What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-11-08 compared with 2022-08-09 · 209 added, 123 removed, 748 unchanged (31% of the section changed)

3 unchanged sentences

(in millions, except per share amounts)

June 30, 2022 March 31, 2022

September 30, 2022 March 31, 2022

Current assets:

2 unchanged sentences

Restricted cash and cash equivalents 591.7 359.8

Accounts receivable, net of allowances of $ 1.3 and $ 0.4 at June 30, 2022 and March 31, 2022, respectively

Accounts receivable, net of allowances of $ 1.3 and $ 0.4 at September 30, 2022 and March 31, 2022, respectively

Software development costs and licenses 89.0 81.4

Capped call receivable 140.1 —

Contract assets 87.6 104.9

28 unchanged sentences

Preferred stock, $ 0.01 par value, 5.0 shares authorized;

no shares issued and outstanding at June 30, 2022 and March 31, 2022

Common stock, $ 0.01 par value, 200.0 shares authorized;

189.9 and 139.0 shares issued and 166.2 and 115.4 outstanding at June 30, 2022 and March 31, 2022, respectively

no shares issued and outstanding at September 30, 2022 and March 31, 2022

Common stock, $ 0.01 par value, 300.0 and 200.0 shares authorized;

191.2 and 139.0 shares issued and 167.5 and 115.4 outstanding at September 30, 2022 and March 31, 2022, respectively

Additional paid-in capital 8,760.5 2,597.2

Treasury stock, at cost;

23.7 and 23.7 common shares at June 30, 2022 and March 31, 2022, respectively

23.7 and 23.7 common shares at September 30, 2022 and March 31, 2022, respectively

( 1,020.6 ) ( 1,020.6 )

7 unchanged sentences

(in millions, except per share amounts)

Three Months Ended June 30,

Three Months Ended September 30, Six Months Ended September 30,

2022 2021 2022 2021

Game $ 1,218.8 $ 832.7 $ 2,238.0 $ 1,629.0

10 unchanged sentences

Interest and other, net ( 50.5 ) ( 0.6 ) ( 79.8 ) ( 1.6 )

(Loss) gain on fair value adjustments, net ( 39.6 ) 2.0

Gain (loss) on fair value adjustments, net 1.9 0.4 ( 37.7 ) 2.4

(Loss) income before income taxes ( 301.1 ) 19.9 ( 407.4 ) 191.4

9 unchanged sentences

Three Months Ended

September 30, Six Months Ended September 30,

2022 2021 2022 2021

Net (loss) income $ ( 257.0 ) $ 10.2 $ ( 361.0 ) $ 162.5

8 unchanged sentences

(in millions)

Three Months Ended June 30,

Six Months Ended September 30,

Operating activities:

20 unchanged sentences

Change in bank time deposits 124.4 1.0

Proceeds from available-for-sale securities 242.8 161.2

Sale and maturities of available-for-sale securities 354.3 353.4

Purchases of available-for-sale securities — ( 492.6 )

Purchases of fixed assets ( 99.4 ) ( 111.2 )

Proceeds from sale of long-term investment 20.6 —

Purchases of long-term investments ( 7.6 ) ( 3.1 )

Business acquisitions ( 3,156.9 ) ( 131.6 )

Acquisition related earn-outs ( 26.0 ) —

Net cash used in investing activities ( 2,790.6 ) ( 384.1 )

5 unchanged sentences

Cost of debt ( 22.4 ) —

Settlement of capped calls 140.1 —

Loan repayment — ( 0.2 )

Repurchase of common stock — ( 200.0 )

Net cash provided by (used in) financing activities 2,133.5 ( 244.4 )

10 unchanged sentences

(in millions)

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Common Stock Additional

3 unchanged sentences

Shares Amount Shares Amount

Balance, June 30, 2022 189.9 $ 1.9 $ 8,616.5 ( 23.7 ) $ ( 1,020.6 ) $ 2,185.0 $ ( 120.5 ) $ 9,662.3

Net loss — — — — — ( 257.0 ) — ( 257.0 )

Change in cumulative foreign currency translation adjustment — — — — — — ( 116.3 ) ( 116.3 )

Net unrealized gain on available-for-sale securities, net of taxes — — — — — — 0.5 0.5

Stock-based compensation — — 125.0 — — — — 125.0

Repurchased common stock — — — — — — — —

Issuance of restricted stock, net of forfeitures and cancellations 0.6 — — — — — — —

Exercise of stock options 0.9 — 42.8 — — — — 42.8

Net share settlement of restricted stock awards ( 0.2 ) — ( 23.8 ) — — — — ( 23.8 )

Balance, September 30, 2022 191.2 $ 1.9 $ 8,760.5 ( 23.7 ) $ ( 1,020.6 ) $ 1,928.0 $ ( 236.3 ) $ 9,433.5

Three Months Ended September 30, 2021

Take-Two Interactive Software, Inc.

Common Stock Additional

Capital Treasury Stock Retained

Earnings Accumulated

Comprehensive

Income (Loss) Non-controlling interest Total Equity

Shares Amount Shares Amount

Balance, June 30, 2021 138.8 $ 1.4 $ 2,417.7 ( 22.4 ) $ ( 820.6 ) $ 2,023.3 $ ( 2.8 ) $ 12.4 $ 3,631.4

Net income — — — — — 10.2 — — 10.2

Change in cumulative foreign currency translation adjustment — — — — — — ( 16.7 ) — ( 16.7 )

Net unrealized gain on available-for-sale securities, net of taxes — — — — — — ( 0.2 ) — ( 0.2 )

Stock-based compensation — — 62.5 — — — — — 62.5

Repurchased common stock — — — ( 1.3 ) ( 200.0 ) — — — ( 200.0 )

Issuance of restricted stock, net of forfeitures and cancellations 0.1 — — — — — — — —

Net share settlement of restricted stock awards — — ( 5.1 ) — — — — — ( 5.1 )

Call option related to Nordeus Acquisition — — — — — — — ( 12.4 ) ( 12.4 )

Balance, September 30, 2021 138.9 $ 1.4 $ 2,475.1 ( 23.7 ) $ ( 1,020.6 ) $ 2,033.5 $ ( 19.7 ) $ — $ 3,469.7

See accompanying Notes.

