What changed in this filing

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Item 9A. Controls and Procedures

2024-05-22 compared with 2023-05-26 · 283 added, 337 removed, 1530 unchanged (29% of the section changed)

1 unchanged sentence

Definition and Limitations of Disclosure Controls and Procedures

our reports filed under the Exchange Act is (i) recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and (ii) accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures.

Our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) are designed to reasonably ensure that information required to be disclosed in our reports filed under the Exchange Act is (i) recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and (ii) accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures.

There are inherent limitations to the effectiveness of any system of disclosure controls and procedures.

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Based on this evaluation, management has concluded that our internal control over financial reporting was effective as of March 31, 2024.

In accordance with SEC guidance, our management's assessment of the effectiveness of internal control over financial reporting did not include the internal controls of Popcore, which we acquired in November 2022 and is included in the March 31, 2023 Consolidated Financial Statements.

The acquired business constituted 1.7% of consolidated total assets as of March 31, 2023.

Our independent registered public accounting firm, Ernst & Young LLP, has issued an audit report on our internal control over financial reporting, which is included in this Form 10-K.

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Other Information

Securities Trading Plans of Directors and Executive Officers

Our Section 16 officers and directors, as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934 (the “Exchange Act”), may from time to time enter into plans for the purchase or sale of our common stock that are intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act.

During the quarter ended March 31, 2024, no Section 16 officer or director, as defined in Rule 16a-1(f), adopted , modified, or terminated a "Rule 10b5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement," as defined in Item 408 of Regulation S-K.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

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Exhibit Number Exhibit Description Form Filing Date Exhibit Filed

2.1 Agreement and Plan of Merger, dated as of January 9, 2022, by and among Take-Two Interactive Software, Inc., Zebra MS I, Inc., Zebra MS II, Inc.

and Zynga Inc.

8-K 1/10/2022 2.1

2.2 First Amendment to the Agreement and Plan of Merger, dated March 10, 2022, among Take-Two Interactive Software, Inc., Zebra MS I, Inc., Zebra MS II, Inc.

and Zynga Inc.

S-4 3/14/2022 2.2

2.3 Second Amendment to the Agreement and Plan of Merger, dated as of May 4, 2022, by and among Take-Two Interactive Software, Inc., Zebra MS I, Inc., Zebra MS II, Inc.

and Zynga Inc.

2.1 Share Purchase Agreement, dated March 27, 2024, by and among Take-Two Interactive Software, Inc., Groundhog 2, LLC, The Gearbox Entertainment Company Holding AB, and Embracer Group AB.

8-K 4/1/2024 2.1

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4.1 Description of Registrant's Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934

10-K 5/22/2020 4.1

4.2 Base Indenture, dated as of April 14, 2022, between Take-Two Interactive Software, Inc.

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8-K 4/14/2022 4.4

Incorporated by Reference

Exhibit Number Exhibit Description Form Filing Date Exhibit Filed

4.6 Fourth Supplemental Indenture, dated as of April 14, 2022, between Take-Two Interactive Software, Inc.

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8-K 4/14/2023 4.2

Incorporated by Reference

Exhibit Number Exhibit Description Form Filing Date Exhibit Filed

4.9 Form of Global Note representing 3.300% Senior Notes due 2024 (included as part of Exhibit 4.3)

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14A 7/27/2017 Annex C

Incorporated by Reference

Exhibit Number Exhibit Description Form Filing Date Exhibit Filed

10.15 Take-Two Interactive Software, Inc.

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10-Q 11/8/2017 10.5

Incorporated by Reference

Exhibit Number Exhibit Description Form Filing Date Exhibit Filed

10.18 Form of Non-Employee Director Restricted Stock Agreement Pursuant to the Take-Two Interactive Software Inc.

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10-Q 8/9/2023 10.4

Incorporated by Reference

Exhibit Number Exhibit Description Form Filing Date Exhibit Filed

10.35 Restricted Unit Agreement dated as of June 1, 2022, by and between Take-Two Interactive Software, Inc.

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10-Q 8/9/2023 10.5

10.36 Restricted Unit Agreement dated as of June 1, 2023, by and between Take-Two Interactive Software, Inc.

and ZMC Advisors, L.P.

S-3 ASR 6/1/2023 10.2

Incorporated by Reference

Exhibit Number Exhibit Description Form Filing Date Exhibit Filed

10.37 Credit Agreement, dated as of May 23, 2022, by and among Take-Two Interactive Software, Inc., JPMorgan Chase Bank, N.A., Wells Fargo Securities, LLC, BOFA Securities, Inc.

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8-K 5/26/2022 10.1

10.38 Amendment No.

1 to Credit Agreement, dated as of May 14, 2024, by and among Take-Two Interactive Software, Inc., and JPMorgan Chase Bank, N.A.

10.39 Xbox 360 Publisher License Agreement dated November 17, 2005, between Microsoft Licensing, GP and the Company *

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10-Q 11/4/2021 10.1

19.1 Take-Two Interactive Software, Inc.

Securities Trading Policy

21.1 Subsidiaries of the Company

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Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

97.1 Take-Two Interactive Software, Inc.

Policy for the Recovery of Erroneously Awarded Compensation

101.INS The Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

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_______________________________________________________________________________

† Schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K.

† Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K.

A copy of any omitted schedule will be furnished supplementally to the U.S.

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Auditing the judgments and estimates made by management in estimating the service period for the game related services is especially challenging as the Company must consider a variety of data points.

Such data points include the weighted average number of days between players’ first and last days played online, known online trends, the service periods of the Company’s previously released products, and, to the extent publicly available, the service periods of the Company’s competitors’ products that are similar in nature.

Such data points include the weighted average number of days between players’ first day played online or first in-game purchase and last day played online, known online trends, the service periods of the Company’s previously released products, and, to the extent publicly available, the service periods of the Company’s competitors’ products that are similar in nature.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s controls over the revenue recognition process.

We selected a sample of transactions and tested the Company’s controls in relation to estimating the service period over which game related services revenue is recognized.

Our audit procedures to test and evaluate the reasonableness of the Company’s estimated service period included, among others, testing the completeness and accuracy of management’s player data analysis, testing qualitative factors utilized such as reviewing online trends, comparing to similar or historical products and analyzing competitor information.

Valuation of intangible assets acquired in the Zynga acquisition

Description of the Matter As disclosed in Note 20 to the consolidated financial statements, the Company acquired Zynga on May 23, 2022 for total purchase consideration of $9,521.8 million.

The Company accounted for the business combination by recognizing the assets acquired and liabilities assumed at their fair value as of the date of acquisition, with the excess recorded to goodwill.

The assets acquired included developed game technology, branding and trade names, and game engine technology which are intangible assets that were valued at $4,440 million, $384 million and $261 million, respectively, as of May 23, 2022.

Auditing the Company’s acquisition of Zynga was complex due to the significant estimation uncertainty in determining the fair value of identified intangible assets including developed game technology, branding and trade names, and game engine technology.

The significant assumptions used to estimate the value of the developed game technology and game engine technology intangible assets included revenue growth rates, EBITDA margins, long-term decay rates, and discount rates.

The significant assumptions used to estimate the value of the branding and trade names intangible assets included revenue growth rates, royalty rates and discount rates.

These significant assumptions were forward-looking and could be affected by future economic and market conditions.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s controls over its accounting for the Zynga acquisition.

For example, we tested controls over the Company’s process to measure acquired intangible assets as well as controls over management’s review of the significant assumptions described above.

To test the estimated fair value of the acquired intangible assets, our audit procedures included, among others, evaluating the valuation methodologies used, evaluating the significant assumptions described above and testing the completeness and accuracy of the underlying data used by the Company in its analyses.

For example, we evaluated the Company’s projected revenue growth rates and EBITDA margins by considering historical results of the acquired business and current industry and economic trends.

In addition, we involved our internal valuation specialists to assist in testing methodologies and certain significant assumptions used to value the acquired intangible assets.

We also performed a sensitivity analysis on certain of the significant assumptions to evaluate the change in the fair value estimates that would result from changes in assumptions.

Our audit procedures to test and evaluate the reasonableness of the Company’s estimated service period included, among others, testing the completeness and accuracy of management’s player data analysis, comparing to similar or historical products, analyzing competitor information and performing sensitivity analyses.

Impairment of intangible assets that are subject to amortization

Description of the Matter As of March 31, 2024, the Company's intangible assets that are subject to amortization included developed game technology of $2,487.4 million.

As disclosed in Note 1 to the consolidated financial statements, intangible assets that are subject to amortization are tested for impairment whenever events or changes in circumstances indicate that the related carrying amount of the asset or asset group may not be recoverable and the carrying amount of the asset exceeds estimated expected undiscounted future cash flows that are expected to result from the use of the asset.

During the fiscal year ended March 31, 2023, the Company recorded an impairment charge of $465.3 million related to certain of its developed game technology intangible assets.

Auditing the Company’s impairment tests was complex due to the significant estimation uncertainty in determining the fair value of the intangible assets that were tested for impairment.

The significant assumptions used to estimate the value of the intangible assets included revenue growth rates, EBITDA margins, long-term decay rates, and discount rates.

These significant assumptions were forward-looking and could be affected by future economic and market conditions.

The carrying amount of the asset is compared to the estimated undiscounted future cash flows that are expected to result from the use of the asset.

During the fiscal year ended March 31, 2024, the Company recorded impairment charges of $577.4 million related to certain of its developed game technology intangible assets.

Auditing the Company’s impairment tests was complex due to the significant management judgment and estimation uncertainty in determining the fair value of certain intangible assets that were tested for impairment.

The significant assumptions used to estimate the value of the intangible assets included forecasted revenue, EBITDA margins, long-term decay rates, and discount rates.

These significant assumptions were forward-looking and could be affected by future company-specific, economic and market conditions.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s controls over its process to determine the fair value of intangible assets that are subject to amortization being measured for impairment.

For example, we tested controls over management's review of the significant assumptions used to estimate the fair value of the developed game technology that was impaired.

For example, we tested controls over management’s review of the significant assumptions used to estimate the fair value of the developed game technology intangible assets that were tested for impairment.

To test the estimated fair value of the developed game technology intangible assets that were impaired, our audit procedures included, among others, evaluating the valuation methodology used, evaluating the significant assumptions described above and testing the completeness and accuracy of the underlying data used by the Company in its analyses.

For example, we evaluated the Company’s projected revenue growth rates and EBITDA margins by considering historical results and current industry and economic trends.

In addition, we involved our internal valuation specialists to assist in testing the methodology and certain significant assumptions used to value the developed game technology intangible assets that were impaired.

For example, we evaluated the Company’s forecasted revenue and EBITDA margins by considering historical results and current industry and economic trends.

We also performed a sensitivity analysis on certain of the significant assumptions to evaluate the change in the fair value estimates that would result from changes in assumptions.

Impairment of goodwill for a certain reporting unit

Description of the Matter As of March 31, 2024, the Company’s goodwill balance was $4,426.4 million.

As disclosed in Note 1 to the consolidated financial statements, goodwill is tested for impairment annually, or more frequently if events and circumstances indicate the fair value of a reporting unit may be below its carrying amount.

If the carrying value exceeds the fair value, an impairment charge is recognized equal to the difference between the carrying value of the reporting unit and its fair value.

During the fiscal year ended March 31, 2024, the Company recorded impairment charges of $2,342.1 million, representing a partial impairment related to a certain reporting unit.

