Business Wire | Nov 5, 2020 04:05PM EST

Take-Two Interactive Software, Inc. Reports Strong Results for Fiscal Second Quarter 2021

Nov. 05, 2020

NEW YORK--(BUSINESS WIRE)--Nov. 05, 2020--Take-Two Interactive Software, Inc. (NASDAQ:TTWO) today reported strong results for its fiscal second quarter 2021 ended September 30, 2020. In addition, the Company provided its initial outlook for its fiscal third quarter ending December 31, 2020 and increased its outlook for the fiscal year 2021, ending March 31, 2021. For additional information, please see the fiscal second quarter 2021 results slide deck posted to the Company's investor relations website at http://ir.take2games.com.

Fiscal Second Quarter 2021 Financial Highlights

GAAP net revenue was $841.1 million, as compared to $857.8 million in last year's fiscal second quarter. Recurrent consumer spending (which is generated from ongoing consumer engagement and includes virtual currency, add-on content and in-game purchases) increased 56% and accounted for 59% of total GAAP net revenue. The largest contributors to GAAP net revenue in fiscal second quarter 2021 were NBA(r) 2K20 and NBA 2K21; Grand Theft Auto(r) Online and Grand Theft Auto V; Red Dead Redemption 2 and Red Dead Online; Borderlands(r) 3; PGA TOUR(r) 2K21; Social Point's mobile offerings; the Mafia: Definitive Editions and Mafia: Trilogy; Sid Meier's Civilization VI; and the WWE(r) series.

Digitally-delivered GAAP net revenue increased 16% to $711.3 million, as compared to $615.8 million in last year's fiscal second quarter, and accounted for 85% of total GAAP net revenue. The largest contributors to GAAP digitally-delivered net revenue in fiscal second quarter 2021 were NBA 2K20 and NBA 2K21; Grand Theft Auto Online and Grand Theft Auto V; Red Dead Redemption 2 and Red Dead Online; Borderlands 3; Social Point's mobile offerings; PGA TOUR 2K21; the Mafia Definitive Editions and Mafia: Trilogy; the WWE series; and Sid Meier's Civilization VI.

GAAP net income increased 38% to $99.3 million, or $0.86 per diluted share, as compared to $71.8 million, or $0.63 per diluted share, for the comparable period last year.

During the six-month period ended September 30, 2020, GAAP net cash provided by operating activities increased 335% to $626.7 million, as compared to $144.2 million in the same period last year. During the six-month period ended September 30, 2020, Adjusted Unrestricted Operating Cash Flow (Non-GAAP), which is defined as GAAP net cash from operating activities, adjusted for changes in restricted cash, increased 1135% to $509.4 million, as compared to $41.2 million in the same period last year (please see the section below titled "Non-GAAP Financial Measure" for additional information). As of September 30, 2020, the Company had cash and short-term investments of $2.386 billion.

The following data, together with a management reporting tax rate of 16%, are used internally by the Company's management and Board of Directors to adjust the Company's GAAP financial results in order to facilitate comparison of its operating performance between periods and to better understand its core business and future outlook:

Three Months Ended September 30, 2020

Financial Data

Change in

deferred Amortization net Statement & impairment Loss on revenue Stock-based Impact of$ in thousands of of acquired long-term and compensation business operations related Business intangible investments reorganization cost of acquisition assets

goods sold



Net revenue $841,142 116,392

Cost of goods sold 432,505 13,450 (19,396 ) (4,411 )

Gross Profit 408,637 102,942 19,396 4,411

Operating expenses 293,270 (25,912 ) (239 ) (2,512 ) (2,364 )

Income from 115,367 102,942 45,308 239 2,512 6,775 operations

Interest and 2,706 (1,669 ) other, net

Loss on long-term 655 investments (655 )

Income before income taxes 117,418 101,273 45,308 239 2,512 6,775 655

In order to calculate net income per diluted share for management reporting purposes, the Company uses its fully diluted share count of 115.4 million.

Operational Metric - Net Bookings

Net Bookings is defined as the net amount of products and services sold digitally or sold-in physically during the period, and includes licensing fees, merchandise, in-game advertising, strategy guides and publisher incentives.

During fiscal second quarter 2021, total Net Bookings grew to $957.5 million, as compared to $950.5 million during last year's fiscal second quarter. Net Bookings from recurrent consumer spending grew 43% and accounted for 64% of total Net Bookings. The largest contributors to Net Bookings in fiscal second quarter 2021 were NBA 2K21 and NBA 2K20; Grand Theft Auto Online and Grand Theft Auto V; Red Dead Redemption 2 and Red Dead Online; PGA TOUR 2K21; Borderlands 3; Social Point's mobile offerings; the Mafia: Definitive Editions and Mafia: Trilogy; the WWE series; and Sid Meier's Civilization VI.

Catalog accounted for $587.3 million of Net Bookings led by Grand Theft Auto; NBA 2K; Red Dead Redemption; Borderlands; Social Point's mobile offerings; the Mafia: Definitive Editions and Mafia: Trilogy; and the WWE series.

Digitally-delivered Net Bookings grew 14% to $791.7 million, as compared to $695.3 million in last year's fiscal second quarter, and accounted for 83% of total Net Bookings. The largest contributors to digitally-delivered Net Bookings in fiscal second quarter 2021 were NBA 2K21 and NBA 2K20; Grand Theft Auto Online and Grand Theft Auto V; Red Dead Redemption 2 and Red Dead Online; Borderlands 3; PGA TOUR 2K21; Social Point's mobile offerings; the Mafia: Definitive Editions and Mafia: Trilogy; Sid Meier's Civilization VI; and the WWE series.

Management Comments

"Our positive momentum continued in the fiscal second quarter with operating results that significantly exceeded our expectations," said Strauss Zelnick, Chairman and CEO of Take-Two. "Our terrific results were highlighted by the outperformance of NBA 2K, PGA TOUR 2K21, and the Mafia: Definitive Editions and Mafia: Trilogy, reflecting our ability to deliver consistently the highest quality entertainment experiences to consumers.

"As a result of our better-than-expected second quarter operating results and increased forecast for the balance of the year, we are raising our fiscal 2021 outlook, and we now expect record Net Bookings of over $3 billion.

"With the strongest development pipeline in the history of the Company and our ongoing investment in emerging markets, platforms and business models, Take-Two is exceedingly well positioned to capitalize on the many positive trends in our industry and to generate growth and margin expansion over the long-term."

