Business Wire | Nov 3, 2021 04:05PM EDT

Take-Two Interactive Software, Inc. Reports Strong Results for Fiscal Second Quarter 2022

Nov. 03, 2021

NEW YORK--(BUSINESS WIRE)--Nov. 03, 2021--Take-Two Interactive Software, Inc. (NASDAQ:TTWO) today reported strong results for the second quarter of its fiscal year 2022, ending September 30, 2021. In addition, the Company raised its outlook for the fiscal year 2022, ending March 31, 2022, and provided its initial outlook for the third quarter of its fiscal year 2022, ending December 31, 2021. For further information, please see the second quarter fiscal 2022 results slide deck posted to the Company's investor relations website at http://ir.take2games.com.

Second Quarter Fiscal 2022 Financial Highlights

GAAP net revenue increased 2% to $858.2 million, as compared to $841.1 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 8% and accounted for 66% of total GAAP net revenue. Digitally-delivered GAAP net revenue increased 7% to $779.1 million, as compared to $725.7 million in last year's fiscal second quarter, and accounted for 91% of total GAAP net revenue. The largest contributors to GAAP net revenue were NBA(r) 2K22 and NBA 2K21; Grand Theft Auto(r) Online and Grand Theft Auto V; Red Dead Redemption 2 and Red Dead Online; Borderlands(r) 3; Two Dots(r);Sid Meier's Civilization(r) VI; and Dragon City(r).

GAAP net income was $10.3 million, or $0.09 per diluted share, as compared to $99.3 million, or $0.86 per diluted share, for the comparable period last year. Cost of goods sold included a $53 million impairment charge related to the Company's decision not to proceed with further development of an unannounced title in its pipeline.

During the six month-period ended September 30, 2021, GAAP net cash provided by operating activities was $283.7 million, as compared to $626.7 million in the same period last year. During the six month-period ended September 30, 2021, Adjusted Unrestricted Operating Cash Flow (Non-GAAP), which is defined as GAAP net cash from operating activities, adjusted for changes in restricted cash, was $56.1 million, as compared to $536.2 million in the same period last year (please see the section below titled "Non-GAAP Financial Measure" for additional information). As of September 30, 2021, the Company had cash and short-term investments of $2.3 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, 2021

Financial Data

Change in deferred Amortization Statement net Impact of and Gain (loss) of revenue Stock-based business impairment Business on long-term Operations and compensation reorganization of acquired acquisition investments, related intangibles net cost of goods sold

Net revenue $858,198 126,654

Cost of 456,682 8,606 (10,366) (13,985) goods sold

Gross profit 401,516 118,048 10,366 13,985

Operating 381,365 (36,810) (326) (3,811) (23,368) expenses

Income from 20,151 118,048 47,176 326 17,796 23,368 operations

Interest and (572) 935 other, net

Gain (loss)on long-term 395 (395)investments,net

Incomebefore 19,974 118,983 47,176 326 17,796 23,368 (395)income taxes

In order to calculate net income per diluted share for management reporting purposes, the Company uses its fully diluted share count of 116.8 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 2022, total Net Bookings increased 3% to $984.9 million, as compared to $957.5 million during last year's fiscal second quarter. Net Bookings from recurrent consumer spending increased 7% and accounted for 69% of total Net Bookings. Digitally-delivered Net Bookings increased 9% to $876.1 million, as compared to $806.1 million in last year's fiscal second quarter, and accounted for 89% of total Net Bookings. The largest contributors to Net Bookings were NBA 2K22 and NBA 2K21; Grand Theft Auto Online and Grand Theft Auto V; Red Dead Redemption 2 and Red Dead Online; Borderlands 3; Top Eleven; Sid Meier's Civilization VI; and Dragon City.

Catalog accounted for $629.2 million of Net Bookings led by Grand Theft Auto, NBA 2K, Red Dead Redemption, Borderlands, Top Eleven, Sid Meier's Civilization and Dragon City.

Management Comments

"Our second quarter results were outstanding, highlighted by Net Bookings of $985 million, which greatly exceeded our expectations and increased 3% as compared to last year," said Strauss Zelnick, Chairman and CEO of Take-Two. "We experienced consistently strong engagement trends across our key franchises, underscoring the durability of our offerings and the deep relationships that we have established with new, existing, and returning players."

"As a result of our better-than-expected second quarter operating results, along with our updated forecast for the balance of the year, we are raising our Net Bookings guidance for the year to $3.3 to $3.4 billion."

"We remain highly optimistic about our ability to capitalize further on the positive trends of our industry. As we continue to harness and enhance our competitive advantages - our incredible creative talent, best-in-class marketing and technology, and strong balance sheet - we will introduce new entertainment experiences that we believe have vast commercial potential and the ability to drive long-term engagement and recurrent consumer spending. We also expect to continue to attract the very best creators who share in our vision to set new benchmarks and captivate audiences throughout the world."

COVID-19 Update

At Take-Two, our number one priority has remained the health and safety of our employees and their families. We are taking a prudent approach relating to our return to office cadence and planning. Some of our offices are open, and we plan for the majority of our offices to reopen in the coming months. Given the evolving dynamics of the COVID-19 pandemic, we are strictly following protocols from local governments and health officials to ensure that we are adhering to their safety standards.

Due to the shelter-in-place orders that began last year, we experienced heightened levels of engagement and Net Bookings growth during our fiscal 2021 period. As the return to normalcy continues to unfold, the impact 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, 2021.

Business and Product Highlights

Since July 1, 2021:

Take-Two:

* The Company repurchased 1.26 million shares of common stock for approximately $200 million, at an average share price of $158.67 per share.