Auditing the Company’s impairment test was complex due to the significant management judgment and estimation uncertainty involved in determining the fair value of the reporting unit that was quantitatively tested for impairment.

The significant assumptions used to estimate the value of the reporting unit included forecasted revenue, EBITDA margins, long-term growth rate, and discount rate.

These significant assumptions are forward-looking and could be affected by future company-specific, economic and market conditions.

For example, we tested controls over management’s review of the significant assumptions used to estimate the fair value of the reporting unit that was impaired.

To test the estimated fair value of the reporting unit that was impaired, our audit procedures included, among others, evaluating the valuation methodologies used, evaluating the significant assumptions described above and testing the completeness and accuracy of the underlying data used by the Company in its analyses.

For example, we evaluated the Company’s forecasted revenue and EBITDA margins by considering historical results and current industry and economic trends.

In addition, we involved our internal valuation specialists to assist in testing the methodologies and certain significant assumptions used to value the reporting unit that was impaired.

We performed a sensitivity analysis on certain of the significant assumptions to evaluate the change in the fair value estimate that would result from changes in assumptions.

/s/ Ernst & Young LLP

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(the Company) maintained, in all material respects, effective internal control over financial reporting as of March 31, 2024, based on the COSO criteria.

As indicated in the accompanying Management’s Report on Internal Control Over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Popcore GmbH, which is included in the March 31, 2023 consolidated financial statements of the Company and constituted 1.7% of total assets as of March 31, 2023 and 1.4% of net revenue for the year then ended.

Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of Popcore GmbH.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of March 31, 2024 and 2023, the related consolidated statements of operations, comprehensive (loss) income, cash flows and stockholders’ equity for each of the three years in the period ended March 31, 2024, and the related notes and our report dated May 21, 2024 expressed an unqualified opinion thereon.

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( 1,020.6 ) ( 1,020.6 )

Retained earnings 1,164.3 2,289.0

(Accumulated Deficit) / Retained earnings ( 2,579.9 ) 1,164.3

Accumulated other comprehensive loss ( 105.1 ) ( 113.3 )

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Depreciation and amortization 171.2 122.3 61.1

Goodwill impairment 2,342.1 — —

Business reorganization 104.6 14.6 0.8

Total operating expenses 5,832.4 3,450.5 1,495.8

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(Loss) income before income taxes ( 3,702.8 ) ( 1,338.1 ) 465.4

(Benefit from) provision for income taxes ( 213.4 ) 47.4 88.9

Provision for (benefit from) income taxes 41.4 ( 213.4 ) 47.4

Net (loss) income $ ( 3,744.2 ) $ ( 1,124.7 ) $ 418.0

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Net (loss) income $ ( 3,744.2 ) $ ( 1,124.7 ) $ 418.0

Other comprehensive (loss) income

Other comprehensive income (loss)

Foreign currency translation adjustment 6.7 ( 58.9 ) ( 43.6 )

Cash flow hedges:

Change in unrealized gains — — ( 3.8 )

Reclassification to earnings — — ( 1.9 )

Tax effect on effective cash flow hedges — — 0.8

Change in fair value of cash flow hedges — — ( 4.9 )

Change in fair value of available-for-sale securities 1.5 2.9 ( 5.1 )

Other comprehensive (loss) income ( 56.0 ) ( 48.7 ) 49.8

Other comprehensive income (loss) 8.2 ( 56.0 ) ( 48.7 )

Comprehensive (loss) income $ ( 3,736.0 ) $ ( 1,180.7 ) $ 369.3

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Noncash lease expense 61.1 81.7 34.5

Amortization and impairment of intellectual property 1,506.7 64.8 32.2

Amortization and impairment of intangibles 1,418.9 1,506.7 64.8

Depreciation 135.5 90.3 61.2

Goodwill impairment 2,342.1 — —

Interest expense 140.6 122.7 6.5

Amortization of debt issuance costs 14.1 6.5 —

Deferred income taxes ( 150.4 ) ( 410.8 ) 8.1

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Accounts payable, accrued expenses and other liabilities ( 200.9 ) ( 405.1 ) ( 45.6 )

Net cash provided by operating activities 1.1 258.0 912.3

Net cash (used in) provided by operating activities ( 16.1 ) 1.1 258.0

Investing activities:

Change in bank time deposits 19.8 100.0 447.0

Proceeds from available-for-sale securities 542.0 779.9 546.3

Sale and maturities of available-for-sale securities 146.9 542.0 779.9

Purchases of available-for-sale securities — — ( 756.3 )

Purchases of fixed assets ( 141.7 ) ( 204.2 ) ( 158.6 )

Proceeds from sale of long-term investment 20.6 — 47.5

Proceeds from sale of long-term investments — 20.6 —

Purchase of long-term investments ( 18.5 ) ( 15.7 ) ( 12.3 )

Business acquisitions, net of cash acquired ( 3,310.9 ) ( 161.3 ) ( 102.5 )

Business acquisitions ( 18.1 ) ( 3,310.9 ) ( 161.3 )

Other ( 16.6 ) ( 8.1 ) 0.8

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Settlement of capped calls — 140.1 —

Payment of convertible notes ( 1,166.8 ) — —

Payment for settlement of convertible notes — ( 1,166.8 ) —

Proceeds from issuance of debt 1,348.9 3,248.9 —

Payment of contingent earn-out consideration ( 35.7 ) ( 26.8 ) —

Net cash provided by (used in) financing activities 1,930.3 ( 256.8 ) ( 57.4 )

Net cash (used in) provided by financing activities ( 91.4 ) 1,930.3 ( 256.8 )

Effects of foreign currency exchange rates on cash, cash equivalents, and restricted cash and cash equivalents 3.1 ( 15.9 ) ( 5.2 )

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Change in cumulative foreign currency translation adjustment — — — — — — ( 43.6 ) ( 43.6 )

Change in unrealized gains on cash flow hedge, net — — — — — — ( 4.9 ) ( 4.9 )

Net unrealized gain on available-for-sale securities, net of taxes — — — — — — ( 5.1 ) ( 5.1 )

Stock-based compensation — — 113.7 — — — — 113.7

Issuance of restricted stock, net of forfeitures and cancellations 1.4 — — — — — — —

Net share settlement of restricted stock awards ( 0.5 ) — ( 71.5 ) — — — — ( 71.5 )

Employee share purchase plan settlement 0.1 — 14.2 — — — — 14.2

Issuance of shared related to Playdots, Inc.

acquisitions 0.6 — 97.6 — — — — 97.6

Balance, March 31, 2021 137.6 1.4 2,288.8 ( 22.4 ) ( 820.6 ) 1,871.0 ( 8.6 ) 3,332.0

Net income — — — — — 418.0 — 418.0

Change in cumulative foreign currency translation adjustment — — — — — — ( 43.6 ) ( 43.6 )

Net unrealized gain on available-for-sale securities, net of taxes — — — — — — ( 5.1 ) ( 5.1 )

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

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Issuance of restricted stock, net of forfeitures and cancellations 1.2 — — — — — — —

Issuance of shares related to Nordeus.

acquisition 0.5 — 94.1 — — — — 94.1

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

Employee share purchase plan settlement 0.1 — 19.7 — — — — 19.7

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Balance, March 31, 2023 192.6 1.9 9,010.2 ( 23.7 ) ( 1,020.6 ) 1,164.3 ( 113.3 ) 9,042.5

Net loss — — — — — ( 3,744.2 ) — ( 3,744.2 )

Change in cumulative foreign currency translation adjustment — — — — — — 6.7 6.7

Stock-based compensation — — 416.1 — — — — 416.1

Net unrealized gain on available-for-sale securities, net of taxes — — — — — — 1.5 1.5

Issuance of restricted stock, net of forfeitures and cancellations 2.1 — — — — — — —

Exercise of stock options — — 1.5 — — — — 1.5

Net share settlement of restricted stock awards ( 0.6 ) — ( 94.1 ) — — — — ( 94.1 )

Employee share purchase plan settlement 0.4 — 37.9 — — — — 37.9

Balance, March 31, 2024 194.5 1.9 $ 9,371.6 ( 23.7 ) $ ( 1,020.6 ) $ ( 2,579.9 ) $ ( 105.1 ) $ 5,667.9

See accompanying Notes.

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We develop, operate, and publish products principally through Rockstar Games, 2K, Private Division, and Zynga.

Our products are currently designed for console gaming systems, PC, and mobile, including smartphones and tablets.

Our products are designed for console gaming systems, PC, and mobile, including smartphones and tablets.

We deliver our products through physical retail, digital download, online platforms, and cloud streaming services.

Acquisition of Zynga

On May 23, 2022, we completed our acquisition of Zynga Inc.

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

Refer to Note 2 0 - Acquisitions for additional information.

Principles of Consolidation

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Our five largest customers accounted for 79.8 %, 79.6 % and 79.0 % of net revenue during the fiscal years ended March 31, 2024, 2023 and 2022, respectively.

One customer accounted for 23.5 %, 38.0 % and 38.9 % of net revenue during the fiscal years ended March 31, 2023, 2022, and 2021, respectively.

One customer accounted for 23.2 %, 23.5 % and 38.0 % of net

revenue during the fiscal years ended March 31, 2024, 2023, and 2022, respectively.

A second customer accounted for 21.1 %, 20.7 %, and 22.0 % of net revenue during the fiscal years ended March 31, 2024, 2023, and 2022, respectively.

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Customers that individually accounted for more than 10% of our gross accounts receivable balance comprised 57.7 % and 50.3 % of such balances at March 31, 2024 and 2023, respectively.

We had three customers who accounted for 21.6 %, 14.5 %, and 14.2 % of our gross accounts receivable as of March 31, 2023 and two customers who accounted for 43.5 % and 20.3 % of our gross accounts receivable as of March 31, 2022.

We had three customers who accounted for 21.8 %, 18.1 %, and 16.9 % of our gross accounts receivable as of March 31, 2024 and three customers who accounted for 21.6 %, 14.5 %, and 14.2 % of our gross accounts receivable as of March 31, 2023.

We did not have any additional customers that exceeded 10% of our gross accounts receivable as of March 31, 2024 and 2023.

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We enter into agreements with third-party developers that require us to make payments for game development and production services.

In exchange for our payments, we receive the exclusive publishing and distribution rights to the finished

game title as well as, in some cases, the underlying intellectual property rights.

In exchange for our payments, we receive the exclusive publishing and distribution rights to the finished game title as well as, in some cases, the underlying intellectual property rights.

Such agreements typically allow us to fully recover these payments to the developers at an agreed upon royalty rate earned on the subsequent sales of such software, net of any agreed upon costs.

Subsequent to establishing technological feasibility of a product, we capitalize all development and production service payments to third-party developers as software development costs and licenses.

We typically enter into agreements with third-party developers after completing the technical design documentation for our products and therefore record the design costs leading up to a signed development contract as research and development expense.

We typically enter into

agreements with third-party developers after completing the technical design documentation for our products and therefore record the design costs leading up to a signed development contract as research and development expense.

When we contract with third-party developers, we generally select those that have proven technology and experience in the genre of the software being developed, which often allows for the establishment of technological feasibility early in the development cycle.

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If there is an identified asset in the contract (either explicitly or implicitly) and we have control over its use, the contract is (or contains) a lease.

In certain of our lease

arrangements, primarily those related to our data center arrangements, judgment is required in determining if a contract contains a lease.