COVID-19 Response

At Take-Two, our number one priority is the health and safety of our employees and their families. After moving to work-from-home environments by mid-March, several of our offices have re-opened on a voluntary basis. With more people staying at home, we have experienced, and are continuing to experience, heightened levels of engagement and Net Bookings growth-to-date. The full extent of the impact of the COVID-19 pandemic to our business, operations and financial results will depend on numerous evolving factors that we are not able to predict. The key risks to our business are set forth under the heading "Cautionary Note Regarding Forward-Looking Statements" in this release and in Take-Two's Annual Report on Form 10-K for the fiscal year ended March 31, 2020.

Business and Product Highlights

Since July 1, 2020:

Take-Two:

* Acquired privately-held Playdots, Inc. for final consideration of $196 million, comprised of $98 million in cash and the balance in newly issued shares of Take-Two common stock. Founded in 2013 and based in New York City, Playdots builds mobile games with unique and thoughtful designs. They are best known for Two Dots, which has been downloaded over 80 million times since its launch six years ago and that continues to deeply engage audiences throughout the world. Playdots is led by Nir Efrat, who came to Playdots in March 2018 and serves as its Chief Executive Officer. Prior to Playdots, Efrat was Head of Franchises and Studios at King, the creator of the widely successful Candy Crush mobile game series. He will continue to lead Playdots and its approximately 70 employees. Playdots has a robust development pipeline with a number of innovative puzzle games planned for launch over the coming years.

Rockstar Games:

* Acquired Ruffian Games. Based in Dundee, Scotland, the studio will operate under the new name of Rockstar Dundee. Terms of the acquisition were not disclosed. Founded in 2008 by Gary Liddon and Billy Thomson, Ruffian partnered with Microsoft to work on the Crackdown series, and with 343 Industries on Halo: Reach from the Halo Master Chief Collection, among many other projects. Ruffian's talented team of just over 40 have a depth of development experience that even includes work on some early Rockstar titles from the Grand Theft Auto and Manhunt series. Both Liddon and Thomson will remain on-board as Co-Studio Directors of Rockstar Dundee. * Released new free content updates for Red Dead Online including: The Naturalist, a massive new update to Red Dead Online featuring the latest specialist Role: The Naturalist, giving players the opportunity to track, study and sample animals for Naturalist Harriet Davenport, or hunt them for the trapper Gus MacMillan. The update also featured Legendary Animals, Legendary Animal Sighting Missions, Poaching Missions, new Free Roam Events, two new weapons, a new variant of the Varmint Rifle, the Advanced Camera, new clothing, and an assortment of unique items and rewards in the latest edition of Outlaw Pass: The Outlaw Pass No. 3. * Released new free content updates for Grand Theft Auto Online, including The Los Santos Summer Special Update, which introduced six Superyacht Life Co-Op Missions, 15 new Vehicles, nine Open Wheel Race Tracks and the new Open Wheel Race Creator, new Business Battles, the Diamond Adversary Series, two new Arcade Cabinets, new collectibles, clothing and Ambient Events, plus multiple gameplay improvements. * Both Grand Theft Auto Online and Red Dead Online will receive major updates later this fiscal year, featuring an extension to existing Frontier Pursuits for Red Dead Online, as well as Grand Theft Auto Online's biggest update ever, featuring a new take on Heists in a new location.

2K:

* Launched NBA 2K21, the next iteration of the top-rated and top-selling NBA video game simulation series, for current-generation platforms worldwide. With its release, NBA 2K21 offers one-of-a-kind immersion into all facets of NBA basketball and basketball culture, including exciting improvements upon its best-in-class gameplay, competitive and community online features and deep, varied game modes. Featuring Portland Trail Blazers' superstar Damian Lillard on the cover, the current-gen version of NBA 2K21 is available for $59.99 on Xbox One, PlayStation 4, Switch, PC and Stadia. The NBA 2K21 Mamba Forever Edition for current-gen features basketball legend Kobe Bryant on a unique custom cover with his No. 8 jersey and is available for $99.99. Of note, the Mamba Forever Edition includes dual-access to NBA 2K21 for current and next-gen versions of the game on either PlayStation or Xbox consoles, providing purchasers with a copy of the standard edition of the game on the other generation within the same console family. NBA 2K21 will be available for PlayStation 5 and Xbox Series X when they launch in November 2020. * Launched Mafia: Definitive Edition for PlayStation 4, Xbox One, and PC. Developed by 2K and Hangar 13, Mafia: Definitive Edition is a comprehensive, built-from-the-ground-up remake of the original Mafia. The remake features an updated script, additional cutscenes, all-new gameplay sequences and features, a re-recorded orchestral score, and other enhancements. * Launched WWE 2K Battlegrounds, the arcade-style brawler that will bring over-the-top WWE action to a new level of intensity, for PlayStation 4, Xbox One, PC , Switch and Stadia. Developed by Saber Interactive, WWE 2K Battlegrounds brings fast-paced action and an assortment of power-ups, special moves, unconventional melee items and interactive environments to take the brawl to the next level. Players can take on the challenges alone or compete with friends and family in person or online in cooperative and competitive multiplayer modes. * Launched PGA TOUR 2K21 from HB Studios for PlayStation 4, Xbox One, Switch (digital), PC and Stadia. The game features PGA TOUR professional Justin Thomas as its cover athlete; officially licensed pro players, courses and gear; the most realistic course scanning to date; play-by-play commentary by Luke Elvy and Rich Beem; a new PGA TOUR Career Mode, online and local multiplayer; course and player customization; and online societies. * Announced that Borderlands 3 will be available for PlayStation 5 and Xbox Series X when they launch in November 2020. In addition, 2K announced a second Season Pass for Borderlands 3 will be available on November 10, 2020 for all previously released and next-gen versions of the game. Season Pass 2 will include two brand new content add-ons - Designer's Cut, which will add all new ways to play Borderlands 3 by introducing a new Skill Tree for each Vault Hunter, a new standalone mode called Arms Race, and more; and the Director's Cut, which is planned for release in spring of next year. * Announced that Season 7 of WWE SuperCard, the newest addition to the action-packed collectible card-battling game, is scheduled to launch in November 2020 as a free, downloadable update for iOS, Android(tm) and Facebook Gaming. * The NBA 2K League concluded its third season on August 28, 2020 with Wizards District Gaming winning the 2020 League Championship. Games were simulcast live on the NBA 2K League's Twitch and YouTube channels, as well as ESPN's platforms and Sportsnet (Canada). The NBA 2K League has begun the tryout process for its fourth season, set to take place in 2021. * Announced a partnership with OneTeam Partners and the National Football League Players Association that will allow the label to include the names, numbers, images and likenesses for over 2,000 current NFL players in multiple, non-simulation football games that are currently in development and set to launch starting in calendar year 2021, during fiscal 2022.