Six Months Ended September 30, 2022

Common Stock Additional

Capital Treasury Stock Retained

Earnings Accumulated

Comprehensive

Income (Loss) Total

Stockholders'

Shares Amount Shares Amount

Balance, March 31, 2022 139.0 $ 1.4 $ 2,597.2 ( 23.7 ) $ ( 1,020.6 ) $ 2,289.0 $ ( 57.3 ) $ 3,809.7

4 unchanged sentences

Issuance of restricted stock, net of forfeitures and cancellations 1.8 — — — — — — —

Exercise of stock options 0.9 — 42.8 — — — — 42.8

Net share settlement of restricted stock awards ( 0.6 ) — ( 77.7 ) — — — — ( 77.7 )

2 unchanged sentences

Stock-based compensation assumed in Zynga Acquisition — — 143.6 — — — — 143.6

Issuance of shares for conversion of Convertible Notes 3.7 — 479.7 — — — — 479.7

Balance, June 30, 2022 189.9 $ 1.9 $ 8,616.5 ( 23.7 ) $ ( 1,020.6 ) $ 2,185.0 $ ( 120.5 ) $ 9,662.3

Three Months Ended June 30, 2021

Take-Two Interactive Software, Inc.

Issuance of shares related to Zynga convertible notes 3.7 — 479.7 — — — — 479.7

Balance, September 30, 2022 191.2 $ 1.9 $ 8,760.5 ( 23.7 ) $ ( 1,020.6 ) $ 1,928.0 $ ( 236.3 ) $ 9,433.5

Six Months Ended September 30, 2021

Common Stock Additional

2 unchanged sentences

Comprehensive

Income (Loss) Non-controlling interest Total

Income (Loss) Total

Stockholders'

Shares Amount Shares Amount

4 unchanged sentences

Stock-based compensation — — 136.3 — — — — 136.3

Repurchased common stock — — — ( 1.3 ) ( 200.0 ) — — ( 200.0 )

Issuance of restricted stock, net of forfeitures and cancellations 1.0 — — — — — — —

2 unchanged sentences

Issuance of shares related to Nordeus acquisition 0.5 — 94.1 — — — — 94.1

Call option related to Nordeus Acquisition — — — — — — — 12.4 12.4

Balance, June 30, 2021 138.8 $ 1.4 $ 2,417.7 ( 22.4 ) $ ( 820.6 ) $ 2,023.3 $ ( 2.8 ) $ 12.4 $ 3,631.5

Balance, September 30, 2021 138.9 $ 1.4 $ 2,475.1 ( 23.7 ) $ ( 1,020.6 ) $ 2,033.5 $ ( 19.7 ) $ 3,469.7

See accompanying Notes.

11 unchanged sentences

("Zynga"), a leading developer of mobile games.

Refer to Note 1 4 - A cquisitions for additional information.

Refer to Note 14 - Acquisitions for additional information.

Basis of Presentation

155 unchanged sentences

Net revenue by timing of recognition was as follows:

Three Months Ended June 30,

Three Months Ended September 30, Six Months Ended September 30,

2022 2021 2022 2021

Net revenue recognized:

2 unchanged sentences

Total net revenue $ 1,393.5 $ 858.2 $ 2,495.9 $ 1,671.5

Recurrent consumer spending revenue is generated from ongoing consumer engagement and includes revenue from virtual currency, add-on content, in-game purchases, and in-game advertising.

Recurrent consumer spending is generated from ongoing consumer engagement and includes revenue from virtual currency, add-on content, in-game purchases, and in-game advertising.

Full game and other revenue primarily includes the initial sale of full game software products, which may include offline and/or significant game related services.

Net revenue by content was as follows:

Three Months Ended June 30,

Three Months Ended September 30, Six Months Ended September 30,

2022 2021 2022 2021

Net revenue recognized:

4 unchanged sentences

Net revenue by geographic region was as follows:

Three Months Ended June 30,

Three Months Ended September 30, Six Months Ended September 30,

2022 2021 2022 2021

Net revenue recognized:

3 unchanged sentences

Net revenue by platform was as follows:

Three Months Ended June 30,

Three Months Ended September 30, Six Months Ended September 30,

2022 2021 2022 2021

Net revenue recognized:

6 unchanged sentences

Net revenue by distribution channel was as follows:

Three Months Ended June 30,

Three Months Ended September 30, Six Months Ended September 30,

2022 2021 2022 2021

Net revenue recognized:

4 unchanged sentences

We record deferred revenue when payments are due or received in advance of the fulfillment of our associated performance obligations.

The balance of deferred revenue, including current and non-current balances as of June 30, 2022 and March 31, 2022 were $ 1,101.2 and $ 936.2 , respectively.

For the three months ended June 30, 2022, the additions to our deferred revenue balance were primarily due to the acquisition of Zynga ( Note 1 4 - Acquisition s ), which added $ 333.1 to our deferred revenue balance and cash payments received or due in advance of satisfying our performance obligations, while the reductions to our deferred revenue balance were due primarily to the recognition of revenue upon fulfillment of our performance obligations, both of which were in the ordinary course of business.

During the three months ended June 30, 2022 and 2021, $ 439.7 and $ 463.2 , respectively, of revenue was recognized that was included in the deferred revenue balance at the beginning of the respective period.

During the three months ended June 30, 2022, $ 80.3 of revenue was recognized from the deferred revenue balance acquired from the Zynga acquisition.

As of June 30, 2022, the aggregate amount of contract revenue allocated to unsatisfied performance obligations is $ 1,254.4 , which includes our deferred revenue balances and amounts to be invoiced and recognized as revenue in future periods.

The balance of deferred revenue, including current and non-current balances as of September 30, 2022 and March 31, 2022 were $ 1,193.8 and $ 936.2 , respectively.

For the six months ended September 30, 2022, the additions to our deferred revenue balance were primarily due to the acquisition of Zynga ( Note 14 - Acquisitions ), which added $ 333.1 to our deferred revenue balance and cash payments received or due in advance of satisfying our performance obligations, while the reductions to our deferred revenue balance were due primarily to the recognition of revenue upon fulfillment of our performance obligations, both of which were in the ordinary course of business.

During the three months ended September 30, 2022 and 2021, $ 259.3 and $ 278.3 , respectively, of revenue was recognized that was included in the deferred revenue balance at the beginning of the respective period.

During the six months ended September 30, 2022 and 2021, $ 698.9 and $ 741.5 , respectively, of revenue was recognized that was included in the deferred revenue balance at the beginning of the respective period.

During the three and six months ended September 30, 2022, $ 150.2 and $ 230.5 , respectively, of revenue was recognized from the deferred revenue balance acquired from the Zynga acquisition.

As of September 30, 2022, the aggregate amount of contract revenue allocated to unsatisfied performance obligations is $ 1,327.1 , which includes our deferred revenue balances and amounts to be invoiced and recognized as revenue in future periods.

We expect to recognize approximately $ 1,251.9 of this balance as revenue over the next 12 months, and the remainder thereafter.

This balance does not include an estimate for variable consideration arising from sales-based royalty license revenue in excess of the contractual minimum guarantee.

As of June 30, 2022 and March 31, 2022, our contract asset balances were $ 101.3 and $ 104.9 , respectively.