In certain of our lease arrangements, primarily those related to our data center arrangements, judgment is required in determining if a contract contains a lease.

For these arrangements, there is judgment in evaluating if the arrangement provides us with an asset that is physically distinct, or that represents substantially all of the capacity of the asset, and if we have the right to direct the use of the asset.

Lease assets and liabilities are recognized based on the present value of future lease payments over the lease term at the commencement date.

Lease assets and liabilities are recognized based on the present value of future lease payments over the lease term at the

commencement date.

Included in the lease liability are future lease payments that are fixed, in-substance fixed, or payments based on an index or rate known at the commencement date of the lease.

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The assessment requires us to make judgments and involves the use of significant estimates and assumptions.

These estimates and assumptions include long-term growth rates and operating margins used to calculate projected future cash flows, risk-adjusted discount rates based on our weighted average cost of capital, future economic and market conditions and the determination of appropriate, comparable market data.

These estimates and assumptions include long-term growth rates and EBITDA margins used to calculate projected future cash flows, risk-adjusted discount rates based on our weighted average cost of capital, future economic and market conditions and the determination of appropriate, comparable market data.

Our estimates for market growth are based on historical data, various internal estimates, and observable external sources when available.

Those estimates are based on assumptions that are consistent with the plans and estimates we use to manage the underlying business.

Based on our annual impairment assessment process for goodwill, no impairments were recorded during the fiscal years ended March 31, 2023, 2022, or 2021.

As of March 31, 2023, the goodwill balance of one of our reporting units is $ 6,377.0 , and a moderate reduction in its fair value may result in an impairment charge, which would be equal to the excess carrying value over the fair value of such assets.

Such a reduction in fair value could result from a reduction in our long-term growth rates and operating margins used to calculate projected future cash flows or a change in any of the estimates mentioned above.

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.

The impairment was primarily due to a reduction in the forecasted performance of the reporting unit due to industry conditions and changes in our strategies for games within the reporting unit in response to those conditions.

There were no goodwill impairments recorded during the fiscal years ended March 31, 2023 or 2022.

As of March 31, 2024, the goodwill balance of that reporting unit is $ 4,131.1 .

Unanticipated changes in business performance or the regulatory environment, market declines, and other events impacting the fair value of the reporting units with assigned goodwill, or increases in the level of equity required to support these businesses, could cause additional goodwill impairment charges in future periods.

Refer to Note 9 - Goodwill and Intangible Assets, Net .

Long-lived Assets

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The estimated fair value is generally measured by discounting expected future cash flows using an appropriate discount rate.

Refer to Note 9 - Goodwill and Intangible Assets, Net for impairments that occurred in the fiscal year ended March 31, 2024.

As of March 31, 2024, no indicators of impairment existed.

Refer to Note 9 - Goodwill and Intangible Assets , Net and Note 13 - Leases for impairments that occurred in the fiscal year ended March 31, 2023.

Derivatives and Hedging

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The changes in fair value of derivatives that are not designated as hedges are recognized currently in earnings as Interest and other, net in our Consolidated Statements of Operations.

If a derivative meets the definition of a cash flow hedge and is so designated, the effective portion of changes in the fair value of the derivative are recognized, as a component of Other comprehensive (loss) income while the ineffective portion of the changes in fair value is recorded currently in earnings as Interest and other, net in our Consolidated Statements of Operations.

Amounts included in Accumulated other comprehensive (loss) income for cash flow hedges are reclassified into earnings in the same period that the hedged item is recognized in Cost of revenue, Research and development expenses, or Interest and other, net, as appropriate.

If a derivative meets the definition of a cash flow hedge and is so designated, the effective portion of changes in the fair value of the derivative are recognized, as a component of Other comprehensive income (loss) while the ineffective portion of the changes in fair value is recorded currently in earnings as Interest and other, net in our Consolidated Statements of Operations.

Amounts included in Accumulated other comprehensive loss for cash flow hedges are reclassified into earnings in the same period that the hedged item is recognized in Cost of revenue, Research and development expenses, or Interest and other, net, as appropriate.

We record a tax provision for the anticipated tax consequences of the reported results of operations.

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Valuation allowances are established when we determine that it is more likely than not that such deferred tax assets will not be realized.

We do not record income tax expense related to foreign withholding taxes or United States income taxes that may become payable upon the repatriation of undistributed earnings of foreign subsidiaries, as such earnings are expected to be reinvested indefinitely outside of the United States.

We do not record income tax expense related to foreign withholding taxes or United States income taxes that may become payable upon the repatriation of undistributed earnings of foreign subsidiaries, to the extent such earnings are expected to be reinvested indefinitely outside of the United States.

We use estimates and assumptions to compute the provision for income taxes including allocations of certain transactions to different tax jurisdictions, amounts of permanent and temporary differences, the likelihood of deferred tax assets being recovered and the outcome of contingent tax risks.

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Determining the estimated sell-through period requires management judgment and estimates.

In addition, some of our software products are sold as digital downloads.

Our software products are sold as digital downloads.

Revenue from digital downloads generally commences when the download is made available to the end user by a third-party digital storefront.

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Our allowances for doubtful accounts are typically immaterial and, if required, are based on our best estimate of expected credit losses inherent in our accounts receivable balance.

Deferred revenue is comprised primarily of unsatisfied revenue related to the portion of the transaction price allocable to game related services of our full game software products and sales of virtual currency.

These sales are typically invoiced at the beginning of the contract period, and revenue is recognized ratably over the estimated service period.

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Significant Estimates

Significant management judgment and estimates must be used in connection with many of the determinations described above, such as estimating the fair value allocation to distinct and separable performance obligations, the service period over which to defer recognition of revenue, and the amounts of price protection.

Significant management judgment and estimates must be used in connection with certain of the determinations described above, such as estimating the fair value allocation to distinct and separable performance obligations, and the service period over which to defer recognition of revenue.

We believe we can make reliable estimates.

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The fair value of all stock-based compensation is either capitalized and amortized in accordance with our software development cost accounting policy or recognized as expense on a straight-line basis over the full vesting period of the awards for time-based stock awards and on an accelerated attribution method for market-based and performance-based stock awards.

We estimate the fair value of time-based awards using our closing stock price on the date of grant.

We estimate the fair value of time-based and performance-based awards using our closing stock price on the date of grant.

We estimate the fair value of market-based awards using a Monte Carlo Simulation method, which takes into account assumptions such as the expected volatility of our common stock, the risk-free interest rate based on the contractual term of the award, expected dividend yield, vesting schedule and the probability that the market conditions of the awards will be achieved.

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dollars using exchange rates for assets and liabilities at the balance sheet date and average prevailing exchange rates for the period for revenue and expense accounts.

Adjustments resulting from translation are included in accumulated other comprehensive (loss) income.

Adjustments resulting from translation are included in Accumulated other comprehensive loss.

Realized and unrealized transaction gains and losses are included in our Consolidated Statements of Operations in the period in which they occur.

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Comprehensive (loss) income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners.

Accumulated other comprehensive (loss) income includes foreign currency translation adjustments, which relate to investments that are permanent in nature and therefore do not require tax adjustments, and the amounts for unrealized gains (losses), net on derivative instruments designated as cash flow hedges, as well as any associated tax impact, and available for sale securities.

Accumulated other comprehensive loss includes foreign currency translation adjustments, which relate to investments that are permanent in nature and therefore do not require tax adjustments, and the amounts for unrealized gains (losses), net on derivative instruments designated as cash flow hedges, as well as any associated tax impact, and available for sale securities.

Recently Adopted Accounting Pronouncements

Accounting for Government Assistance

In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832):

Disclosures by Business Entities about Government Assistance , which requires annual disclosures that increase the transparency of transactions involving government grants, including (1) the types of transactions, (2) the accounting for those transactions, and (3) the effect of those transactions on any entity's financial statements.

The new guidance is effective for fiscal years beginning after December 15, 2021, with the new disclosures required on an annual basis, and can be applied either prospectively or retrospectively.

We adopted the new guidance on April 1, 2022 and included the required disclosures with respect to any government assistance or grants subject to the scope of the guidance to the extent material.

Refer to Note 7 - Software Development Costs and Licenses .

Accounting for Contract Assets and Contract Liabilities

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers .

Under this new standard, deferred revenue acquired in a business combination is measured pursuant to ASC 606 , Revenue from Contracts with Customers , rather than its assumed acquisition date fair value under the current guidance.

We adopted this effective April 1, 2022.

The adoption of this update did not have an impact on our Consolidated Financial Statements and was applied to our acquisition of Zynga.

Refer to Note 20 - Acquisitions .

Accounting for Convertible Debt

In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40), which simplifies the accounting for convertible instruments by reducing the number of accounting models and generally requiring that a convertible instrument be accounted for as a single liability measured at amortized cost, with no conversion feature separately recorded in equity.

Similarly, no portion of issuance costs will be allocated to equity under the ASU.

Further, the ASU amends the earnings per share guidance by requiring the diluted earnings per share calculation for convertible instruments to follow the if-converted method, with use of the treasury stock method no longer permitted.

We adopted this effective April 1, 2022.

The adoption of this update did not have an impact on our Consolidated Financial Statements.

Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which expands disclosures in an entity’s income tax rate reconciliation table and regarding cash taxes paid both in the U.S.

and foreign jurisdictions.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 (April 1, 2025 for the Company).

The amendments in this ASU are required to be applied on a prospective basis and retrospective adoption is permitted.

We are currently evaluating the potential impact of adopting this guidance on our Consolidated Financial Statements and related disclosures.

Segment Reporting Disclosures

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 (April 1, 2024 for the Company).

The amendments in this ASU must be applied on a retrospective basis to all prior periods presented in the financial statements.

We are currently evaluating the potential impact of adopting this guidance on our Consolidated Financial Statements and related disclosures.

REVENUE FROM CONTRACTS WITH CUSTOMERS

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Net revenue recognized over time is primarily comprised of revenue from our software products that include game related services, separate virtual currency transactions, and in-game purchases, which are recognized over an estimated service period.

Over time net revenue includes in-game advertising.

Net revenue recognized over time also includes in-game advertising, which is recognized over a contractual term.

Net revenue by timing of recognition was as follows:

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Total net revenue $ 5,349.6 $ 5,349.9 $ 3,504.8

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 ("RCS") 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.

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The balance of deferred revenue, including current and non-current balances as of March 31, 2024 and March 31, 2023 were $ 1,102.4 and $ 1,114.3 , respectively.

For the fiscal year ended March 31, 2023, the additions to our deferred revenue balance were primarily due to the acquisition of Zynga ( Note 2 0 - 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 fiscal year ended March 31, 2023, $ 860.1 of revenue was recognized that was included in the deferred revenue balance at the beginning of the period.

During the fiscal year ended March 31, 2023, $ 332.1 of revenue was recognized from the deferred revenue balance acquired from the Zynga acquisition.

For the fiscal year ended March 31, 2024, the additions to our deferred revenue balance were due primarily to 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 fiscal year ended March 31, 2024, $ 1,065.1 of revenue was recognized that was included in the deferred revenue balance at the beginning of the respective period.

As of March 31, 2024, the aggregate amount of contract revenue allocated to unsatisfied performance obligations is $ 1,238.7 , which includes our deferred revenue balances and amounts to be invoiced and recognized as revenue in future periods.