Private Division:

* Released, along with Obsidian Entertainment, The Outer Worlds: Peril on Gorgon, the first narrative-led expansion for the critically acclaimed, darkly humorous sci-fi RPG for the PlayStation 4, Xbox One and PC. The expansion will be coming later to Nintendo Switch. The Outer Worlds: Peril on Gorgon is available individually or at a discount as part of The Outer Worlds Expansion Pass, which will also include The Outer Worlds: Murder on Eridanos, the second expansion set to launch in the first half of calendar 2021. * Announced three new publishing agreements with top independent developers Moon Studios, League of Geeks, and Roll7. In collaboration with these developers, Private Division will announce more details about each specific project in the future. The first of these titles is expected to launch in fiscal year 2022.

Outlook for Fiscal 2021

Take-Two is providing its initial outlook for its fiscal third quarter ending December 31, 2020 and increasing its outlook for the fiscal year ending March 31, 2021:

Third Quarter Ending December 31, 2020

* GAAP net revenue is expected to range from $760 to $810 million * GAAP net income is expected to range from $128 to $140 million * GAAP diluted net income per share is expected to range from $1.10 to $1.21 * Share count used to calculate both GAAP and management reporting diluted net income per share is expected to be 115.9 million (1) * Net Bookings (operational metric) are expected to range from $675 to $725 million

The Company is also providing selected data and its management reporting tax rate of 16%, which are used internally by its management and Board of Directors to adjust the Company's GAAP financial outlook in order to facilitate comparison of its operating performance between periods and to better understand its core business and future outlook:

Three Months Ending December 31, 2020

Financial Data

Change in Amortization deferred of net GAAP outlook^ Stock-based acquired$ in millions (2) revenue and compensation intangible related cost of assets

goods sold

Net revenue $760 to $810 ($85)



Cost of goods sold $291 to $317 $46 ($55) ($5)



Operating Expenses $325 to $335 ($26) ($3)

Interest and other, ($1) net

Income before income $145 to $159 ($131) $81 $8taxes

Fiscal Year Ending March 31, 2021

* GAAP net revenue is expected to range from $3.05 to $3.15 billion * GAAP net income is expected to range from $372 to $403 million * GAAP diluted net income per share is expected to range from $3.22 to $3.49 * Share count used to calculate both GAAP and management reporting diluted net income per share is expected to be 115.5 million (3) * Net cash provided by operating activities is expected to be over $690 million * Adjusted Unrestricted Operating Cash Flow (Non-GAAP) is expected to be over $650 million (4) * Capital expenditures are expected to be approximately $75 million * Net Bookings (operational metric) are expected to range from $3.15 to $3.25 billion

The Company is also providing selected data and its management reporting tax rate of 16%, which are used internally by its management and Board of Directors to adjust the Company's GAAP financial outlook in order to facilitate comparison of its operating performance between periods and to better understand its core business and future outlook:

Twelve Months Ending March 31, 2021

Financial Data

Change in

deferred net Amortization $ in GAAP revenue Stock-based of acquired Reorganizationmillions outlook and ^ (2) compensation intangible & Acquisition related Loss on cost assets long-term of goods investments sold



Net $3,050revenue to $100 $3,150



Cost of $1,441goods to $12 ($83) ($17) sold $1,487



Operating $1,205Expenses to ($97) ($11) ($3) $1,225

Interest and ($14) $3 other, ($1)net

Income $418 to $85 $180 $28 before $452 $1 $3incometaxes

1)

Includes 115.0 million basic shares and 0.9 million shares representing the potential dilution from unvested employee stock grants.

2)

The individual components of the financial outlook may not foot to the totals, as the Company does not expect actual results for every component to be at the low end or high end of the outlook range simultaneously.

3)

Includes 114.6 million basic shares and 0.9 million shares representing the potential dilution from unvested employee stock grants.

4)

Includes a $40 million net increase in restricted cash for fiscal 2021.

Key assumptions and dependencies underlying the Company's outlook include: the timely delivery of the titles included in this financial outlook; a stable economic environment; continued consumer acceptance of Xbox One and PlayStation 4; the ability to develop and publish products that capture market share for these current generation systems while also leveraging opportunities on PlayStation 5 and Xbox Series X, PC, mobile and other platforms; and stable foreign exchange rates. See also "Cautionary Note Regarding Forward Looking Statements" below.

Product Releases

The following titles have been released since July 1, 2020:

1) Includes 115.0 million basic shares and 0.9 million shares representing the potential dilution from unvested employee stock grants.

The individual components of the financial outlook may not foot to the 2) totals, as the Company does not expect actual results for every component to be at the low end or high end of the outlook range simultaneously.

3) Includes 114.6 million basic shares and 0.9 million shares representing the potential dilution from unvested employee stock grants.

4) Includes a $40 million net increase in restricted cash for fiscal 2021.

Key assumptions and dependencies underlying the Company's outlook include: the timely delivery of the titles included in this financial outlook; a stable economic environment; continued consumer acceptance of Xbox One and PlayStation 4; the ability to develop and publish products that capture market share for these current generation systems while also leveraging opportunities on PlayStation 5 and Xbox Series X, PC, mobile and other platforms; and stable foreign exchange rates. See also "Cautionary Note Regarding Forward Looking Statements" below.

Product Releases

The following titles have been released since July 1, 2020:

Label Title Platforms Release Date

Private Kerbal Space Program: Shared PC July 1,Division Horizons (free update) 2020

2K Sid Meier's Civilization VI - New PS4, Xbox One, July 23, Frontier Pass: Ethiopia Pack (DLC) Switch, PC 2020

Rockstar Red Dead Online: The Naturalist PS4, Xbox One, PC, July 28,Games Stadia 2020

2K PGA TOUR 2K21 PS4, Xbox One, August 21, Switch, PC, Stadia 2020

2K NBA 2K21 PS4, Xbox One, September Switch, PC, Stadia 4, 2020

Private The Outer Worlds: Peril on Gorgon PS4, Xbox One, PC SeptemberDivision (DLC) 9, 2020

2K Borderlands 3: Psycho Krieg and the PS4, Xbox One, September Fantastic Flustercluck (DLC) Switch, PC, Stadia 10, 2020