As of September 30, 2022 and March 31, 2022, our contract asset balances were $ 87.6 and $ 104.9 , respectively.

MANAGEMENT AGREEMENT

11 unchanged sentences

In connection with the 2022 Management Agreement, we have and expect to grant time-based and performance-based restricted units to ZMC.

In consideration for ZMC's services, we recorded consulting expense (a component of General and administrative expenses) of $ 2.7 and $ 1.7 during the three months ended June 30, 2022 and 2021, respectively.

We recorded stock-based

compensation expense for restricted stock units granted to ZMC, which is included in General and administrative expenses, of $ 8.5 and $ 7.2 during the three months ended June 30, 2022 and 2021, respectively.

In consideration for ZMC's services, we recorded consulting expense (a component of General and administrative expenses) of $ 1.2 and $ 1.7 during the three months ended September 30, 2022 and 2021, respectively, and $ 3.9 and $ 3.4 during the six months ended September 30, 2022 and 2021, respectively.

We recorded stock-based compensation expense for restricted stock units granted to ZMC, which is included in General and administrative expenses, of $ 13.0 and $ 7.4 during the three months ended September 30, 2022 and 2021, respectively, and $ 21.5 and $ 14.6 during the six months ended September 30, 2022 and 2021, respectively.

In connection with the 2022 Management Agreement and 2017 Management Agreement, we have granted restricted stock units (in thousands) to ZMC as follows:

Three Months Ended June 30,

Six Months Ended September 30,

Time-based 192 51

9 unchanged sentences

Market-based restricted stock units granted in fiscal year 2023 pursuant to the 2022 Management Agreement are eligible to vest on June 1, 2024 and June 1, 2025.

Market-based restricted stock units are eligible to vest based on the Company's Total Shareholder Return (as defined in the relevant grant agreement) relative to the Total Shareholder Return (as defined in the relevant grant agreement) of the companies that constitute either the NASDAQ Composite Index under the 2017 Management Agreement or the NASDAQ 100 index under the 2022 Management Agreement (as defined in the relevant grant agreement) as of the grant date measured over a two-year period or three-year period.

To earn the target number of market-based restricted stock units (which represents 50 % of the number of the market-based restricted stock units set forth in the table above), the Company must perform at the 50 th percentile, with the maximum number of market-based restricted stock units earned if the Company performs at the 75 th percentile.

1 unchanged sentence

Performance-based restricted stock units granted in fiscal year 2023 pursuant to the 2022 Management Agreement are eligible to vest on June 1, 2024 and June 1, 2025.

The performance-based restricted stock units, of which certain are tied to "IP" and "RCS" (as defined in the relevant grant agreement), are eligible to vest based on the Company's achievement of certain performance metrics (as defined in the relevant grant agreement) of either individual product releases of "IP" or "RCS" measured over a two - or three-year period.

The performance-based restricted stock units, of which certain are tied to "IP" and "RCS" (as defined in the relevant grant agreement), are eligible to vest based on the Company's achievement of certain performance metrics (as defined in the relevant grant agreement) of either individual product releases of "IP" measured over a two-year period or "RCS" measured over a three-year period.

The target number of performance-based restricted stock units that may be earned pursuant to these grants is equal to 50 % of the grant amounts set forth in the above table (the numbers in the table represent the maximum number of performance-based restricted stock units that may be earned).

At the end of each reporting period, we assess the probability of each performance metric and upon determination that certain thresholds are probable, we record expense for the unvested portion of the shares of performance-based restricted stock units.

The unvested portion of time-based, market-based and performance-based restricted stock units held by ZMC were 1.1 and 0.4 as of June 30, 2022 and March 31, 2022, respectively.

During the three months ended June 30, 2022, 0.2 restricted stock units previously granted to ZMC vested, and 0.1 restricted stock units were forfeited by ZMC.

The unvested portion of time-based, market-based and performance-based restricted stock units held by ZMC were 1.1 and 0.4 as of September 30, 2022 and March 31, 2022, respectively.

During the six months ended September 30, 2022, 0.2 restricted stock units previously granted to ZMC vested, and 0.1 restricted stock units were forfeited by ZMC.

FAIR VALUE MEASUREMENTS

8 unchanged sentences

The table below segregates all assets and liabilities that are measured at fair value on a recurring basis (which is measured at least annually) into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date.

June 30, 2022

September 30, 2022

Quoted prices

17 unchanged sentences

Private equity — — 26.1 26.1

Capped call receivable — 140.1 — 140.1

Total financial assets $ 878.1 $ 325.7 $ 26.1 $ 1,229.9

Accrued expenses and other current liabilities:

Foreign currency forward contracts $ — $ ( 1.8 ) $ — $ ( 1.8 )

Contingent earn-out consideration — — ( 52.7 ) ( 52.7 )

33 unchanged sentences

Total financial liabilities $ — $ ( 0.2 ) $ ( 109.0 ) $ ( 109.2 )

We did not have any transfers between Level 1 and Level 2 fair value measurements, nor did we have any transfers into or out of Level 3 during the three months ended June 30, 2022.

We did not have any transfers between Level 1 and Level 2 fair value measurements, nor did we have any transfers into or out of Level 3 during the six months ended September 30, 2022.

In connection with the Nordeus acquisition we completed on June 1, 2021, our consideration included a contingent earn-out consideration arrangement that requires us to pay an aggregate of $ 153.0 in cash if Nordeus achieves certain performance measures over the 12 - and 24 -month periods following the closing.

1 unchanged sentence

The fair value was estimated using a Monte-Carlo simulation model, which included significant unobservable Level 3 inputs, such as projected financial performance over the earn-out period along with estimates for market volatility and the discount rate applicable to potential cash payouts.

During the three months ended June 30, 2022, we recognized General and administrative expense of $ 6.3 within our Condensed Consolidated Statements of Operations for the increase in fair value of the contingent earn-out consideration liability associated with the Nordeus acquisition, which increased the fair value of the contingent consideration liability to $ 115.3 and is recorded within Accrued expenses and other current liabilities in our Condensed Consolidated Balance Sheet as

of June 30, 2022.

The increase resulted from Nordeus achieving certain performance measures in the first 12 -month period and a higher probability of Nordeus achieving certain performance measures in the second 12 -month period.

The remaining contingent consideration of $ 7.5 relates to immaterial earn-out arrangements from Zynga's historical acquisitions.

During the three months ended September 30, 2022, we paid $ 70.1 related to these earn-out consideration arrangements.

During the six months ended September 30, 2022, we recognized General and administrative expense of $ 13.0 within our Condensed Consolidated Statements of Operations for the increase in fair value of the contingent earn-out consideration liability associated with the Nordeus acquisition, which increased the fair value of the contingent consideration liability related to the second earn-out period to $ 51.9 and is recorded within Accrued expenses and other current liabilities in our Condensed

Consolidated Balance Sheet as of September 30, 2022.

