Take-Two Interactive Software FY2023 Q4 Earnings Release

May, 2023 TAKE -TWO INTERACTIVE
SOFTWARE, INC.
(NASDAQ: TTWO)
FOURTH QUARTER AND FISCAL 2023 RESULTS &
GUIDANCE SUMMARY

CAUTIONARY NOTE:
FORWARD LOOKING STATEMENTS
Statements contained herein which are not historical facts are considered forward -looking statements under federal securities la ws 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 s tatements 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 uncertai nti es, 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 o f risks and uncertainties including: risks relating to our
combination with Zynga; the uncertainty of the impact of the COVID -19 pandemic and measures taken in response thereto; the effec t 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 sit uation with the pandemic continues to evolve;
the risks of conducting business internationally; the impact of changes in interest rates by the Federal Reserve and other ce ntr al banks, including on our short -term investment
portfolio; the impact of potential inflation; volatility in foreign currency exchange rates; our dependence on key management an d 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®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 ass oci ated with international operations.
Other important factors and information are contained in the Company’s most recent Annual Report on Form 10 -K, including the ris ks 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.
2

Q4 FY2023 RESULTS SUMMARY:
GAAP
FINANCIAL SUMMARY ($ in millions, except EPS)
Note: GAAP results were impacted by amortization of acquired intangibles and business acquisition costs
Q 4
ACTUAL GUID ANCE
GAAP Net Revenue $ 1 , 4 4 6 $ 1 , 3 3 6 T O $ 1 , 3 8 6
Operating Expenses $926 $ 8 7 1 T O $ 8 8 1
GAAP Net Loss $(610) $(214) TO $(197)
GAAP EPS $ ( 3 . 6 2 ) $ ( 1 . 2 7 ) T O $ ( 1 . 1 7 )
3

Q4 FY2023 RESULTS SUMMARY:
SELECT MANAGEMENT RESULTS
4
• Net Bookings were $1.39 billion, which was above the high end of our
guidance range
• Our results reflected better -than -expected results from Grand Theft Auto
Vand Grand Theft Auto Online, Red Dead Redemption 2 , and Zynga’s
mobile portfolio
• RCS rose 115%, which was above our outlook, primarily driven by Zynga
and Grand Theft Auto Online
• As a part of our ongoing portfolio management measures, we made the
decision to cancel several unannounced titles in development, which we
believe will enable us to tighten our focus and reallocate resources to
projects for which our creative teams have higher levels of conviction
and expectations of success. Excluding the associated write -offs, our
fourth quarter and full -year management earnings results were above
the high end of our guidance
SELECT FINANCIAL DATA ($ in millions)
Q4
ACTUAL GUID ANCE
Net Bookings $1,394 $1,310 TO $1,360
Recurrent Consumer Spending
Growth (RCS)
+115% +105%
Digitally -Delivered Net Bookings
Growth
+76% +70%
Note: Results from last year did not include Zynga business.

FY2023 RESULTS SUMMARY:
GAAP
FINANCIAL SUMMARY ($ in millions, except EPS)
Note: GAAP results were impacted by amortization of acquired intangibles and business acquisition costs
FY2023
ACTUAL GUID ANCE
GAAP Net Revenue $ 5 , 3 5 0 $ 5 , 2 4 0 T O $ 5 , 2 9 0
Operating Expenses $ 3 , 4 5 1 $ 3 , 3 9 6 T O $ 3 , 4 0 6
GAAP Net Loss $(1,125) $(712) TO $(704)
GAAP EPS $ ( 7 . 0 3 ) $ ( 4 . 5 0 ) T O $ ( 4 . 4 0 )
5

FY2023 RESULTS SUMMARY:
SELECT MANAGEMENT RESULTS
6
• Net Bookings were $5.3 billion, which was above the high end of our
guidance
• While the challenging macroeconomic backdrop impacted certain
components of our portfolio, we experienced favorable performance
within our catalog of industry -leading intellectual property and Zynga
had a strong finish to the year
• Recurrent consumer spending increased 88%, which was above our
guidance
• Non -GAAP Adjusted Unrestricted Operating Cash Flow was $56 million as
compared to our outlook of over $400 million, due to higher -than –
expected tax payments and timing of payments to external developers
and IT vendors
• At fiscal year -end, we had cash and short -term investments of
approximately $1.0 billion and debt of approximately $3 billion
SELECT FINANCIAL DATA ($ in millions)
FY 2023
ACTUAL GUID ANCE
Net Bookings $5,284 $5,200 TO $5,250
Recurrent Consumer Spending
Growth (RCS)
+88% +85%
Digitally -Delivered Net Bookings
Growth
+63% +60%
Non -GAAP Adjusted Unrestricted
Operating Cash Flow
$56 Over $400
Note: Results from last year did not include Zynga business.