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MANAGEMENT AGREEMENT

In November 2017, we entered into a management agreement (the "2017 Management Agreement") with ZelnickMedia Corporation ("ZelnickMedia") that replaced our previous agreement with ZelnickMedia and pursuant to which ZelnickMedia provides financial and management consulting services to the Company through March 31, 2024.

In November 2017, we entered into a management agreement (the "2017 Management Agreement") with ZelnickMedia Corporation ("ZelnickMedia"), which replaced our previous agreement with ZelnickMedia and pursuant to which ZelnickMedia provided financial and management consulting services to the Company through March 31, 2024.

The 2017 Management Agreement became effective January 1, 2018.

As part of the 2017 Management Agreement, Strauss Zelnick, the President of ZelnickMedia, continues to serve as Executive Chairman and Chief Executive Officer of the Company, and Karl Slatoff, a partner of ZelnickMedia, continues to serve as President of the Company.

The 2017 Management Agreement provides for an annual management fee of $ 3.1 over the term of the agreement and a maximum annual bonus opportunity of $ 7.4 over the term of the agreement, based on the Company achieving certain performance thresholds.

As part of the 2017 Management Agreement, Strauss Zelnick, the President of ZelnickMedia, continued to serve as Executive Chairman and Chief Executive Officer of the Company, and Karl Slatoff, a partner of ZelnickMedia, continued to serve as President of the Company.

The 2017 Management Agreement provided for an annual management fee of $ 3.1 over the term of the agreement and a maximum annual bonus opportunity of $ 7.4 over the term of the agreement, based on the Company achieving certain performance thresholds.

In May 2022, we entered into a new management agreement (the "2022 Management Agreement") with ZelnickMedia that replaced the 2017 Management Agreement and pursuant to which ZelnickMedia will continue to provide financial and management consulting services to the Company through March 31, 2029.

The 2022 Management Agreement became effective May 23, 2022, when our acquisition of Zynga closed (refer to Note 20 - Acquisitions ).

On May 21, 2022, ZelnickMedia

assigned substantially all of its rights and obligations and other liabilities under the 2022 Management Agreement to ZMC Advisors, L.P.

On May 21, 2022, ZelnickMedia assigned substantially all of its rights and obligations and other liabilities under the 2022 Management Agreement to ZMC Advisors, L.P.

("ZMC Advisors").

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The 2022 Management Agreement provides for an annual management fee of $ 3.3 over the term of the agreement and a maximum annual bonus opportunity of $ 13.2 over the term of the agreement, based on the Company achieving certain performance thresholds.

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

In consideration for ZelnickMedia's services, we recorded consulting expense (a component of General and administrative expenses) of $ 3.5 , $ 9.9 , and $ 10.5 for the fiscal years ended March 31, 2023, 2022, and 2021, respectively.

Pursuant to the 2022 Management Agreement and 2017 Management Agreement, we also issued stock-based awards to ZelnickMedia.

During the fiscal years ended March 31, 2023, 2022, and 2021, we recorded $ 47.1 , $ 29.2 , and $ 27.3 , respectively, of stock-based compensation expense for non-employee awards, which is included in General and administrative expenses.

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 $ 6.5 , $ 3.5 , and $ 9.9 for the fiscal years ended March 31, 2024, 2023, and 2022, respectively.

Pursuant to the 2022 Management Agreement and 2017 Management Agreement, we also issued stock-based awards to ZMC.

During the fiscal years ended March 31, 2024, 2023, and 2022, we recorded $ 52.8 , $ 47.1 , and $ 29.2 , respectively, of

stock-based compensation expense for non-employee awards, which is included in General and administrative expenses.

See Note 16 - Stock-Based Compensation for a discussion of such awards.

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This includes certain pricing models, discounted cash flow methodologies, and similar techniques that use significant unobservable inputs.

The table below segregates all assets 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.

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.

March 31, 2024

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Short-term investments:

Corporate bonds — 145.2 — 145.2

Bank-time deposits 22.0 — — 22.0

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Accrued expenses and other current liabilities:

Foreign currency forward contracts $ — $ 2.5 $ — $ 2.5

Contingent earn-out consideration $ — $ — $ 12.4 $ 12.4

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Contingent earn-out consideration — — 0.7 0.7

Short-term debt, net:

Convertible notes — 24.6 — 24.6

Long-term debt, net:

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Money market funds 145.8 — — 145.8

Commercial paper — 119.4 — 119.4

US Treasuries 52.0 — — 52.0

Certificates of Deposit — 10.0 — 10.0

Short-term investments:

Corporate bonds — 145.2 — 145.2

Bank-time deposits 41.8 — — 41.8

Restricted cash and cash equivalents:

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Bank-time deposits 0.5 — — 0.5

Short-term investments:

Corporate bonds — 538.5 — 538.5

Bank-time deposits 131.8 — — 131.8

Commercial paper — 125.4 — 125.4

US Treasuries 23.4 — — 23.4

Certificates of Deposit — 1.0 — 1.0

Other assets:

Private equity — — 16.1 16.1

Restricted cash and cash equivalents, long term:

Money market funds 99.6 — — 99.6

Other assets:

Private equity — — 26.5 26.5

Total financial assets $ 961.8 $ 145.2 $ 26.5 $ 1,133.5

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Contingent earn-out consideration — — 27.3 27.3

Long-term debt, net:

Convertible notes — 44.1 — 44.1

Total financial liabilities $ — $ 46.6 $ 93.9 $ 140.5

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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 fiscal year ended March 31, 2023, we paid $ 70.1 related to these earn-out consideration arrangements.

During the fiscal year ended March 31, 2023, we recognized General and administrative expense of $ 26.5 within our 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 $ 65.4 and is recorded within Accrued expenses and other current liabilities in our Consolidated Balance Sheet as

of March 31, 2023.

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

In connection with our acquisition of Popcore we completed on November 16, 2022, our consideration included a contingent earn-out consideration arrangement that requires us to pay an aggregate of $ 105.0 in cash if Popcore achieves certain performance measures over each of the three calendar years following the closing.

During the fiscal years ended March 31, 2024, March 31, 2023, and March 31, 2022, we recognized General and administrative expense of $ 4.5 , $ 26.5 , and $ 48.0 , respectively, within our 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 $ 69.5 .

During the fiscal year ended March 31, 2024, we paid $ 69.5 related to the second earn-out period.

During the fiscal year ended March 31, 2023, we paid $ 70.1 related to the first earn-out period.

In connection with our acquisition of Popcore on November 16, 2022, consideration included a contingent earn-out consideration arrangement that requires us to pay an aggregate of $ 105.0 in cash if Popcore achieves certain performance measures over each of the three calendar years following the closing.

We recorded $ 23.3 as the initial fair value of contingent earn-out consideration.

At March 31, 2023, $ 25.6 is recorded within Other long-term liabilities in our Consolidated Balance Sheet.

The remaining contingent earn-out consideration liability of $ 1.2 recorded within Accrued expenses and other current liabilities and $ 1.7 recorded within Other long-term liabilities in our Consolidated Balance Sheet as of March 31, 2023, relates to immaterial earn-out arrangements from Zynga's historical acquisitions.

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 fiscal years ended March 31, 2024 and March 31, 2023 we recognized General and administrative expense of $( 12.9 ) and $ 26.5 , respectively, within our Consolidated Statements of Operations for the change in fair value of the contingent earn-out consideration liability associated with the Popcore acquisition.

The fair value of the contingent consideration liability related to the earn-out period is $ 12.7 , with $ 12.0 and $ 0.7 being recorded within Accrued expenses and other current liabilities and Other long-term liabilities, respectively, in our Consolidated Balance Sheet as of March 31, 2024.

The change resulted from a lower probability of Popcore achieving certain performance measures in the remaining two 12-month periods.

The remaining contingent earn-out consideration liability of $ 0.4 recorded within Accrued expenses and other current liabilities in our Consolidated Balance Sheet as of March 31, 2024, 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.

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At March 31, 2024 and March 31, 2023, we held $ 8.0 and $ 8.0 , respectively, of such investments in Other assets within our Consolidated Balance Sheet.

See Note 9 - Goodwill and Intangible Assets, Net for intangible related fair value measurements.

See Note 13 - Leases for lease impairment related fair value measurements.

See Note 9 - Goodwill and Intangible Assets, Net for goodwill and intangible related fair value measurements.

SHORT-TERM INVESTMENTS

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Bank time deposits $ 22.0 $ — $ — $ 22.0

Available-for-sale securities:

Corporate bonds 147.2 — ( 2.0 ) 145.2

Total Short-term investments $ 22.0 $ — $ — $ 22.0

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Corporate bonds 147.2 — ( 2.0 ) 145.2

US Treasuries 23.4 — — 23.4

Certificates of Deposit 1.0 — — 1.0

Commercial Paper 125.4 — — 125.4

Total Short-term investments $ 189.0 $ — $ ( 2.0 ) $ 187.0

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Due in 1 year or less $ 22.0 $ 22.0

Due in 1-2 years — —

Total Short-term investments $ 22.0 $ 22.0

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Our risk management strategy includes the use of derivative financial instruments to reduce the volatility associated with changes in foreign currency exchange rates on earnings, cash flows, and certain balance sheet amounts.

We do not enter into derivative financial contracts for speculative or trading purposes.

We do not enter

into derivative financial contracts for speculative or trading purposes.

We recognize derivative instruments as either assets or liabilities on our Consolidated Balance Sheets, and we measure those instruments at fair value.

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Forward contracts to purchase foreign currencies 72.2 51.2

For the fiscal years ended March 31, 2023, 2022 and 2021, we recorded a loss of $ 15.1 , a gain of $ 5.9 , and a loss of $ 3.6 , respectively, related to foreign currency forward contracts in Interest and other, net on our Consolidated Statements of Operations.

For the fiscal years ended March 31, 2024, 2023, and 2022, we recorded a gain of $ 5.3 , a loss of $ 15.1 , and a gain of $ 5.9 , respectively, related to foreign currency forward contracts in Interest and other, net on our Consolidated Statements of Operations.

Our foreign currency exchange forward contracts are not designated as hedging instruments under hedge accounting and are used to reduce the impact of foreign currency on certain balance sheet exposures.

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Amortization and impairment, net of stock-based compensation $ 292.7 $ 268.3 $ 153.3

During the fiscal year ended March 31, 2023, the impairment charges related to (i) a decision not to proceed with further development of certain interactive entertainment software products, 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 fiscal year ended March 31, 2024, $ 88.2 of the impairment charges relate to our cost reduction program (refer to Note 21 - Business Reorganization ), the remaining $ 21.7 related to (i) a decision not to proceed with further development of certain interactive entertainment software products, and (ii) recognizing unamortized capitalized costs for the development of a title that exceed the anticipated net realizable value of the asset at the time they were impaired.

As a result of government grants earned on qualified production spend to date, our software development costs and licenses were reduced by $ 108.3 and $ 108.1 as of March 31, 2024 and 2023, respectively.

Also, we had $ 0.0 and $ 10.0 current receivable within Prepaid expenses and other, and $ 256.8 and $ 256.5 non-current receivable within Other assets on our Consolidated Balance Sheets relating to such government grants as of March 31, 2023 and 2022, respectively.