The increase resulted from a higher probability of Nordeus achieving certain performance measures in the second 12 -month period.

The remaining contingent earn-out consideration liability of $ 5.1 relates to immaterial earn-out arrangements from Zynga's historical acquisitions.

For these acquisitions, we estimated the acquisition date fair value of the contingent consideration obligations using a discounted cash flow model.

4 unchanged sentences

Based on these considerations, we estimate that the carrying value of the acquired shares represents the fair value of the investment.

At June 30, 2022, we held $ 25.0 of such investments in Other assets within our Condensed Consolidated Balance Sheet.

At September 30, 2022, we held $ 7.0 of such investments in Other assets within our Condensed Consolidated Balance Sheet.

SHORT-TERM INVESTMENTS

Our Short-term investments consisted of the following:

June 30, 2022

September 30, 2022

Amortized Cost Gains Losses Fair Value

16 unchanged sentences

Total Short-term investments $ 825.9 $ — $ ( 5.8 ) $ 820.1

The following table summarizes the contracted maturities of our short-term investments at June 30, 2022:

June 30, 2022

The following table summarizes the contracted maturities of our short-term investments at September 30, 2022:

September 30, 2022

Short-term investments

9 unchanged sentences

The following table shows the gross notional amounts of foreign currency forward contracts:

June 30, 2022 March 31, 2022

September 30, 2022 March 31, 2022

Forward contracts to sell foreign currencies $ 197.0 $ 132.8

Forward contracts to purchase foreign currencies 57.3 75.8

For the three months ended June 30, 2022 and 2021, we recorded a gain of $ 1.6 and a loss of $ 1.8 , respectively, related to foreign currency forward contracts in Interest and other, net in our Condensed Consolidated Statements of Operations.

For the three months ended September 30, 2022 and 2021, we recorded a loss of $ 4.6 and a gain of $ 0.6 , respectively, and for the six months ended September 30, 2022 and 2021 we recorded a loss of $ 2.6 and a loss of $ 1.2 , respectively, related to foreign currency forward contracts in Interest and other, net in our Condensed Consolidated Statements of Operations.

Our foreign currency exchange forward contracts are not designated as hedging instruments under hedge accounting.

2 unchanged sentences

Details of our capitalized software development costs and licenses were as follows:

June 30, 2022 March 31, 2022

September 30, 2022 March 31, 2022

Current Non-current Current Non-current

3 unchanged sentences

Software development costs and licenses $ 89.0 $ 907.8 $ 81.4 $ 755.9

During the three months ended June 30, 2022 and 2021, we recorded $ 19.9 and $ 9.8 , respectively, of software development impairment charges (a component of Cost of revenue).

The impairment charges recorded during the three months ended June 30, 2022 related to a decision not to proceed with further development of certain interactive entertainment software products.

The impairment charges recorded during the three months ended June 30, 2021 related to unamortized capitalized costs for the development of a title, which were anticipated to exceed the net realizable value of the asset at the time they were impaired.

During the three months ended September 30, 2022 and 2021, we recorded $ 6.4 and $ 55.3 , respectively, of software development impairment charges (a component of Cost of revenue).

The impairment charges recorded during the three months ended September 30, 2022 related to recognizing unamortized capitalized costs for the development of a title, which were anticipated to exceed the net realizable value of the asset at the time they were impaired.

The impairment charges recorded during the three months ended September 30, 2021 related to (i) a decision not to proceed with further development of certain interactive entertainment software and (ii) recognizing unamortized capitalized costs for the development of a title, which were anticipated to exceed the net realizable value of the asset at the time they were impaired.

During the six months ended September 30, 2022 and 2021, we recorded $ 23.3 and $ 65.0 , respectively, of software development impairment charges (a component of Cost of revenue).

The impairment charges recorded during the six months ended September 30, 2022 to (i) a decision not to proceed with further development of certain interactive entertainment software and (ii) recognizing unamortized capitalized costs for the development of a title, which were anticipated to exceed the net realizable value of the asset at the time they were impaired.

The impairment charges recorded during the six months ended September 30, 2021 related to (i) a decision not to proceed with further development of certain interactive entertainment software and (ii) recognizing unamortized capitalized costs for the development of a title, which were anticipated to exceed the net realizable value of the asset at the time they were impaired.

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consisted of the following:

June 30, 2022 March 31, 2022

September 30, 2022 March 31, 2022

Software development royalties $ 772.2 $ 615.7

Deferred acquisition payments 192.4 78.6

Tax payable 159.7 14.1

Compensation and benefits 167.1 134.0

Tax payable 158.2 14.1

Deferred acquisition payments 133.7 78.6

Licenses 112.0 81.1

1 unchanged sentence

Refund liability 52.0 51.7

Professional fees 26.6 17.0

Interest payable 32.8 —

Professional fees 17.8 17.0

Sales tax liability 16.9 17.2

1 unchanged sentence

Accrued expenses and other current liabilities $ 1,733.9 $ 1,074.9

The components of Long-term debt, net on our Condensed Consolidated Balance Sheet were as follows:

Annual Interest Rate Maturity Date September 30, 2022 Fair Value (Level 2)

2024 Notes 3.30 % March 28, 2024 $ 1,000.0 $ 974.2

2025 Notes 3.55 % April 14, 2025 600.0 574.8

2027 Notes 3.70 % April 14, 2027 600.0 557.2

2032 Notes 4.00 % April 14, 2032 500.0 434.2

2022 Credit Agreement 4.84 % May 23, 2027 200.0 200.0

2024 Convertible Notes 0.25 % June 1, 2024 23.5 23.5

2026 Convertible Notes — % December 15, 2026 29.4 29.4

Total $ 2,952.9 $ 2,793.3

Unamortized discount and issuance costs ( 17.4 )

Long-term debt, net $ 2,935.5

The components of Short-term debt on our Condensed Consolidated Balance Sheet were as follows:

Annual Interest Rate Maturity Date September 30, 2022 Fair Value (Level 2)

Term Loan 3.60 % June 21, 2023 $ 350.0 $ 350.0

Short-term debt $ 350.0

The interest expense as it relates to our debt is recorded within Interest and other, net in our Condensed Consolidated Statements of Operations for the three and six months ended September 30, 2022 and was as follows:

Three Months Ended September 30, Six Months Ended September 30,

2024 Notes $ 8.3 $ 15.0

2025 Notes 5.3 9.8

2027 Notes 5.6 10.2

2032 Notes 5.0 9.2

2022 Credit Agreement 3.2 3.5

Term Loan 1.5 1.7

Total $ 28.9 $ 49.4

The following table outlines the aggregate amount of maturities of our long-term borrowings, as of September 30, 2022:

Fiscal Year Ended March 31, Maturities

2023 (remaining) $ —

Thereafter 1,300.0

Total 2,950.8

Fair Value Adjustments 2.1

Total Face Value $ 2,952.9

During the fiscal year ended March 31, 2022, in connection with our acquisition of Zynga (refer to Note 14 - Acquisitions ), we received a bridge loan commitment of $ 2,700.0 .