2K WWE 2K Battlegrounds PS4, Xbox One, September Switch, PC, Stadia 18, 2020

Sid Meier's Civilization VI - New PS4, Xbox One, September2K Frontier Pass: Byzantium & Gaul Pack Switch, PC 24, 2020 (DLC)

2K Mafia I Definitive Edition PS4, Xbox One, PC September 25, 2020

2K PGA TOUR 2K21 - 3-Hole Match Types PS4, Xbox One, October 2, Update (DLC) Switch, PC, Stadia 2020

Private Kerbal Space Program: Shared PS4, Xbox One October 14,Division Horizons (free update) 2020

2K PGA TOUR 2K21 - Halloween Update PS4, Xbox One, October 20, (DLC) Switch, PC, Stadia 2020

2K WWE 2K Battlegrounds DLC (free PS4, Xbox One, November 4, update) Switch, PC, Stadia 2020



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



Label Title Platforms Release Date

2K Borderlands 3 Xbox Series X November (digital only) 10, 2020

2K NBA 2K21 Xbox Series X November 10, 2020

PS4, PS5, Xbox One, November2K Borderlands 3 - Season Pass 2 Xbox Series X, PC, 10, 2020 Stadia

2K Borderlands 3 PS5 (digital only) November 12, 2020

2K NBA 2K21 PS5 November 12, 2020

2K WWE SuperCard: Season 7 iOS, Android, November Facebook Gaming 2020

Private The Outer Worlds: Murder on Eridanos 1^st HalfDivision (DLC) PS4, Xbox One, PC Calendar 2021

Rockstar Grand Theft Auto V PS5, Xbox Series X Fiscal 2022Games

Private Kerbal Space Program 2 PS4, Xbox One, PC Fiscal 2023Division

Conference Call

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

Non-GAAP Financial Measure

In addition to reporting financial results in accordance with U.S. generally accepted accounting principles (GAAP), the Company uses a Non-GAAP measure of financial performance: Adjusted Unrestricted Operating Cash Flow, which is defined as GAAP net cash from operating activities, adjusted for changes in restricted cash. The Company's management believes it is important to consider Adjusted Unrestricted Operating Cash Flow, in addition to net cash from operating activities, as it provides more transparency into current business trends without regard to the timing of payments from restricted cash, which is primarily related to a dedicated account limited to the payment of certain internal royalty obligations.

This Non-GAAP financial measure is not intended to be considered in isolation from, as a substitute for, or superior to, GAAP results. This Non-GAAP financial measure may be different from similarly titled measures used by other companies. In the future, Take-Two may also consider whether other items should also be excluded in calculating this Non-GAAP financial measure used by the Company. Management believes that the presentation of this Non-GAAP financial measure provides investors with additional useful information to measure Take-Two's financial and operating performance. In particular, this measure facilitates comparison of our operating performance between periods and may help investors to understand better the operating results of Take-Two. Internally, management uses this Non-GAAP financial measure in assessing the Company's operating results and in planning and forecasting. A reconciliation of this Non-GAAP financial measure to the most comparable GAAP measure is contained in the financial tables to this press release.

Final Results

The financial results discussed herein are presented on a preliminary basis; final data will be included in Take-Two's Quarterly Report on Form 10-Q for the period ended September 30, 2020.

About Take-Two Interactive Software

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

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

Cautionary Note Regarding Forward-Looking Statements

The statements contained herein which are not historical facts are considered forward-looking statements under federal securities laws and may be identified by words such as "anticipates," "believes," "estimates," "expects," "intends," "plans," "potential," "predicts," "projects," "seeks," "should," "will," or words of similar meaning and include, but are not limited to, statements regarding the outlook for the Company's future business and financial performance. Such forward-looking statements are based on the current beliefs of our management as well as assumptions made by and information currently available to them, which are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Actual outcomes and results may vary materially from these forward-looking statements based on a variety of risks and uncertainties including: the uncertainty of the impact of the COVID-19 pandemic and measures taken in response thereto; the effect that measures taken to mitigate the COVID-19 pandemic have on our operations, including our ability to timely deliver our titles and other products, and on the operations of our counterparties, including retailers and distributors; the effects of the COVID-19 pandemic on consumer demand and the discretionary spending patterns of our customers; the impact of reductions in interest rates by the Federal Reserve and other central banks, including on our short-term investment portfolio; the impact of potential inflation; volatility in foreign currency exchange rates; our dependence on key management and product development personnel; our dependence on our Grand Theft Auto and NBA 2K products and our ability to develop other hit titles; our ability to leverage opportunities on PlayStation 5 and Xbox Series X; the timely release and significant market acceptance of our games; the ability to maintain acceptable pricing levels on our games; and risks associated with international operations.

Other important factors and information are contained in the Company's most recent Annual Report on Form 10-K, including the risks summarized in the section entitled "Risk Factors," the Company's most recent Quarterly Report on Form 10-Q, and the Company's other periodic filings with the SEC, which can be accessed at www.take2games.com. All forward-looking statements are qualified by these cautionary statements and apply only as of the date they are made. The Company undertakes no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.

TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except per share amounts) Three months ended Six months ended September 30, September 30, 2020 2019 2020 2019

Net revenue $ 841,142 $ 857,841 $ 1,672,452 $ 1,398,300

Cost of goods sold:Internal royalties 127,804 109,991 341,867 172,880

Software development costs 142,771 211,996 290,818 320,437and royaltiesLicenses 92,944 59,693 148,963 82,197

Product costs 68,986 86,568 127,546 134,203

Total cost of goods sold 432,505 468,248 909,194 709,717

Gross profit 408,637 389,593 763,258 688,583

Selling and marketing 113,691 149,566 198,470 241,387

General and administrative 91,433 76,659 193,606 151,492

Research and development 74,216 76,197 147,324 145,160

Depreciation and 13,691 12,024 26,109 23,281amortizationBusiness reorganization 239 327 239 713

Total operating expenses 293,270 314,773 565,748 562,033

Income from operations 115,367 74,820 197,510 126,550

Interest and other, net 2,706 8,054 10,924 18,479

Loss on long-term 655 - 655 -investmentsIncome before income taxes 117,418 82,874 207,779 145,029

Provision for income taxes 18,097 11,059 19,953 26,934

Net income $ 99,321 $ 71,815 $ 187,826 $ 118,095

Earnings per share:Basic earnings per share $ 0.87 $ 0.63 $ 1.65 $ 1.05

Diluted earnings per share $ 0.86 $ 0.63 $ 1.63 $ 1.04

Weighted average sharesoutstanding:^Basic 114,444 113,117 114,153 112,869

Diluted 115,414 114,077 115,245 113,925

Computation of Basic EPS:Net income $ 99,321 $ 71,815 $ 187,826 $ 118,095

Weighted average shares 114,444 113,117 114,153 112,869outstanding - basic Basic earnings per share $ 0.87 $ 0.63 $ 1.65 $ 1.05