Rockstar Games:

* On November 11th, Rockstar Games will digitally launch Grand Theft Auto: The Trilogy - The Definitive Edition for PlayStation 5, PlayStation 4, Xbox Series X|S, Xbox One, Nintendo Switch, and the Rockstar Games Launcher for PC. The Definitive Edition will feature across-the-board upgrades for all three games, including graphical improvements and modern controls for all three titles, while still maintaining the classic and distinct aesthetic of the original games. Grand Theft Auto: The Trilogy - The Definitive Edition will launch physically for consoles on December 7th and will release for iOS and Android devices in the first half of calendar 2022. As part of the 20th anniversary celebration, fans can also collect an array of special commemorative gear in Grand Theft Auto Online throughout a series of upcoming events this Fall. * Released new free content updates for Grand Theft Auto Online: On July 20th, delivered the Los Santos Tuners update, another major update for Grand Theft Auto Online's evolving world. The Los Santos Tuners update brought a renewed focus to the underground street racing scene and introduced a host of innovative and highly requested features, including the LS Car Meet - a shared social space where players can get together to modify, test and race their cars, get tattoos, and more. The update also added 17 highly customizable vehicles, a shoppable auto workshop, new robbery Contracts and street races, and the ability to add music in a new way through collectible media sticks. Rockstar Games continued to provide an array of free content for their vast and growing online communities. To celebrate Halloween, Grand Theft Auto Online added a series of random events to shock and surprise players, including driverless phantom killer cars, superhuman slashers, UFOs that bend the laws of physics, and more, including bonuses on Alien Survival modes, and a new Arcade game. * Released new free content updates for Red Dead Online: On July 13th, released the Blood Money update for Red Dead Online. The update introduced a series of criminal-themed opportunities; complex new missions, including the game's first train robbery; and The Quick Draw Club - a series of four distinct, rapid-fire passes featuring criminal-themed unlockable rewards, bonuses, and more. Rockstar Games introduced new content to players following the Blood Money update, including new missions, contracts, special bonuses and rare items. * Rockstar Games looks forward to launching the expanded and enhanced version of Grand Theft Auto V and a standalone version of Grand Theft Online for new-generation consoles in March 2022. Players will enjoy a range of technical and graphical improvements across the entire experience including performance enhancements for select vehicles in Grand Theft Auto Online, and much more.

2K:

* On September 10th, launched NBA 2K22, the next iteration of the top-rated NBA video game simulation series of the past 20 years. Global phenomenon and two-time NBA All-Star, Luka Doncic, appears on the cover of the Standard Edition and Cross-Gen Digital Bundle, while the premium NBA 75th Anniversary Edition showcases NBA legends Kareem Abdul-Jabbar, Dirk Nowitzki, and Kevin Durant. In North America, players are able to purchase a special version of the Standard Edition featuring six-time WNBA All-Star and WNBA Champion, Candace Parker on the cover and available exclusively through GameStop and EB Games. In Japan, players can also purchase a special version of the Standard Edition featuring Washington Wizards Rui Hachimura, a rising star who was the first Japanese player to not only be drafted in the first round in 2019, but also to reach the NBA Playoffs. * Launched the NBA 2K22 Arcade Edition on Apple Arcade on October 19th. The game offers the all-new Association mode, where players can be the GM or Head Coach of their favorite NBA Franchises and build their own NBA dream teams, as well as other popular modes including MyCOURT, Online Multiplayer mode, and MyCAREER. * Announced Season 4 of NBA 2K Mobile, which includes a new Courtside Pass to unlock exclusive rewards, updated player likenesses and jerseys, card stats to reflect the current NBA season, and more. * In September, PGA TOUR 2K21 surpassed 2.5 million units sold-in around the globe, a key milestone for the series. Alongside this announcement, 2K and HB Studios revealed the theme for its all-new custom courses coming to multiplayer playlists, as well as a collaboration with lifestyle brand and gaming collective 100 Thieves. * On October 14th, 2K and HB Studios launched the PGA TOUR 2K21 Baller Edition, which includes the base game, all previously released DLC courses and game modes, an assortment of exclusive adidas apparel and gear, and the Golden Touch Pack featuring a gold putter and driver. * 2K and Visual Concepts revealed new details behind WWE 2K22, which is planned for launch in March 2022. WWE 2K22 promises new controls, incredible graphics, and a redesigned engine for the most impressive WWE 2K experience to date. As part of the game's development process, 85% of the in-game roster has taken part in facial scanning for ultra-realistic and updated character models, and more than 3,400 new animations have been captured. * WWE SuperCard released content updates, including new card tiers, rewards and the return of John Cena with a "Summer of Cena" gift redeemable for a limited time. * Announced that, for the first time ever, the Borderlands 3 Ultimate Edition will be available in physical disc form for PlayStation 5 and Xbox Series X. Borderlands 3 Ultimate Edition will be released on November 12th and feature the award-winning base game plus all six content add-ons and the full collection of bonus cosmetic packs. The PlayStation 5 and Xbox Series X versions are optimized to take full advantage of the new-gen hardware's processing power. * Announced that Tiny Tina's Wonderlands, a new franchise from 2K and Gearbox, will be released in March 2022. The game is an epic adventure full of whimsy, wonder, and high-powered weaponry set in a chaotic fantasy world where magic, broadswords, and bullets collide. Tiny Tina's Wonderlands is a full experience with a rich, story-driven co-op campaign and repeatable end-game content. * 2K and Marvel Entertainment announced Marvel's Midnight Suns, a new tactical RPG set in the darker side of the Marvel Universe that brings players face-to-face against supernatural forces as they team up with and live among the Midnight Suns, Earth's last line of defense against the underworld. Marvel's Midnight Suns is now expected to launch in the second half of Calendar 2022 (Fiscal Year 2023), as compared to prior expectations of March 2022 (Fiscal Year 2022). * 2K has expanded its presence in Montral, Qubec to support several of its business units, including Global Services, an internal team responsible for artists, animators, motion capture and visual effects specialists, project managers, sound designers, user researchers, and more who work across the label's growing portfolio of original franchises and licensed products. * 2K Foundations, in partnership with the Municipality of Ljubljana and Dallas Mavericks All-Star Guard Luka Doncic, unveiled its latest project in Ljubljana, Slovenia. Together, they refurbished the athlete's childhood court and added new seating and lighting. 2K Foundations is the philanthropic arm of 2K that supports and inspires underserved communities by directly investing in local enrichment programs.