The bridge loan commitment was terminated in April 2022 as a result of our Senior Notes debt offering discussed below.

During the three months ended June 30, 2022, we recognized expense related to interest and fees of $ 6.1 related to the bridge loan commitment within Interest and other, net in our Condensed Consolidated Statements of Operations.

At June 30, 2022, all deferred financing costs related to the bridge loan commitment were fully amortized.

During the six months ended September 30, 2022, we recognized expense related to interest and fees of $ 6.1 related to the bridge loan commitment within Interest and other, net in our Condensed Consolidated Statements of Operations.

At April 30, 2022, all deferred financing costs related to the bridge loan commitment were fully amortized.

On April 14, 2022, we completed our offering and sale of $ 2,700.0 aggregate principal amount of our senior notes, consisting of $ 1,000.0 principal amount of our 3.300 % Senior Notes due 2024 (the “2024 Notes”), $ 600.0 principal amount of our 3.550 % Senior Notes due 2025 (the “2025 Notes”), $ 600.0 principal amount of our 3.700 % Senior Notes due 2027 (the “2027 Notes”), and $ 500.0 principal amount of our 4.000 % Senior Notes due 2032 (the “2032 Notes” and, together with the 2024 Notes, the 2025 Notes and the 2027 Notes, the “Senior Notes”).

1 unchanged sentence

The Senior Notes are the Company’s senior unsecured obligations and rank equally with all of our other existing and future unsubordinated obligations.

The 2024 Notes mature on March 28, 2024 and bear interest at an annual rate of 3.300 %.

The 2025 Notes mature on April 14, 2025 and bear interest at an annual rate of 3.550 %.

The 2027 Notes mature on April 14, 2027 and bear interest at an annual rate of 3.700 %.

The 2032 Notes mature on April 14, 2032 and bear interest at an annual rate of 4.000 %.

We will pay interest on the 2024 Notes semi-annually on March 28 and September 28 of each year, commencing September 28, 2022.

During the three months ended September 30, 2022, we made interest payments of $ 15.0 .

We will pay interest on each of the 2025 Notes, 2027 Notes, and 2032 Notes semi-annually on April 14 and October 14 of each year, commencing October 14, 2022.

7 unchanged sentences

These covenants are subject to a number of important exceptions and limitations, as further provided in the Indenture.

During the three months ended June 30, 2022, we recognized interest expense of $ 20.2 within Interest and other, net in our Condensed Consolidated Statements of Operations.

Debt issuance costs of $ 19.1 and original issuance discount of $ 1.3 were incurred in connection with the Senior Notes.

These debt issuance costs and original issuance discount are included as a reduction of the debt within Long-term debt, net on our Condensed Consolidated Balance Sheet and will be amortized into Interest and other, net in our Consolidated Statements of Operations over the contractual term of the Senior Notes.

During the three months ended June 30, 2022, we recognized $ 1.2 of amortization of debt issuance costs and $ 0.1 of amortization of the original issuance discount.

As of June 30, 2022, $ 2,681.0 was recorded within Long term debt, net on Condensed Consolidated Balance Sheet, and the fair value (Level 2) of the Senior Notes was $ 2,630.9 .

During the three months ended September 30, 2022, we recognized $ 1.4 of amortization of debt issuance costs and $ 0.1 of amortization of the original issuance discount.

During the six months ended September 30, 2022, we recognized $ 2.6 of amortization of debt issuance costs and $ 0.2 of amortization of the original issuance discount.

Credit Agreement

2 unchanged sentences

In addition, the 2022 Credit Agreement contains uncommitted incremental capacity permitting the incurrence of up to an additional amount not to exceed the greater of $ 250.0 and 35.0 % of the Company's Consolidated Adjusted EBITDA (as defined in the 2022 Credit Agreement).

Loans under the 2022 Credit Agreement will bear interest at a rate of (a) 0.000 % to 0.625 % above an alternate base rate ( 3.25 % at June 30, 2022) or (b) 1.000 % to 1.625 % above Secured Overnight Financing Rate ("SOFR"), approximately 0.10 % at June 30, 2022, which rates are determined by the Company's credit rating.

Loans under the 2022 Credit Agreement will bear interest at a rate of (a) 0.000 % to 0.625 % above an alternate base rate ( 6.25 % at September 30, 2022) or (b) 1.000 % to 1.625 % above Secured Overnight Financing Rate ("SOFR"), approximately 3.04 % at September 30, 2022, which rates are determined by the Company's credit rating.

The 2022 Credit Agreement also includes, among other terms and conditions, a maximum leverage ratio covenant, as well as customary affirmative and negative covenants, including covenants that limit or restrict the Company and its subsidiaries’ ability to, among other things, incur subsidiary indebtedness, grant liens, and dispose of all or substantially all assets, in each case subject to certain exceptions and baskets.

1 unchanged sentence

Upon execution of the 2022 Credit Agreement, we incurred $ 3.5 of debt issuance costs that were capitalized within Other assets on our Condensed Consolidated Balance Sheet and will be amortized on a straight-line basis over the five-year term of the 2022 Credit Agreement, with the expense recorded within Interest and other, net in our Condensed Consolidated Statements of Operations.

During the three months ended June 30, 2022, we amortized $ 0.1 of these debt issuance costs.

During the three and six months ended September 30, 2022, we amortized $ 0.2 and $ 0.3 , respectively, of these debt issuance costs.

On June 22, 2022, we drew down $ 200.0 at approximately 3.28 % from our facility under the 2022 Credit Agreement, which constitutes senior unsecured indebtedness of the Company, ranking equally with all of our other existing and future senior unsecured unsubordinated obligations, and will record interest within Interest and other, net in our Condensed Consolidated Statement of Operations.

This borrowing has a maturity date of May 23, 2027.

On September 22, 2022, we repriced our outstanding borrowing at approximately 4.84 %.

The proceeds were used to finance a portion of the repurchase of the Convertible Notes (see below).

After giving effect to this borrowing, $ 200.0 is recorded within Long Term Debt, net on our Condensed Consolidated Balance Sheet;

the fair value (Level 2) of the debt was $ 200.0 ;

and we had approximately $ 297.5 available for additional borrowings as of June 30, 2022.

We had approximately $ 299.5 available for additional borrowings as of September 30, 2022.

During the three months ended September 30, 2022, we made interest payments of $ 1.7 .