In addition, within our Consolidated Statements of Operations, amortization of software development costs and licenses, which is a component of Cost of Revenue, for fiscal years ended March 31, 2023, 2022, and 2021, were reduced by $ 41.2 , $ 46.8 , and $ 43.3 , respectively, and Research and development expense was reduced by $ 4.5 for the fiscal year ended March 31, 2023, with no such reduction in fiscal years ended in March 31, 2022, and 2021 .

We had $ 198.5 and $ 0.0 current receivable within Prepaid expenses and other, and $ 109.3 and $ 256.8 non-current receivable within Other assets on our Consolidated Balance Sheets relating to such government grants as of March 31, 2024 and 2023, respectively.

Within our Consolidated Statements of Operations, Cost of revenue, for fiscal years ended March 31, 2024, 2023, and 2022, was reduced by $ 45.3 , $ 41.2 , and $ 46.8 , respectively, and Research and development expense was reduced by $ 5.9 for the fiscal year ended March 31, 2024, $ 4.5 for the fiscal year ended March 31, 2023, with no such reduction in the fiscal year ended March 31, 2022 .

FIXED ASSETS, NET

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Balance at March 31, 2022 $ 674.6

Acquisition of Nordeus 115.5

Acquisition of Zynga ( see Note 20 )

Acquisition of Popcore ( see Note 20 )

Additions from immaterial acquisitions 26.5

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Balance at March 31, 2023 $ 6,767.1

Acquisition of Zynga ( see Note 20 )

Acquisition of Popcore ( see Note 20 )

Impairment ( 2,342.1 )

Additions from immaterial acquisitions 9.7

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Balance at March 31, 2024 $ 4,426.4

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.

We identified various qualitative factors that, collectively, indicated that the fair value of one of our reporting units was more likely than not less than its carrying amount, including a reduction in the forecasted performance of the reporting unit due to industry conditions and changes in our strategies for games within the reporting unit in response to those conditions.

As a result of this qualitative analysis, we performed a valuation of the reporting unit using discounted cash flow and guideline public company methodologies.

Key assumptions and estimates used in deriving the fair value are forecasted revenue, EBITDA margins, long-term growth rate, and discount rate.

There were no goodwill impairment charges for the fiscal years ended March 31, 2023 and March 31, 2022.

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

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Game Engine Technology 322.5 ( 147.3 ) 175.2 323.2 ( 73.5 ) 249.7 4 years

User Base 319.2 ( 274.4 ) 44.8 9.4 ( 8.9 ) 0.5 1 year

User Base 319.2 ( 319.2 ) — 319.2 ( 274.4 ) 44.8 0 years

Developer Relationships 57.0 ( 26.5 ) 30.5 57.0 ( 12.2 ) 44.8 5 years

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Total amortization of intangible assets $ 1,418.9 $ 1,506.7 $ 64.8

During the fiscal year ended March 31, 2023, we recorded impairment charges of $ 465.3 for acquisition-related Developed Game Technology intangible assets within Cost of revenue as a result of (i) a reduction in the forecasted performance of certain games due macroeconomic conditions and changes in our strategies for those games and (ii) our decision not to proceed with further development of a certain interactive entertainment software product.

During the fiscal year ended March 31, 2024, we recorded 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 for certain games in response to those conditions.

During the fiscal year ended March 31, 2023, we recorded impairment charges of $ 465.3 for acquisition-related Developed Game Technology intangible assets within Cost of revenue as a result of (i) a reduction in the forecasted performance of certain games due to macroeconomic conditions and changes in our strategies for those games and (ii) our decision not to proceed with further development of a certain interactive entertainment software product.

The fair value of those intangible assets was measured using the multi-period excess earnings method, consistent with the approach used at acquisition.

Key assumptions and estimates used in deriving the fair value are forecasted revenue, EBITDA margins, long-term decay rate, and discount rate.

During the fiscal years ended March 31, 2022 and 2021, there were no impairment charges for intangible assets.

Key assumptions and estimates used in deriving the fair value are forecasted revenue, EBITDA margins, long-term decay rates, and discount rates.

During the fiscal year ended March 31, 2022, there were no impairment charges for intangible assets.

Estimated future amortization of intangible assets that will be recorded in Cost of revenue and operating expenses for the years ending March 31, are as follows:

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Marketing and promotions 94.5 132.7

Deferred acquisition payments 82.7 78.6

Licenses 64.4 63.0

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Sales tax liability 19.3 14.0

Deferred acquisition payments 17.6 82.7

Professional fees 16.7 9.5

Other 113.4 120.7

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2025 Notes 3.55 % April 14, 2025 $ 600.0 $ 588.9

2026 Notes 5.00 % March 28, 2026 550.0 547.6

2027 Notes 3.70 % April 14, 2027 600.0 576.5

2028 Notes 4.95 % March 28, 2028 800.0 797.8

2032 Notes 4.00 % April 14, 2032 500.0 462.9

2026 Convertible Notes 0.00 % December 15, 2026 25.9 25.9

Total $ 3,075.9 $ 2,999.6

Unamortized discount and issuance costs ( 17.6 )

Long-term debt, net $ 3,058.3

Annual Interest Rate Maturity Date March 31, 2023 Fair Value (Level 2)

2025 Notes 3.55 % April 14, 2025 $ 600.0 $ 583.8

2027 Notes 3.70 % April 14, 2027 600.0 580.9

2032 Notes 4.00 % April 14, 2032 500.0 460.6

2024 Convertible Notes 0.25 % June 1, 2024 20.8 20.8

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Annual Interest Rate Maturity Date March 31, 2024 Fair Value (Level 2)

2024 Convertible Notes 0.25 % June 1, 2024 $ 24.6 $ 24.6

Total $ 24.6 $ 24.6

Unamortized discount and issuance costs —

Short-term debt, net $ 24.6

Annual Interest Rate Maturity Date March 31, 2023 Fair Value (Level 2)

2024 Notes 3.30 % March 28, 2024 $ 1,000.0 $ 978.2

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Short-term debt, net $ 1,346.8

The interest expense as it relates to our debt is recorded within Interest and other, net in our Consolidated Statements of Operations for the fiscal year ended March 31, 2023 and was as follows:

Fiscal Year Ended March 31,

The interest expense as it relates to our debt is recorded within Interest and other, net in our Consolidated Statements of Operations for the fiscal year ended March 31, 2024, and 2023, respectively, and was as follows:

Fiscal Year Ended March 31, Fiscal Year Ended

2024 Notes $ 15.1 $ 31.5

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2027 Notes 22.2 21.4

2028 Notes 27.2 —

2032 Notes 20.0 19.2

Term Loan 1.5 11.9

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Fiscal Year Ended March 31, Maturities

2024 $ 1,350.0

Thereafter 500.0

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Total Face Value $ 3,100.5

During the fiscal year ended March 31, 2022, in connection with our acquisition of Zynga (refer to Note 2 0 - Acquisitions ), we received a bridge loan commitment of $ 2,700.0 .

The bridge loan commitment was terminated in April 2022 in connection with our Senior Notes debt offering discussed below.

During the fiscal year ended March 31, 2023, we recognized expense related to interest and fees of $ 6.1 related to the bridge loan commitment within Interest and other, net in our 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 2,700.00 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”).

The Senior Notes were issued under an indenture, dated as of April 14, 2022 (the “Base Indenture”), between the Company and The Bank of New York Mellon, as trustee (the “Trustee”) and (i) a first supplemental indenture, with respect to the 2024 Notes, (ii) a second supplemental indenture, with respect to the 2025 Notes, (iii) a third supplemental indenture, with respect to the 2027 Notes and (iv) a fourth supplemental indenture, with respect to the 2032 Notes (collectively, the “Supplemental Indentures” and together with the Base Indenture, the “Indenture”), each dated as of April 14, 2022, between the Company and the Trustee.

On April 14, 2023, we completed our offering and sale of $ 1,000.0 aggregate principal amount of our senior notes, consisting of $ 500.0 principal amount of our 5.000 % Senior Notes due 2026 (the "2026 Notes") and $ 500.0 principal amount of our 4.950 % Senior Notes due 2028 ("the 2028 Notes").

On January 8, 2024, we completed our add-on offering and sale of $ 350.0 aggregate principal amount of our senior notes, consisting of $ 50.0 principal amount of additional 2026 Notes and $ 300.0 principal amount of additional 2028 Notes.

The additional 2026 Notes and 2028 Notes (the “New Notes”) were issued as additional notes under the existing Indenture.

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, 2025 Notes, 2026 Notes, 2027 Notes, and 2028 Notes, the "Senior Notes").

The Senior Notes were issued under an indenture, dated as of April 14, 2022 (the “Base Indenture”), between the Company and The Bank of New York Mellon, as trustee (the “Trustee”) and (i) a first supplemental indenture, with respect to the 2024 Notes, (ii) a second supplemental indenture, with respect to the 2025 Notes, (iii) a third supplemental indenture, with respect to the 2027 Notes, (iv) a fourth supplemental indenture, with respect to the 2032 Notes, (v) a fifth supplemental indenture, with respect to the 2026 Notes, and (vi) a sixth supplemental indenture, with respect to the 2028 Notes (collectively, the “Supplemental Indentures” and together with the Base Indenture, the “Indenture”), between the Company and the Trustee.

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

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 fiscal year ended March 31, 2023, we made interest payments of $ 31.5 on the 2024 Notes.

We will pay interest on the 2024 Notes, 2026 Notes, and 2028 Notes semi-annually on March 28 and September 28 of each year, commencing September 28, 2022 for the 2024 Notes and September 28, 2023 for the 2026 Notes and 2028 Notes.

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.

During the fiscal year ended March 31, 2023, we made interest payments of $ 31.8 on the 2025 Notes, 2027 Notes, and 2032 Notes.

The proceeds were used to finance a portion of our acquisition of Zynga.

During the fiscal year ended March 31, 2024, we made interest payments of $ 135.2 .

The proceeds from the issuances of the Senior Notes were used to finance a portion of our acquisition of Zynga and repay certain of our debt.

The Senior Notes are not entitled to any sinking fund payments.

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Debt issuance costs of $ 29.4 and original issuance discount of $ 2.4 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 and Short-term debt, net on our 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 fiscal year ended March 31, 2023, we recognized $ 5.5 of amortization of debt issuance costs and $ 0.4 of amortization of the original issuance discount.

These debt issuance costs and original issuance discount are included as a reduction of the debt within Long-term debt, net on our 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 fiscal year ended March 31, 2024 and 2023, we recognized $ 6.2 and $ 5.5 , respectively, of amortization of debt issuance costs and $ 0.4 and $ 0.4 , respectively, of amortization of the original issuance discount.

On June 5, 2023, pursuant to a tender offer, we purchased and retired $ 650.0 in aggregate principal amount of our 2024 Notes, with proceeds received from the 2026 Notes and 2028 Notes.

We repaid the remaining principal amount of $ 350.0 on its maturity date on March 28, 2024, with proceeds received from the New Notes.

During the fiscal year ended March 31, 2024, we recognized a debt extinguishment gain of approximately $ 7.7 , net of unamortized debt discount and debt issuance costs recorded within Interest and other, net in our Consolidated Statement of Operations.

Credit Agreement

On May 23, 2022, we entered into a new unsecured Credit Agreement (the "2022 Credit Agreement"), which replaced in its entirety the Company's prior Credit Agreement, dated as of February 8, 2019, which was paid off in full and terminated.

On May 23, 2022, we entered into an unsecured Credit Agreement (as amended, the "2022 Credit Agreement"), which replaced in its entirety the Company's prior Credit Agreement, dated as of February 8, 2019, which was paid off in full and terminated.