Private Division:

* On August 13th, Private Division and Supergiant Games partnered together to release a physical edition of Hades for PlayStation and Xbox platforms. Hades is a winner of over 50 "Game of the Year" awards and is currently Metacritic's highest rated game for the PlayStation 5 and Xbox Series X. * On September 8th, released Murder on Eridanos, the final expansion for The Outer Worlds, for the Nintendo Switch. * On September 24th, released Kerbal Space Program Enhanced Edition for PlayStation 5 and Xbox Series X|S. The title contains multiple hardware advancements and developments, which allow for an upgraded resolution, improved frame-rate, advanced shaders, better textures, and additional performance improvements. * OlliOlli World, the skateboarding action-platformer from Roll7 remains on track to launch this winter in fiscal Q4 for PlayStation 4, PlayStation 5, Xbox One, Xbox Series X|S, PC and Nintendo Switch.

T2 Mobile Games:

* Continued the integration of Socialpoint, Playdots, and Nordeus into "T2 Mobile Games." This new structure is helping Take-Two's mobile teams achieve cost synergies and share best practices. * Many of our mobile games launched new features, challenges, and marketing activations to drive player engagement. Our studios will continue to introduce new enhancements to their games this year to further optimize the player experience. * Nordeus released Top Eleven 2022, the latest installment of their mobile title that is the world's most successful soccer management game of all time. Top Eleven 2022 delivers significant updates to the gameplay and soccer management experience.

Outlook for Fiscal 2022

Take-Two is raising its outlook for the fiscal year ending March 31, 2022 and providing its initial outlook for its fiscal third quarter ending December 31, 2021:

Fiscal Year Ending March 31, 2022

* GAAP net revenue is expected to range from $3.35 to $3.45 billion * GAAP net income is expected to range from $320 to $350 million * GAAP diluted net income per share is expected to range from $2.75 to $3.00 * Share count used to calculate both GAAP and management reporting diluted net income per share is expected to be 116.6 million(1) * Net cash provided by operating activities is expected to be over $380 million * Adjusted Unrestricted Operating Cash Flow (Non-GAAP) is expected to be over $400 million (2) * Capital expenditures are expected to be approximately $170 million * Net Bookings (operational metric) are expected to range from $3.3 to $3.4 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 Ended March 31, 2022

Financial Data

Change in deferred Gain on Amortization GAAP net Stock-based long- and$ in outlook revenue compensation term impairment Reorganizationmillions ^(2) and ^(3) investments, of & acquisition related net acquired cost of intangibles goods sold

Net $3,350revenue to $(50) $3,450

Cost of $1,506goods to $2 $(40) $(50) sold $1,551

Operating $1,468expenses to $(130) $(15) $(23) $1,488

Interestand $(3) $2 other,net

Incomebefore $379 to $(52) $170 $(2) $65 $23income $414taxes

ThirdQuarter Ending December 31, 2021

* GAAP net revenue is expected to range from $840 to $890 million * GAAP net income is expected to range from $99 to $111 million * GAAP diluted net income per share is expected to range from $0.85 to $0.95 * Share count used to calculate both GAAP and management reporting diluted net income per share is expected to be 116.3 million (4) * Net Bookings (operational metric) are expected to range from $800 to $850 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 Ended December 31, 2021

Financial Data

Change in deferred Amortization GAAP net revenue Stock-based of$ in millions outlook ^ and compensation intangible (3) related cost assets of goods sold

Net revenue $840 to $(40) $890

Cost of goods sold $344 to $(9) $(12) $370

Operating expenses $378 to $(30) $(3) $388

Interest and other, net

Income before $118 to $(40) $39 $15income taxes $132

1)

Includes 115.5 million basic shares and 1.1 million shares representing the potential dilution from unvested employee stock grants.

2)

Adjusted for changes in restricted cash.

3)

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.

4)

Includes 115.3 million basic shares and 1.0 million shares representing the potential dilution from unvested employee stock grants.

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, as well as continued growth in the installed base of PlayStation 5 and Xbox Series X|S; the ability to develop and publish products that capture market share for these current generation systems while also leveraging opportunities on PC, mobile and other platforms; and stable foreign exchange rates. See also "Cautionary Note Regarding Forward Looking Statements" below.

Product Releases

The following have been released since July 1, 2021:

1) Includes 115.5 million basic shares and 1.1 million shares representing the potential dilution from unvested employee stock grants.

2) Adjusted for changes in restricted cash.

The individual components of the financial outlook may not foot to the 3) 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.

4) Includes 115.3 million basic shares and 1.0 million shares representing the potential dilution from unvested employee stock grants.

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, as well as continued growth in the installed base of PlayStation 5 and Xbox Series X|S; the ability to develop and publish products that capture market share for these current generation systems while also leveraging opportunities on PC, mobile and other platforms; and stable foreign exchange rates. See also "Cautionary Note Regarding Forward Looking Statements" below.

Product Releases

The following have been released since July 1, 2021:

Label Product Platforms Release Date

Rockstar Red Dead Redemption Online: PS4, Xbox One, PC July 13,Games Blood Money Update 2021

Rockstar Grand Theft Auto Online: Los PS4, Xbox One, PC July 20,Games Santos Tuners Update 2021

Private Hades (physical release) PS4, PS5, Xbox One, Xbox August 13,Division Series X 2021

Private The Outer Worlds: Murder on Switch SeptemberDivision Eridanos (DLC) 8, 2021

2K NBA 2K22 PS4, PS5, Xbox One, Xbox September Series X|S, PC, Switch 10, 2021

Private Kerbal Space Program Enhanced PS5, Xbox Series X|S SeptemberDivision Edition 24, 2021

2K Mafia III: Definitive Edition Stadia October 1, 2021

Nordeus Top Eleven 2022 iOs, Android October 11, 2021

2K PGA TOUR 2K21 Baller Edition PS4, Xbox One, PC October 14, 2021

2K NBA 2K22 Arcade Edition Apple Arcade October 19, 2021

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

Label Product Platforms Release Date

Rockstar Grand Theft Auto: The Trilogy PS4, PS5, Xbox One, November 11,Games - The Definitive Edition Xbox Series X|S, Switch 2021 (digital release)