Information related to availability on our respective credit agreements for each period was as follows:

June 30, 2022 March 31, 2022

September 30, 2022 March 31, 2022

Available borrowings $ 299.5 $ 247.5

Outstanding letters of credit 2.9 2.5

We recorded interest expense and fees related to the 2022 Credit Agreement and our prior credit agreement of $ 0.1 and $ 0.1 for the three months ended June 30, 2022 and 2021, respectively, within Interest and other, net in our Condensed Consolidated Statement of Operations.

On June 22, 2022, we entered into an unsecured 364 -Day Term Loan Credit Agreement ("Term Loan").

The Term Loan provides for an unsecured 364 -day term loan credit facility in the aggregate principal amount of $ 350.0 and matures on June 21, 2023, and will bear interest at our election at a margin of (a) 0.000 % to 0.375 % above an alternate base rate (defined on the basis of prime rate) or (b) 0.750 % to 1.375 % above SOFR, which margins are determined by reference to the our credit rating.

The Term Loan constitutes senior unsecured indebtedness of the Company, ranking equally with all of our other existing and future senior unsecured unsubordinated obligations.

3 unchanged sentences

The proceeds were used to finance a portion of the repurchase of the Convertible Notes (see below).

We will record interest within Interest and other, net in our Condensed Consolidated Statement of Operations.

As of June 30, 2022, $ 350.0 was recorded within Short-term debt on Condensed Consolidated Balance Sheet, and the fair value (Level 2) of the Term Loan debt approximates book value.

Convertibles Notes

9 unchanged sentences

The acquisition of Zynga constituted a Fundamental Change, a Make-Whole Fundamental Change, and a Share Exchange Event (each as defined in the Indentures) under the Indentures.

The effective date of the Fundamental Change, Make-

Whole Fundamental Change and Share Exchange Event in respect of the Convertible Notes was May 23, 2022 (the “Convertible Notes Effective Date”), and the related tender and conversion periods expired on June 22, 2022.

The effective date of the Fundamental Change, Make-Whole Fundamental Change and Share Exchange Event in respect of the Convertible Notes was May 23, 2022 (the “Convertible Notes Effective Date”), and the related tender and conversion periods expired on June 22, 2022.

As a result, each holder of Convertible Notes had the right to tender its Convertible Notes to the Company for cash or surrender its Convertible Notes for conversion into the Reference Property at the applicable conversion rate, in each case pursuant to the terms and procedures set forth in the applicable Indenture.

2 unchanged sentences

In total, we paid $ 321.6 for the tendered or converted 2024 Convertible Notes, including interest, and $ 845.1 for the tendered 2026 Convertible Notes in cash, and we issued 3.7 shares of our common stock upon the conversion of the 2024 Convertible Notes.

After settlement of all Convertible Notes tendered or surrendered for conversion, $ 21.4 aggregate principal amount of the 2024 Convertible Notes remained outstanding and $ 29.4 aggregate principal amount of the 2026 Convertible Notes remained outstanding at June 30, 2022.

The 2024 Convertible Notes and 2026 Convertible Notes constitute senior unsecured indebtedness of Zynga, ranking pari passu with all of our other existing and future senior unsecured unsubordinated obligations of Zynga.

8 unchanged sentences

Upon any conversion, holders will receive either cash or a combination of cash and shares of Take-Two common stock, at our election.

As of June 30, 2022, the conditions allowing holders of the Convertible Notes to convert their respective series of the Convertible Notes have not been met and therefore both the Convertible Notes are not yet convertible.

As of September 30, 2022, the conditions allowing holders of the Convertible Notes to convert their respective series of the Convertible Notes have not been met and therefore both the Convertible Notes are not yet convertible.

We have elected to account for these Convertible Notes, which are considered derivatives, using the fair value option (Level 2) under ASC 825, as the Convertible Notes were initially recognized at fair value under the acquisition method of accounting in connection with the Zynga Acquisition (refer to Note 14 - Acquisitions ) and we do not expect significant fluctuations in fair value through maturity.

1 unchanged sentence

The fair value was determined as the expected cash payment and value of shares to be issued to settle the Convertible Notes.

As of June 30, 2022, we recorded $ 25.0 as the fair value of the remaining outstanding 2024 Convertible Notes, or $ 3.6 more than principal, and $ 29.3 as the fair value of the remaining outstanding 2026 Convertible Notes, or $ 0.1 less than principal, within Long-term debt, net in our Condensed Consolidated Balance Sheet.

During the three months ended June 30, 2022, we recognized a loss of $ 47.8 within (Loss) gain on fair value adjustments, net in our Condensed Consolidated Statements of Operations, which includes the loss recognized on the converted Convertible Notes.

As of September 30, 2022, we recorded $ 23.5 as the fair value of the remaining outstanding 2024 Convertible Notes, and $ 29.4 as the fair value of the remaining outstanding 2026 Convertible Notes, within Long-term debt, net in our Condensed Consolidated Balance Sheet.

During the three and six months ended September 30, 2022, we recognized a gain of $ 1.5 and a loss of $ 46.3 within Gain (loss) on fair value adjustments, net in our Condensed Consolidated Statements of Operations, which includes the loss recognized on the converted Convertible Notes.

In connection with the Convertible Notes, Zynga also previously entered into privately negotiated Capped Call options with certain counterparties.

These Capped Call options were intended to reduce the potential economic dilution of Zynga shares

upon any conversion of the Convertible Notes and/or offset any cash payments made in excess of the principal amount of converted notes with such reduction and/or offset, as the case might have been, subject to a maximum based on the cap price.

These Capped Call options were intended to reduce the potential economic dilution of Zynga shares upon any conversion of the Convertible Notes and/or offset any cash payments made in excess of the principal amount of converted notes with such reduction and/or offset, as the case might have been, subject to a maximum based on the cap price.

Following the acquisition of Zynga, we entered into Termination Agreements with each counterparty related to the acquired Capped Call arrangements to be settled in cash.

Pursuant to the terms of the Termination Agreements, the Capped Call options will be terminated over a period of time specified in each Termination Agreement and each counterparty will owe a cash payment to the Company, as applicable, as a result of the termination of the Capped Call options that will be calculated based on their fair market value calculated by each counterparty during a termination valuation period.

Pursuant to the terms of the Termination Agreements, the Capped Call options will be terminated over a period of time specified in each Termination Agreement and each counterparty will owe a

cash payment to the Company, as applicable, as a result of the termination of the Capped Call options that will be calculated based on their fair market value calculated by each counterparty during a termination valuation period.

We have accounted for these Capped Calls as derivatives under ASC 815.

1 unchanged sentence

The fair value (Level 2), in each instance, was determined based on negotiated termination agreements with the counterparties, which are dependent on our stock price over a certain period of time as further defined in the respective agreements.