The 2022 Credit Agreement provides for an unsecured five-year revolving credit facility with commitments of $ 500.0 , including sublimits for (i) the issuance of letters of credit in an aggregate face amount of up to $ 100.0 and (ii) borrowings and letters of credit denominated in Pounds Sterling, Euros, and Canadian Dollars in an aggregate principal amount of up to $ 100.0 .

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).

On May 16, 2024, we increased the total commitments under the facility to $ 750.0 pursuant to the 2022 Credit Agreement's incremental provisions, leaving no further uncommitted incremental capacity.

Loans under the 2022 Credit Agreement will bear interest at a rate of (a) 0.000 % to 0.625 % above an alternate base rate ( 8.50 % at March 31, 2024) or (b) 1.000 % to 1.625 % above Secured Overnight Financing Rate ("SOFR"), approximately 5.33 % at March 31, 2024, which rates are determined by the Company's credit rating.

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Upon execution of the 2022 Credit Agreement, we incurred $ 3.5 of debt issuance costs that were capitalized within Other assets on our 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 Consolidated Statements of Operations.

During the fiscal year ended March 31, 2023, we amortized $ 0.6 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 constitute senior unsecured indebtedness of the Company, ranking equally with all of our other existing and future senior unsecured unsubordinated obligations, and recorded interest within Interest and other, net in our 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).

In December 2022, we fully repaid the $ 200.0 drawdown.

During the fiscal year ended March 31, 2024, and 2023, we amortized $ 0.7 and $ 0.6 , respectively, of these debt issuance costs.

As of March 31, 2024, there were no borrowings under the 2022 Credit Agreement, and we had approximately $ 497.7 available for additional borrowings.

During the fiscal year ended March 31, 2023, we made interest payments of $ 4.1 .

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

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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 rates are determined by reference to 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.

The Term Loan 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.

In addition, the Term Loan provides for events of default customary for a credit facility of this size and type, including, among others, non-payment of principal and interest when due thereunder, breaches of representations and warranties, noncompliance with covenants, acts of insolvency, cross-defaults to material indebtedness, and material judgment defaults (subject to certain limitations and cure periods).

The Term Loan provided for an unsecured 364 -day term loan credit facility in the aggregate principal amount of $ 350.0 , maturing on June 21, 2023.

We fully drew down on the Term Loan on June 22, 2022 at approximately 3.60 %.

We repriced our outstanding borrowing at approximately 5.62 % in December 2022 and 5.91 % in March 2023.

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

A portion of the proceeds from the April 14, 2023 issuance of the 2026 Notes and 2028 Notes were used to fully repay the Term Loan on April 27, 2023.

During the fiscal year ended March 31, 2024, we made interest payments of $ 1.8 .

Convertibles Notes

Convertible Notes

In conjunction with the acquisition of Zynga on May 23, 2022 (refer to Note 20 - Acquisitions ), we entered into (a) the First Supplemental Indenture (the “2024 Supplemental Indenture”) to the Indenture, dated as of June 14, 2019 (the “2024 Indenture”), between Zynga and Computershare Trust Company, N.A.

(as successor to Wells Fargo Bank, National Association) (the “Trustee”), relating to Zynga’s 0.25 % Convertible Senior Notes due 2024 (the “2024 Convertible Notes”), and (b) the First Supplemental Indenture (the “2026 Supplemental Indenture” and, together with the 2024 Supplemental Indenture, the “Supplemental Indentures”) to the Indenture, dated as of December 17, 2020 (the “2026 Indenture” and, together with the 2024 Indenture, the “Indentures”), between Zynga and the Trustee, relating to Zynga’s 0.00 % Convertible Senior Notes due 2026 (the “2026 Convertible Notes” and, together with the 2024 Convertible Notes, the “Convertible Notes”).

As of the closing date of the acquisition, approximately $ 690.0 aggregate principal amount of the 2024 Convertible Notes were outstanding and approximately $ 874.5 aggregate principal amount of the 2026 Convertible Notes were outstanding.

(as successor to Wells Fargo Bank, National Association) (the “Convertible Notes Trustee”), relating to Zynga’s 0.25 % Convertible Senior Notes due 2024 (the “2024 Convertible Notes”), and (b) the First Supplemental Indenture (the “2026 Supplemental Indenture” and, together with the 2024 Supplemental Indenture, the “Supplemental Indentures”) to the Indenture, dated as of December 17, 2020 (the “2026 Indenture” and, together with the 2024 Indenture, the “Indentures”), between Zynga and the Convertible Notes Trustee, relating to Zynga’s 0.00 % Convertible Senior Notes due 2026 (the “2026 Convertible Notes” and, together with the 2024 Convertible Notes, the “Convertible Notes”).

As of the closing date of the acquisition, approximately $ 690.0 aggregate principal amount of the 2024 Convertible Notes was outstanding and approximately $ 874.5 aggregate principal amount of the 2026 Convertible Notes was outstanding.

Following the acquisition and according to the Supplemental Indentures, we assumed all of Zynga’s rights and obligations under the Indentures, and the Company guaranteed the payment and other obligations of Zynga under the Convertible Notes.

As a result of our acquisition of Zynga, the right to convert each one thousand dollar principal amount of such Convertible Notes into shares of Zynga common stock was changed into a right to convert such principal amount of such Convertible Notes into the number of units of Reference Property equal to the conversion rate in effect immediately prior to the closing of the Zynga Acquisition, in each case pursuant to the terms and procedures set forth in the applicable Indenture.

As a result of our acquisition of Zynga, the right to convert each one thousand dollar principal amount of such Convertible Notes into shares of Zynga common stock was changed into a right to convert such principal amount of such Convertible Notes into the number of units of Reference Property equal to the conversion rate in effect immediately prior to the closing, in each case pursuant to the terms and procedures set forth in the applicable Indenture.

A unit of Reference Property is defined in each Indenture as 0.0406 shares of Take-Two common stock and $ 3.50 in cash, without interest, plus cash in lieu of any fractional shares of Take-Two common stock.

The 2024 Convertible Notes and 2026 Convertible Notes mature on June 1, 2024, and December 15, 2026, respectively, unless earlier converted, redeemed, or repurchased in accordance with their terms, respectively, prior to the maturity date.

maturity date.

Interest is payable semiannually on the 2024 Convertible Notes in arrears on March 1 and September 1 of each year.

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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.

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.

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, 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.

As of the expiration of the Fundamental Change, Make-Whole Fundamental Change, and Share Exchange Event, (a) $ 0.3 aggregate principal amount of the 2024 Convertible Notes and (b) $ 845.1 aggregate principal amount of the 2026 Convertible Notes were tendered for cash.

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

As of March 31, 2023, we recorded $ 20.8 as the fair value of the remaining outstanding 2024 Convertible Notes, and $ 23.3 as the fair value of the remaining outstanding 2026 Convertible Notes, within Long-term debt, net in our Consolidated Balance Sheet.

During the fiscal year ended March 31, 2023, we recognized a loss of $ 37.6 within (Loss) gain on fair value adjustments, net in our 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.

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.

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

We initially recorded $ 131.3 as the acquisition date fair value of these Capped Calls, and, as of June 30, 2022, the fair value of $ 140.1 is recorded on our Consolidated Balance Sheet.

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 fiscal year ended March 31, 2023, we recognized a gain of $ 8.8 within (Loss) gain 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 of March 31, 2024, we recorded $ 24.6 as the fair value of the remaining outstanding 2024 Convertible Notes, within Short-term debt, net, and $ 25.9 as the fair value of the remaining outstanding 2026 Convertible Notes, within Long-term debt, net, in our Consolidated Balance Sheet.

During the fiscal year

ended March 31, 2024 and 2023, we recognized a loss of $ 6.4 and a loss of $ 37.6 , respectively, within (Loss) gain on fair value adjustments, net in our Consolidated Statements of Operations.

(LOSS) EARNINGS PER SHARE ("EPS")

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Diluted (loss) earnings per share $ ( 22.01 ) $ ( 7.03 ) $ 3.58

We incurred a net loss for the fiscal year ended March 31, 2023;

We incurred a net loss for the fiscal year ended March 31, 2024 and 2023;

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

We had 1.6 potentially dilutive shares from share-based awards and 0.6 of shares from Convertible Notes that are excluded due to the net loss for the period.

For the fiscal year ended March 31, 2024, we had 2.4 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.

Our lease arrangements are primarily for (1) corporate, administrative, and development studio offices and (2) data centers and server equipment.

Our existing leases have remaining lease terms ranging from one to fifteen years.

Our existing leases have remaining lease terms ranging from one to fourteen years .

In certain instances, such leases include one or more options to renew, with renewal terms that generally extend the lease term by one to five years for each option.

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Short-term lease costs 4.9 4.1 1.4

As part of our acquisition of Zynga (refer to Note 20 - Acquisitions ), we recognized an ROU asset related to Zynga's office space lease in San Francisco, which is available for sublease and not currently used by us.

Due to the continued deterioration of the sublease market, unsuccessful negotiations with a potential sub-tenant, and our decision to change our sublease marketing strategy, we recognized a $ 30.0 impairment loss related to the ROU asset during the fourth quarter of fiscal year 2023, which is included in General and administrative expense within our Consolidated Statement of Operations and in the Operating lease costs in the table above.

During the fiscal year ended March 31, 2023, we recognized a $ 30.0 impairment loss related to an ROU asset related to Zynga's office space lease in San Francisco, which is available for sublease and not currently used by us due to the continued deterioration of the sublease market, unsuccessful negotiations with a potential sub-tenant, and our decision to change our sublease marketing strategy.

This impairment loss is included in General and administrative expense within our Consolidated Statement of Operations and in the Operating lease costs in the table above.

The fair value of the San Francisco Office was estimated using a risk-adjusted, discounted cash flow model with Level 3 inputs.

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As of March 31, 2024, we have entered into facility leases that have not yet commenced with future lease payments of approximately $ 11.6 .

These leases are expected to commence within the next twelve months and will have lease terms ranging from five to seven years .

These leases are expected to commence within the next twelve months and will have lease terms ranging from three to ten years .

COMMITMENTS AND CONTINGENCIES

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Software Development and Licensing Agreements:

We make payments to third-party software developers that include contractual payments to developers under several software development agreements that expire at various times through July 2031.

We make payments to third-party software developers that include contractual payments to developers under several software development agreements that expire at various times through October 2030.

Our aggregate outstanding software development commitments assume satisfactory performance by third-party software developers.

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These obligations are primarily related to agreements to purchase services that are enforceable and legally binding on us that specifies all significant terms, including fixed, minimum or variable pricing provisions;

and the approximate timing of the transactions, expiring at various times through October 2027.

and the approximate timing of the transactions, expiring at various times through August 2028.

Employee Savings Plans:

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Total deferred income taxes ( 101.5 ) ( 384.9 ) 11.9

(Benefit from) provision for income taxes $ ( 213.4 ) $ 47.4 $ 88.9

Provision for (benefit from) income taxes $ 41.4 $ ( 213.4 ) $ 47.4

A reconciliation of our effective tax rate to the U.S.