NET REVENUE
AND NET BOOKINGS
$846
$1,393
$766
$1,348
Q4 FY22 Q4 FY23 Recurrent Consumer Spending Physical & Other Digital
60% of
Total
78% of
Total
$80
$45
GAAP Net Revenue
Net Bookings (Operational Metric)
$ in Millions
$523
$405
$684
$400
7
$930
$1,446
$833
$1,392
Q4 FY22 Q4 FY23 Recurrent Consumer Spending Physical & Other Digital
63% of
Total
79% of
Total
$97
$54
$ in Millions
$3,408
$5,284 $5,450 -$5,550
$3,085
$5,034
FY22 FY23 FY24E Recurrent Consumer Spending Physical & Other Digital
64% of
Total
78% of
Total
$405 $250 79% of
Total
$323
$3,505
$5,350 $5,370 -$5,470
$3,149
$5,086
FY22 FY23 FY24E Recurrent Consumer Spending Physical & Other Digital
65% of
Total
78% of
Total $400
$264
$356

CASH FLOW
8
$258
$1
$90
$159
$204 $180
FY22 FY23 FY24E
Net Cash From Operating Activities Capital Expenditures
$425
$56
$100
$159
$204 $180
FY22 FY23 FY24E
Adjusted Unrestricted Operating Cash Flow Capital Expenditures
Net Cash From Operating Activities
Adjusted Unrestricted Operating Cash Flow (Non -GAAP) (1)
$ in Millions
$ in Millions
(1) The Company is reporting a Non -GAAP measure of financial performance: Adjusted unrestricted Operating Cash Flow, which is define d as GAAP net cash from operating activities, adjusted for changes in restricted cash. See slide 15 for a reconciliation to the most directly comparable GAAP measure.

FY 2024 GUIDANCE:
GAAP
9
FY 2024 GUIDANCE
GAAP Net Revenue $5,370 TO $5,470
Operating Expenses $3,386 TO $3,406
GAAP Net Loss $(518) TO $(477)
GAAP EPS $(3.05) TO $(2.80)
FISCAL YEAR 2024 GUIDANCE ($ in millions, except EPS)

FY 2024 GUIDANCE:
SELECT FINANCIAL DATA
(3) The individual components of the financial outlook may not foot 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.
10
FISCAL YEAR 2024 GUIDANCE ($ in millions, except EPS)
• We expect to deliver Net Bookings of $5.45 to $5.55 billion, which assumes a continuation of the
current cautious consumer backdrop within our forecasts. Additionally, the development timelines
of some of our titles have lengthened, especially as we strive to redefine the creative standards of
excellence in our industry, which affects our release slate for the year
• Fiscal 2025 is a highly anticipated year for our Company. For the last several years, we have been
preparing our business to release an incredibly robust pipeline of projects that we believe will take
our company to even greater levels of success
• In Fiscal 2025, we expect to enter this new era by launching several groundbreaking titles that we
believe will set new standards in our industry and enable us to achieve over $8 billion in Net
Bookings and over $1 billion in Adjusted Unrestricted Operating Cash Flow. We expect to sustain this
momentum by delivering additional growth in our operating results in Fiscal 2026 and beyond
FY 2024
GUIDANCE
($ IN MILLIONS)
Net Bookings $5,450 TO $5,550
Recurrent Consumer Spending Growth (RCS) +5% YOY
Non -GAAP Adjusted Unrestricted Operating Cash
Flow
APPROXIMATELY $100

Q1 FY2024 GUIDANCE:
GAAP
11
Q1 FISCAL 2024 GUIDANCE ($ in millions, except EPS)
Q1 FY24 GUIDANCE
GAAP Net Revenue $1,210 TO $1,260
Operating Expenses $827 TO $837
GAAP Net Loss $(178) TO $(161)
GAAP EPS $(1.05) TO $(0.95)
Note: GAAP results are expected to be impacted by amortization of acquired intangibles and business acquisition costs

Q1 FY2024 GUIDANCE:
SELECT FINANCIAL DATA
(3) The individual components of the financial outlook may not foot 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. 12
Q1 FISCAL 2024 GUIDANCE ($ in millions, except EPS)
• We expect to deliver Net Bookings of $1.15 billion to $1.20 billion
• The largest contributors to Net Bookings are expected to be NBA 2K, Grand Theft Auto Online
and Grand Theft Auto V , our hyper -casual mobile portfolio, Empires & Puzzles, Toon Blast,
Merge Dragons, Words With Friends, Zynga Poker, Red Dead Redemption 2 and Red Dead Online
Q1 FY2024 GUIDANCE
($ IN MILLIONS)
Net Bookings $1,150 TO $1,200
Recurrent Consumer Spending Growth
(RCS)
+35% YOY