During the three months ended June 30, 2022, we recognized a gain of $ 8.8 within (Loss) gain on fair value adjustments, net in our Consolidated Statements of Operations.

During the six months ended September 30, 2022, we recognized a gain of $ 8.8 within Gain (loss) on fair value adjustments, net in our Consolidated Statements of Operations.

In July 2022, we received $ 140.1 in cash for settlement of these Capped Calls.

As a result of the different debt components discuss above, the aggregate amount of maturities for all of our long-term borrowings is as follows:

Fiscal Year Ended March 31, Maturities

2023 (remaining) $ —

(LOSS) EARNINGS PER SHARE ("EPS")

The following table sets forth the computation of basic and diluted (loss) earnings per share:

Three Months Ended June 30,

Three Months Ended September 30, Six Months Ended September 30,

2022 2021 2022 2021

Computation of Basic (loss) earnings per share:

8 unchanged sentences

Diluted (loss) earnings per share $ ( 1.54 ) $ 0.09 $ ( 2.38 ) $ 1.39

We incurred a net loss for the three months ended June 30, 2022;

We incurred a net loss for the three and six months ended September 30, 2022;

therefore, the diluted weighted average shares outstanding exclude the effect of unvested common stock equivalents because their effect would be antidilutive.

For the three months ended June 30, 2022, we had 2.7 potentially dilutive shares from share-based awards and 1.7 of shares from Convertible Notes that are excluded due to the net loss for the period.

During the three months ended June 30, 2022, 1.2 restricted stock awards vested, we granted 2.5 unvested restricted stock awards, and 0.8 unvested restricted stock awards were forfeited.

For the three months ended September 30, 2022, we had 1.5 potentially dilutive shares from share-based awards and 0.2 of shares from Convertible Notes that are excluded due to the net loss for the period.

For the six months ended September 30, 2022, we had 1.6 potentially dilutive shares from share-based awards and 1.0 of shares from Convertible Notes that are excluded due to the net loss for the period.

During the six months ended September 30, 2022, 1.8 restricted stock awards vested, we granted 2.7 unvested restricted stock awards, and 1.2 unvested restricted stock awards were forfeited.

The forfeiture of awards resulted in the reversal of expense of $ 48.3 and amounts capitalized as software development costs of $ 8.1 .

1 unchanged sentence

The following table provides the components of accumulated other comprehensive loss:

Three Months Ended June 30, 2022

Six Months Ended September 30, 2022

adjustments Unrealized

4 unchanged sentences

Other comprehensive loss before reclassifications ( 179.1 ) 0.1 ( 179.0 )

Balance at June 30, 2022 $ ( 115.6 ) $ ( 4.9 ) $ ( 120.5 )

Three Months Ended June 30, 2021

Balance at September 30, 2022 $ ( 231.9 ) $ ( 4.4 ) $ ( 236.3 )

Six Months Ended September 30, 2021

adjustments Unrealized

4 unchanged sentences

Other comprehensive income (loss) before reclassifications ( 10.6 ) ( 0.4 ) ( 11.0 )

Balance at June 30, 2021 $ ( 3.2 ) $ 0.4 $ ( 2.8 )

Balance at September 30, 2021 $ ( 19.9 ) $ 0.2 $ ( 19.7 )

COMMITMENTS AND CONTINGENCIES

A summary of annual minimum contractual obligations and commitments as of June 30, 2022 is as follows:

A summary of annual minimum contractual obligations and commitments as of September 30, 2022 is as follows:

Fiscal Year Ending March 31, Software

23 unchanged sentences

We are, or may become, subject to demands and claims (including intellectual property and employment related claims) and are involved in routine litigation in the ordinary course of business which we do not believe to be material to our business or financial condition or results of operations.

We have appropriately accrued amounts related to certain of these claims and legal and other proceedings.

We have appropriately accrued amounts

related to certain of these claims and legal and other proceedings.

While it is reasonably possible that a loss may be incurred in excess of the amounts accrued in our financial statements, we believe that such losses, unless otherwise disclosed, would not be material.

The benefit from income taxes for the three months ended June 30, 2022 is based on our projected annual effective tax rate for fiscal year 2023, adjusted for specific items that are required to be recognized in the period in which they are incurred.

The benefit from income taxes was $ 2.3 for the three months ended June 30, 2022, as compared to the provision for income taxes of $ 19.2 for the prior year period.

When compared to the statutory rate of 21%, the effective tax rate of 2.2 % for the three months ended June 30, 2022 was due primarily to tax expense of $ 12.1 related to the geographic mix of earnings, tax expense of $ 9.4 from employee stock-based compensation, nondeductible expense of $ 8.2 related to the settlement of convertible debt, offset by benefits of $ 22.4 from tax credits.

Tax Cuts and Jobs Act of 2017 (“TCJA”) requires taxpayers to capitalize and amortize research and development costs pursuant to Internal Revenue Code ("IRC") Section 174.

The benefit from income taxes for the three months ended September 30, 2022 is based on our projected annual effective tax rate for fiscal year 2023, adjusted for specific items that are required to be recognized in the period in which they are incurred.

The benefit from income taxes was $ 44.1 for the three months ended September 30, 2022, as compared to the provision for income taxes of $ 9.7 for the prior year period.

When compared to the statutory rate of 21%, the effective tax rate of 14.6 % for the three months ended September 30, 2022 was due primarily to tax benefits of $ 8.5 from tax credits, tax benefits of $ 3.4 from employee stock-based compensation, and tax expense of $ 12.8 related to geographic mix of earnings.

The benefit from income taxes for the six months ended September 30, 2022 is based on our projected annual effective tax rate for fiscal year 2023, adjusted for specific items that are required to be recognized in the period in which they are incurred.

The benefit from income taxes was $ 46.4 for the six months ended September 30, 2022, as compared to the provision for income taxes of $ 28.9 for the prior year period.

When compared to the statutory rate of 21%, the effective tax rate of 11.4 % for the six months ended September 30, 2022 was due primarily to tax expense of $ 22.6 related to the geographic mix of earnings, tax expense of $ 6.0 from employee stock-based compensation, nondeductible expense of $ 8.2 related to the settlement of convertible debt, offset by benefits of $ 30.9 from tax credits.

The Tax Cuts and Jobs Act of 2017 (“TCJA”) requires taxpayers to capitalize and amortize research and development costs pursuant to Internal Revenue Code ("IRC") Section 174.

Although Congress is considering legislation that would defer the capitalization and amortization requirement to later years, we have no assurance that the requirement will be repealed or otherwise modified.

The requirement is effective for the Company beginning April 1, 2022.

For the three months ended June 30, 2022, we recorded an estimated increase to income tax payable and deferred tax assets of approximately $ 70.0 due to Section 174 capitalization.

The requirement was effective for the Company beginning April 1, 2022.

For the six months ended September 30, 2022, we recorded an estimated increase to income tax payable and deferred tax assets of approximately $ 70.0 due to Section 174 capitalization.

The actual impact of Section 174 capitalization and amortization on the income tax payable and deferred tax asset will depend on multiple factors, including the amount of research and development expenses we will incur and whether we conduct our research and development activities inside or outside the United States.

If legislation is not passed to defer, repeal, or otherwise modify the capitalization and amortization requirement we expect our cash taxes payable and deferred tax assets to increase in the future.

In August 2022, President Biden signed into law the Inflation Reduction Act of 2022 (the “Inflation Reduction Act”), which includes a 15% book-income alternative minimum tax on corporations with average applicable financial statement income over $1 billion for any 3-year period ending with 2022 or later and a 1% excise tax on the fair market value of stock that is repurchased by publicly traded U.S.

corporations or their specified affiliates.

The alternative minimum tax and the excise tax are effective in taxable years beginning after December 31, 2022.

We will continue to evaluate the potential impact of the Inflation Reduction Act may have on our operations and Consolidated Financial Statements in future periods.

We are regularly examined by domestic and foreign taxing authorities.

5 unchanged sentences

Our consideration consisted of an aggregate of $ 3,992.4 in cash, 46.3 shares of our common stock, and $ 143.6 of replacement equity awards attributable to the pre-acquisition service period (see below).

In connection with the transaction, on April 14, 2022, we completed our offering and sale of $ 2,700.0 aggregate principal amount of our Senior Notes (refer to Note 9 - D ebt ).

In connection with the transaction, on April 14, 2022, we completed our offering and sale of $ 2,700.0 aggregate principal amount of our Senior Notes (refer to Note 9 - Debt ).

The cash portion of the merger consideration was funded from our cash on hand, including the proceeds from our senior notes offering.

Transaction costs of $ 104.8 , $ 8.3 , and $ 5.6 for the three months ended June 30, 2022 have been recorded within General and administrative expense, Research and development, and Selling and marketing, respectively, in our Condensed Consolidated Statements of Operations.

Transaction costs of $ 18.3 , $ 1.6 , and $ 1.2 for the three months ended September 30, 2022 have been recorded within General and administrative expense, Research and development, and Selling and marketing, respectively, in our Condensed Consolidated Statements of Operations.

Transaction costs of $ 123.1 , $ 9.9 , and $ 6.8 for the six months ended September 30, 2022 have been recorded within General and administrative expense, Research and development, and Selling and marketing, respectively, in our Condensed Consolidated Statements of Operations.

We acquired Zynga as part of our ongoing strategy to expand selectively our portfolio of owned intellectual property and to diversify and strengthen further our mobile offerings

7 unchanged sentences

As we finalize our estimation of the fair value of the assets acquired and liabilities assumed, additional adjustments may be recorded during the measurement period (a period not to exceed 12 months from the acquisition date).

The initial accounting is incomplete as of June 30, 2022 for the acquired assets and assumed liabilities as the Company is currently in the process of completing the assessment of intangible assets.

Additional intangible assets may be recognized as the valuation is complete.

The following table summarizes the preliminary acquisition date fair value of net tangible and intangible assets acquired, net of liabilities assumed from Zynga:

44 unchanged sentences

The portion of the fair value related to pre-combination services of $ 143.6 was included in the purchase price, and $ 28.6 was recognized as day-one post-combination expense for acceleration of awards, while the remaining fair value will be recognized over the remaining service periods.

As of June 30, 2022, the future expense for the Converted RSU and PSU Awards was approximately $ 411.5 , which will be recognized over a weighted average service period of approximately 1.7 years.

As of June 30, 2022, the future expense for the Converted Options was approximately $ 4.8 , which will be recognized over a weighted average service period of approximately 0.9 years.

As of September 30, 2022, the future expense for the Converted RSU and PSU Awards was approximately $ 325.3 , which will be recognized over a weighted average service period of approximately 1.6 years.

As of September 30, 2022, the future expense for the Converted Options was approximately $ 1.7 , which will be recognized over a weighted average service period of approximately 0.8 years.

Zynga Revenue and Earnings

The amounts of revenue and earnings of Zynga included in our Condensed Consolidated Statement of Operations from the acquisition date are as follows:

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022 Six Months Ended September 30, 2022

Net revenue $ 639.4 916.1

1 unchanged sentence

Pro-forma Financial Information

The following table summarizes the pro-forma consolidated results of operations (unaudited) for the three months ended June 30, 2022 and 2021, as though the acquisition had occurred on April 1, 2021, the beginning of fiscal year 2022, and Zynga had been included in our consolidated results for the entire periods subsequent to that date.

Three Months Ended June 30,

The following table summarizes the pro-forma consolidated results of operations (unaudited) for the three and six months ended September 30, 2022 and 2021, as though the acquisition had occurred on April 1, 2021, the beginning of fiscal year 2022, and Zynga had been included in our consolidated results for the entire periods subsequent to that date.

Three Months Ended September 30, Six Months Ended September 30,

2022 2021 2022 2021

Pro-forma Net revenue $ 1,393.5 $ 1,552.3 $ 2,874.1 $ 3,090.6

10 unchanged sentences

Currency translation adjustment ( 36.3 )

Balance at June 30, 2022 $ 7,227.2

Balance at September 30, 2022 $ 6,871.5

The following table sets forth the intangible assets that are subject to amortization:

June 30, 2022

September 30, 2022

Amount Accumulated

3 unchanged sentences

Branding and Trade Names $ 394.6 $ ( 16.2 ) $ 378.4 12 years

Game engine technology $ 159.4 $ ( 18.8 ) $ 140.6 3 years

User Base $ 325.4 $ ( 122.6 ) $ 202.8 1 year

Game Engine Technology $ 291.8 $ ( 35.6 ) $ 256.2 4 years

Developer Relationships $ 57.0 $ ( 5.1 ) $ 51.9 4 years

Advertising Technology $ 43.0 $ ( 5.1 ) $ 37.9 3 years

Intellectual property $ 41.1 $ ( 26.8 ) $ 14.3 6 years

Customer relationships $ 31.0 $ ( 2.2 ) $ 28.8 5 years

Analytics Technology $ 26.8 $ ( 26.7 ) $ 0.1 0 years

Intellectual Property $ 22.3 $ ( 16.9 ) $ 5.4 6 years

In Place Lease $ 1.5 $ ( 0.7 ) $ 0.8 4 years

1 unchanged sentence

Amortization of intangible assets is included in our Condensed Consolidated Statements of Operations as follows:

Three Months Ended June 30,

Three Months Ended September 30, Six Months Ended September 30,

2022 2021 2022 2021

Cost of revenue $ 201.6 $ 14.4 $ 298.9 $ 25.7

7 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements