\tCommon Stock\t\tAdditional Paid-in Capital\t\tTreasury Stock\t\t\tRetained Earnings\tAccumulated Other Comprehensive Income (Loss)\tTotal Stockholders' Equity\n\tShares\tAmount\t\tShares\t\tAmount\t\t\nBalance September 30 2020\t137349\t1373\t2285394\t\t(22421)\t\t(820572)\t1469911\t(34824)\t2901282\nNet income\t0\t0\t0\t\t0\t\t0\t182248\t0\t182248\nChange in cumulative foreign currency translation adjustment\t0\t0\t0\t\t0\t\t0\t0\t30135\t30135\nChange in gains on cash flow hedge net\t0\t0\t0\t\t0\t\t0\t0\t(600)\t(600)\nNet unrealized gain on available-for-sale securities net of taxes\t0\t0\t0\t\t0\t\t0\t0\t(295)\t(295)\nStock-based compensation\t0\t0\t47192\t\t0\t\t0\t0\t0\t47192\nIssuance of restricted stock net of forfeitures and cancellations\t141\t2\t(1)\t\t0\t\t0\t0\t0\t1\nNet share settlement of restricted stock awards\t(60)\t(1)\t(12383)\t\t0\t\t0\t0\t0\t(12384)\nEmployee share purchase plan settlement\t74\t1\t7711\t\t0\t\t0\t0\t0\t7712\nBalance December 31 2020\t137504\t1375\t2327913\t\t(22421)\t\t(820572)\t1652159\t(5584)\t3155291\n", "q10k_tbl_6": "\tThree Months Ended December 31 2019\t\t\t\t\t\t\t\t\t\n\tCommon Stock\t\tAdditional Paid-in Capital\t\tTreasury Stock\t\t\tRetained Earnings\tAccumulated Other Comprehensive Income (Loss)\tTotal Stockholders' Equity\n\tShares\tAmount\t\tShares\t\tAmount\t\t\nBalance September 30 2019\t135616\t1356\t2059720\t\t(22421)\t\t(820572)\t995721\t(54462)\t2181763\nNet income\t0\t0\t0\t\t0\t\t0\t163642\t0\t163642\nChange in cumulative foreign currency translation adjustment\t0\t0\t0\t\t0\t\t0\t0\t18172\t18172\nChange in gains on cash flow hedge net\t0\t0\t0\t\t0\t\t0\t0\t(1930)\t(1930)\nNet unrealized gain on available-for-sale securities net of taxes\t0\t0\t0\t\t0\t\t0\t0\t(267)\t(267)\nStock-based compensation\t0\t0\t45055\t\t0\t\t0\t0\t0\t45055\nIssuance of restricted stock net of forfeitures and cancellations\t171\t2\t(2)\t\t0\t\t0\t0\t0\t0\nNet share settlement of restricted stock awards\t(80)\t(1)\t(9781)\t\t0\t\t0\t0\t0\t(9782)\nEmployee share purchase plan settlement\t64\t1\t5381\t\t0\t\t0\t0\t0\t5382\nBalance December 31 2019\t135771\t1358\t2100373\t\t(22421)\t\t(820572)\t1159363\t(38487)\t2402035\n", "q10k_tbl_7": "\tNine Months Ended December 31 2020\t\t\t\t\t\t\t\t\t\n\tCommon Stock\t\tAdditional Paid-in Capital\t\tTreasury Stock\t\t\tRetained Earnings\tAccumulated Other Comprehensive Income (Loss)\tTotal Stockholders' Equity\n\tShares\tAmount\t\tShares\t\tAmount\t\t\nBalance March 31 2020\t135927\t1359\t2134748\t\t(22421)\t\t(820572)\t1282085\t(58376)\t2539244\nNet income\t0\t0\t0\t\t0\t\t0\t370074\t0\t370074\nChange in cumulative foreign currency translation adjustment\t0\t0\t0\t\t0\t\t0\t0\t53697\t53697\nChange in gains on cash flow hedge net\t0\t0\t0\t\t0\t\t0\t0\t(4905)\t(4905)\nNet unrealized gain on available-for-sale securities net of taxes\t0\t0\t0\t\t0\t\t0\t0\t4000\t4000\nStock-based compensation\t0\t0\t141904\t\t0\t\t0\t0\t0\t141904\nIssuance of restricted stock net of forfeitures and cancellations\t1235\t13\t(12)\t\t0\t\t0\t0\t0\t1\nNet share settlement of restricted stock awards\t(401)\t(5)\t(60581)\t\t0\t\t0\t0\t0\t(60586)\nEmployee share purchase plan settlement\t139\t2\t14213\t\t0\t\t0\t0\t0\t14215\nIssuance of shares related to Playdots Inc. acquisition\t604\t6\t97641\t\t0\t\t0\t0\t0\t97647\nBalance December 31 2020\t137504\t1375\t2327913\t\t(22421)\t\t(820572)\t1652159\t(5584)\t3155291\n", "q10k_tbl_8": "\tNine Months Ended December 31 2019\t\t\t\t\t\t\t\t\t\n\tCommon Stock\t\tAdditional Paid-in Capital\t\tTreasury