Take-Two Interactive Software, Inc. (NASDAQ:TTWO) today reported strong financial results for fiscal second quarter 2014, ended September 30, 2013. In addition, the Company increased its financial outlook for fiscal year 2014, ending March 31, 2014, and provided its initial financial outlook for fiscal third quarter 2014, ending December 31, 2013.
GAAP Financial Results
GAAP results for fiscal second quarter 2014 exclude net revenue and cost of goods sold related to sell-in of the Grand Theft Auto V® game during the fiscal second quarter as Grand Theft Auto Online, a free game available with every copy of Grand Theft Auto V, launched during fiscal third quarter 2014. For fiscal second quarter 2014, GAAP net revenue was $148.8 million, as compared to $273.1 million for fiscal second quarter 2013. GAAP net loss from continuing operations was $124.1 million, or $1.40 per diluted share, as compared to $12.4 million, or $0.15 per diluted share, for the year-ago period. As of September 30, 2013, the Company had cash and cash equivalents of $661.9 million.
Non-GAAP Financial ResultsFor fiscal second quarter 2014, Non-GAAP net revenue, which includes sell-in of Grand Theft Auto V, grew to $1.27 billion, as compared to $288.0 million for the year-ago period. Non-GAAP net income increased to $325.6 million, or $2.49 per diluted share, as compared to $10.2 million, or $0.11 per diluted share, for the year-ago period. The largest contributor to Non-GAAP net revenue in fiscal second quarter 2014 was G rand Theft Auto V. Catalog sales contributed $118.9 million in net revenue led by Grand Theft Auto IV, and offerings for Borderlands® 2, Sid Meier’s Civilization® V, NBA® 2K13 and Red Dead Redemption®. Non-GAAP net revenue from digitally-delivered content grew 85% year-over-year to $105.5 million, driven by the Grand Theft Auto series (particularly digital sales of Grand Theft Auto V), and offerings for Borderlands 2, Sid Meier’s Civilization V and BioShock® Infinite. Management Comments “During the fiscal second quarter, we delivered record Non-GAAP results driven by the unprecedented success of Rockstar Games’ Grand Theft Auto V,” said Strauss Zelnick, Chairman and CEO of Take-Two. “The title received stellar reviews, shattered entertainment industry records, and has already sold-in nearly 29 million units to date. The extraordinary success of Grand Theft Auto V illustrates the positive momentum in our business and consumers’ enduring appetite for the highest-quality interactive entertainment. “Take-Two has an extensive development pipeline of groundbreaking new intellectual properties and exciting titles from our proven franchises, along with digitally-delivered offerings to complement our core business. We currently have more than ten unique titles planned for next-generation consoles, including multiple releases slated for fiscal 2015. As a result, I am confident that we will be able to achieve Non-GAAP profitability in fiscal 2015 and every year for the foreseeable future.”