Computation of Diluted EPS:Net income for diluted EPS $ 99,321 $ 71,815 $ 187,826 $ 118,095calculation Weighted average shares 114,444 113,117 114,153 112,869outstanding - basicAdd: dilutive effect of 970 960 1,092 1,056common stock equivalentsWeighted average common 115,414 114,077 115,245 113,925shares outstanding - diluted Diluted earnings per share $ 0.86 $ 0.63 $ 1.63 $ 1.04

TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(in thousands, except per share amounts)September 30,March 31,2020

2020

ASSETS(Unaudited)Current assets:Cash and cash equivalents$

1,345,099

$

1,357,664

Short-term investments1,040,786

644,003

Restricted cash and cash equivalents450,145

546,604

Accounts receivable, net of allowances of $448 and $443 at September 30, 2020 and March 31, 2020,respectively787,818

592,555

Inventory26,934

19,108

Software development costs and licenses73,714

40,316

Deferred cost of goods sold15,410

19,598

Prepaid expenses and other192,192

273,503

Total current assets3,932,098

3,493,351

Fixed assets, net133,404

131,888

Right-of-use assets156,310

154,284

Software development costs and licenses, net of current portion403,390

401,778

Goodwill521,000

386,494

Other intangibles, net126,392

51,260

Deferred tax assets117,692

116,676

Long-term restricted cash and cash equivalents289,536

89,124

Other assets156,332

123,977

Total assets$

5,836,154

$

4,948,832

LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities:Accounts payable$

85,103

$

65,684

Accrued expenses and other current liabilities1,148,617

1,169,884

Deferred revenue1,063,064

777,784

Lease liabilities29,051

25,187

Total current liabilities2,325,835

2,038,539

Non-current deferred revenue32,880

28,339

Non-current lease liabilities150,793

152,059

Non-current software development royalties302,435

104,417

Other long-term liabilities122,929

86,234

Total liabilities2,934,872

2,409,588

Stockholders' equity:Preferred stock, $.01 par value, 5,000 shares authorized-

-

Common stock, $.01 par value, 200,000 shares authorized; 137,349 and 135,927 sharesissued and 114,928 and 113,506 outstanding at September 30, 2020 and March 31, 2020, respectively1,373

1,359

Additional paid-in capital2,285,394

2,134,748

Treasury stock, at cost; 22,421 common shares at September 30, 2020 and, March 31, 2020, respectively(820,572

)

(820,572

)

Retained earnings1,469,911

1,282,085

Accumulated other comprehensive loss(34,824

)

(58,376

)

Total stockholders' equity2,901,282

2,539,244

Total liabilities and stockholders' equity$

5,836,154

$

4,948,832

TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(in thousands, except per share amounts) September 30, March 31, 2020 2020

ASSETS (Unaudited)Current assets:Cash and cash equivalents $ 1,345,099 $ 1,357,664

Short-term investments 1,040,786 644,003

Restricted cash and cash equivalents 450,145 546,604

Accounts receivable, net of allowances of $448and $443 at September 30, 2020 and March 31,2020,respectively 787,818 592,555

Inventory 26,934 19,108

Software development costs and licenses 73,714 40,316

Deferred cost of goods sold 15,410 19,598

Prepaid expenses and other 192,192 273,503

Total current assets 3,932,098 3,493,351

Fixed assets, net 133,404 131,888

Right-of-use assets 156,310 154,284

Software development costs and licenses, net of 403,390 401,778 current portionGoodwill 521,000 386,494

Other intangibles, net 126,392 51,260

Deferred tax assets 117,692 116,676

Long-term restricted cash and cash equivalents 289,536 89,124

Other assets 156,332 123,977

Total assets $ 5,836,154 $ 4,948,832

LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities:Accounts payable $ 85,103 $ 65,684

Accrued expenses and other current liabilities 1,148,617 1,169,884

Deferred revenue 1,063,064 777,784

Lease liabilities 29,051 25,187

Total current liabilities 2,325,835 2,038,539

Non-current deferred revenue 32,880 28,339

Non-current lease liabilities 150,793 152,059

Non-current software development royalties 302,435 104,417

Other long-term liabilities 122,929 86,234

Total liabilities 2,934,872 2,409,588

Stockholders' equity:Preferred stock, $.01 par value, 5,000 shares - - authorizedCommon stock, $.01 par value, 200,000 sharesauthorized; 137,349 and 135,927 sharesissued and 114,928 and 113,506 outstanding at 1,373 1,359 September 30, 2020 and March 31, 2020,respectivelyAdditional paid-in capital 2,285,394 2,134,748

Treasury stock, at cost; 22,421 common shares at (820,572 ) (820,572 )September 30, 2020 and, March 31, 2020,respectivelyRetained earnings 1,469,911 1,282,085

Accumulated other comprehensive loss (34,824 ) (58,376 )

Total stockholders' equity 2,901,282 2,539,244

Total liabilities and stockholders' equity $ 5,836,154 $ 4,948,832

TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands)Six months ended September 30,2020

2019

Operating activities:Net income$

187,826

$

118,095

Adjustments to reconcile net income to net cash provided by operating activities:Amortization and impairment of software development costs and licenses92,664

72,505

Depreciation25,826

23,037

Amortization of intellectual property11,801

10,627

Stock-based compensation98,719

113,199

Other, net(2,631

)

4,325

Changes in assets and liabilities:Accounts receivable(189,477

)

(463,019

)

Inventory(7,266

)

(12,064

)

Software development costs and licenses(127,290

)

(51,932

)

Prepaid expenses and other current and other non-current assets65,296

(131,055

)

Deferred revenue284,441

66,148

Deferred cost of goods sold4,753

15,287

Accounts payable, accrued expenses and other liabilities182,083

379,005

Net cash provided by operating activities626,745

144,158

Investing activities:Change in bank time deposits(218,239

)

6,720

Proceeds from available-for-sale securities260,729

137,071

Purchases of available-for-sale securities(435,511

)

(141,244

)

Purchases of fixed assets(25,021

)

(25,532

)

Purchases of long-term investments(9,100

)

(4,500

)

Business acquisitions(75,482

)

(8,715

)

Net cash used in investing activities(502,624

)

(36,200

)

