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    Take-Two Interactive Software Inc (TTWO)

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    Business Description

    Take-Two Interactive Software, Inc. (TTWO) is a prominent developer, publisher, and marketer of interactive entertainment products for a global audience. The company operates through several well-known labels, including Rockstar Games, 2K, Private Division, and Zynga, offering products for console gaming systems, PC, and mobile platforms. These products are distributed via physical retail, digital download, online platforms, and cloud streaming services . A significant portion of their revenue is derived from popular franchises, with Grand Theft Auto being a major contributor . Recurrent consumer spending, including virtual currency and in-game purchases, forms a substantial part of their business model .

    1. Grand Theft Auto Franchise - Develops and markets the Grand Theft Auto series, a major revenue driver known for its open-world action-adventure games.
    2. Recurrent Consumer Spending - Generates revenue through virtual currency, add-on content, in-game purchases, and in-game advertising, contributing significantly to the company's financial performance.
    3. Rockstar Games - Produces and publishes high-quality games, including the Grand Theft Auto series, known for their immersive storytelling and expansive worlds.
    4. 2K - Offers a diverse range of games, including sports titles like NBA 2K, catering to various gaming audiences.
    5. Zynga - Focuses on mobile gaming, delivering popular social games and interactive experiences on mobile platforms.
    6. Private Division - Publishes independent games, supporting and promoting innovative titles from smaller development teams.
    7. International Sales - Engages in global distribution, with a significant portion of revenue generated from markets outside the U.S.

    Key Metrics

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    Executive Team

    NamePositionStart DateShort Bio
    Strauss ZelnickChairman and Chief Executive OfficerMarch 2007 (Chairman), January 2011 (CEO)Strauss Zelnick has been the Chairman of Take-Two Interactive Software, Inc. since March 2007 and the CEO since January 2011. He is also the founder and a partner in Zelnick Media Capital .
    Karl SlatoffPresidentMay 2013Karl Slatoff has been serving as the President of Take-Two Interactive Software, Inc. since May 2013. He was previously the Chief Operating Officer from October 2010 through April 2013 .
    Lainie GoldsteinChief Financial OfficerJune 2007Lainie Goldstein has been the CFO of Take-Two Interactive Software, Inc. since June 2007. She oversees Finance, Investor Relations, and Corporate Communications .
    Daniel EmersonExecutive Vice President and Chief Legal OfficerMay 2019 (CLO)Daniel Emerson serves as the Executive Vice President and Chief Legal Officer. He joined as a Vice President in June 2005 and became Chief Legal Officer in May 2019 .

    Questions to Ask Management

    1. With the increasing costs and complexities of game development, how do you plan to balance investing in new IP versus focusing on existing successful franchises to ensure sustainable growth in a maturing industry?
    2. Considering the competitive nature of the sports gaming market and your current portfolio, what specific strategies are you implementing to expand your presence in major sports genres beyond basketball, and how do you plan to overcome barriers in acquiring licenses for other big sports?
    3. Given the delays in releasing the seven core titles you mentioned earlier this fiscal year, with line of sight on only four, have any titles been pushed back, and how will this impact your financial guidance and pipeline expectations?
    4. With record net bookings anticipated for fiscal '26 and '27, can you provide more clarity on how you plan to sustain growth beyond the major releases like Mafia, Borderlands, and GTA VI, especially considering the challenges in maintaining momentum in subsequent years?
    5. As the mobile gaming landscape evolves, particularly in terms of advertising and user acquisition costs, how are you adapting your strategies to maintain growth in your mobile division, and do you see the need to rely more on third-party platforms like Chartboost, or can your internal resources suffice?

    Share Repurchase Program

    Program DetailsProgram 1
    Approval DateN/A
    End Date/DurationN/A
    Total additional amount21.7 million shares
    Remaining authorization10.0 million shares (as of 2024-12-21)
    DetailsThe program allows for repurchase through various methods, including open market and privately negotiated transactions. It is flexible and may be suspended or discontinued at any time.

    Debt Maturity Schedule

    YearAmount Due (in millions)Debt TypeInterest Rate (%)% of Total Debt
    2024$24.6 Convertible Notes0.25 0.7% = (24.6 / 3,655.1) * 100
    2025$600.0 Senior Notes3.55 16.4% = (600.0 / 3,655.1) * 100
    2026$500.0 Senior Notes5.00 13.7% = (500.0 / 3,655.1) * 100
    2026$29.4 Convertible Notes0.00 0.8% = (29.4 / 3,655.1) * 100
    2027$600.0 Senior Notes3.70 16.4% = (600.0 / 3,655.1) * 100
    2028$800.0 Senior Notes4.95 21.9% = (800.0 / 3,655.1) * 100
    2029$300.0 Senior Notes5.40 8.2% = (300.0 / 3,655.1) * 100
    2032$500.0 Senior Notes4.00 13.7% = (500.0 / 3,655.1) * 100
    2034$300.0 Senior Notes5.60 8.2% = (300.0 / 3,655.1) * 100

    Competitors

    Competitors mentioned in the company's latest 10K filing.

    • Activision Blizzard, Inc. - Competes in interactive entertainment and mobile games .
    • Electronic Arts Inc. - Competes in interactive entertainment and mobile games .
    • Embracer Group AB - Competes in interactive entertainment and mobile games .
    • Playrix - Competes in interactive entertainment and mobile games .
    • Playtika - Competes in interactive entertainment and mobile games .
    • Roblox - Competes in interactive entertainment and mobile games .
    • Scopely - Competes in interactive entertainment and mobile games .
    • Tencent - Competes in interactive entertainment and mobile games .
    • Ubisoft Entertainment S.A. - Competes in interactive entertainment and mobile games .
    • Sony - Competes for licenses and sale of interactive entertainment software, large developer and marketer for its own platforms .
    • Microsoft - Competes for licenses and sale of interactive entertainment software, large developer and marketer for its own platforms .
    • Nintendo - Competes for licenses and sale of interactive entertainment software .
    • Apple - Competes with new and expanded mobile gaming offerings .
    • Google - Competes with new and expanded mobile gaming offerings .

    Customer Concentration

    CustomerRelationshipSegmentDetails
    Sony
    Platform licensing and distribution
    All
    Contributed >10% of net revenue during FY 2024; part of the five largest customers collectively accounting for 79.8% of net revenue in FY 2024And 69.9% of gross A/R.
    Apple
    Mobile distribution
    All
    Contributed >10% of net revenue during FY 2024; part of the five largest customers collectively accounting for 79.8% of net revenue in FY 2024And 69.9% of gross A/R.
    Google
    Mobile distribution
    All
    Contributed >10% of net revenue during FY 2024; part of the five largest customers collectively accounting for 79.8% of net revenue in FY 2024And 69.9% of gross A/R.
    Microsoft
    Platform licensing and distribution
    All
    Contributed >10% of net revenue during FY 2024; part of the five largest customers collectively accounting for 79.8% of net revenue in FY 2024And 69.9% of gross A/R.

    Auditor

    NameStart DateEnd DateReason for Change
    Ernst & Young LLP2006 PresentCurrent auditor