Stock\t\t\tRetained Earnings\tAccumulated Other Comprehensive Income (Loss)\tTotal Stockholders' Equity\n\tShares\tAmount\t\tShares\t\tAmount\t\t\nBalance March 31 2019\t134602\t1346\t2019369\t\t(22421)\t\t(820572)\t877626\t(37189)\t2040580\nNet income\t0\t0\t0\t\t0\t\t0\t281737\t0\t281737\nChange in cumulative foreign currency translation adjustment\t0\t0\t0\t\t0\t\t0\t0\t(3192)\t(3192)\nChange in gains on cash flow hedge net\t0\t0\t0\t\t0\t\t0\t0\t1441\t1441\nNet unrealized gain on available-for-sale securities net of taxes\t0\t0\t0\t\t0\t\t0\t0\t453\t453\nStock-based compensation\t0\t0\t141761\t\t0\t\t0\t0\t0\t141761\nIssuance of restricted stock net of forfeitures and cancellations\t1674\t17\t(17)\t\t0\t\t0\t0\t0\t0\nNet share settlement of restricted stock awards\t(631)\t(7)\t(71253)\t\t0\t\t0\t0\t0\t(71260)\nEmployee share purchase plan settlement\t126\t2\t10513\t\t0\t\t0\t0\t0\t10515\nBalance December 31 2019\t135771\t1358\t2100373\t\t(22421)\t\t(820572)\t1159363\t(38487)\t2402035\n", "q10k_tbl_9": "\tThree Months Ended December 31\t\tNine Months Ended December 31\t\n\t2020\t2019\t2020\t2019\nNet revenue recognized:\t\t\t\t\nService and other\t578830\t481301\t1662456\t1327433\nProduct\t282059\t448828\t870885\t1000996\nTotal net revenue\t860889\t930129\t2533341\t2328429\n", "q10k_tbl_10": "\tThree Months Ended December 31\t\tNine Months Ended December 31\t\n\t2020\t2019\t2020\t2019\nNet revenue recognized:\t\t\t\t\nRecurrent consumer spending\t533475\t340496\t1508604\t973822\nFull game and other\t327414\t589633\t1024737\t1354607\nTotal net revenue\t860889\t930129\t2533341\t2328429\n", "q10k_tbl_11": "\tThree Months Ended December 31\t\tNine Months Ended December 31\t\n\t2020\t2019\t2020\t2019\nNet revenue recognized:\t\t\t\t\nUnited States\t528324\t536841\t1502397\t1361981\nInternational\t332565\t393288\t1030944\t966448\nTotal net revenue\t860889\t930129\t2533341\t2328429\n", "q10k_tbl_12": "\tThree Months Ended December 31\t\tNine Months Ended December 31\t\n\t2020\t2019\t2020\t2019\nNet revenue recognized:\t\t\t\t\nConsole\t656079\t679799\t1909033\t1766431\nPC and other\t204810\t250330\t624308\t561998\nTotal net revenue\t860889\t930129\t2533341\t2328429\n", "q10k_tbl_13": "\tThree Months Ended December 31\t\tNine Months Ended December 31\t\n\t2020\t2019\t2020\t2019\nNet revenue recognized:\t\t\t\t\nDigital online\t728510\t700321\t2166035\t1743876\nPhysical retail and other\t132379\t229808\t367306\t584553\nTotal net revenue\t860889\t930129\t2533341\t2328429\n", "q10k_tbl_14": "\tNine Months Ended December 31\t\n\t2020\t2019\nTime-based\t79\t92\nMarket-based(1)\t145\t168\nPerformance-based(1)\t\t\nIP\t24\t28\nRecurrent Consumer Spending (\"RCS\")\t24\t28\nTotal-Performance-based\t48\t56\nTotal Restricted Stock Units\t272\t316\n", "q10k_tbl_15": "\tDecember 31 2020\tQuoted prices in active markets for identical assets (level 1)\tSignificant other observable inputs (level 2)\tSignificant unobservable inputs (level 3)\tBalance Sheet Classification\nMoney market funds\t745564\t745564\t0\t0\tCash and cash equivalents\nBank-time deposits\t471688\t471688\t0\t0\tCash and cash equivalents\nCommercial paper\t37005\t0\t37005\t0\tCash and cash equivalents\nCorporate bonds\t300\t0\t300\t0\tCash and cash equivalents\nCorporate bonds\t509949\t0\t509949\t0\tShort-term investments\nBank-time deposits\t118000\t118000\t0\t0\tShort-term investments\nUS Treasuries\t45041\t45041\t0\t0\tShort-term investments\nAsset-backed securities\t699\t0\t699\t0\tShort-term investments\nCommercial paper\t98994\t0\t98994\t0\tShort-term investments\nMoney market funds\t469988\t469988\t0\t0\tRestricted cash and cash equivalents\nBank-time deposits\t560\t560\t0\t0\tRestricted cash and cash equivalents\nMoney market funds\t98538\t98538\t0\t0\tLong-term restricted cash and cash equivalents\nPrivate equity\t6178\t0\t0\t6178\tOther assets\nForeign currency forward contracts\t(128)\t0\t(128)\t0\tAccrued expenses and other current liabilities\nTotal recurring fair value measurements net\t2602376\t1949379\t646819\t6178\t\n", "q10k_tbl_16": "\tMarch 31 2020\tQuoted prices in active markets for identical assets (level 1)\tSignificant other observable inputs (level 2)\tSignificant unobservable inputs (level 3)\tBalance Sheet Classification\nMoney market funds\t497861\t497861\t0\t0\tCash and cash equivalents\nBank-time deposits\t313757\t313757\t0\t0\tCash and cash equivalents\nCommercial paper\t97544\t0\t97544\t0\tCash and cash equivalents\nCorporate bonds\t9888\t0\t9888\t0\tCash and cash equivalents\nMoney market funds\t546604\t546604\t0\t0\tRestricted cash and cash equivalents\nCorporate bonds\t334631\t0\t334631\t0\tShort-term investments\nBank-time deposits\t191000\t191000\t0\t0\tShort-term investments\nUS Treasuries\t30819\t30819\t0\t0\tShort-term investments\nCommercial paper\t87553\t0\t87553\t0\tShort-term investments\nCross-currency swap\t11275\t0\t11275\t0\tPrepaid expenses and other\nMoney market funds\t89124\t89124\t0\t0\tLong-term restricted cash and cash equivalents\nPrivate equity\t2759\t0\t0\t2759\tOther assets\nForeign currency forward contracts\t(11)\t0\t(11)\t0\tAccrued and other current liabilities\nTotal recurring fair value measurements net\t2212804\t1669165\t540880\t2759\t\n", "q10k_tbl_17": "\tDecember 31 2020\t\t\t\n\t\tGross Unrealized\t\t\n\tCost or Amortized Cost\tGains\tLosses\tFair Value\nShort-term investments\t\t\t\t\nBank time deposits\t118000\t0\t0\t118000\nAvailable-for-sale securities:\t\t\t\t\nCorporate bonds\t508431\t1617\t(99)\t509949\nUS Treasuries\t44948\t94\t(1)\t45041\nAsset-backed securities\t697\t2\t0\t699\nCommercial paper\t98994\t0\t0\t98994\nTotal Short-term investments\t771070\t1713\t(100)\t772683\n", "q10k_tbl_18": "\tMarch 31 2020\t\t\t\n\t\tGross Unrealized\t\t\n\tCost or Amortized Cost\tGains\tLosses\tFair Value\nShort-term investments\t\t\t\t\nBank time deposits\t191000\t0\t0\t191000\nAvailable-for-sale securities:\t\t\t\t\nCorporate bonds\t337752\t307\t(3428)\t334631\nUS Treasuries\t30481\t338\t0\t30819\nCommercial paper\t87553\t0\t0\t87553\nTotal Short-term investments\t646786\t645\t(3428)\t644003\n", "q10k_tbl_19": "\tDecember 31 2020\t\n\tAmortized Cost\tFair Value\nShort-term investments\t\t\nDue in 1 year or less\t573013\t574084\nDue in 1 - 2 years\t197361\t197900\nDue in 2 - 3 years\t696\t699\nTotal Short-term investments\t771070\t772683\n", "q10k_tbl_20": "\tDecember 31 2020\tMarch 31 2020\nForward contracts to sell foreign currencies\t114105\t122024\nForward contracts to purchase foreign currencies\t81050\t52596\n", "q10k_tbl_21": "\tDecember 31 2020\tMarch 31 2020\nFinished products\t21848\t17984\nParts and supplies\t4885\t1124\nInventory\t26733\t19108\n", "q10k_tbl_22": "\tDecember 31 2020\t\tMarch 31 2020\t\n\tCurrent\tNon-current\tCurrent\tNon-current\nSoftware development costs internally developed\t35506\t353982\t17367\t305970\nSoftware development costs externally developed\t8592\t65445\t10971\t92908\nLicenses\t4686\t17275\t11978\t2900\nSoftware development costs and licenses\t48784\t436702\t40316\t401778\n", "q10k_tbl_23": "\tDecember 31 2020\tMarch 31 2020\nSoftware development