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Valuation allowance—domestic (4)

( 9.1 ) % ( 6.3 ) % ( 0.1 ) %

Valuation allowance—foreign (4)

( 1.1 ) % ( 0.1 ) % 0.4 %

Nondeductible compensation ( 0.1 ) % ( 0.9 ) % 0.4 %

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Change in reserves 0.9 % ( 0.1 ) % ( 0.9 ) %

Goodwill impairment ( 12.8 ) % — % — %

( 0.4 ) % ( 1.6 ) % 0.6 %

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income tax rates.

(2) Fiscal years ended March 31, 2023 and March 31, 2022 include effects of an increase of the deferred tax asset related to the Federal Act on Tax Reform and AVH Financing ("TRAF") enacted on January 1, 2020.

(2) Fiscal year ended March 31, 2024 include tax expense of $ 29.2 from a decrease in the deferred tax assets related to Switzerland's Federal Act on Tax Reform and AVH Financing ("TRAF") enacted on January 1, 2020.

Fiscal years ended March 31, 2023, and March 31, 2022, include tax benefit of $ 5.6 and $ 11.6 , respectively, from the effects of an increase in the deferred tax asset.

(3) Tax benefits were recorded for fiscal years ended March 31, 2024, 2023, and 2022 attributable to certain tax credits related to software development activities.

(4) Includes nondeductible expense of $ 8.2 relating to loss on the redemption of convertible debt for the fiscal year ended March 31, 2023.

(4) The change in domestic and foreign valuation allowance includes an increase in our valuation allowance on deferred tax assets as a result of a determination in the fiscal year ended March 31, 2024 that it was more likely than not that such deferred tax assets would not be realized.

(5) For the fiscal year ended March 31, 2023, includes nondeductible expense of $ 8.2 relating to loss on the redemption of convertible debt

The effects of temporary differences that gave rise to our deferred tax assets and liabilities were as follows:

Deferred tax assets:

Tax credit carryforward $ 159.5 $ 71.6

Capitalized development costs, software and depreciation $ 365.1 $ 157.8

Tax credit carryforward 174.4 159.5

Equity-based compensation 143.0 109.8

Accrued compensation expense 96.6 106.0

Operating lease liabilities 90.6 54.3

Tax basis step up related to TRAF 131.1 79.1

Operating lease liabilities 101.9 90.6

Accrued compensation expense 72.6 96.6

Net operating loss carryforward 63.2 50.3

Deferred revenue — 13.0

Other 2.7 26.0

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Deferred revenue ( 5.0 ) ( 15.0 )

Capitalized software and depreciation — ( 145.1 )

Total deferred tax liabilities ( 593.9 ) ( 920.7 )

Net deferred tax asset (1)

Net deferred tax liability (1)

$ ( 339.0 ) $ ( 489.2 )

(1) As of March 31, 2023, $ 44.8 is included in Deferred tax assets and $ 534.0 is included in Other long-term liabilities.

As of March 31, 2022 , $ 73.8 is included in Deferred tax assets and $ 21.8 is included in Other long-term liabilities.

The valuation allowance is primarily attributable to deferred tax assets for which no benefit is provided due to uncertainty with respect to their realization.

(1) As of March 31, 2024, $ 1.9 is included in Deferred tax assets and $ 340.9 is included in Deferred tax liabilities, net.

As of March 31, 2023 , $ 44.8 is included in Deferred tax assets and $ 534.0 is included in Deferred tax liabilities, net.

We assess the realizability of the deferred tax assets based on the available positive and negative evidence in order to determine the amount which is more likely than not to be realized and record a valuation allowance as necessary.

Due to our cumulative loss position, which provides significant negative evidence, we recognized a tax expense of $ 378.8 from an increase in our valuation allowance on U.S.

and foreign deferred tax assets, as a result of a determination that it was more likely than not that such deferred tax assets would not be realized.

The remaining net deferred tax liability is primarily related to a basis difference in intangibles as a result of the acquisition of Zynga in May 2022.

At March 31, 2024, we had domestic net operating loss carryforwards totaling $ 367.5 of which $ 28.3 will expire from 2024 to 2029, $ 187.3 will expire from 2030 to 2040, $ 136.8 will expire from 2041 to 2043, and the remainder will be carried forward indefinitely.

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The total amount of undistributed earnings of foreign subsidiaries was approximately $ 492.5 at March 31, 2024 and $ 64.6 at March 31, 2023.

The amount of undistributed earnings of foreign subsidiaries of $ 456.0 as of March 31, 2023 was offset by a deficit of $ 391.4 relating to Zynga, while the amount at March 31, 2024 does not include amounts relating to foreign subsidiaries with deficits.

As of March 31, 2024, it is our intention to reinvest indefinitely undistributed earnings of our foreign subsidiaries.

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We recognize interest and penalties related to uncertain tax positions in the provision for income taxes in our Consolidated Statements of Operations.

For the fiscal years ended March 31, 2023, 2022 and 2021, we recognized an increase of interest and penalties of $ 8.9 , $ 1.9 and $ 2.6 , respectively.

For the fiscal years ended March 31, 2024, 2023, and 2022, we recognized an increase

of interest and penalties of $ 13.5 , $ 8.9 , and $ 1.9 , respectively.

The gross amount of interest and penalties accrued as of March 31, 2024 and 2023 was $ 33.6 and $ 20.2 , respectively.

As of March 31, 2024, we had gross unrecognized tax benefits, including interest and penalties, of $ 276.3 , of which $ 167.9 would affect our effective tax rate if realized.

For the fiscal year ended March 31, 2023, gross unrecognized tax benefits increased by $ 118.8 .

For the fiscal year ended March 31, 2024, gross unrecognized tax benefits decreased by $ 18.5 .

We are no longer subject to audit for U.S.

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Lapse of statute of limitations ( 76.2 ) — ( 8.0 )

Other 0.6 — —

Balance, end of period $ 242.8 $ 274.7 $ 164.8

(1) Increase in prior year tax positions of $ 109.9 relates to purchase accounting for the Zynga acquisition.

(1) For the fiscal year ended March 31, 2023, the increase in prior year tax positions of $ 109.7 related to purchase accounting for the Zynga acquisition.

We believe that we have provided for any reasonably foreseeable outcomes related to our tax audits and that any settlement will not have a material adverse effect on our consolidated financial statements.

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Stock-based compensation expense before income taxes 335.6 317.8 183.0

Income tax provision/(benefit) ( 45.8 ) ( 35.4 ) ( 21.7 )

Provision for (benefit from) income taxes ( 12.2 ) ( 45.8 ) ( 35.4 )

Stock-based compensation expense, net of income tax benefit 323.4 272.0 147.6

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Employee Awards

Time-based restricted stock units granted to employees under our stock-based compensation plans generally vest either annually or quarterly over three years from the date of grant.

Time-based restricted stock units granted to employees under our stock-based compensation plans generally vest either annually or quarterly over three years or four years from the date of grant.

Certain restricted stock units granted to key officers, senior-level employees, or key employees vest based on market conditions, primarily related to the performance of the price of our common stock.

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(1) Represents the maximum number of shares eligible to vest.

Time-based restricted stock units granted in fiscal year 2023 pursuant to the 2017 Management Agreement will vest on April 13, 2024, and those granted in fiscal year 2022 vested on April 13, 2023.

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

Market-based restricted stock units granted in fiscal year 2023 pursuant to the 2017 Management Agreement are eligible to vest on April 13, 2024, and those granted in fiscal year 2022 that were eligible to vest vested on April 13, 2023.

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.

Time-based restricted stock units granted in fiscal year 2024 pursuant to the 2022 Management Agreement will vest on May 31, 2024, May 30, 2025, and June 1, 2026, and those granted in fiscal year 2023 pursuant to the 2022 Management Agreement, vested in part on June 1, 2023 and will also vest in part on May 31, 2024, and May 30, 2025.

Time-based restricted stock units granted in fiscal year 2023 pursuant to the 2017 Management Agreement vested on April 12, 2024.

Market-based restricted stock units granted in fiscal year 2024 pursuant to the 2022 Management Agreement are eligible to vest on June 1, 2026, and those granted in fiscal year 2023 pursuant to the 2022 Management Agreement are eligible to vest on May 31, 2024 and May 30, 2025.

Market-based restricted stock units granted in fiscal year 2023 pursuant to the 2017 Management Agreement vested on April 12, 2024.

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, as applicable.

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.

Performance-based restricted stock units granted in fiscal year 2023 pursuant to the 2017 Management Agreement are eligible to vest on April 13, 2024, and those granted in fiscal year 2022 vested on April 13, 2023.

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" measured over a two-year period or "RCS" measured over a two - or three-year period.

Performance-based restricted stock units granted in fiscal year 2024 pursuant to the 2022 Management Agreement are eligible to vest on June 1, 2026, and those granted in fiscal year 2023 pursuant to the 2022 Management Agreement are eligible to vest on May 31, 2024 and May 30, 2025.

Performance-based restricted stock units granted in fiscal year 2023 pursuant to the 2017 Management Agreement vested on April 12, 2024.

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).

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Granted 1.6 138.21

Converted 4.0 116.12

Vested ( 1.9 ) 130.24

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Risk-free interest rate 4.0 %

0.1 % 0.2 % 0.2 % 0.2 %

Expected stock price volatility 36.6 %

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34.2 - 37.6 %

Expected service period (years) 1.8 - 2.8

37.3 % 36.3 %

Expected service period (years) 2.8

Dividends None None None None None None

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Granted 0.5 195.03

Converted 0.1 116.12

Vested ( 0.2 ) 276.07

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Granted 0.2 141.90

Converted 0.2 86.09

Vested ( 0.1 ) 166.02

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Balance as of March 31, 2023

Converted 1.6 71.66

0.7 $ 49.54 $ 46.51 4.53

Vested ( 0.1 ) 38.68

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Vested and expected to vest — $ 44.59 $ 0.13 6.51

The following table presents the weighted-average grant date fair value and related assumptions used to estimate the fair value of our stock options:

The following table presents the weighted-average grant date fair value and related assumptions used to estimate the fair value of our stock options converted during the fiscal year ended March 31, 2023.

We had no stock options converted or granted in the fiscal year ended March 31, 2024:

Fiscal Year Ended March 31,

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The total fair value of options that vested during the fiscal year ended March 31, 2024 was $ 1.5 .

The total fair value of options that were exercised during the fiscal year ended March 31, 2024 was $ 6.1 .

During the fiscal year ended March 31, 2024, total unrecognized stock-based compensation expense of $ 0.1 related to unvested stock options is expected to be recognized over a weighted-average recognition period of approximately 0.28 years.