2K Borderlands 3 Ultimate PS5, Xbox Series X November 12, Edition (physical only) 2021

Rockstar Grand Theft Auto: The Trilogy PS4, PS5, Xbox One,Games - The Definitive Edition Xbox Series X, Switch December 7, 2021 (physical release)

Private PS4, PS5, Xbox One,Division OlliOlli World Xbox Series X|S, Switch Q4 Fiscal 2022 (digital only)

2K Tiny Tina's Wonderlands PS4, PS5, Xbox One, March 25, 2022 Xbox Series X|S, PC

Rockstar Grand Theft Auto V: Expanded PS5, Xbox Series X|S March 2022Games and Enhanced

Rockstar Grand Theft Auto Online - PS4, PS5, Xbox One, March 2022Games Standalone Xbox Series X|S, PC

2K WWE 2K22 TBA March 2022

Rockstar Grand Theft Auto: The Trilogy First Half ofGames - The Definitive Edition iOS, Android Calendar 2022 (mobile release)

PS4, PS5, Xbox One, Second Half of2K Marvel's Midnight Suns Xbox Series X|S, PC Calendar 2022 (Fiscal 2023)

Private Kerbal Space Program 2 PS4, PS5, Xbox One, Fiscal 2023Division Xbox Series X|S, PC

Share Repurchase Authorization

In November, the Company's Board of Directors authorized an increase of 7.4 million shares to the number of its shares of common stock that the Company is permitted to repurchase, resulting in an aggregate of 10 million shares remaining available for repurchase as of the date of the additional authorization. The authorization permits the Company to purchase shares from time to time through a variety of methods, including in the open market or through privately negotiated transactions, in accordance with applicable securities laws. It does not obligate the Company to make any purchases at any specific time or situation. Repurchases are subject to the availability of stock, prevailing market conditions, the trading price of the stock, the Company's financial performance and other conditions. The program may be suspended or discontinued at any time for any reason. As of October 22, 2021, the Company had approximately 115.3 million common shares outstanding.

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, 2021.

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 T2 Mobile Games. 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

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 both consumer demand and the discretionary spending patterns of our customers as the situation with the pandemic continues to evolve; the risks of conducting business internationally; 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 NBA 2K and Grand Theft Auto products and our ability to develop other hit titles; our ability to leverage opportunities on PlayStation(r)5 and Xbox Series X|S; 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 September 30, 30,

2021 2020 2021 2020

Net revenue $ 858,198 $ 841,142 $ 1,671,544 $ 1,672,452

Cost of goods sold:Internal royalties 159,586 127,804 304,964 341,867

Software development 144,869 142,771 231,906 290,818 costs and royaltiesLicenses 86,130 92,944 136,534 148,963

Product costs 66,097 68,986 112,993 127,546

Total cost of goods 456,682 432,505 786,397 909,194 sold Gross profit 401,516 408,637 885,147 763,258

Selling and 136,019 113,691 239,873 198,470 marketingGeneral and 127,331 91,433 231,778 193,606 administrativeResearch and 101,508 74,216 193,802 147,324 developmentDepreciation and 16,181 13,691 28,646 26,109 amortizationBusiness 326 239 423 239 reorganizationTotal operating 381,365 293,270 694,522 565,748 expensesIncome from 20,151 115,367 190,625 197,510 operationsInterest and other, (572 ) 2,706 (1,599 ) 10,924 netGain (loss) on 395 (655 ) 2,392 (655 )long-terminvestments, netIncome before income 19,974 117,418 191,418 207,779 taxesProvision for income 9,677 18,097 28,865 19,953 taxesNet income $ 10,297 $ 99,321 $ 162,553 $ 187,826

Earnings per share:Basic earnings per $ 0.09 $ 0.87 $ 1.40 $ 1.65 shareDiluted earnings per $ 0.09 $ 0.86 $ 1.39 $ 1.63 share Weighted averageshares outstanding:Basic 115,757 114,444 115,727 114,153

Diluted 116,803 115,414 116,891 115,245

Computation of BasicEPS:Net income $ 10,297 $ 99,321 $ 162,553 $ 187,826

Weighted average 115,757 114,444 115,727 114,153 shares outstanding -basic Basic earnings per $ 0.09 $ 0.87 $ 1.40 $ 1.65 share Computation ofDiluted EPS:Net income $ 10,297 $ 99,321 $ 162,553 $ 187,826

Weighted average 115,757 114,444 115,727 114,153 shares outstanding -basicAdd: dilutive effect 1,046 970 1,164 1,092 of common stockequivalentsWeighted averagecommon shares 116,803 115,414 116,891 115,245 outstanding -diluted Diluted earnings per $ 0.09 $ 0.86 $ 1.39 $ 1.63 share TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(in thousands, except per share amounts)September 30,March 31,2021

2021

ASSETSCurrent assets:Cash and cash equivalents$

856,901

$

1,422,884

Short-term investments1,440,631

1,308,692

Restricted cash and cash equivalents754,368

538,822

Accounts receivable, net of allowances of $350 and $350 at September 30, 2021 and March 31, 2021, respectively804,468

552,762

Inventory12,579

17,742

Software development costs and licenses54,540

43,443

Deferred cost of goods sold12,601

15,524

Prepaid expenses and other307,370

320,646

Total current assets4,243,458

4,220,515

Fixed assets, net231,230

149,364

Right-of-use assets208,751

164,763

Software development costs and licenses, net of current portion621,470

490,892

Goodwill662,585

535,306

Other intangibles, net288,090

121,591

Deferred tax assets74,994

90,206

Long-term restricted cash and cash equivalents103,437

98,541

Other assets185,016

157,040

Total assets$

6,619,031

$

6,028,218

LIABILITIES AND EQUITYCurrent liabilities:Accounts payable$

83,401

$

71,001

Accrued expenses and other current liabilities1,499,898

1,204,090

Deferred revenue951,612

928,029

Lease liabilities31,962

31,595

Total current liabilities2,566,873

2,234,715

Non-current deferred revenue51,531

37,302

Non-current lease liabilities207,437

159,671

Non-current software development royalties112,459

110,127

Other long-term liabilities211,063

154,511

Total liabilities3,149,363

2,696,326

Stockholders' equity:Preferred stock, $0.01 par value, 5,000 shares authorized: no shares issued and outstanding at September 30, 2021 and March 31, 2021-

