AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 6/6 · 18/10/2026
Moat56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 3/4 · Owned intellectual property, Grand Theft Auto's reported sell-in and substantial recurrent spending demonstrate differentiated franchise assets. They do not establish network effects, cost leadership or strong switching friction.
durability · 2/4 · Franchise sales and repeated monetization support persistence, but finite licensed rights, current franchise declines and historical impairments limit confidence in durability across the portfolio.
customer dependency · 2/4 · Ongoing spending demonstrates repeat demand indirectly, but does not show that customers depend on Take-Two or face substantial switching barriers. Individual franchise declines show demand can weaken.
erosion resilience · 2/4 · NBA 2K and other franchise growth offset weakness elsewhere, and recurrent spending increased. Repeated acquired-asset impairments and platform control constrain resilience; low entry barriers are structural exposure rather than proof that every franchise is weak.
Pricing power38
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 1/4 · The disclosed physical-product price reductions trigger credits for unsold inventory, providing limited adverse pricing evidence. Physical distribution is now small; revenue growth and recurrent spending do not establish realized digital price increases or premiums.
retention · 3/4 · Fiscal 2026 recurrent spending of $5.20 billion and quarterly recurrent spending rising from $1,256.1 million to $1,289.8 million demonstrate substantial repeat monetization. This is indirect operating evidence of engagement, not a measured same-player retention rate.
margin resilience · 1/4 · Quarterly gross margin fell from 62.9% to 57.5% and operating profit became an operating loss despite revenue growth. Disclosed development, royalty and license cost increases show weak recent cost absorption; these results do not isolate price effects. Management-reported direct-to-consumer benefits have not established consolidated resilience.
contractual freedom · 1/4 · Apple and Google can set platform fees and change terms at their discretion, while physical distribution includes price-protection obligations. Direct-to-consumer progress improves optionality, but the supplied disclosures do not demonstrate broad freedom over distribution economics.
Predictability66
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 75.00
- Revenue growth volatility (pp)
- 20.50
- Positive FCF years (%)
- 40.00
- FCF margin volatility (pp)
- 4.33
Financial strength19
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 35.97
- netDebtEbitGrade
- 0.00
- interestCoverageGrade
- 0.00
- currentRatioGrade
- 38.87
- Debt / FCF (x)
- 5.48
- Interest coverage (x)
- -0.69
- Current ratio (x)
- 1.24
Capital allocation21
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- -36.83
- 3-year average dilution (%)
- 4.78
- 3-year average SBC / revenue (%)
- 5.54
- cashConversionGrade
- 0.00
Management44
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 1/4 · Repeated multibillion-dollar goodwill impairments and acquired-game write-downs demonstrate disappointing capital outcomes. Latest quarterly operating cash consumption increased to $168.8 million, partly funding development, following a $1,192.8 million net equity raise. The $550 million principal repayment is positive but does not offset the broader weak record.
incentive alignment · 2/4 · Existing stock ownership requirements, anti-hedging safeguards and multiyear market-based awards support alignment. Actual time-based vesting and substantial stock compensation create mixed incentives and dilution. Complete executive ownership and payout-target evidence is unavailable.
execution · 2/4 · Franchise revenue growth and substantial recurring monetization demonstrate successful commercial delivery indirectly. Current title declines, weaker profitability, operating cash consumption and historical impairments make the overall execution record mixed. Forecast releases receive no credit as completed achievements.
governance · 2/4 · Annual director elections, documented attendance, independent committee leadership and independent review of ZMC transactions support oversight. Combined chair/CEO leadership, related-party management arrangements and unilateral board defensive powers temper the assessment. The officer-exculpation amendment remained subject to shareholder approval in the supplied disclosure.
Evidence
Most of our intellectual property is internally owned and developed, which we believe best positions us financially and competitively.
MD&A / intellectual-property ownership · Filed 07/08/2026
We believe that Rockstar Games has established a uniquely original, popular, cultural phenomenon with its Grand Theft Auto series, which is the interactive entertainment industry's most iconic and critically acclaimed brand and has sold-in over 470 million units worldwide.
MD&A / Rockstar Games / Grand Theft Auto cumulative sell-in · Filed 07/08/2026
Net revenue by timing of recognition was as follows: Three Months Ended June 30, 2026 2025 Net revenue recognized: Over time $ 1,295.0 $ 1,262.9 Point in time 238.9 240.9 Total net revenue $ 1,533.9 $ 1,503.8 Content Recurrent consumer spending ("RCS") is generated from ongoing consumer engagement and includes revenue from virtual currency, add-on content, in-game purchases, and in-game advertising.
Revenue note / recurrent consumer spending definition · Filed 07/08/2026
Net revenue by content was as follows: Three Months Ended June 30, 2026 2025 Net revenue by content: Recurrent consumer spending $ 1,289.8 $ 1,256.1 Full game and other 244.1 247.7 Total net revenue $ 1,533.9 $ 1,503.8 8 Platform Net revenue by platform was as follows: Three Months Ended June 30, 2026 2025 Net revenue by platform: Mobile $ 762.3 $ 801.7 Console 640.5 550.6 PC and other 131.1 151.5 Total net revenue $ 1,533.9 $ 1,503.8 Distribution Channel Our products are delivered through digital online services (digital download, online platforms, and cloud streaming) and physical retail and other.
Revenue note / quarterly revenue by content and platform · Filed 07/08/2026
The increase was primarily driven by higher net revenue of (i) $312.6 from our NBA 2K franchise; (ii) $200.3 from Color Block Jam, which released in November 2024; (iii) $181.0 from our Borderlands franchise, the latest installment of which, Borderlands 4, released in September 2025; and (iv) $92.7 from Toon Blast!.
MD&A / nine-month franchise revenue growth · Filed 04/02/2026
Fiscal 2026 Financial and Operating Results Net Revenue $6.66 Billion Net Bookings (operating metric) $6.72 Billion Net Revenue by Platform Console, PC and Other $3.32 Billion 49.9% of Net Revenue Recurrent Consumer Spending (virtual currency, add-on content, and in-game purchases) Mobile $5.20 Billion 78.1% of Net Revenue $3.33 Billion 50.1% of Net Revenue 6 TAKE-TWO INTERACTIVE SOFTWARE, INC.
Proxy summary / fiscal 2026 financial and operating results · Filed 27/07/2026
The increase was primarily driven by higher net revenue of $89.0 from NBA 2K, partially offset by lower net revenue of $32.8 from Color Block Jam and $24.2 from our Grand Theft Auto series.
MD&A / quarterly franchise revenue changes · Filed 07/08/2026
As there are relatively low barriers to entry to develop a mobile or online game, we expect new game competitors to enter the market and existing competitors to allocate more resources to develop and market competing games and applications.
Risk factors / low barriers to mobile and online game development · Filed 22/05/2026
Apple and Google generally have the discretion to set the amounts of their platform fees and change their platforms’ terms of service and other policies with respect to us or other developers at their sole discretion, and those changes may be unfavorable to us.
MD&A / platform fee and contractual discretion · Filed 07/08/2026
These licenses are typically limited to the use of the licensed rights in products for specific time periods.
Business / finite content-license terms · Filed 22/05/2026
During the fiscal year ended March 31, 2025, we recognized Goodwill impairment charges of $3,545.2, representing a partial impairment related to one of our reporting units, and we recognized impairment charges of $137.0 for acquisition-related Developed Game Technology intangible assets within Cost of revenue and $39.3 for acquisition-related Branding and Trade Names intangible assets within Depreciation and amortization.
MD&A / fiscal 2025 goodwill and acquisition-related intangible impairments · Filed 20/05/2025
During the fiscal year ended March 31, 2024, we recognized Goodwill impairment charges of $2,342.1, representing a partial impairment related to one of our reporting units, and we recognized impairment charges of $577.4 for acquisition-related Developed Game Technology intangible assets within Cost of revenue as a result of a reduction in the forecasted performance of certain games due to industry conditions and changes in our strategies in response to those conditions.
MD&A / fiscal 2024 impairments and reduced game forecasts · Filed 22/05/2024
We also derive significant revenues from distribution on third‑party mobile and web platforms, such as the Apple App Store, the Google Play Store, and Facebook, which are also our direct competitors and, in some cases, the exclusive means through which our content reaches gamers on those platforms, and most of the virtual currency we sell is purchased using these platform providers’ payment processing systems.
Risk factors / named distribution platforms also identified as direct competitors · Filed 22/05/2026
Following reductions in the price of our physical software products, we grant price protection to permit customers to take credits against amounts they owe us with respect to merchandise unsold by them.
Revenue accounting / physical-product price reductions and protection credits · Filed 22/05/2026
Results of Operations The following tables set forth, for the periods indicated, our Condensed Consolidated Statements of Operations, net revenue by platform, net revenue by distribution channel, and net revenue by content type: Three Months Ended June 30, 2026 2025 Total net revenue $ 1,533.9 100.0 % $ 1,503.8 100.0 % Cost of revenue 651.4 42.5 % 558.8 37.1 % Gross profit 882.5 57.5 % 945.0 62.9 % Selling and marketing 369.7 24.1 % 409.2 27.2 % Research and development 273.8 17.8 % 256.4 17.1 % General and administrative 226.3 14.8 % 207.4 13.8 % Depreciation and amortization 48.2 3.1 % 50.4 3.4 % Total operating expenses 918.0 59.8 % 923.4 61.5 % (Loss) income from operations (35.5) (2.3) % 21.6 1.4 % Interest and other, net: Interest income 22.8 1.5 % 16.5 1.1 % Interest expense (30.4) (2.0) % (38.9) (2.6) % Other income/(expense), net (6.2) (0.4) % (13.0) (0.9) % Interest and other, net (13.8) (0.9) % (35.4) (2.4) % Loss before income taxes (49.3) (3.2) % (13.8) (1.0) % Benefit from income taxes (15.2) (1.0) % (1.9) (0.1) % Net loss $ (34.1) (2.2) % $ (11.9) (0.9) % Three Months Ended June 30, 2026 2025 Net revenue by platform: Mobile $ 762.3 49.7 % $ 801.7 53.3 % Console 640.5 41.8 % 550.6 36.6 % PC and other 131.1 8.5 % 151.5 10.1 % Net revenue by distribution channel: Digital online $ 1,507.3 98.3 % $ 1,476.6 98.2 % Physical retail and other 26.6 1.7 % 27.2 1.8 % Net revenue by content: Recurrent consumer spending $ 1,289.8 84.1 % $ 1,256.1 83.5 % Full game and other 244.1 15.9 % 247.7 16.5 % 22 Three Months Ended June 30, 2026 Compared to June 30, 2025 2026 % 2025 % Increase/ (decrease) % Increase/ (decrease) Total net revenue $ 1,533.9 100.0 % $ 1,503.8 100.0 % $ 30.1 2.0 % Product costs 187.8 12.2 % 210.4 14.0 % (22.6) (10.7) % Game intangibles 154.3 10.1 % 158.5 10.5 % (4.2) (2.6) % Software development costs and royalties (1) 135.1 8.8 % 30.1 2.0 % 105.0 348.8 % Licenses 99.5 6.5 % 70.9 4.7 % 28.6 40.3 % Internal royalties 74.7 4.9 % 88.9 5.9 % (14.2) (16.0) % Cost of revenue 651.4 42.5 % 558.8 37.1 % 92.6 16.6 % Gross profit $ 882.5 57.5 % $ 945.0 62.9 % $ (62.5) (6.6) % (1) Includes $3.1 and $(41.0) of stock-based compensation expense in 2026 and 2025, respectively, in software development costs and royalties.
MD&A / comparative operating results and cost-of-revenue components · Filed 07/08/2026
Our changes in cash flows were as follows: Three Months Ended June 30, (millions of dollars) 2026 2025 Net cash used in operating activities $ (168.8) $ (44.7) Net cash used in investing activities (52.4) (36.8) Net cash provided by financing activities 30.5 618.3 Effects of foreign currency exchange rates on cash, cash equivalents, and restricted cash and cash equivalents (1.3) 20.2 Net change in cash, cash equivalents, and restricted cash and cash equivalents $ (192.0) $ 557.0 At June 30, 2026, we had $1,446.1 of cash and cash equivalents and restricted cash and cash equivalents, compared to $1,638.1 at March 31, 2026.
Liquidity / quarterly cash flows · Filed 07/08/2026
The decrease during the three months ended June 30, 2026 was primarily due to Net cash used in operating activities, which was primarily due to investments in software development and licenses, partially offset by sales of our products.
Liquidity / development and license investment behind operating cash consumption · Filed 07/08/2026
On May 22, 2025, we issued 5.5 shares of our common stock, at a price to the public of $225.00 per share, resulting in $1,192.8 of proceeds net of underwriting fees and expenses.
Equity note / completed May 2025 public share issuance · Filed 22/05/2026
On March 28, 2026, we repaid our 2026 Notes with a principal amount of $550.0.
Liquidity / March 2026 principal repayment · Filed 22/05/2026
(“ZMC”) Incentive caps on annual bonuses to NEOs Strong anti-hedging and anti-pledging policies Double-trigger acceleration of vesting on a change in control Meaningful stock ownership requirements (6x per annum management fee, excluding any bonuses, for each of CEO/Chairman and President; 3x annual base salary for other NEOs; and 5x annual cash retainer for directors) Equity incentive plan provisions that prohibit re-pricing of stock options without shareholder approval Limited perquisites No tax gross ups in respect of any excise taxes on parachute payments Annual compensation risk assessment for employee plans Retention of independent compensation consultants by the Compensation Committee Balanced compensation approach between short- and long-term incentive opportunities TAKE-TWO INTERACTIVE SOFTWARE, INC.
Proxy / compensation safeguards and stock ownership requirements · Filed 27/07/2026
Time-based restricted stock units granted pursuant to the 2022 Management Agreement in fiscal year 2027 will vest on June 1, 2027, June 1, 2028, and June 1, 2029, and those granted in fiscal year 2026, partially vested on June 1, 2026 and will also vest in part on June 1, 2027 and June 1, 2028.
Management agreement / actual time-based grants and vesting · Filed 07/08/2026
Market-based restricted stock units granted pursuant to the 2022 Management Agreement in fiscal year 2027 are eligible to vest on June 1, 2029, those granted in fiscal year 2026 are eligible to vest on June 1, 2028, and those granted in fiscal year 2025 are eligible to vest on June 1, 2027.
Management agreement / market-based award vesting eligibility · Filed 07/08/2026
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Unaudited) (in millions) Three Months Ended June 30, 2026 Common Stock Additional Paid-in Capital Treasury Stock Retained Earnings/(Accumulated Deficit) Accumulated Other Comprehensive Loss Total Stockholders' Equity Shares Amount Shares Amount Balance, March 31, 2026 209.1 $ 2.1 $ 11,953.7 (23.7) $ (1,020.6) $ (7,357.0) $ (67.3) $ 3,510.9 Net loss — — — — — (34.1) — (34.1) Change in cumulative foreign currency translation adjustment — — — — — — (10.5) (10.5) Stock-based compensation — — 111.3 — — — — 111.3 Issuance of restricted stock, net of forfeitures and cancellations 1.4 — — — — — — — Net share settlement of restricted stock awards — — (1.3) — — — — (1.3) Employee share purchase plan settlement 0.2 — 31.8 — — — — 31.8 Other changes, net — — 0.3 — — — — 0.3 Balance, June 30, 2026 210.7 $ 2.1 $ 12,095.8 (23.7) $ (1,020.6) $ (7,391.1) $ (77.8) $ 3,608.4 Three Months Ended June 30, 2025 Common Stock Additional Paid-in Capital Treasury Stock Retained Earnings/(Accumulated Deficit) Accumulated Other Comprehensive Loss Total Stockholders' Equity Shares Amount Shares Amount Balance, March 31, 2025 200.8 $ 2.0 $ 10,312.0 (23.7) $ (1,020.6) $ (7,058.8) $ (96.9) $ 2,137.7 Net loss — — — — — (11.9) — (11.9) Change in cumulative foreign currency translation adjustment — — — — — — 82.9 82.9 Stock-based compensation — — 54.3 — — — — 54.3 Issuance of restricted stock, net of forfeitures and cancellations 1.6 — — — — — — — Net share settlement of restricted stock awards — — (1.3) — — — — (1.3) Employee share purchase plan settlement 0.2 — 26.8 — — — — 26.8 Issuance of common stock 5.5 0.1 1,192.7 — — — — 1,192.8 Other changes, net — — (0.4) — — — — (0.4) Balance, June 30, 2025 208.1 $ 2.1 $ 11,584.1 (23.7) $ (1,020.6) $ (7,070.7) $ (14.0) $ 3,480.9 See accompanying Notes.
Statement of equity / stock compensation and share issuance · Filed 07/08/2026
Board Best Practices Active and empowered lead independent director role Deliberate approach to Board refreshment, including the addition of five new independent directors in the past nine years (50% of the board), and rotation of leadership positions Annual election of all directors Annual self-evaluations by the Board of Directors and its Committees, as well as biennial individual interviews of each director by an outside third party Majority vote standard for uncontested director elections 9 out of 10 (i.e.
Proxy / board election and evaluation practices · Filed 27/07/2026
Each of the incumbent directors attended at least 75% in the aggregate of all meetings of the Board of Directors and committees on which the individual served for the period of his or her service in the fiscal year.
Corporate governance / actual director meeting attendance · Filed 27/07/2026
Transactions with Related Persons During fiscal 2026, we were not a participant in any financial transaction, arrangement or relationship in which a related person had or will have a direct or indirect material interest, in an amount exceeding $120,000, except for the transactions described above with ZMC, which the independent directors of the Board of Directors had previously reviewed, approved and ratified in accordance with its policy on transactions with related persons.
Related-person transactions / independent review of ZMC arrangements · Filed 27/07/2026
the Board and CEO, a Lead Independent Director, and Board committees led by independent directors.
Corporate governance / combined leadership and independent oversight · Filed 27/07/2026
Our Board has the power, without stockholder approval, to adopt a stockholder rights plan and/or to designate the terms of one or more series of preferred stock and issue shares of preferred stock.
Risk factors / board powers over rights plans and preferred stock · Filed 22/05/2026
–Our direct-to-consumer channel contributed to Net Bookings and margin growth as we integrated additional mobile titles and deepened player relationships by reducing payment friction and enhancing the user experience.
Performance highlights / management-reported direct-to-consumer contribution · Filed 27/07/2026
On July 16, 2026, pursuant to the recommendation of the Corporate Governance Committee, the Board of Directors approved the Officer Exculpation Amendment, subject to shareholder approval.
Officer exculpation proposal / board approval subject to shareholder approval · Filed 27/07/2026
Net revenue by distribution channel was as follows: Three Months Ended June 30, 2026 2025 Net revenue by distribution channel: Digital online $ 1,507.3 $ 1,476.6 Physical retail and other 26.6 27.2 Total net revenue $ 1,533.9 $ 1,503.8 Deferred Revenue We record deferred revenue when payments are due or received in advance of the fulfillment of our associated performance obligations.
Revenue note / digital versus physical distribution revenue · Filed 07/08/2026