royalties\t680428\t822416\nCompensation and benefits\t170780\t81791\nLicenses\t118664\t57651\nRefund liability\t72795\t77829\nMarketing and promotions\t62664\t40797\nOther\t114283\t89400\nAccrued expenses and other current liabilities\t1219614\t1169884\n", "q10k_tbl_24": "\tDecember 31 2020\tMarch 31 2020\nAvailable borrowings\t197874\t198336\nOutstanding letters of credit\t2126\t1664\n", "q10k_tbl_25": "\tThree Months Ended December 31\t\tNine Months Ended December 31\t\n\t2020\t2019\t2020\t2019\nComputation of Basic earnings per share:\t\t\t\t\nNet income\t182248\t163642\t370074\t281737\nWeighted average shares outstanding-basic\t115004\t113251\t114436\t112996\nBasic earnings per share\t1.58\t1.44\t3.23\t2.49\nComputation of Diluted earnings per share:\t\t\t\t\nNet income\t182248\t163642\t370074\t281737\nWeighted average shares outstanding-basic\t115004\t113251\t114436\t112996\nAdd: dilutive effect of common stock equivalents\t1113\t1003\t1137\t1013\nWeighted average common shares outstanding-diluted\t116117\t114254\t115573\t114009\nDiluted earnings per share\t1.57\t1.43\t3.20\t2.47\n", "q10k_tbl_26": "\tNine Months Ended December 31 2020\t\t\t\t\n\tForeign currency translation adjustments\tUnrealized gain (loss) on forward contracts\tUnrealized gain (loss) on cross-currency swap\tUnrealized gain (loss) on available-for- sales securities\tTotal\nBalance at March 31 2020\t(60535)\t600\t4305\t(2746)\t(58376)\nOther comprehensive income (loss) before reclassifications\t53697\t0\t(2972)\t4000\t54725\nAmounts reclassified from accumulated other comprehensive loss\t0\t(600)\t(1333)\t0\t(1933)\nBalance at December 31 2020\t(6838)\t0\t0\t1254\t(5584)\n", "q10k_tbl_27": "\tNine Months Ended December 31 2019\t\t\t\t\n\tForeign currency translation adjustments\tUnrealized gain (loss) on derivative instruments\tUnrealized gain (loss) on cross-currency swap\tUnrealized gain (loss) on available-for- sales securities\tTotal\nBalance at March 31 2019\t(33090)\t600\t(5285)\t586\t(37189)\nOther comprehensive income (loss) before reclassifications\t(3192)\t0\t2598\t453\t(141)\nAmounts reclassified from accumulated other comprehensive loss\t0\t0\t(1157)\t0\t(1157)\nBalance at December 31 2019\t(36282)\t600\t(3844)\t1039\t(38487)\n", "q10k_tbl_28": "\tFair Value\tWeighted average useful life\nCash acquired\t12098\tN/A\nOther tangible net assets\t8206\tN/A\nOther liabilities assumed\t(24680)\tN/A\nIntangible Assets\t\t\nDeveloped game technology\t69000\t6\nUser base\t6200\t1\nBranding and trade names\t3400\t8\nGame engine technology\t2200\t4\nGoodwill\t119069\tN/A\nTotal\t195493\t\n", "q10k_tbl_29": "\tThree Months Ended December 31 2020\tNine Months Ended December 31 2020\nNet revenue\t7269\t8503\nNet income (loss)\t(12368)\t(18417)\n", "q10k_tbl_30": "\tThree Months Ended December 31\t\tNine Months Ended December 31\t\n\t2020\t2019\t2020\t2019\nPro-forma Net revenue\t860000\t937690\t2553352\t2341580\nPro-forma Net income\t182951\t153691\t360201\t247406\n", "q10k_tbl_31": "Title\tPublishing Label\tInternal or External Development\tPlatform(s)\tDate Released\nPGA TOUR 2K21\t2K\tExternal\tPS4 Xbox One Switch PC Stadia\tAugust 21 2020\nNBA 2K21\t2K\tInternal\tPS4 Xbox One Switch PC Stadia\tSeptember 4 2020\nWWE 2K Battlegrounds\t2K\tExternal\tPS4 Xbox One Switch PC Stadia\tSeptember 18 2020\nMafia I: Definitive Edition\t2K\tExternal\tPS4 Xbox One PC\tSeptember 25 2020\nBorderlands 3\t2K\tExternal\tXbox Series X (digital only)\tNovember 10 2020\nNBA 2K21\t2K\tInternal\tXbox Series X\tNovember 10 2020\nBorderlands 3\t2K\tExternal\tPS5 (digital only)\tNovember 12 2020\nNBA 2K21\t2K\tInternal\tPS5\tNovember 12 2020\nRed Dead Online - Standalone\tRockstar Games\tInternal\tPS4 Xbox One PC Steam Epic Store\tDecember 1 2020\n", "q10k_tbl_32": "\tThree Months Ended December 31\t\t\t\tNine Months Ended December 31\t\t\t\n\t2020\t2019\tIncrease/ (decrease)\t% Increase/ (decrease)\t2020\t2019\tIncrease/ (decrease)\t% Increase/ (decrease)\nNet Bookings\t814282\t888179\t(73897)\t(8.3)%\t2768066\t2260935\t507131\t22.4%\n", "q10k_tbl_33": "\tThree Months Ended December 31\t\t\t\tNine Months Ended December 31\t\t\t\n(thousands of dollars)\t2020\t\t2019\t\t2020\t\t2019\t\nNet revenue\t860889\t100.0%\t930129\t100.0%\t2533341\t100.0%\t2328429\t100.0%\nCost of goods sold\t346244\t40.2%\t437093\t47.0%\t1255438\t49.6%\t1146810\t49.3%\nGross profit\t514645\t59.8%\t493036\t53.0%\t1277903\t50.4%\t1181619\t50.7%\nSelling and marketing\t139906\t16.3%\t137068\t14.7%\t338376\t13.4%\t378455\t16.3%\nGeneral and administrative\t98624\t11.5%\t84531\t9.1%\t292230\t11.5%\t236023\t10.1%\nResearch and development\t86428\t10.0%\t82520\t8.9%\t233752\t9.2%\t227680\t9.8%\nDepreciation and amortization\t14007\t1.6%\t12330\t1.3%\t40116\t1.6%\t35611\t1.5%\nBusiness reorganization\t(377)\t-%\t(246)\t-%\t(138)\t-%\t467\t-%\nTotal operating expenses\t338588\t39.3%\t316203\t34.0%\t904336\t35.7%\t878236\t37.7%\nIncome from operations\t176057\t20.5%\t176833\t19.0%\t373567\t14.7%\t303383\t13.0%\nInterest and other net\t1098\t0.1%\t11943\t1.3%\t12022\t0.5%\t30422\t1.3%\nGain on long-term investments net\t39291\t4.6%\t0\t-%\t38636\t1.5%\t0\t-%\nIncome before income taxes\t216446\t25.1%\t188776\t20.3%\t424225\t16.7%\t333805\t14.3%\nProvision for income taxes\t34198\t4.0%\t25134\t2.7%\t54151\t2.1%\t52068\t2.2%\nNet income\t182248\t21.2%\t163642\t17.6%\t370074\t14.6%\t281737\t12.1%\n", "q10k_tbl_34": "\tThree Months Ended December 31\t\t\t\tNine Months Ended December 31\t\t\t\n\t2020\t\t2019\t\t2020\t\t2019\t\nNet revenue by geographic region:\t\t\t\t\t\t\t\t\nUnited States\t528324\t61.4%\t536841\t57.7%\t1502397\t59.3%\t1361981\t58.5%\nInternational\t332565\t38.6%\t393288\t42.3%\t1030944\t40.7%\t966448\t41.5%\nNet revenue by platform:\t\t\t\t\t\t\t\t\nConsole\t656079\t76.2%\t679799\t73.1%\t1909033\t75.4%\t1766431\t75.9%\nPC and other\t204810\t23.8%\t250330\t26.9%\t624308\t24.6%\t561998\t24.1%\nNet revenue by distribution channel:\t\t\t\t\t\t\t\t\nDigital online\t728510\t84.6%\t700321\t75.3%\t2166035\t85.5%\t1743876\t74.9%\nPhysical retail and other\t132379\t15.4%\t229808\t24.7%\t367306\t14.5%\t584553\t25.1%\nNet revenue by content:\t\t\t\t\t\t\t\t\nRecurrent consumer spending\t533475\t62.0%\t340496\t36.6%\t1508604\t59.5%\t1354607\t58.2%\nFull game and other\t327414\t38.0%\t589633\t63.4%\t1024737\t40.5%\t973822\t41.8%\n", "q10k_tbl_35": "(thousands of dollars)\t2020\t%\t2019\t%\tIncrease/ (decrease)\t% Increase/ (decrease)\nNet revenue\t860889\t100.0%\t930129\t100.0%\t(69240)\t(7.4)%\nSoftware development costs and royalties (1)\t83514\t9.7%\t130985\t14.1%\t(47471)\t(36.2)%\nInternal royalties\t137657\t16.0%\t166432\t17.9%\t(28775)\t(17.3)%\nProduct costs\t67156\t7.8%\t90959\t9.8%\t(23803)\t(26.2)%\nLicenses\t57917\t6.7%\t48717\t5.2%\t9200\t18.9%\nCost of goods sold\t346244\t40.2%\t437093\t47.0%\t(90849)\t(20.8)%\nGross profit\t514645\t59.8%\t493036\t53.0%\t21609\t4.4%\n", "q10k_tbl_36": "(thousands of dollars)\t2020\t% of net revenue\t2019\t% of net revenue\tIncrease/ (decrease)\t% Increase/ (decrease)\nSelling and marketing\t139906\t16.3%\t137068\t14.7%\t2838\t2.1%\nGeneral and