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Expected stock price volatility 26.3 - 39.1 %

27.7 % - 33.2 %

Expected service period (years) 0.5 0.5

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Interest and other, net $ ( 103.6 ) $ ( 141.9 ) $ ( 14.2 )

ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME

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

ACCUMULATED OTHER COMPREHENSIVE (LOSS)

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

Foreign currency

adjustments Unrealized gain

instruments Unrealized gain (loss) on cross-currency swap Unrealized gain

securities Total

Balance at March 31, 2022 $ ( 52.8 ) $ ( 4.5 ) $ ( 57.3 )

Other comprehensive (loss) income before reclassifications ( 43.6 ) — — ( 5.1 ) ( 48.7 )

Other comprehensive income (loss) before reclassifications ( 58.9 ) 2.9 ( 56.0 )

Balance at March 31, 2023 $ ( 111.7 ) $ ( 1.6 ) $ ( 113.3 )

Other comprehensive (loss) income before reclassifications ( 58.9 ) — — 2.9 ( 56.0 )

Other comprehensive income (loss) before reclassifications 6.7 1.5 8.2

Balance at March 31, 2024 $ ( 105.0 ) $ ( 0.1 ) $ ( 105.1 )

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Valuation allowance for deferred income taxes $ 338.2 488.0 ( 27.1 ) — $ 799.1

Allowance for doubtful accounts 0.4 — — 0.9 1.3

Fiscal Year Ended March 31, 2023

Valuation allowance for deferred income taxes $ 121.9 218.5 ( 2.2 ) — $ 338.2

Allowance for doubtful accounts 0.4 — — — 0.4

Fiscal Year Ended March 31, 2022

Valuation allowance for deferred income taxes $ 95.7 27.9 ( 1.7 ) — $ 121.9

Allowance for doubtful accounts 0.4 — — — 0.4

Zynga Acquisition

On May 23, 2022, we completed our acquisition of 100 % of the issued and outstanding shares of Zynga, a leading developer of mobile games (the "Zynga Acquisition").

On May 23, 2022, we completed the Zynga Acquisition.

Under the terms and conditions of the merger agreement, each Zynga stockholder received $ 3.50 in cash and 0.0406 shares of our common stock and cash in lieu of fractional shares for each share of Zynga common stock outstanding at closing.

Our consideration consisted of an aggregate of $ 3,992.4 in cash, 46.3 shares of our common stock, and $ 151.7 of replacement equity awards attributable to the pre-acquisition service period (see below).

Our consideration consisted of an aggregate of $ 3,992.4 in cash, 46.3 shares of our common stock, and $ 151.7 of replacement equity awards attributable to the pre-acquisition service period.

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 11 - 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 $ 139.5 , $ 14.2 , and $ 8.1 for the fiscal year ended March 31, 2023 have been recorded within General and administrative expense, Research and development, and Selling and marketing, respectively, in our 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.

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We used the acquisition method of accounting and recognized assets acquired and liabilities assumed at their fair value as of the date of acquisition, with the excess recorded to goodwill.

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

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

Fair Value Weighted average useful life

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Deferred revenue ( 333.1 ) N/A

Long-term debt ( 1,653.1 ) N/A

Deferred tax liabilities, net ( 922.9 ) N/A

Lease liabilities ( 15.7 ) N/A

Long-term debt ( 1,653.1 ) N/A

Non-current lease liabilities ( 131.6 ) N/A

Deferred tax liabilities, net ( 922.9 ) N/A

Other liabilities assumed ( 61.5 ) N/A

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Total $ 9,521.8

Convertible Notes and Related Capped Calls

Refer to Note 11 - Debt for a discussion of the Convertible Notes and related Capped Calls that were previously issued by Zynga.

Identifiable Intangible Assets Acquired and Goodwill

The preliminary fair value estimates of Developed game technology, certain Game engine technology, and Advertising technology were estimated using the multi-period excess earnings method.

The excess earnings methodology is an income approach methodology that estimates the projected cash flows of the business attributable to the Developed game technology, Advertising technology, and Game engine technology intangible assets, respectively, net of charges for the use of other identifiable assets of the business including working capital, fixed assets and other intangible assets.

Key assumptions and estimates used in deriving the projected cash flows are forecasted revenue, EBITDA margin growth, long-term decay rate, and discount rate.

The amortization for these intangible assets has been recorded to Cost of revenue in our Consolidated Statements of Operations .

The preliminary fair value estimate of Branding and trade names was estimated using the relief-from-royalty method, which presumes the owner of the asset avoids hypothetical royalty payments that would need to be made for the use of the asset if the asset was not owned.

Key assumptions and estimates used are forecasted revenue, royalty rates, and discount rate.

The amortization for the Branding and trade names intangible asset has been recorded to Depreciation and amortization in our Consolidated Statements of Operations .

The preliminary fair value estimate of User base and certain Game engine technology was estimated using the replacement cost method.

The replacement cost methodology is a cost approach methodology based on replacement or

reproduction cost of the User Base as an indicator of fair value.

The key assumption and estimate used is the hypothetical replacement or reproduction cost.

The amortization for the User base intangible asset has been recorded to Selling and marketing in our Consolidated Statements of Operations .

The preliminary fair value estimate of Developer relationships and Customer relationships were estimated using the with and without method, which is a form of the income approach.

The with and without method considers the hypothetical impact to the projected cash flows of the business if the asset were not in place.

Key assumptions and estimates used are forecasted revenue and expenses as well as discount rate.

The amortization for the Developer relationships and Customer relationships intangible assets have been recorded to Research and development and Selling and marketing, respectively, in our Consolidated Statements of Operations .

The $ 5,994.4 of goodwill recognized, which is not deductible for U.S.

income tax purposes, is primarily attributable to the assembled workforce of the acquired business and expected synergies at the time of the acquisition.

Zynga Revenue and Earnings

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

Fiscal Year Ended March 31, 2023

Net revenue $ 2,159.2

Net loss 1,139.7

Pro-forma Financial Information

The following table summarizes the pro-forma consolidated results of operations (unaudited) for the fiscal year ended March 31, 2023 and 2022, 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.

Fiscal Year Ended March 31,

Pro-forma Net revenue $ 5,728.1 $ 6,313.1

Pro-forma Net loss 766.7 621.5

The unaudited pro-forma consolidated results above are based on the historical financial statements of Take-Two and Zynga and are not necessarily indicative of the results of operations that would have been achieved if the acquisition was completed at the beginning of fiscal year 2022 and are not indicative of the future operating results of the combined company.

The unaudited pro-forma information for all periods presented includes the following adjustments, where applicable, for business combination accounting effects resulting from the acquisition:

(i) alignment of Zynga's accounting policy with Take-Two’s revenue accounting policy regarding the timing of recognition of consumable and durable virtual items, (ii) additional interest expense related to financing for the acquisition, (iii) additional incremental stock-based compensation expense for the replacement of Zynga’s outstanding equity awards with Take-Two replacement equity awards, (iv) alignment of Zynga's accounting policy with Take-Two’s policy to expense certain royalty prepayments until technological feasibility is established, (v) additional amortization expense related to finite-lived intangible assets acquired, and (vi) the related tax effects assuming that the business combination occurred on April 1, 2021.

The significant nonrecurring adjustments reflected in the unaudited pro-forma consolidated information above include the reclassification of the transaction costs and the related tax effects incurred after the acquisition to the earliest period presented.

Popcore Acquisition

On November 16, 2022, we completed the acquisition of 100 % of Popcore GmbH ("Popcore"), a privately-held Germany-based free-to-play mobile game developer, for initial consideration of $ 116.9 in cash, 0.6 shares of our common stock, and a contingent earn-out consideration arrangement that requires us to pay up to an aggregate of $ 105.0 in cash if Popcore achieves certain performance measures over each of the three calendar years following the closing.

On November 16, 2022, we completed the acquisition of 100 % of Popcore, a privately-held Germany-based free-to-play mobile game developer, for initial consideration of $ 116.9 in cash, 0.6 shares of our common stock, and a contingent earn-out consideration arrangement that requires us to pay up to an aggregate of $ 105.0 in cash if Popcore achieves certain performance measures over each of the three calendar years following the closing.

The cash portion was funded from our cash on hand.

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We estimated the fair value of the contingent earn-out consideration using a Monte Carlo simulation model.

This fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement as defined in ASC 820.

(Refer to Note 4 - Fair Value Measurements .)

This fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement as defined in ASC 820 (refer to Note 4 - Fair Value Measurements ).

We used the acquisition method of accounting and recognized assets and liabilities at their fair value as of the date of acquisition, with the excess recorded to goodwill.

The preliminary fair values of net tangible and intangible assets are management’s estimates based on the information available at the acquisition date and may change over the measurement period, which will end no later than one year from the acquisition date, as additional information is received.

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

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

Fair Value Weighted average useful life

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income tax purposes, is primarily attributable to the assembled workforce of the acquired business and expected synergies at the time of the acquisition.

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

Fiscal Year Ended March 31, 2023

Net revenue $ 73.3

Supplemental pro-forma financial information has not been provided as the historical results of Popcore were not material to us.

Transaction costs of $ 2.9 for the fiscal year ended March 31, 2023 have been recorded within General and administrative expense in our Consolidated Statements of Operations.

SUBSEQUENT EVENTS

On April 14, 2023, we completed our offering and sale of $ 1,000.0 aggregate principal amount of our senior notes, consisting of $ 500.0 principal amount of 5.000 % Senior Notes due 2026 (the "2026 Notes") and $ 500.00 principal amount of 4.950 % Senior Notes due 2028 (the "2028 Notes").

The 2026 Notes mature on March 28, 2026 and bear interest at an annual rate of 5.000 %.

The 2028 Notes mature on March 28, 2028 and bear interest at an annual rate of 4.950 %.

We will pay interest on the 2026 Notes and 2028 Notes semi-annually on March 28 and September 28 of each year, commencing September 28, 2023.

The 2026 Notes and 2028 Notes were issued under an indenture between the Company and The Bank of New York Mellon, as trustee.

The proceeds were used to fully repay the $ 350.0 Term Loan on April 27, 2023.

The remaining proceeds will be used to partially pay down other outstanding debt.

On May 18, 2023, we announced that we have commenced a tender offer to purchase for cash up to $ 500.0 aggregate principal amount of our 2024 Notes.

The tender offer is being conducted on the terms and conditions set forth in the offer to purchase dated May 18, 2023.

Gearbox Acquisition

On March 27, 2024, we entered into a Share Purchase Agreement to purchase 100 % of the issued and outstanding capital stock of The Gearbox Entertainment Company, Inc.

("Gearbox"), from Embracer Group AB.

The purchase price is $ 460.0 , consisting of newly issued shares of Take-Two common stock, valued based on the volume weighted average closing price per share of our common stock on the Nasdaq Global Select Market for the five consecutive trading days ending on (and including) the trading day immediately preceding the closing date, subject to adjustments as defined in the Share Purchase Agreement.

The transaction, which is currently anticipated to close during the first quarter in fiscal 2025, is subject to the satisfaction or waiver of customary closing conditions for both parties.

BUSINESS REORGANIZATION

We have implemented a cost reduction program to identify efficiencies across our business (the "2024 Plan"), which includes eliminating several projects in development and streamlining our organizational structure.

The 2024 Plan is expected to be largely completed by December 31, 2024.

We estimate that we will incur approximately $ 160.0 to $ 200.0 in total charges in connection with the 2024 Plan, which consists of approximately $ 120.0 to $ 140.0 related to title cancellations, $ 25.0 to $ 35.0 associated with employee severance and employee-related costs, and approximately $ 15.0 to $ 25.0 related to office space reductions.

We incurred business reorganization expenses of $ 104.6 , $ 14.6 , and $ 0.8 during the fiscal year ended March 31, 2024, 2023, and 2022, respectively.

Of these amounts, $ 93.3 was incurred in connection with the 2024 Plan during the fiscal year

ended March 31, 2024, of which $ 88.2 related to title cancellations (refer to Note 7 - Software Development Costs and Licenses ), $ 3.2 was for employee-related costs, and the remaining $ 1.9 consisted of professional fees.

Through March 31, 2024, we paid $ 1.9 related to these reorganization activities and $ 13.1 remained accrued for in Accrued expenses and other current liabilities.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

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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-K

Item 9A. Controls and Procedures