FY24 -FY26 PIPELINE DETAILS
* FY24 -26 release estimates provided as of May 17, 2023. Full updated FY25/26 pipeline details to be given with Q4 FY2024 result s.
** Mobile count only includes titles in our plans for worldwide launch and excludes hyper -casual games.
These titles are a snapshot of our current development pipeline. It is likely that some of these titles will not be develope d through completion, that launch timing may change, and that we will also be adding new titles to our slate. 13
FY 2024 –FY
2026* TITLES OFFICIALLY ANNOUNCED TO -DATE
Immersive Core
Independent
Mobile**
(Currently scheduled for worldwide launch)
Mid -Core
New Iterations
of Previously Released
Titles
17 • NBA 2K24 (2K) –Launched Fiscal 2024
• WWE 2K24 (2K) –Launching Fiscal 2024
• Judas (Ghost Story Games) –TBA
7
18
4
6
• Star Wars Hunters (Zynga) –Planned for worldwide launch in Fiscal 2024
• Grand Theft Auto: The Trilogy –The Definitive Edition (Rockstar Games)
• After Us (Private Division) –Launching May 23, 2023
• Title planned from partnership with Weta Workshop
• Title planned from partnership with Game Freak
• LEGO 2K Drive (2K) –Launching May 19, 2023

PIPELINE DEFINITIONS
14
Titles that have the deepest gameplay and the most hours of content. Examples include our key sports franchises (e.g. PGA TOUR 2K and
NBA 2K ) as well as Grand Theft Auto and Red Dead Redemption (to name a few).
IMMERSIVE CORE
Externally -developed Private Division releases.
INDEPENDENT
Any title released on a mobile platform. Our title counts only include titles we have scheduled for worldwide launch and excl ude hyper -casual
games.
MOBILE
Titles that are either an arcade title (like WWE Battlegrounds ) or games that have many hours of gameplay, but not to the same extent
as an immersive core title.
MID -CORE
This includes ports and remastered titles. Sequels would not fall into this category.
NEW ITERATIONS OF PRIOR RELEASES

NON -GAAP FINANCIAL MEASURE
15
In addition to reporting financial results in accordance with U.S. generally accepted accounting principles (GAAP), the Compa ny uses Non -GAAP measures of financial performance:
Adjusted Unrestricted Operating Cash Flow, which is defined as GAAP net cash from operating activities, adjusted for changes in restricted cash, and EBITDA, which is defined as GAAP
net income (loss) excluding interest income (expense), provision for (benefit from) income taxes, depreciation expense, and a mor tization and impairment of acquired intangibles.
The Company’s management believes it is important to consider Adjusted Unrestricted Operating Cash Flow, in addition to net c ash 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 r ela ted to a dedicated account limited to the payment of
certain internal royalty obligations. The Company’s management believes it is important to consider EBITDA, in addition to n et income, as it removes the effect of certain non -cash
expenses, debt -related charges, and income taxes. The Company has chosen to report EBITDA in light of the combination with Zynga, including the related debt financing.
Management believes that, when considered together with reported amounts, EBITDA is useful to investors and management in und ers tanding the Company’s ongoing operations and
in analysis of ongoing operating trends and provides useful additional information relating to the Company’s operations and f ina ncial condition.
These Non -GAAP financial measures are not intended to be considered in isolation from, as a substitute for, or superior to, GAAP results. These Non -GAAP financial measures 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 these Non –
GAAP financial measures used by the Company. Management believes that the presentation of these Non -GAAP financial measures pro vides investors with additional useful
information to measure Take -Two’s financial and operating performance. In particular, these measures facilitate comparison of o ur operating performance between periods and may
help investors to understand better the operating results of Take -Two. Internally, management uses these Non -GAAP financial mea sures in assessing the Company’s operating results
and in planning and forecasting. A reconciliation of these Non -GAAP financial measures to the most comparable GAAP measure is c ontained in the financial tables to this press
release.

RECONCILIATION OF GAAP TO NON -GAAP MEASURE
16
TAKE -TWO INTERACTIVE SOFTWARE, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON -GAAP
MEASURE
(in millions)

RECONCILIATION OF GAAP TO NON -GAAP MEASURE
17
TAKE -TWO INTERACTIVE SOFTWARE, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON -GAAP
MEASURE
(in millions)

RECONCILIATION OF GAAP TO NON -GAAP MEASURE
18
TAKE -TWO INTERACTIVE SOFTWARE, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON -GAAP
MEASURE
(in millions)

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