administrative\t98624\t11.5%\t84531\t9.1%\t14093\t16.7%\nResearch and development\t86428\t10.0%\t82520\t8.9%\t3908\t4.7%\nDepreciation and amortization\t14007\t1.6%\t12330\t1.3%\t1677\t13.6%\nBusiness reorganization\t(377)\t-%\t(246)\t-%\t(131)\t53.3%\nTotal operating expenses(1)\t338588\t39.3%\t316203\t34.0%\t22385\t7.1%\n", "q10k_tbl_37": "\t2020\t2019\nSelling and marketing\t4131\t4113\nGeneral and administrative\t15538\t14911\nResearch and development\t8347\t11327\n", "q10k_tbl_38": "(thousands of dollars)\t2020\t%\t2019\t%\tIncrease/ (decrease)\t% Increase/ (decrease)\nNet revenue\t2533341\t100.0%\t2328429\t100.0%\t204912\t8.8%\nSoftware development costs and royalties (1)\t374332\t14.8%\t451422\t19.4%\t(77090)\t(17.1)%\nInternal royalties\t479524\t18.9%\t339312\t14.6%\t140212\t41.3%\nProduct costs\t194702\t7.7%\t225162\t9.7%\t(30460)\t(13.5)%\nLicenses\t206880\t8.2%\t130914\t5.6%\t75966\t58.0%\nCost of goods sold\t1255438\t49.6%\t1146810\t49.3%\t108628\t9.5%\nGross profit\t1277903\t50.4%\t1181619\t50.7%\t96284\t8.1%\n", "q10k_tbl_39": "(thousands of dollars)\t2020\t% of net revenue\t2019\t% of net revenue\tIncrease/ (decrease)\t% Increase/ (decrease)\nSelling and marketing\t338376\t13.4%\t378455\t16.3%\t(40079)\t(10.6)%\nGeneral and administrative\t292230\t11.5%\t236023\t10.1%\t56207\t23.8%\nResearch and development\t233752\t9.2%\t227680\t9.8%\t6072\t2.7%\nDepreciation and amortization\t40116\t1.6%\t35611\t1.5%\t4505\t12.7%\nBusiness reorganization\t(138)\t-%\t467\t-%\t(605)\t(129.6)%\nTotal operating expenses (1)\t904336\t35.7%\t878236\t37.7%\t26100\t3.0%\n", "q10k_tbl_40": "\t2020\t2019\nSelling and marketing\t13298\t14333\nGeneral and administrative\t42568\t42054\nResearch and development\t22440\t28633\n", "q10k_tbl_41": "\tNine Months Ended December 31\t\n(thousands of dollars)\t2020\t2019\nNet cash provided by operating activities\t787661\t439975\nNet cash used in investing activities\t(240899)\t(27077)\nNet cash used in financing activities\t(46371)\t(60745)\nEffects of foreign currency exchange rates on cash cash equivalents and restricted cash and cash equivalents\t19006\t(1705)\nNet change in cash cash equivalents and restricted cash and cash equivalents\t519397\t350448\n", "q10k_tbl_42": "Period\tShares purchased\tAverage price per share\tTotal number of shares purchased as part of publicly announced plans or programs\tMaximum number of shares that may yet be purchased under the repurchase program\nOctober 1-31 2020\t0\t0\t0\t3818\nNovember 1-30 2020\t0\t0\t0\t3818\nDecember 1-31 2020\t0\t0\t0\t3818\n", "q10k_tbl_43": "Exhibits:\t\n31.1\tChief Executive Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002\n31.2\tChief Financial Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002\n32.1\tChief Executive Officer Certification pursuant to 18 U.S.C. Section 1350 as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002\n32.2\tChief Financial Officer Certification pursuant to 18 U.S.C. Section 1350 as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002\n101.INS\tThe Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.\n101.SCH\tInline XBRL Taxonomy Extension Schema Document\n101.CAL\tInline XBRL Taxonomy Calculation Linkbase Document\n101.LAB\tInline XBRL Taxonomy Label Linkbase Document\n101.PRE\tInline XBRL Taxonomy Presentation Linkbase Document\n101.DEF\tInline XBRL Taxonomy Extension Definition Document\n"}{"bs": "q10k_tbl_1", "is": "q10k_tbl_2", "cf": "q10k_tbl_4"}None
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2020
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .
Commission file number 001-34003
TAKE-TWO INTERACTIVE SOFTWARE, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
51-0350842
(State or Other Jurisdiction of Incorporation or Organization)
(I.R.S. Employer Identification No.)
110 West 44th Street
10036
New York
New York
(Zip Code)
(Address of principal executive offices)
Registrant's Telephone Number, Including Area Code: (646) 536-2842
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading symbol
Name of each exchange on which registered
Common Stock, $.01 par value
TTWO
NASDAQ Global Select Market
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yesý No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yesý No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
ý
Accelerated filer
o
Non-accelerated filer
o
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ý
As of January 28, 2021, there were 115,177,650 shares of the Registrant's Common Stock outstanding, net of treasury stock.
Accounts receivable, net of allowances of $350 and $443 at December 31, 2020 and March 31, 2020, respectively
581,136
592,555
Inventory
26,733
19,108
Software development costs and licenses
48,784
40,316
Deferred cost of goods sold
19,854
19,598
Prepaid expenses and other
296,518
273,503
Total current assets
4,159,959
3,493,351
Fixed assets, net
135,257
131,888
Right-of-use assets
161,750
154,284
Software development costs and licenses, net of current portion
436,702
401,778
Goodwill
534,535
386,494
Other intangibles, net
117,618
51,260
Deferred tax assets
127,312
116,676
Long-term restricted cash and cash equivalents
98,538
89,124
Other assets
194,428
123,977
Total assets
$
5,966,099
$
4,948,832
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable
$
100,159
$
65,684
Accrued expenses and other current liabilities
1,219,614
1,169,884
Deferred revenue
991,476
777,784
Lease liabilities
30,540
25,187
Total current liabilities
2,341,789
2,038,539
Non-current deferred revenue
31,813
28,339
Non-current lease liabilities
156,835
152,059
Non-current software development royalties
108,667
104,417
Other long-term liabilities
171,704
86,234
Total liabilities
$
2,810,808
$
2,409,588
Commitments and contingencies (See Note 13)
Stockholders' equity:
Preferred stock, $.01 par value, 5,000 shares authorized; no shares issued and outstanding at December 31, 2020 and March 31, 2020
—
—
Common stock, $.01 par value, 200,000 shares authorized; 137,504 and 135,927 shares issued and 115,083 and 113,506 outstanding at December 31, 2020 and March 31, 2020, respectively
1,375
1,359
Additional paid-in capital
2,327,913
2,134,748
Treasury stock, at cost; 22,421 common shares at December 31, 2020 and March 31, 2020
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in thousands, except per share amounts)
1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
Take-Two Interactive Software, Inc. (the "Company," "we," "us," or similar pronouns) was incorporated in the state of Delaware in 1993. We are a leading developer, publisher, and marketer of interactive entertainment for consumers around the globe. We develop and publish products principally through Rockstar Games, 2K, Private Division, Social Point, and Playdots. Our products are designed for console systems and personal computers, including smart phones and tablets, and are delivered through physical retail, digital download, online platforms, and cloud streaming services.
Basis of Presentation
The accompanying Condensed Consolidated Financial Statements are unaudited and include the accounts of the Company and its wholly-owned subsidiaries and, in our opinion, reflect all normal and recurring adjustments necessary for the fair presentation of our financial position, results of operations, and cash flows. Interim results may not be indicative of the results that may be expected for the full fiscal year. All intercompany accounts and transactions have been eliminated in consolidation. The preparation of these Condensed Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") requires management to make estimates and assumptions that affect the amounts reported in these Condensed Consolidated Financial Statements and accompanying notes. As permitted under U.S. GAAP, interim accounting for certain expenses, including income taxes, are based on full year assumptions when appropriate. Actual results could differ materially from those estimates, including as a result of the COVID-19 pandemic, which may affect economic conditions in a number of different ways and result in uncertainty and risk.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"), although we believe that the disclosures are adequate to make the information presented not misleading. These Condensed Consolidated Financial Statements and accompanying notes should be read in conjunction with our annual Consolidated Financial Statements and the notes thereto, included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2020.