Financing activities:Tax payment related to net share settlements on restricted stock awards(48,202

)

(61,478

)

Issuance of common stock6,503

-

Net cash used in financing activities(41,699

)

(61,478

)

Effects of foreign currency exchange rates on cash, cash equivalents, and restricted cash and cash equivalents8,966

(8,063

)

Net change in cash, cash equivalents, and restricted cash and cash equivalents91,388

38,417

Cash, cash equivalents, and restricted cash and cash equivalents, beginning of year1,993,392

1,391,986

Cash, cash equivalents, and restricted cash and cash equivalents, end of period$

2,084,780

$

1,430,403

TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands) Six months ended September 30, 2020 2019

Operating activities: Net income $ 187,826 $ 118,095

Adjustments to reconcile net income to net cash provided by operating activities: Amortization and impairment of software 92,664 72,505 development costs and licenses Depreciation 25,826 23,037

Amortization of intellectual property 11,801 10,627

Stock-based compensation 98,719 113,199

Other, net (2,631 ) 4,325

Changes in assets and liabilities: Accounts receivable (189,477 ) (463,019 )

Inventory (7,266 ) (12,064 )

Software development costs and licenses (127,290 ) (51,932 )

Prepaid expenses and other current and other 65,296 (131,055 ) non-current assets Deferred revenue 284,441 66,148

Deferred cost of goods sold 4,753 15,287

Accounts payable, accrued expenses and other 182,083 379,005 liabilities Net cash provided by operating activities 626,745 144,158

Investing activities: Change in bank time deposits (218,239 ) 6,720

Proceeds from available-for-sale securities 260,729 137,071

Purchases of available-for-sale securities (435,511 ) (141,244 )

Purchases of fixed assets (25,021 ) (25,532 )

Purchases of long-term investments (9,100 ) (4,500 )

Business acquisitions (75,482 ) (8,715 )

Net cash used in investing activities (502,624 ) (36,200 )

Financing activities: Tax payment related to net share settlements on (48,202 ) (61,478 ) restricted stock awards Issuance of common stock 6,503 -

Net cash used in financing activities (41,699 ) (61,478 )

Effects of foreign currency exchange rates on 8,966 (8,063 ) cash, cash equivalents, and restricted cash and cash equivalents Net change in cash, cash equivalents, and 91,388 38,417 restricted cash and cash equivalents Cash, cash equivalents, and restricted cash and 1,993,392 1,391,986 cash equivalents, beginning of year Cash, cash equivalents, and restricted cash and $ 2,084,780 $ 1,430,403 cash equivalents, end of period TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIESNet Revenue and Net Bookings by Geographic Region, Distribution Channel, and Platform Mix(in thousands)Three Months EndedSeptember 30, 2020Three Months EndedSeptember 30, 2019Amount% of TotalAmount% of TotalNet revenue by geographic regionUnited States$

503,583

60

%

$

494,661

58

%

International337,559

40

%

363,180

42

%

Total net revenue$

841,142

100

%

$

857,841

100

%

Net bookings by geographic regionUnited States$

612,813

64

%

$

567,503

60

%

International344,721

36

%

383,013

40

%

Total net bookings$

957,534

100

%

$

950,516

100

%

Three Months EndedSeptember 30, 2020Three Months EndedSeptember 30, 2019Amount% of TotalAmount% of TotalNet revenue by distribution channelDigital online$

711,299

85

%

$

615,774

72

%

Physical retail and other129,843

15

%

242,067

28

%

Total net revenue$

841,142

100

%

$

857,841

100

%

Net bookings by distribution channelDigital online$

791,705

83

%

$

695,346

73

%

Physical retail and other165,829

17

%

255,170

27

%

Total net bookings$

957,534

100

%

$

950,516

100

%

Three Months EndedSeptember 30, 2020Three Months EndedSeptember 30, 2019Amount% of TotalAmount% of TotalNet revenue by platform mixConsole$

641,269

76

%

$

651,818

76

%

PC and other199,873

24

%

206,023

24

%

Total net revenue$

841,142

100

%

$

857,841

100

%

Net bookings by platform mixConsole$

761,450

80

%

$

737,085

78

%

PC and other196,084

20

%

213,431

22

%

Total net bookings$

957,534

100

%

$

950,516

100

%

TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIESNet Revenue and Net Bookings by Geographic Region, Distribution Channel, andPlatform Mix(in thousands) Three Months Ended Three Months Ended September 30, 2020 September 30, 2019 Amount % of Amount % of Total Total Net revenue by geographic regionUnited States $ 503,583 60 % $ 494,661 58 %

International 337,559 40 % 363,180 42 %

Total net revenue $ 841,142 100 % $ 857,841 100 %

Net bookings by geographic regionUnited States $ 612,813 64 % $ 567,503 60 %

International 344,721 36 % 383,013 40 %

Total net bookings $ 957,534 100 % $ 950,516 100 %

Three Months Ended Three Months Ended September 30, 2020 September 30, 2019 Amount % of Amount % of Total Total Net revenue by distribution channelDigital online $ 711,299 85 % $ 615,774 72 %

Physical retail and other 129,843 15 % 242,067 28 %

Total net revenue $ 841,142 100 % $ 857,841 100 %

Net bookings by distribution channelDigital online $ 791,705 83 % $ 695,346 73 %

Physical retail and other 165,829 17 % 255,170 27 %

Total net bookings $ 957,534 100 % $ 950,516 100 %

Three Months Ended Three Months Ended September 30, 2020 September 30, 2019 Amount % of Amount % of Total TotalNet revenue by platform mixConsole $ 641,269 76 % $ 651,818 76 %

PC and other 199,873 24 % 206,023 24 %

Total net revenue $ 841,142 100 % $ 857,841 100 %

Net bookings by platform mixConsole $ 761,450 80 % $ 737,085 78 %

PC and other 196,084 20 % 213,431 22 %

Total net bookings $ 957,534 100 % $ 950,516 100 %

TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIESNet Revenue and Net Bookings by Geographic Region, Distribution Channel, and Platform Mix(in thousands)Six Months EndedSeptember 30, 2020Six Months EndedSeptember 30, 2019Amount% of TotalAmount% of TotalNet revenue by geographic regionUnited States$

974,073

58

%

$

825,140

59

%

International698,379

42

%

573,160

41

%

Total net revenue$

1,672,452

100

%

$

1,398,300

100

%

Net bookings by geographic regionUnited States$

1,199,927

61

%

$

826,738

60

%

International753,857

39

%

546,018

40

%

Total net bookings$

1,953,784

100

%

$

1,372,756

100

%

Six Months EndedSeptember 30, 2020Six Months EndedSeptember 30, 2019Amount% of TotalAmount% of TotalNet revenue by distribution channelDigital online$

1,437,525

86

%

$

1,043,555

75

%

Physical retail and other234,927

14

%

354,745

25

%

Total net revenue$

1,672,452

100

%

$

1,398,300

100

%

Net bookings by distribution channelDigital online$

1,706,894

87

%

$

1,077,825

79

%

Physical retail and other246,890

13

%

294,931

21

%

Total net bookings$

1,953,784

100

%

$

1,372,756

100

%

Six Months EndedSeptember 30, 2020Six Months EndedSeptember 30, 2019Amount% of TotalAmount% of TotalNet revenue by Platform MixConsole$

1,252,954

75

%

$

1,086,632

78

%

PC and other419,498

25

%

311,668

22

%

Total net revenue$

1,672,452

100

%

$

1,398,300

100

%

Net bookings by platform mixConsole$

1,484,249

76

%

$

1,049,716

76

%

PC and other469,535

24

%

323,040

24

%

Total net bookings$

1,953,784

100

%

$

1,372,756

100

%

TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIESNet Revenue and Net Bookings by Geographic Region, Distribution Channel, andPlatform Mix(in thousands) Six Months Ended Six Months Ended September 30, 2020 September 30, 2019 Amount % of Amount % of Total Total Net revenue by geographic regionUnited States $ 974,073 58 % $ 825,140 59 %

International 698,379 42 % 573,160 41 %

Total net revenue $ 1,672,452 100 % $ 1,398,300 100 %

Net bookings by geographic regionUnited States $ 1,199,927 61 % $ 826,738 60 %

International 753,857 39 % 546,018 40 %

Total net bookings $ 1,953,784 100 % $ 1,372,756 100 %

Six Months Ended Six Months Ended September 30, 2020 September 30, 2019 Amount % of Amount % of Total Total Net revenue by distribution channelDigital online $ 1,437,525 86 % $ 1,043,555 75 %

Physical retail and other 234,927 14 % 354,745 25 %

Total net revenue $ 1,672,452 100 % $ 1,398,300 100 %

Net bookings by distributionchannelDigital online $ 1,706,894 87 % $ 1,077,825 79 %

Physical retail and other 246,890 13 % 294,931 21 %

Total net bookings $ 1,953,784 100 % $ 1,372,756 100 %

Six Months Ended Six Months Ended September 30, 2020 September 30, 2019 Amount % of Amount % of Total TotalNet revenue by Platform MixConsole $ 1,252,954 75 % $ 1,086,632 78 %

PC and other 419,498 25 % 311,668 22 %

Total net revenue $ 1,672,452 100 % $ 1,398,300 100 %

Net bookings by platform mixConsole $ 1,484,249 76 % $ 1,049,716 76 %

PC and other 469,535 24 % 323,040 24 %

Total net bookings $ 1,953,784 100 % $ 1,372,756 100 %

TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIESADDITIONAL DATA(in thousands)Three Months Ended September 30, 2020Net revenue

Cost of goods sold-

Internal royalties

Cost of goods sold-

Software

development costs

and royalties

Cost of goods sold-

Licenses

Cost of goods sold-

Product costs

Selling and

marketing

As reported$

841,142

$

127,804

$

142,771

$

92,944

$

68,986

$

113,691

Net effect from deferral and related cost of goods sold116,392

16,209

(3,994

)

1,235

Stock-based compensation(19,396

)

(4,439

)

Amortization and impairment of acquired intangibles(4,411

)

(517

)

Three Months Ended September 30, 2020General and

administrative

Research and

development

Depreciation and

amortization

Business

reorganization

Interest and

other, net

Loss on long-

term

investments

As reported$

91,433

$

74,216

$

13,691

$

239

$

2,706

$

655

Net effect from deferral and related cost of goods sold(1,669

)

Stock-based compensation(13,830

)

(7,643

)

Amortization and impairment of acquired intangibles(1,684

)

(163

)

Impact of business reorganization(239

)

Loss on long-term investments(655

)

Acquisition related expenses(2,512

)

Three Months Ended September 30, 2019Net revenue

Cost of goods sold-

Internal royalties

Cost of goods sold-

Software

development costs

and royalties

Cost of goods sold-

Licenses

Cost of goods sold-

Product costs

Selling and

marketing

As reported$

857,841

$

109,991

$

211,996

$

59,693

$

86,568

$

149,566

Net effect from deferral and related cost of goods sold92,675

(26,161

)

1,133

(1,904

)

Stock-based compensation(27,832

)

(3,744

)

Amortization and impairment of acquired intangibles(3,311

)

Three Months Ended September 30, 2019General and

administrative

Research and

development

Depreciation and

amortization

Business

reorganization

Interest and

other, net

As reported$

76,659

$

76,197

$

12,024

$

327

$

8,054

Net effect from deferral and related cost of goods sold1,306

Stock-based compensation(13,576

)

(10,616

)

Amortization and impairment of acquired intangibles(1,546

)

(121

)

Impact of business reorganization(327

)

Acquisition related expenses(41

)

TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIESADDITIONAL DATA(in thousands)Six Months Ended September 30, 2020Net revenue

Cost of goods sold-

Internal royalties

Cost of goods sold-

Software

development costs

and royalties

Cost of goods sold-

Licenses

Cost of goods sold-

Product costs

Selling and

marketing

As reported$

1,672,452

$

341,867

$

290,818

$

148,963

$

127,546

$

198,470

Net effect from deferral and related cost of goods sold281,331

20,260

(4,444

)

(3,589

)

Stock-based compensation(48,429

)

(9,167

)

Amortization and impairment of acquired intangibles(7,694

)

(517

)

Six Months Ended September 30, 2020General and

administrative

Research and

development

Depreciation and

amortization

Business

reorganization

Interest and

other, net

Loss on long-

term

investments

As reported$

193,606

$

147,324

$

26,109

$

239

$

10,924

$

655

Net effect from deferral and related cost of goods sold(2,430

)

Stock-based compensation(27,030

)

(14,093

)

Amortization and impairment of acquired intangibles(3,237

)

(283

)

Impact of business reorganizationLoss on long-term investments(655

)

Acquisition related expenses(2,512

)

(239

)

Six Months Ended September 30, 2019Net revenue

Cost of goods sold-

Internal royalties

Cost of goods sold-

Software

development costs

and royalties

Cost of goods sold-

Product costs

Cost of goods sold-

Licenses

Selling and

marketing

As reported$

1,398,300

$

172,880

$

320,437

$

134,203

$

82,197

$

241,387

Net effect from deferral and related cost of goods sold(25,544

)

(39,320

)

(17,553

)

344

Stock-based compensation(58,630

)

(10,220

)

Amortization and impairment of acquired intangibles(7,015

)

Six Months Ended September 30, 2019General and

administrative

Research and

development

Depreciation and

amortization

Business

reorganization

Interest and

other, net

As reported$

151,492

$

145,160

$

23,281

$

713

$

18,479

Net effect from deferral and related cost of goods sold812

Stock-based compensation(27,143

)

(17,206

)

Amortization and impairment of acquired intangibles(3,106

)

(244

)

Impact of business reorganization(713

)

Acquisition related expenses(367

)

TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIESADDITIONALDATA(in thousands) Cost of goods sold- Cost of Cost ofThree Months goods sold- Software Cost of goods goods sold- Selling andEnded Net revenue sold- September 30, Internal development Product marketing2020 royalties costs Licenses costs

and royalties

As reported $ 841,142 $ 127,804 $ 142,771 $ 92,944 $ 68,986 $ 113,691

Net effectfrom deferral 116,392 16,209 (3,994 ) 1,235 and relatedcost of goodssoldStock-based (19,396 ) (4,439 )compensationAmortizationand impairment (4,411 ) (517 )of acquiredintangibles Loss onThree Months General and Research Depreciation Business Interest long-Ended and and and September 30, administrative reorganization term2020 development amortization other, net investments

As reported $ 91,433 $ 74,216 $ 13,691 $ 239 $ 2,706 $ 655

Net effectfrom deferral (1,669 )and relatedcost of goodssoldStock-based (13,830 ) (7,643 )compensationAmortizationand impairment (1,684 ) (163 )of acquiredintangiblesImpact of (239 )businessreorganizationLoss on (655 )long-terminvestmentsAcquisition (2,512 )relatedexpenses Cost of goods sold- Cost of Cost ofThree Months goods sold- Software Cost of goods goods sold- Selling andEnded Net revenue sold- September 30, Internal development Product marketing2019 royalties costs Licenses costs

and royalties

As reported $ 857,841 $ 109,991 $ 211,996 $ 59,693 $ 86,568 $ 149,566

Net effectfrom deferral 92,675 (26,161 ) 1,133 (1,904 )and relatedcost of goodssoldStock-based (27,832 ) (3,744 )compensationAmortizationand impairment (3,311 )of acquiredintangibles Three Months General and Research Depreciation Business InterestEnded and and andSeptember 30, administrative reorganization2019 development amortization other, net

As reported $ 76,659 $ 76,197 $ 12,024 $ 327 $ 8,054

Net effectfrom deferral 1,306 and relatedcost of goodssoldStock-based (13,576 ) (10,616 )compensationAmortizationand impairment (1,546 ) (121 )of acquiredintangiblesImpact of (327 )businessreorganizationAcquisition (41 )relatedexpenses TAKE-TWO INTERACTIVE SOFTWARE,INC. and SUBSIDIARIESADDITIONALDATA(in thousands) Cost of goods sold- Cost of Cost ofSix Months goods sold- Software Cost of goods goods sold- Selling andEnded Net revenue sold- September 30, Internal development Product marketing2020 royalties costs Licenses costs

and royalties

As reported $ 1,672,452 $ 341,867 $ 290,818 $ 148,963 $ 127,546 $ 198,470

Net effectfrom deferral 281,331 20,260 (4,444 ) (3,589 )and relatedcost of goodssoldStock-based (48,429 ) (9,167 )compensationAmortizationand impairment (7,694 ) (517 )of acquiredintangibles Loss onSix Months General and Research Depreciation Business Interest long-Ended and and and September 30, administrative reorganization term2020 development amortization other, net investments

As reported $ 193,606 $ 147,324 $ 26,109 $ 239 $ 10,924 $ 655

Net effectfrom deferral (2,430 )and relatedcost of goodssoldStock-based (27,030 ) (14,093 )compensationAmortizationand impairment (3,237 ) (283 )of acquiredintangiblesImpact ofbusinessreorganizationLoss on (655 )long-terminvestmentsAcquisition (2,512 )relatedexpenses (239 )

Cost of goods sold- Cost ofSix Months goods sold- Software Cost of goods Cost of Selling andEnded Net revenue sold- goods sold- September 30, Internal development marketing2019 royalties costs Product costs Licenses

and royalties

As reported $ 1,398,300 $ 172,880 $ 320,437 $ 134,203 $ 82,197 $ 241,387

Net effectfrom deferral (25,544 ) (39,320 ) (17,553 ) 344 and relatedcost of goodssoldStock-based (58,630 ) (10,220 )compensationAmortizationand impairment (7,015 )of acquiredintangibles Six Months General and Research Depreciation Business InterestEnded and and andSeptember 30, administrative reorganization2019 development amortization other, net

As reported $ 151,492 $ 145,160 $ 23,281 $ 713 $ 18,479

Net effectfrom deferral 812 and relatedcost of goodssoldStock-based (27,143 ) (17,206 )compensationAmortizationand impairment (3,106 ) (244 )of acquiredintangiblesImpact of (713 )businessreorganizationAcquisition (367 )relatedexpenses TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIESRECONCILIATION OF GAAP TO NON-GAAP MEASURE(in thousands)Six months ended September 30,2020

2019

Net cash from operating activities$

626,745

$

144,158

Net change in Restricted cash related to Operations (1)(117,393

)

(102,910

)

Adjusted Unrestricted Operating Cash Flow$

509,352

$

41,248

FY 2021FY 2020Restricted cash beginning of period (4/1)$

635,728

$

565,461

Less Restricted cash end of period (9/30)739,681

668,371

Less Restricted cash related to acquisitions13,440

-

(1) Net change in Restricted cash realated to Operations$

(117,393

)

($

102,910

)

View source version on businesswire.com: https://www.businesswire.com/news/home/20201105005964/en/

CONTACT: (Investor Relations) Henry A. Diamond Senior Vice President Investor Relations & Corporate Communications Take-Two Interactive Software, Inc. (646) 536-3005 Henry.Diamond@take2games.com

CONTACT: (Corporate Press) Alan Lewis Vice President Corporate Communications & Public Affairs Take-Two Interactive Software, Inc. (646) 536-2983 Alan.Lewis@take2games.com