-

Common stock, $0.01 par value, 200,000 shares authorized; 138,891 and 137,584 sharesissued and 115,210 and 115,163 outstanding at September 30, 2021 and March 31, 2021, respectively1,390

1,376

Additional paid-in capital2,475,085

2,288,781

Treasury stock, at cost; 23,681 and 22,421 common shares at September 30, 2021 and March 31, 2021, respectively(1,020,584

)

(820,572

)

Retained earnings2,033,524

1,870,971

Accumulated other comprehensive loss(19,747

)

(8,664

)

Total stockholders' equity3,469,668

3,331,892

Total liabilities and stockholders' equity$

6,619,031

$

6,028,218

TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(in thousands, except per share amounts) September 30, March 31, 2021 2021

ASSETSCurrent assets:Cash and cash equivalents $ 856,901 $ 1,422,884

Short-term investments 1,440,631 1,308,692

Restricted cash and cash equivalents 754,368 538,822

Accounts receivable, net of allowances of $350 804,468 552,762 and $350 at September 30, 2021 and March 31,2021, respectivelyInventory 12,579 17,742

Software development costs and licenses 54,540 43,443

Deferred cost of goods sold 12,601 15,524

Prepaid expenses and other 307,370 320,646

Total current assets 4,243,458 4,220,515

Fixed assets, net 231,230 149,364

Right-of-use assets 208,751 164,763

Software development costs and licenses, net of 621,470 490,892 current portionGoodwill 662,585 535,306

Other intangibles, net 288,090 121,591

Deferred tax assets 74,994 90,206

Long-term restricted cash and cash equivalents 103,437 98,541

Other assets 185,016 157,040

Total assets $ 6,619,031 $ 6,028,218

LIABILITIES AND EQUITYCurrent liabilities:Accounts payable $ 83,401 $ 71,001

Accrued expenses and other current liabilities 1,499,898 1,204,090

Deferred revenue 951,612 928,029

Lease liabilities 31,962 31,595

Total current liabilities 2,566,873 2,234,715

Non-current deferred revenue 51,531 37,302

Non-current lease liabilities 207,437 159,671

Non-current software development royalties 112,459 110,127

Other long-term liabilities 211,063 154,511

Total liabilities 3,149,363 2,696,326

Stockholders' equity:Preferred stock, $0.01 par value, 5,000 shares - - authorized: no shares issued and outstanding atSeptember 30, 2021 and March 31, 2021Common stock, $0.01 par value, 200,000 sharesauthorized; 138,891 and 137,584 sharesissued and 115,210 and 115,163 outstanding at 1,390 1,376 September 30, 2021 and March 31, 2021,respectivelyAdditional paid-in capital 2,475,085 2,288,781

Treasury stock, at cost; 23,681 and 22,421 common (1,020,584 ) (820,572 )shares at September 30, 2021 and March 31, 2021,respectivelyRetained earnings 2,033,524 1,870,971

Accumulated other comprehensive loss (19,747 ) (8,664 )

Total stockholders' equity 3,469,668 3,331,892

Total liabilities and stockholders' equity $ 6,619,031 $ 6,028,218

TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands)Six months ended September 30,2021

2020

Operating activities:Net income$

162,553

$

187,826

Adjustments to reconcile net income to net cash provided by operating activities:Amortization of software development costs and licenses95,339

92,664

Impairment of software development costs and licenses65,049

-

Depreciation28,436

25,826

Amortization of intellectual property33,668

11,801

Stock-based compensation96,196

98,719

Other, net2,067

(2,631

)

Changes in assets and liabilities:Accounts receivable(242,844

)

(189,477

)

Inventory5,155

(7,266

)

Software development costs and licenses(263,235

)

(127,290

)

Prepaid expenses and other assets(35,745

)

65,296

Deferred revenue32,672

284,441

Deferred cost of goods sold3,018

4,753

Accounts payable, accrued expenses and other liabilities301,350

182,083

Net cash provided by operating activities283,679

626,745

Investing activities:Change in bank time deposits1,021

(218,239

)

Proceeds from available-for-sale securities353,399

260,729

Purchases of available-for-sale securities(492,582

)

(435,511

)

Purchases of fixed assets(111,192

)

(25,021

)

Purchases of long-term investments(3,122

)

(9,100

)

Business acquisitions(131,617

)

(75,482

)

Net cash used in investing activities(384,093

)

(502,624

)

Financing activities:Tax payment related to net share settlements on restricted stock awards(53,370

)

(48,202

)

Issuance of common stock9,230

6,503

Loan repayment(234

)

-

Repurchase of common stock(200,012

)

-

Net cash used in financing activities(244,386

)

(41,699

)

Effects of foreign currency exchange rates on cash, cash equivalents, and restricted cash and cash equivalents(741

)

8,966

Net change in cash, cash equivalents, and restricted cash and cash equivalents(345,541

)

91,388

Cash, cash equivalents, and restricted cash and cash equivalents, beginning of year2,060,247

1,993,392

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

1,714,706

$

2,084,780

TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands) Six months ended September 30, 2021 2020

Operating activities: Net income $ 162,553 $ 187,826

Adjustments to reconcile net income to net cash provided by operating activities: Amortization of software development costs and 95,339 92,664 licenses Impairment of software development costs and 65,049 - licenses Depreciation 28,436 25,826

Amortization of intellectual property 33,668 11,801

Stock-based compensation 96,196 98,719

Other, net 2,067 (2,631 )

Changes in assets and liabilities: Accounts receivable (242,844 ) (189,477 )

Inventory 5,155 (7,266 )

Software development costs and licenses (263,235 ) (127,290 )

Prepaid expenses and other assets (35,745 ) 65,296

Deferred revenue 32,672 284,441

Deferred cost of goods sold 3,018 4,753

Accounts payable, accrued expenses and other 301,350 182,083 liabilities Net cash provided by operating activities 283,679 626,745

Investing activities: Change in bank time deposits 1,021 (218,239 )

Proceeds from available-for-sale securities 353,399 260,729

Purchases of available-for-sale securities (492,582 ) (435,511 )

Purchases of fixed assets (111,192 ) (25,021 )

Purchases of long-term investments (3,122 ) (9,100 )

Business acquisitions (131,617 ) (75,482 )

Net cash used in investing activities (384,093 ) (502,624 )

Financing activities: Tax payment related to net share settlements on (53,370 ) (48,202 ) restricted stock awards Issuance of common stock 9,230 6,503

Loan repayment (234 ) -

Repurchase of common stock (200,012 ) -

Net cash used in financing activities (244,386 ) (41,699 )

Effects of foreign currency exchange rates on (741 ) 8,966 cash, cash equivalents, and restricted cash and cash equivalents Net change in cash, cash equivalents, and (345,541 ) 91,388 restricted cash and cash equivalents Cash, cash equivalents, and restricted cash and 2,060,247 1,993,392 cash equivalents, beginning of year Cash, cash equivalents, and restricted cash and $ 1,714,706 $ 2,084,780 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, 2021Three Months EndedSeptember 30, 2020Amount% of TotalAmount% of TotalNet revenue by geographic regionUnited States$

514,920

60%

$

503,583

60%

International343,278

40%

337,559

40%

Total net revenue$

858,198

100%

$

841,142

100%

Net Bookings by geographic regionUnited States$

603,744

61%

$

612,813

64%

International381,108

39%

344,721

36%

Total Net Bookings$

984,852

100%

$

957,534

100%

Three Months EndedSeptember 30, 2021Three Months EndedSeptember 30, 2020Amount% of TotalAmount% of TotalNet revenue by distribution channelDigital online$

779,097

91%

$

725,684

86%

Physical retail and other79,101

9%

115,458

14%

Total net revenue$

858,198

100%

$

841,142

100%

Net Bookings by distribution channelDigital online$

876,059

89%

$

806,090

84%

Physical retail and other108,793

11%

151,445

16%

Total Net Bookings$

984,852

100%

$

957,534

100%

Three Months EndedSeptember 30, 2021Three Months EndedSeptember 30, 2020Amount% of TotalAmount% of TotalNet revenue by platform mixConsole$

596,080

70%

$

641,269

76%

PC and other147,002

17%

138,686

17%

Mobile115,116

13%

61,187

7%

Total net revenue$

858,198

100%

$

841,142

100%

Net Bookings by platform mixConsole$

724,337

74%

$

761,450

80%

PC and other154,584

16%

133,205

14%

Mobile105,931

10%

62,879

6%

Total Net Bookings$

984,852

100%

$

957,534

100%

TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIESNet Revenue and Net Bookings by Geographic Region, DistributionChannel, and Platform Mix(in thousands) Three Months Ended Three Months Ended September 30, 2021 September 30, 2020 Amount % of Amount % of Total Total Net revenue by geographic regionUnited States $ 514,920 60% $ 503,583 60%

International 343,278 40% 337,559 40%

Total net revenue $ 858,198 100% $ 841,142 100%

Net Bookings by geographic regionUnited States $ 603,744 61% $ 612,813 64%

International 381,108 39% 344,721 36%

Total Net Bookings $ 984,852 100% $ 957,534 100%

Three Months Ended Three Months Ended September 30, 2021 September 30, 2020 Amount % of Amount % of Total Total Net revenue by distribution channelDigital online $ 779,097 91% $ 725,684 86%

Physical retail and other 79,101 9% 115,458 14%

Total net revenue $ 858,198 100% $ 841,142 100%

Net Bookings by distribution channelDigital online $ 876,059 89% $ 806,090 84%

Physical retail and other 108,793 11% 151,445 16%

Total Net Bookings $ 984,852 100% $ 957,534 100%

Three Months Ended Three Months Ended September 30, 2021 September 30, 2020 Amount % of Amount % of Total TotalNet revenue by platform mixConsole $ 596,080 70% $ 641,269 76%

PC and other 147,002 17% 138,686 17%

Mobile 115,116 13% 61,187 7%

Total net revenue $ 858,198 100% $ 841,142 100%

Net Bookings by platform mixConsole $ 724,337 74% $ 761,450 80%

PC and other 154,584 16% 133,205 14%

Mobile 105,931 10% 62,879 6%

Total Net Bookings $ 984,852 100% $ 957,534 100%

TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES

Net Revenue and Net Bookings by Geographic Region, Distribution Channel, and Platform Mix(in thousands)Six Months EndedSeptember 30, 2021Six Months EndedSeptember 30, 2020Amount% of TotalAmount% of TotalNet revenue by geographic regionUnited States$

1,008,106

60%

$

974,073

58%

International663,438

40%

698,379

42%

Total net revenue$

1,671,544

100%

$

1,672,452

100%

Net Bookings by geographic regionUnited States$

1,022,559

60%

$

1,199,927

61%

International673,723

40%

753,857

39%

Total Net Bookings$

1,696,282

100%

$

1,953,784

100%

Six Months EndedSeptember 30, 2021Six Months EndedSeptember 30, 2020Amount% of TotalAmount% of TotalNet revenue by distribution channelDigital online$

1,519,903

91%

$

1,461,260

87%

Physical retail and other151,641

9%

211,192

13%

Total net revenue$

1,671,544

100%

$

1,672,452

100%

Net Bookings by distribution channelDigital online$

1,556,444

92%

$

1,730,628

89%

Physical retail and other139,838

8%

223,155

11%

Total Net Bookings$

1,696,282

100%

$

1,953,784

100%

Six Months EndedSeptember 30, 2021Six Months EndedSeptember 30, 2020Amount% of TotalAmount% of TotalNet revenue by platform mixConsole$

1,198,523

72%

$

1,252,954

75%

PC and other275,647

16%

303,946

18%

Mobile197,374

12%

115,552

7%

Total net revenue$

1,671,544

100%

$

1,672,452

100%

Net Bookings by platform mixConsole$

1,215,864

72%

$

1,484,249

76%

PC and other284,698

16%

339,757

16%

Mobile195,720

12%

129,779

8%

Total Net Bookings$

1,696,282

100%

$

1,953,784

100%

TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES

Net Revenue and Net Bookings by Geographic Region, Distribution Channel,and Platform Mix(in thousands) Six Months Ended Six Months Ended September 30, 2021 September 30, 2020 Amount % of Amount % of Total Total Net revenue by geographic regionUnited States $ 1,008,106 60% $ 974,073 58%

International 663,438 40% 698,379 42%

Total net revenue $ 1,671,544 100% $ 1,672,452 100%

Net Bookings by geographic regionUnited States $ 1,022,559 60% $ 1,199,927 61%

International 673,723 40% 753,857 39%

Total Net Bookings $ 1,696,282 100% $ 1,953,784 100%

Six Months Ended Six Months Ended September 30, 2021 September 30, 2020 Amount % of Amount % of Total Total Net revenue by distributionchannelDigital online $ 1,519,903 91% $ 1,461,260 87%

Physical retail and other 151,641 9% 211,192 13%

Total net revenue $ 1,671,544 100% $ 1,672,452 100%

Net Bookings by distributionchannelDigital online $ 1,556,444 92% $ 1,730,628 89%

Physical retail and other 139,838 8% 223,155 11%

Total Net Bookings $ 1,696,282 100% $ 1,953,784 100%

Six Months Ended Six Months Ended September 30, 2021 September 30, 2020 Amount % of Amount % of Total TotalNet revenue by platform mixConsole $ 1,198,523 72% $ 1,252,954 75%

PC and other 275,647 16% 303,946 18%

Mobile 197,374 12% 115,552 7%

Total net revenue $ 1,671,544 100% $ 1,672,452 100%

Net Bookings by platform mixConsole $ 1,215,864 72% $ 1,484,249 76%

PC and other 284,698 16% 339,757 16%

Mobile 195,720 12% 129,779 8%

Total Net Bookings $ 1,696,282 100% $ 1,953,784 100%

TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIESADDITIONAL DATA(in thousands)Three Months Ended September 30, 2021Net revenueCost of goods sold-Internal royaltiesCost of goods sold-Softwaredevelopment costsand royaltiesCost of goods sold-LicensesCost of goods sold-Product costsSelling andmarketingAs reported$

858,198

$

159,586

$

144,869

$

86,130

$

66,097

$

136,019

Net effect from deferred net revenue and related cost of goods sold126,654

6,439

530

1,637

Stock-based compensation(10,336

)

(7,134

)

Amortization and impairment of acquired intangibles(13,985

)

(1,833

)

Three Months Ended September 30, 2021General andadministrativeResearch anddevelopmentDepreciation andamortizationBusinessreorganizationInterest andother, netGain/(loss) onlong-terminvestments, netAs reported$

127,331

$

101,508

$

16,181

$

326

$

(572

)

$

395

Net effect from deferred net revenue and related cost of goods sold935

Stock-based compensation(16,666

)

(13,010

)

Amortization and impairment of acquired intangibles(1,643

)

(335

)

Acquisition related expenses(23,368

)

Impact of business reorganization(326

)

Gain on long-term investments, net(395

)

Three Months Ended September 30, 2020Net revenueCost of goods sold-Internal royaltiesCost of goods sold-Softwaredevelopment costsand royaltiesCost of goods sold-LicensesCost of goods sold-Product costsSelling andmarketingAs reported$

841,142

$

127,804

$

142,771

$

92,944

$

68,986

$

113,691

Net effect from deferred net revenue 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 andadministrativeResearch anddevelopmentDepreciation andamortizationBusinessreorganizationInterest andother, netGain/(loss) onlong-terminvestments, netAs reported$

91,433

$

74,216

$

13,691

$

239

$

2,706

(655

)

Net effect from deferred net revenue and related cost of goods sold(760

)

Stock-based compensation(13,830

)

(7,643

)

Amortization and impairment of acquired intangibles(1,684

)

(163

)

Acquisition related expenses(2,512

)

Non-cash amounts related to convertible notesImpact of business reorganization(239

)

Loss on long-term investments655

TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIESADDITIONAL DATA(in thousands)Six Months Ended September 30, 2021Net revenueCost of goods sold-Internal royaltiesCost of goods sold-Softwaredevelopment costsand royaltiesCost of goods sold-LicensesCost of goods sold-Product costsSelling andmarketingAs reported$

1,671,544

$

304,964

$

231,906

$

136,534

$

112,993

$

239,873

Net effect from deferred net revenue and related cost of goods sold24,737

3,580

393

(3,500

)

Stock-based compensation(22,386

)

(15,167

)

Amortization and impairment of acquired intangibles(25,096

)

(3,650

)

Six Months Ended September 30, 2021General andadministrativeResearch anddevelopmentDepreciation andamortizationBusinessreorganizationInterest andother, netGain/(loss) onlong-terminvestments, netAs reported$

231,778

$

193,802

$

28,646

$

423

$

(1,599

)

$

2,392

Net effect from deferred net revenue and related cost of goods sold325

Stock-based compensation(33,863

)

(24,780

)

Amortization and impairment of acquired intangibles(3,350

)

(706

)

Impact of business reorganization(423

)

Gain on long-term investments, net(2,392

)

Acquisition related expenses(25,554

)

Six Months Ended September 30, 2020Net revenueCost of goods sold-Internal royaltiesCost of goods sold-Softwaredevelopment costsand royaltiesCost of goods sold-LicensesCost of goods sold-Product costsSelling andmarketingAs reported$

1,672,452

$

341,867

$

290,818

$

148,963

$

127,546

$

198,470

Net effect from deferred net revenue 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 andadministrativeResearch anddevelopmentDepreciation andamortizationBusinessreorganizationInterest andother, netGain (loss) onlong-terminvestments, netAs reported$

193,606

$

147,324

$

26,109

$

239

$

10,924

($

655

)

Net effect from deferred net revenue and related cost of goods sold(2,460

)

Stock-based compensation(27,030

)

(14,093

)

Amortization and impairment of acquired intangibles(3,237

)

(283

)

Impact of business reorganization(239

)

Loss on long-term investments5,333

Acquisition related expenses(2,512

)

TAKE-TWO INTERACTIVE SOFTWARE, INC. andSUBSIDIARIESADDITIONAL DATA(in thousands) Cost of goods Three Months Cost of sold- Cost of goods Cost of Ended September Net revenue goods sold- Software sold- goods sold- Selling and 30, 2021 Internal development Licenses Product marketing royalties costs costs and royaltiesAs reported $ 858,198 $ 159,586 $ 144,869 $ 86,130 $ 66,097 $ 136,019

Net effect from deferred net revenue 126,654 6,439 530 1,637 and related cost of goods sold Stock-based (10,336 ) (7,134 ) compensation Amortization and impairment (13,985 ) (1,833 ) of acquired intangibles Gain/(loss) Three Months General and Research Depreciation Business Interest on Ended September administrative and and reorganization and long-term 30, 2021 development amortization other, net investments, netAs reported $ 127,331 $ 101,508 $ 16,181 $ 326 $ (572 ) $ 395

Net effect from deferred net revenue 935 and related cost of goods sold Stock-based (16,666 ) (13,010 ) compensation Amortization and impairment (1,643 ) (335 ) of acquired intangibles Acquisition (23,368 ) related expenses Impact of (326 ) business reorganization Gain on long-term (395 ) investments, net Cost of goods Three Months Cost of sold- Cost of goods Cost of Ended September Net revenue goods sold- Software sold- goods sold- Selling and 30, 2020 Internal development Licenses Product marketing royalties costs costs and royaltiesAs reported $ 841,142 $ 127,804 $ 142,771 $ 92,944 $ 68,986 $ 113,691

Net effect from deferred net revenue 116,392 16,209 (3,994 ) 1,235 and related cost of goods sold Stock-based (19,396 ) (4,439 ) compensation Amortization and impairment (4,411 ) (517 ) of acquired intangibles Gain/(loss) Three Months General and Research Depreciation Business Interest on Ended September administrative and and reorganization and long-term 30, 2020 development amortization other, net investments, netAs reported $ 91,433 $ 74,216 $ 13,691 $ 239 $ 2,706 (655 )

Net effect from deferred net revenue (760 ) and related cost of goods sold Stock-based (13,830 ) (7,643 ) compensation Amortization and impairment (1,684 ) (163 ) of acquired intangibles Acquisition (2,512 ) related expenses Non-cash amounts related to convertible notes Impact of (239 ) business reorganization Loss on 655 long-term investments TAKE-TWO INTERACTIVE SOFTWARE, INC. andSUBSIDIARIESADDITIONAL DATA(in thousands) Cost of goods Six Months Cost of sold- Cost of goods Cost of Ended September Net revenue goods sold- Software sold- goods sold- Selling and 30, 2021 Internal development Licenses Product marketing royalties costs costs and royaltiesAs reported $ 1,671,544 $ 304,964 $ 231,906 $ 136,534 $ 112,993 $ 239,873

Net effect from deferred net revenue 24,737 3,580 393 (3,500 ) and related cost of goods sold Stock-based (22,386 ) (15,167 ) compensation Amortization and impairment (25,096 ) (3,650 ) of acquired intangibles Gain/(loss) Six Months General and Research Depreciation Business Interest on Ended September administrative and and reorganization and long-term 30, 2021 development amortization other, net investments, netAs reported $ 231,778 $ 193,802 $ 28,646 $ 423 $ (1,599 ) $ 2,392

Net effect from deferred net revenue 325 and related cost of goods sold Stock-based (33,863 ) (24,780 ) compensation Amortization and impairment (3,350 ) (706 ) of acquired intangibles Impact of (423 ) business reorganization Gain on long-term (2,392 ) investments, net Acquisition (25,554 ) related expenses Cost of goods Six Months Cost of sold- Cost of goods Cost of Ended September Net revenue goods sold- Software sold- goods sold- Selling and 30, 2020 Internal development Licenses Product marketing royalties costs costs and royaltiesAs reported $ 1,672,452 $ 341,867 $ 290,818 $ 148,963 $ 127,546 $ 198,470

Net effect from deferred net revenue 281,331 20,260 (4,444 ) (3,589 ) and related cost of goods sold Stock-based (48,429 ) (9,167 ) compensation Amortization and (7,694 ) (517 ) impairment of acquired intangibles Gain (loss) Six Months General and Research Depreciation Business Interest on Ended September administrative and and reorganization and long-term 30, 2020 development amortization other, net investments, netAs reported $ 193,606 $ 147,324 $ 26,109 $ 239 $ 10,924 ($ 655 )

Net effect from deferred net revenue (2,460 ) and related cost of goods sold Stock-based (27,030 ) (14,093 ) compensation Amortization and impairment (3,237 ) (283 ) of acquired intangibles Impact of (239 ) business reorganization Loss on 5,333 long-term investments Acquisition (2,512 ) related expenses TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIESRECONCILIATION OF GAAP TO NON-GAAP MEASURE(in thousands)Six months ended September 30,2021

2020

Net cash from operating activities$

283,679

$

626,745

Net change in Restricted cash related to Operations (1)(227,573

)

(117,393

)

Adjusted Unrestricted Operating Cash Flow$

56,106

$

509,352

FY 2022FY 2021Restricted cash beginning of period (4/1)$

637,363

$

635,728

Less Restricted cash end of period (9/30)857,805

739,681

Restricted cash related to acquisitions7,131

(13,440

)

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

(227,573

)

($

117,393

)

View source version on businesswire.com: https://www.businesswire.com/news/home/20211103006094/en/

CONTACT: (Investor Relations) Nicole Shevins Senior Vice President Investor Relations & Corporate Communications Take-Two Interactive Software, Inc. (646) 536-3005 Nicole.Shevins@take2games.com (Corporate Press) Alan Lewis Vice President Corporate Communications & Public Affairs Take-Two Interactive Software, Inc. (646) 536-2983 Alan.Lewis@take2games.com