Certain immaterial reclassifications have been made to prior period amounts to conform to the current period presentation.
Recently Adopted Accounting Pronouncements
Accounting for Fair Value Measurement
In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements on fair value measurements by removing, modifying, or adding certain disclosures. We adopted this update effective April 1, 2020. The adoption of this standard did not have a material impact on our Condensed Consolidated Financial Statements.
Accounting for Credit Losses
In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses, which replaces the incurred loss impairment methodology in current U.S. GAAP with a methodology that will require the reflection of expected credit losses and will also require consideration of a broader range of reasonable and supportable information to determine credit loss estimates. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. For most financial instruments, the standard will require the use of a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses, which will generally result in the earlier recognition of credit losses on financial instruments. We adopted this update effective April 1, 2020 under a modified retrospective basis. No adjustment to retained earnings was recorded as a result of the adoption of this standard, which did not have a material impact on our Condensed Consolidated Financial Statements.
8
Recently Issued Accounting Pronouncements
Accounting for Reference Rate Reform
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional guidance to ease potential accounting impacts associated with transitioning away from reference rates that are expected to be discontinued, such as interbank offered rates and LIBOR. The guidance includes practical expedients for contract modifications due to reference rate reform. Generally, contract modifications related to reference rate reform may be considered an event that does not require remeasurement or reassessment of a previous accounting determination at the modification date. This guidance is effective immediately and is only available through December 31, 2022. We are currently evaluating the potential impact of adopting this guidance on our Consolidated Financial Statements.
Accounting for Income Taxes
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which enhances and simplifies various aspects of the income tax accounting guidance, including requirements such as tax basis step-up in goodwill obtained in a transaction that is not a business combination, ownership changes in investments, and interim-period accounting for enacted changes in tax law. ASU 2019-12 is effective for fiscal years, and interim periods within those fiscal years, beginning December 15, 2020 (April 1, 2021 for the Company), with early adoption permitted. We are currently evaluating the potential impact of adopting this guidance, and we do not expect that the impact of adopting this guidance will be material to our Consolidated Financial Statements.
2. REVENUE FROM CONTRACTS WITH CUSTOMERS
Disaggregation of revenue
Service and other revenue
Service and other revenue is primarily comprised of revenue from game related services, virtual currency transactions, and in-game purchases which are recognized over an estimated service period.
Product revenue
Product revenue is primarily comprised of the portion of revenue from software products that is recognized when the customer takes control of the product (i.e., upon delivery of the software product).
Net revenue by product revenue and service and other was as follows:
Three Months Ended December 31,
Nine Months Ended December 31,
2020
2019
2020
2019
Net revenue recognized:
Service and other
$
578,830
$
481,301
$
1,662,456
$
1,327,433
Product
282,059
448,828
870,885
1,000,996
Total net revenue
$
860,889
$
930,129
$
2,533,341
$
2,328,429
9
Recurrent consumer spending revenue
Recurrent consumer spending revenue is generated from ongoing consumer engagement and includes revenue from virtual currency, add-on content, and in-game purchases.
Full game and other revenue
Full game and other revenue primarily includes the initial sale of full game software products, which may include offline and/or significant game related services.
Net revenue by full game and other revenue and recurrent consumer spending was as follows:
Three Months Ended December 31,
Nine Months Ended December 31,
2020
2019
2020
2019
Net revenue recognized:
Recurrent consumer spending
$
533,475
$
340,496
$
1,508,604
$
973,822
Full game and other
327,414
589,633
1,024,737
1,354,607
Total net revenue
$
860,889
$
930,129
$
2,533,341
$
2,328,429
Geography
We attribute net revenue to geographic regions based on software product destination. Net revenue by geographic region was as follows:
Three Months Ended December 31,
Nine Months Ended December 31,
2020
2019
2020
2019
Net revenue recognized:
United States
$
528,324
$
536,841
$
1,502,397
$
1,361,981
International
332,565
393,288
1,030,944
966,448
Total net revenue
$
860,889
$
930,129
$
2,533,341
$
2,328,429
Platform
Net revenue by platform was as follows:
Three Months Ended December 31,
Nine Months Ended December 31,
2020
2019
2020
2019
Net revenue recognized:
Console
$
656,079
$
679,799
$
1,909,033
$
1,766,431
PC and other
204,810
250,330
624,308
561,998
Total net revenue
$
860,889
$
930,129
$
2,533,341
$
2,328,429
10
Distribution channel
Our products are delivered through digital online services (digital download, online platforms, and cloud streaming) and physical retail and other. Net revenue by distribution channel was as follows: