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Item 7. Management’s Discussion and Analysis

2025-05-20 compared with 2024-05-22 · 113 added, 155 removed, 206 unchanged (57% of the section changed)

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We are a leading developer, publisher, and marketer of interactive entertainment for consumers around the globe.

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.

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

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

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

Refer to Item 1 - Business for additional discussion.

During the fiscal year ended March 31, 2024, we recognized Goodwill impairment charges of $2,342.1, representing a partial impairment related to one of our reporting units, and we recognized impairment charges of $577.4 for acquisition-related Developed Game Technology intangible assets within Cost of revenue as a result of a reduction in the forecasted performance of certain games due to industry conditions and changes in our strategies in response to those conditions.

During the fiscal year ended March 31, 2025, we recognized Goodwill impairment charges of $3,545.2, representing a partial impairment related to one of our reporting units, and we recognized impairment charges of $137.0 for acquisition-related Developed Game Technology intangible assets within Cost of revenue and $39.3 for acquisition-related Branding and Trade Names intangible assets within Depreciation and amortization.

The impairment charges are a result of a reduction in the forecasted performance of certain games due to industry conditions and changes in our strategies in response to those conditions.

Key assumptions and estimates used in deriving the fair values of these assets are forecasted revenue, EBITDA margins, long-term decay rate, and discount rate (refer to Note 9 - Goodwill and Intangible Assets, Net ).

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During the fiscal year ended March 31, 2025, we also recognized impairment charges related to our Software development costs and licenses of $77.5, of which $35.1 related to title cancellations as part of our cost reduction program (refer to Note 7 - Software Development Costs and Licenses and Note 21 - Business Reorganization) .

Debt Transactions

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 additional 2028 Notes (the “New Notes”) were issued as additional notes under the existing Indenture (refer to Note 11 - Debt ).

Our 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 2026 Notes and 2028 Notes semi-annually on March 28 and September 28 of each year, commencing September 28, 2023 for the 2026 Notes and 2028 Notes.

During the fiscal year ended March 31, 2024, we made interest payments of $137.0 for our various debt obligations.

On June 5, 2023, pursuant to a tender offer, we purchased and retired $650.0 in aggregate principal amount of our 3.300% Senior Notes due 2024 (the "2024 Notes"), with proceeds received from the 2026 Notes and 2028 Notes.

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

Trends and Factors Affecting our Business

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Generally, a significant portion of our revenue has been derived from a few popular franchises, particularly around new releases within those franchises, some of which have annual or biennial releases.

Our Grand Theft Auto products in particular have historically accounted for a significant portion of our revenue.

Additionally, our Grand Theft Auto products in particular have historically accounted for a significant portion of our revenue.

Sales of Grand Theft Auto products generated 12.6% of our net revenue for the fiscal year ended March 31, 2025.

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Economic Environment and Retailer Performance.

We continue to monitor various macroeconomic and geopolitical factors that may affect our business in several areas, including consumer demand, inflation, pricing pressure on our products, credit quality of our receivables, and foreign currency exchange rates.

For example, in response to the conflict in Ukraine, we suspended sales of our products in Russia and Belarus, which had a negative impact on our financial results.

Actions taken to date and other potential actions could result in additional negative impact in future periods.

We continue to monitor various macroeconomic and geopolitical factors, such as global tariff policy, that may affect our business in several areas, including consumer demand, inflation, pricing pressure on our products, credit quality of our receivables, and foreign currency exchange rates.

Actions we have taken to date and other potential actions we may take in the future in response to these factors could result in negative impacts in future periods.

The economic environment has affected our customers in the past and may do so in the future.

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Such console revenue comprised 37.3% of our net revenue by product platform for the fiscal year ended March 31, 2025.

The success of our business is dependent upon consumer acceptance of these platforms and the continued growth in the installed base of these platforms.

When new hardware platforms are introduced, demand for interactive entertainment used on older platforms typically declines, which may negatively affect our business during the market transition to the new consoles.

The success of our business is dependent upon consumer acceptance of these platforms and

the continued growth in the installed base of these platforms, which could be impacted by global economic factors, including global tariff policy.

When new hardware platforms are introduced, demand for interactive entertainment developed for older platforms typically declines, which may negatively affect our business during the market transition to the new consoles.

The latest Sony and Microsoft consoles provide "backwards compatibility" (i.e., the ability to play games for the previous generation of consoles).

The inclusion of such features on new consoles could mitigate

the risk of such a decline.

The inclusion of such features on new consoles could mitigate the risk of such a decline.

However, we cannot be certain how backwards compatibility will affect demand for our products.

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Online Content and Digital Distribution.

We provide a variety of online delivered products, including direct digital downloads of our titles, and access to additional offerings through virtual currency, add-on content, and in-game purchases, which drive ongoing engagement and incremental revenue from recurrent consumer spending on our titles.

We provide a variety of online delivered products, including direct digital downloads of our titles, and access to additional offerings through virtual currency, add-on content, in-game purchases, and in-game advertising, which drive ongoing engagement and incremental revenue from recurrent consumer spending on our titles.

Net revenue from digital online channels comprised 96.4% of our net revenue for the fiscal year ended March 31, 2025.

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A significant portion of our mobile titles are distributed, marketed, and promoted through third parties, primarily Apple’s App Store and the Google Play Store.

Virtual items for our mobile games are purchased through the payment processing systems of these platform providers.

Virtual items for our mobile games are purchased principally through the payment processing systems of these platform providers, as well as our direct-to-consumer commerce platform.

We generate a significant portion of our net revenue through the Apple and Google platforms and expect to continue to do so for the foreseeable future.

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Accordingly, the overall product mix between mobile and other game sales may affect our gross margin percentage.

We are also expanding our direct-to-consumer efforts more meaningfully across our mobile portfolio to enhance profitability.

In addition, we aim to drive ongoing engagement and incremental revenue from recurrent consumer spending on our titles through virtual currency, add-on content, in-game purchases, and in-game advertising, all of which are typically delivered digitally.

We are also continuing to expand our direct-to-consumer efforts more meaningfully across our mobile portfolio to enhance profitability.

Player acquisition costs.

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Content Release Highlights

During fiscal year 2024, 2K released WWE 2K24, LEGO 2K Drive and NBA 2K24 ;

Zynga released Match Factory!

and Top Troops ;

and Private Division released Penny's Big Breakaway.

During fiscal year 2025 to date, 2K released TopSpin 2K25 and Private Division released No Rest for the Wicked early access on PC.

Rockstar plans to release Grand Theft Auto VI in the Fall of calendar 2025.

In addition, throughout the year, we expect to continue to deliver new content for our franchises.

We will also continue to invest in opportunities that we believe will enhance and scale our business and have the potential to drive growth over the long term.

During fiscal year 2025, 2K released NBA 2K25 , TopSpin 2K25 , Sid Meier's Civilization VII , PGA TOUR 2K25 , and WWE 2K25 , and Zynga released Game of Thrones:

Rockstar plans to release Grand Theft Auto VI on May 26, 2026.

Fiscal 2025 Financial Summary

Our net revenue for the fiscal year ended March 31, 2024 was essentially flat year-on-year at $5,349.6, a decrease of $0.3 or 0.0% compared to the fiscal year ended March 31, 2023 and included net revenue of $2,390.9 from Zynga, which we acquired in May 2022 (refer to Note 20 - Acquisitions ), including top contributors Toon Blast , our hyper-casual mobile portfolio, Empires & Puzzles, Merge Dragons!

, and Words With Friends, as well as a variety of our top franchises, primarily NBA 2K, Grand Theft Auto, Red Dead Redemption , and WWE 2K.

Our operating loss for the fiscal year ended March 31, 2024 was $3,590.6 compared to operating loss of $1,165.2 for fiscal year ended March 31, 2023, primarily due to Goodwill impairment charges of $2,342.1, representing a partial impairment related to one of our reporting units.

Our net revenue for the fiscal year ended March 31, 2025 was led by a variety of our top franchises, primarily NBA 2K, Grand Theft Auto , Red Dead Redemption , WWE 2K , and Sid Meier's Civilization, as well as top contributors Toon Blast , our hyper-casual mobile portfolio, Empires & Puzzles , Match Factory!

, and Words With Friends.

Our net revenue for the fiscal year ended March 31, 2025 was $5,633.6, an increase of $284.0 or 5.3% compared to the fiscal year ended March 31, 2024.

Our operating loss for the fiscal year ended March 31, 2025 was $4,391.1 compared to operating loss of $3,590.6 for fiscal year ended March 31, 2024, primarily due to an increase in Goodwill impairment charges of $1,203.1 related to an additional partial impairment related to one of our reporting units.

For the fiscal year ended March 31, 2025, our net loss was $4,478.9, as compared to net loss of $3,744.2 in the prior year.

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At March 31, 2025, we had $1,559.2 of Cash, cash equivalents, and restricted cash and cash equivalents, compared to $1,102.0 at March 31, 2024.

The decrease was primarily due to Net cash used in financing activities, primarily related to net share settlements of our restricted stock awards and payment of contingent earn-outs for prior acquisitions, partially offset by issuance of common stock and our net debt activity.

The debt activity included proceeds from the issuance of 2026 Notes and

2028 Notes offset by our repayment of 2024 Notes and Term Loan (refer to Note 11 - Debt ).

To a lesser extent, the decrease was also due to i) Net cash used in investing activities, which was due primarily to the purchase of fixed assets and our individually immaterial acquisitions and investments, offset by our sales and maturities of available for sale securities, and ii) Net cash used in operating activities, which was due primarily to investments in software development and licenses, partially offset by sales of our products.

The increase was primarily due to Net cash provided by financing activities, primarily related to proceeds from the issuance of our 2029 Notes and 2034 Notes (refer to Note 11 - Debt ) and the issuance of common stock.

This increase was partially offset by (i) Net cash used in investing activities, which was primarily due to the purchase of fixed assets and (ii) Net cash used in operating activities, which was primarily due to investments in software development and licenses, partially offset by sales of our products.

On June 11, 2024, we completed the purchase of 100% of the issued and outstanding capital stock of The Gearbox Entertainment Company, Inc.

("Gearbox"), from Embracer Group AB, for an initial consideration of 2.8 shares of our common stock (refer to Note 20 - Acquisitions ).

Critical Accounting Policies and Estimates

Our most critical accounting policies, which are those that require significant judgment, include revenue recognition;

capitalization and recognition of software development costs and licenses;

fair value estimates including valuation of goodwill and intangible assets;

valuation and recognition of stock-based compensation;

and income taxes.

Our most critical accounting policies, which are those that require significant judgment, include revenue recognition, capitalization and recognition of software development costs and licenses, fair value estimates including valuation of goodwill and intangible assets, valuation and recognition of stock-based compensation, and income taxes.

See Note 1 - Basis of Presentation and Significant Accounting Policies in the Notes to our Consolidated Financial Statements in this Annual Report on Form 10-K.

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For the fiscal year ended March 31, 2025, Net Bookings increased by $315.0 as compared to the prior year.

The increase was primarily due to an increase in Net Bookings of $247.5 from Zynga, which we acquired in May 2022 (refer to Note 20 - Acquisitions ), including from our hyper-casual mobile portfolio, which benefited from our November 2022 acquisition of Popcore (refer to Note 20 - Acquisitions ), and our other top contributors Toon Blast , Empires & Puzzles , Words with Friends, and Merge Dragons!, as well as an increase in Net Bookings from our Grand Theft Auto and Red Dead Redemption franchises, including our August 2023 release of Red Dead Redemption and Undead Nightmare.

This increase was partially offset by a decrease in Net Bookings from Tiny Tina's Wonderlands , which released in March 2022, The Quarry , which released in June 2022, and our Sid Meier's Civilization, PGA TOUR 2K, the latest installment of which, PGA TOUR 2K23 released in October 2022, and NBA 2K franchises.

The increase was primarily due to an increase in Net Bookings from Match Factory!

our Sid Meier's Civilization franchise, the latest installment of which, Civilization VII , released in February 2025;

our NBA 2K franchise;

and TopSpin 2K25 , which released in April 2024.

These increases were partially offset by a decrease in Net Bookings from Empires & Puzzles, our Grand Theft Auto franchise, our hyper- and hybrid-casual mobile portfolio, and LEGO 2K Drive , which released in May 2023.

Results of Operations

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For the comparison of fiscal year 2024 to fiscal year 2023, refer to Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended March 31, 2024.

The following table sets forth, for the periods indicated, our statements of operations, net revenue by geographic region, net revenue by platform, net revenue by distribution channel, and net revenue by content type:

The following table sets forth, for the periods indicated, our statements of operations, net revenue by content type, net revenue by platform, and net revenue by distribution channel:

Fiscal Year Ended March 31,

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Total operating expenses 7,453.3 132.3 % 5,832.4 109.0 % 3,450.5 64.5 %

(Loss) income from operations (3,590.6) (67.1) % (1,165.2) (21.8) % 473.6 13.5 %

Loss from operations (4,391.1) (78.0) % (3,590.6) (67.1) % (1,165.2) (21.8) %

Interest and other, net (93.3) (1.7) % (103.6) (1.9) % (141.9) (2.7) %

(Loss) gain on fair value adjustments, net (8.6) (0.2) % (31.0) (0.6) % 6.0 0.2 %

(Loss) income before income taxes (3,702.8) (69.2) % (1,338.1) (25.0) % 465.4 13.3 %

Provision for (benefit from) income taxes 41.4 0.8 % (213.4) (4.0) % 47.4 1.4 %

Net (loss) income $ (3,744.2) (70.0) % $ (1,124.7) (21.0) % $ 418.0 11.9 %

Loss on fair value adjustments, net (6.9) (0.1) % (8.6) (0.2) % (31.0) (0.6) %

Loss before income taxes (4,491.3) (79.8) % (3,702.8) (69.2) % (1,338.1) (25.0) %

(Benefit from) provision for income taxes (12.4) (0.2) % 41.4 0.8 % (213.4) (4.0) %

Net loss $ (4,478.9) (80.0) % $ (3,744.2) (70.0) % $ (1,124.7) (21.0) %

Fiscal Year Ended March 31,

2025 2024 2023

Net revenue by content:

Recurrent consumer spending $ 4,474.6 79.4 % $ 4,213.5 78.8 % $ 4,180.4 78.1 %

Full game and other 1,159.0 20.6 % 1,136.1 21.2 % 1,169.5 21.9 %

Net revenue by platform:

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Physical retail and other 201.8 3.6 % 237.4 4.4 % 264.2 4.9 %

Net revenue by content:

Recurrent consumer spending $ 4,213.5 78.8 % $ 4,180.4 78.1 % $ 2,271.2 64.8 %

Full game and other 1,136.1 21.2 % 1,169.5 21.9 % 1,233.6 35.2 %

Fiscal Years ended March 31, 2025 and 2024

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Total net revenue $ 5,633.6 100.0 % $ 5,349.6 100.0 % $ 284.0 5.3 %

Game intangibles 1,301.1 24.3 % 1,169.7 21.9 % 131.4 11.2 %

Product costs 821.1 14.6 % 756.6 14.1 % 64.5 8.5 %

Game intangibles 811.0 14.4 % 1,301.1 24.3 % (490.1) (37.7) %

Internal royalties 405.4 7.2 % 397.6 7.4 % 7.8 2.0 %

Licenses 365.8 6.5 % 305.8 5.8 % 60.0 19.6 %

Software development costs and royalties (1)

168.1 3.0 % 346.7 6.5 % (178.6) (51.5) %

Licenses 305.8 5.8 % 306.9 5.7 % (1.1) (0.4) %

Cost of revenue 2,571.4 45.7 % 3,107.8 58.1 % (536.4) (17.3) %

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(1) Includes $9.4 and $24.4 of stock-based compensation expense in fiscal year 2025 and 2024, respectively.

For the fiscal year ended March 31, 2024, net revenue decreased by $0.3, as compared to the prior year.

The decrease was due primarily to a decrease in net revenue of $58.0 from Tiny Tina's Wonderlands , which released in March 2022, $44.2 from The Quarry , which released in June 2022, $38.9 from our Sid Meier's Civilization franchise, and $30.0 from our NBA 2K franchise.

The decrease was partially offset by an increase in net revenue of (i) $225.7 from Zynga, which we acquired in May 2022 (refer to Note 20 - Acquisitions ), including top contributors Toon Blast, our hyper-casual mobile portfolio, which benefited from our November 2022 acquisition of Popcore (refer to Note 20 - Acquisitions ), Empires & Puzzles, Merge Dragons!, and Words with Friends, and (ii) $41.0 from our Red Dead Redemption franchise, including our August 2023 release of Red Dead Redemption and Undead Nightmare .

For the fiscal year ended March 31, 2025, net revenue increased by $284.0, as compared to the prior year.

The increase was primarily due to an increase in net revenue of $237.1 from Match Factory!

, which released in November 2023;

$127.2 from our Sid Meier's Civilization franchise, the latest installment of which, Civilization VII , released in February 2025;

and $84.2 from Toon Blast .

These increases were partially offset by a decrease in net revenue of $73.3 from our Grand Theft Auto franchise.

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.

Net revenue from recurrent consumer spending increased by $261.1 and accounted for 79.4% of net revenue for the fiscal year ended March 31, 2025, as compared to 78.8% for the prior year.

The increase was primarily due to an increase in net revenue from Match Factory!

and Toon Blast .

These increases were partially offset by a decrease in net revenue from our Grand Theft Auto franchise.

Net revenue from full game and other increased by $22.9 and accounted for 20.6% of net revenue for the fiscal year ended March 31, 2025, as compared to 21.2% for the prior year.

The increase was primarily due to an increase in net revenue from our Sid Meier's Civilization franchise and TopSpin 2K25 .

These increases were partially offset by a decrease in net revenue from our NBA 2K franchise , a decrease as a result of a divestiture in our business, and a decrease in our Grand Theft Auto franchise.

Net revenue from mobile increased by $194.0 and accounted for 52.2% of our total net revenue in the fiscal year ended March 31, 2025, as compared to 51.4% in the prior year.

The increase was due to an increase in net revenue of $205.2 from Zynga, including top contributors Toon Blast , our hyper-casual mobile portfolio, Empires & Puzzles , Merge Dragons!

, and Words with Friends, as well as an increase in our Grand Theft Auto franchise, partially offset by a decrease in Two Dots and our WWE 2K franchise.

The increase was primarily due to an increase in net revenue from Match Factory!

and Toon Blast.

These increases were partially offset by a decrease in our Grand Theft Auto franchise, Merge Dragons!, and as a result of a divestiture.

Net revenue from console games decreased by $68.2 and accounted for 37.3% of our total net revenue in the fiscal year ended March 31, 2025, as compared to 40.5% in the prior year.

The decrease was due to a decrease in net revenue from The Quarry , Tiny Tina's Wonderlands, our Grand Theft Auto, NBA 2K, PGA TOUR 2K, the latest installment of which, PGA TOUR 2K23 released in October 2022 , Mafia, and Borderlands franchises, partially offset by an increase in net revenue from our Red Dead Redemption franchise and LEGO 2K Drive , which released in May 2023.

Net revenue from PC and other decreased by $73.2 and accounted for 8.1% of our total net revenue in the fiscal year ended March 31, 2024, as compared to 9.5% in the prior year.

The decrease was due to a decrease in net revenue from our Sid Meier's Civilization franchise;

Tiny Tina's Wonderlands;

our NBA 2K franchise;

our Borderlands franchise;

Marvel's Midnight Suns, which released in December 2022;

and our XCOM and Red Dead Redemption franchises, partially offset by an increase in net revenue of $20.6 from Zynga, including top contributors Hit It Rich and Zynga Poker, and our Grand Theft Auto franchise.

The decrease was primarily due to a decrease in net revenue from our Grand Theft Auto and NBA 2K franchises, and LEGO 2K Drive , which released in May 2023 .

These decreases were partially offset by an increase in net revenue from TopSpin 2K25 , which released in April 2024, and our Sid Meier's Civilization franchise.

Net revenue from PC and other increased by $158.2 and accounted for 10.5% of our total net revenue in the fiscal year ended March 31, 2025, as compared to 8.1% in the prior year.

The increase was primarily due to an increase in net revenue from our Sid Meier's Civilization franchise ;

our Risk of Rain franchise , which was acquired in connection with our acquisition of Gearbox in June 2024 (refer to Note 20 - Acquisitions );

and our Grand Theft Auto and NBA 2K franchises.

Net revenue from digital online channels increased by $319.6 and accounted for 96.4% of our total net revenue for the fiscal year ended March 31, 2025, as compared to 95.6% in the prior year.

The increase was due to an increase in net revenue of $226.2 from Zynga, including top contributors Toon Blast , our hyper-casual mobile portfolio , Empires & Puzzles, Merge Dragons!, and Words with Friends, as well as an increase in net revenue from our Red Dead Redemption franchise .

These increases were partially offset by a decrease in net revenue from Tiny Tina's Wonderlands , our Sid Meier's Civilization franchise and The Quarry.

The increase was primarily due to an increase in net revenue from Match Factory!

, our Sid Meier's Civilization franchise, and Toon Blast.

These increases were partially offset by a decrease in net revenue from our Grand Theft Auto franchise .

Net revenue from physical retail and other channels decreased by $35.6 and accounted for 3.6% of our total net revenue for the fiscal year ended March 31, 2025, as compared to 4.4% for the prior year.

The decrease was due to a decrease in net revenue from our NBA 2K franchise;

The Quarry, Marvel's Midnight Suns, our PGA TOUR 2K franchise, and Tiny Tina's Wonderlands.

These decreases were partially offset by an increase in net revenue from our Red Dead Redemption franchise and LEGO 2K Drive.

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.

Net revenue from recurrent consumer spending increased by $33.1 and accounted for 78.8% of net revenue for the fiscal year ended March 31, 2024, as compared to 78.1% for the prior year.

The increase was due to an increase in net revenue of $224.5 from Zynga, including top contributors Toon Blast , our hyper-casual mobile portfolio, Empires & Puzzles , Merge Dragons!, and Words With Friends, partially offset by a decrease in net revenue from our Grand Theft Auto franchise, Tiny Tina's Wonderlands, our NBA 2K franchise, Two Dots, and our Sid Meier's Civilization franchise.

Net revenue from full game and other decreased by $33.4 and accounted for 21.2% of net revenue for the fiscal year ended March 31, 2024, as compared to 21.9% for the prior year.

The decrease was due to a decrease in net revenue from The Quarry, Tiny Tina's Wonderlands, our Sid Meier's Civilization, PGA TOUR 2K, and Mafia franchises, partially offset by an increase in net revenue from our Grand Theft Auto and Red Dead Redemption franchises, and LEGO 2K Drive .

The decrease was primarily due to a decrease in net revenue from our NBA 2K and Red Dead Redemption franchises, and LEGO 2K Drive .

Gross profit as a percentage of net revenue for the fiscal year ended March 31, 2025 was 54.3%, as compared to 41.9% in the prior year.

The percentage decrease was due primarily to higher amortization related to intangible assets related to our Zynga acquisition, including a $577.4 impairment charge (refer to Note 9 - Goodwill and Intangible Assets, net ) partially offset by lower internal royalties due to the timing of when royalties are earned.

Changes in foreign currency exchange rates increased net revenue and gross profit by $10.2 and $3.5, respectively, in the fiscal year ended March 31, 2024 as compared to the prior year.

The increase was primarily due to lower impairment charges related to intangible assets related to our Zynga acquisition (refer to Note 9 - Goodwill and Intangible Assets, net ).

Changes in foreign currency exchange rates decreased net revenue by $2.5 and increased gross profit by $0.2, respectively, in the fiscal year ended March 31, 2025 as compared to the prior year.

Operating Expenses

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General and administrative 123.2 111.5

Foreign currency exchange rates increased total operating expenses by $19.5 for the fiscal year ended March 31, 2024 as compared to the prior year.

Foreign currency exchange rates decreased total operating expenses by $6.8 for the fiscal year ended March 31, 2025 as compared to the prior year.

Selling and marketing

Selling and marketing expenses decreased by $36.3 for the fiscal year ended March 31, 2024 as compared to the prior year period, due primarily to lower amortization related to intangible assets offset by an increase in personnel expense due to increased headcount, including as a result of our Zynga acquisition.

Selling and marketing expenses increased by $133.5 for the fiscal year ended March 31, 2025 as compared to the prior year period, primarily due to (i) higher overall marketing expenses for Match Factory!

, Game of Thrones:

Legends , and our Sid Meier's Civilization franchise, partially offset by lower marketing expenses for our hyper-casual mobile portfolio, and (ii) lower amortization related to our intangible assets.

Research and development

Research and development expenses increased by $60.6 for the fiscal year ended March 31, 2024, as compared to the prior year period, due primarily to increases in personnel expenses due to increased headcount, including related to our acquisition of Zynga.

These increases were partially offset by lower production and development expenses primarily due to a reduction in the number of titles in development at certain studios as a result of our ongoing development pipeline management process and additional capitalization of costs for development on titles having established technological feasibility compared to the prior year.

Research and development expenses increased by $57.0 for the fiscal year ended March 31, 2025, as compared to the prior year period, primarily due to increases in (i) personnel expenses due to increased headcount and (ii) production and development expenses for titles that are not technologically feasible, partially offset by the timing of tax related credits for certain titles.

General and administrative

General and administrative expenses decreased by $123.4 for the fiscal year ended March 31, 2024, as compared to the prior year period, due to a decrease in professional fees related to our acquisition and integration of Zynga, a right-of-use asset impairment expense related to Zynga's San Francisco office (see Note 13 - Leases ) in the prior year with no corresponding expense in the current year, a reduction of expense in the current year as compared to the prior year related to updating the fair value of contingent earn-out liability related to our acquisition of Nordeus, and a decrease in the fair value of the contingent earn-out liability related to our acquisition of Popcore.

These decreases were partially offset by an increase in personnel expense due to increased headcount as well as an increase in IT-related expenses for cloud-based services and IT infrastructure.

General and administrative expenses increased by $167.2 for the fiscal year ended March 31, 2025, as compared to the prior year period, primarily due to increases in (i) transaction costs related to our acquisition of Gearbox (refer to Note 2 0 - Acquisitions ), (ii) personnel expenses due to increased headcount, (iii) legal fees and contingencies related to the IBM case against Zynga, (iv) IT-related expenses for cloud-based services and IT infrastructure, as well as, (v) a reduction of expense in the prior year related to updating the fair value of contingent earn-out liability for our acquisition of Popcore with no corresponding reduction in the current year.

General and administrative expenses for the fiscal years ended March 31, 2025 and 2024 include occupancy expense (primarily rent, utilities and office expenses) of $73.9 and $69.9, respectively, related to our development studios.

Depreciation and amortization

Depreciation and amortization expenses increased by $48.9 for the fiscal year ended March 31, 2024, as compared to the prior year period, due primarily to leasehold improvements for office buildouts, acquired intangible assets, and depreciation expense related to Zynga.

Depreciation and amortization expenses increased by $58.2 for the fiscal year ended March 31, 2025, as compared to the prior year period, primarily due to increases in (i) impairment expense related to our intangible assets (refer to Note 9 - Goodwill and Intangible Assets, Net ), (ii) IT infrastructure expense, and (iii) leasehold improvements for office buildouts.

Goodwill impairment

Goodwill impairment expense was $2,342.1 for the fiscal year ended March 31, 2024 due to a partial impairment recognized related to one of our reporting units (refer to Note 9 - Goodwill and Intangible Assets, Net ), with no corresponding expense in the prior year.

Goodwill impairment expense for the fiscal years ended March 31, 2025 and 2024, were $3,545.2 and $2,342.1, respectively, due to partial impairments recognized related to one of our reporting units (refer to Note 9 - Goodwill and Intangible Assets, Net ).

Business reorganization

Business reorganization expense increased by $90.0 for the fiscal year ended March 31, 2024, as compared to the prior year period, due primarily to titles cancelled as part of our approved cost reduction program.

Business reorganization expense increased by $1.9 for the fiscal year ended March 31, 2025, as compared to the prior year period, primarily due to an increase in employee-related costs and losses on our divestitures, partially offset by a decrease in expense due to cancellations of our titles (refer to Note 21 - Business Reorganization ).

Interest and other, net

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Interest and other, net was expense of $93.3 for the fiscal year ended March 31, 2025, as compared to $103.6 for the fiscal year ended March 31, 2024.

The net decrease was due primarily to an increase in interest income primarily due to increases in interest rates, a gain on debt extinguishment recognized on the partial repayment of our 2024 Notes, a decrease in interest expense related to our bridge loan commitment in connection with our acquisition of Zynga in the prior year, and a decrease in foreign currency losses.

These decreases in expense were partially offset by an increase in interest expense related to our debt transactions (refer to Note 11 - Debt ).

The net decrease in expense was primarily due to an increase in interest income primarily due to increases in interest rates and cash balances and a gain on the sale of an investment.

These decreases in net expense were partially offset by increases in foreign currency losses, interest expense related to our debt transactions (refer to Note 11 - Debt ) and a gain on debt extinguishment recognized in the prior year on the partial repayment of our 2024 Notes.

Loss on fair value adjustments, net

Loss on fair value adjustments, net for the fiscal year ended March 31, 2025 was a loss of $6.9 compared to a loss of $8.6 in the prior year period.

The change was due primarily to a prior year loss for the increase in fair value of our Convertible Notes, partially offset by a prior year gain related to our Capped Calls, both as result of our Zynga Acquisition (refer to Note 11 - Debt and Note 20 - Acquisitions ).

Provision for income taxes

Our income tax expense was $41.4 for the fiscal year ended March 31, 2024 as compared to a benefit from income taxes of $213.4 for the fiscal year ended March 31, 2023.

When compared to the statutory rate of 21%, the effective tax rate of (1.1)% for the fiscal year ended March 31, 2024 was due primarily to an expense of $474.7 from nondeductible goodwill impairments, $337.2 from an increase in the U.S.

The change was primarily due to changes in fair value based on observable price changes of our long-term investments and an increase in fair value of our Convertible Notes.

Benefit from income taxes

Our income tax benefit was $12.4 for the fiscal year ended March 31, 2025 as compared to a provision for income taxes of $41.4 for the fiscal year ended March 31, 2024.

When compared to the statutory rate of 21%, the effective tax rate of 0.3% for the fiscal year ended March 31, 2025 was primarily due to an expense of $718.0 from nondeductible goodwill impairments, $222.7 from an increase in the U.S.

valuation allowance expense, $25.5 from an increase in the foreign valuation allowance expense, $41.4 from our geographic mix and foreign earnings partially offset by a $54.5 benefit from tax credits anticipated to be utilized.

When compared to the statutory rate of 21%, the effective tax rate of (1.1)% for the fiscal year ended March 31, 2024 was primarily due to an expense of $474.7 from nondeductible goodwill impairments, $337.2 from an increase in the U.S.

valuation allowance expense, $41.6 from an increase in the foreign valuation allowance expense, $39.0 from our geographic mix and foreign earnings, and $29.2 from a decrease in the net deferred tax asset relating to the Swiss cantonal basis step-up (as noted below) partially offset by a $63.3 benefit from tax credits anticipated to be utilized and $32.7 benefit from changes in reserves due to statute lapses.

When compared to the statutory rate of 21%, the effective tax rate of 15.9% for the fiscal year ended March 31, 2023 was due primarily to an expense of $84.0 from an increase in the U.S.

valuation allowance, expense of $39.7 from our geographic mix and foreign earnings, and $20.2 nondeductible expense relating to compensation expense related to covered employees pursuant to Section 162(m) and loss on the redemption of convertible debt, partially offset by a $76.8 benefit from tax credits anticipated to be utilized.

The effective tax rate in the current year was lower compared to the prior year primarily due to increased expense from nondeductible goodwill impairments, increased expense related to an increase in our valuation allowance, decreased benefits from tax credits, and the impact of geographic mix and foreign earnings.

The effective tax rate in the current year was higher compared to the prior year primarily due to increased expense from nondeductible goodwill impairments, decreased benefits from tax credits, decreased expense related to an increase in our valuation allowance, and the impact of geographic mix and foreign earnings.

The accounting for share-based compensation will increase or decrease our effective tax rate based upon the difference between our share-based compensation expense and the deductions taken on our tax return, which depends on the stock price at the time of the employee award vesting.

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It is possible that settlement of audits or the expiration of the statute of limitations could have an impact on our effective tax rate in future periods.

The American Rescue Plan Act of 2021 (the “ARPA”), among other things, includes provisions to expand the IRC Section 162(m) disallowance for deduction of certain compensation paid by publicly held corporations.

The ARPA, among other things, includes provisions to expand the IRC Section 162(m) disallowance for deduction of certain compensation paid by publicly held corporations.

Effective for tax years starting after December 31, 2026 (April 1, 2027 for the Company), ARPA expands the limitation to cover the next five most highly compensated employees.

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We continue to evaluate the potential impact ARPA may have on our operations and Consolidated Financial Statements in future periods.

The Inflation Reduction Act of 2022 (the “Inflation Reduction Act”) includes a new corporate alternative minimum tax (CAMT) of 15% on the adjusted financial statement income (AFSI) of corporations with an average AFSI exceeding $1.0 billion over a consecutive three-year period.

The CAMT was effective for taxable year ending March 31, 2024.

The Inflation Reduction Act includes a new CAMT of 15% on the AFSI of corporations with an average AFSI exceeding $1.0 billion over a consecutive three-year period.

The CAMT is effective for taxable year ending March 31, 2024.

It is possible that the CAMT could result in an additional tax liability over the regular federal corporate tax liability in a particular year based on differences between book and taxable income.

We estimate no tax liability relating to the CAMT for the current fiscal year.

We do not estimate any tax liability relating to CAMT for the current fiscal year.

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

The Organization for Economic Co-operation and Development (”OECD”) has proposed a global minimum tax of 15% of reported profits, referred to as Pillar Two.

The OECD has proposed a global minimum tax of 15% of reported profits, referred to as Pillar Two.

Many countries have already implemented or are taking steps to implement Pillar Two.

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Many aspects of Pillar Two are effective for the fiscal year ending March 31, 2025.

It is possible that Pillar Two could result in additional tax liability over the regular corporate tax liability in a particular jurisdiction to the extent tax expense is less than the 15% minimum rate.

We will continue to evaluate the potential impact Pillar Two may have on our operations and Consolidated Financial Statements in future periods.

Pillar Two could result in additional tax liability over the regular corporate tax liability in a particular jurisdiction to the extent tax expense is less than a 15% minimum rate.

The impact of Pillar Two was not material to the tax provision for the fiscal year ended March 31, 2025.

Switzerland's Federal Act on Tax Reform and AVH Financing ("TRAF") abolished preferential tax regimes for holding companies, domicile companies, and mixed companies at the cantonal level.

The TRAF allows the cantons to establish transition rules, the implementation of which may be subject to a ruling from the canton.

For the fiscal year ended March 31, 2024, we recorded a net tax expense of $29.2 due to an increase in the valuation of allowance of $81.3 offset by an increase in the deferred tax asset of $52.1 relating to the Swiss cantonal basis step-up, as it is more-likely-than-not that such deferred tax assets would not be realized.

For the fiscal year ended March 31,

2024, we recorded a net tax expense of $29.2 due to an increase in the valuation of allowance of $81.3 offset by an increase in the deferred tax asset of $52.1 relating to the Swiss cantonal basis step-up, as it is more-likely-than-not that such deferred tax assets would not be realized.

As of March 31, 2025, we had gross unrecognized tax benefits, including interest and penalties, of $267.1, of which $109.5 would affect our effective tax rate if realized.

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jurisdictions for years prior to fiscal year ended March 31, 2018.

Certain taxing authorities are currently examining our income tax returns for the fiscal years ended March 31, 2016 through March 31, 2022.

federal, state and foreign taxing authorities are currently examining our income tax returns for the fiscal years ended March 31, 2016 through March 31, 2023.

Net loss and loss per share

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Basic and diluted loss per share for the fiscal year ended March 31, 2025 was $25.58, as compared to basic and diluted loss per share of $22.01 for the fiscal year ended March 31, 2024.

Basic weighted average shares of 170.1 were 10.2 higher due primarily to normal stock compensation activity, including vests as well as grants and forfeitures in the prior year being fully outstanding in the current year.

See Note 12 - (Loss) Earnings Per Share to our Consolidated Financial Statements for additional information.

Basic weighted average shares of 175.1 were 5.0 higher as compared to the prior year period basic weighted average shares, primarily due to stock issued as consideration for the acquisition of Gearbox, as well as normal stock compensation activity, including vests as well as grants and forfeitures in the prior year being fully outstanding in the current year.

See Note 12 - Loss Per Share to our Consolidated Financial Statements for additional information.

Liquidity and Capital Resources

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From time to time, we may place additional short-term investments depending on future market conditions and liquidity needs.

The additional 2026 Notes and additional 2028 Notes (the “New Notes”) were issued as additional notes under the existing Indenture (refer to Note 11 - Debt ).

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 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, 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, 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.

Subject to market conditions, we currently intend to refinance the 2025 Notes prior to maturity.

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

As of March 31, 2025, we had $3,650.0 of Senior Notes outstanding.

On April 14, 2025, we repaid our 2025 Notes with a principal amount of $600.0.

Credit Agreement

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.

As of March 31, 2025, there were no borrowings under the 2022 Credit Agreement, and we had approximately $747.8 available for additional borrowings.

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 “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.

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.

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

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

The 2026 Convertible Notes do not bear regular interest, and the principal amount does not accrete.

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, 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.

In addition, (a) $668.3 aggregate principal amount of the 2024 Convertible Notes, and (b) no 2026 Convertible Notes were surrendered for conversion into the applicable Reference Property.

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

After settlement of all Convertible Notes tendered or surrendered for conversion, $21.4 aggregate principal amount of the 2024 Convertible Notes remained outstanding and $29.4 aggregate principal amount of the 2026 Convertible Notes remained outstanding at March 31, 2024.

An aggregate principal amount of $29.4 of the 2026 Convertible Notes remained outstanding at March 31, 2025.

Financial Condition

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These balances are dispersed across various locations around the world.

We believe that such dispersion meets the

business and liquidity needs of our foreign affiliates.

We believe that such dispersion meets the business and liquidity needs of our foreign affiliates.

In addition, we expect to have the ability to generate sufficient cash domestically to support ongoing operations for the foreseeable future.

Our Board of Directors has authorized the repurchase of up to 21.7 shares of our common stock.

Our Board has authorized the repurchase of up to 21.7 shares of our common stock.

Under this program, we may purchase shares from time to time through a variety of methods, including in the open market or through privately negotiated transactions, in accordance with applicable securities laws.

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The program does not require us to repurchase shares and may be suspended or discontinued at any time for any reason.

During the fiscal years ended March 31, 2024, 2023, and 2022, we repurchased 0.0, 0.0, and 1.3 shares of our common stock, respectively, in the open market for $0.0, $0.0, and $200.0, respectively, including commissions as part of the program.

During the fiscal years ended March 31, 2025, 2024, and 2023, we did not repurchase shares of our common stock.

As of March 31, 2025, we had repurchased a total of 11.7 shares of our common stock under the program, and 10.0 shares of our common stock remained available for repurchase under the share repurchase program.

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Net cash (used in) provided by investing activities (151.5) (28.2) (2,876.3)

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

Net cash provided by (used in) financing activities 650.5 (91.4) 1,930.3

Effects of foreign currency exchange rates on cash, cash equivalents, and restricted cash and cash equivalents 3.4 3.1 (15.9)

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At March 31, 2025, we had $1,559.2 of Cash, cash equivalents, and restricted cash and cash equivalents, compared to $1,102.0 at March 31, 2024.

The debt activity included proceeds from the issuance of 2026 Notes and 2028 Notes offset by our repayment of 2024 Notes and Term Loan (refer to Note 11 - Debt ).

To a lesser extent, the decrease was also due to i) Net cash used in investing activities which was due primarily to the purchase of fixed assets and our immaterial acquisitions and investments, offset by our sales and maturities of available for sale securities, and ii) Net cash used in operating activities, which was due primarily to investments in software development and licenses, partially offset by sales of our products.

This increase was partially offset by (i) Net cash used in investing activities which was primarily due to the purchase of fixed assets and (i) Net cash used in operating activities, which was primarily due to investments in software development and licenses, partially offset by sales of our products.

Refer to Note 14 - Commitments and Contingencies to our Consolidated Financial Statements for disclosures regarding our commitments.

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International Operations

Net revenue earned outside of the United States is principally generated by our operations in Europe, Asia, Australia, Canada and Latin America.

For the fiscal years ended March 31, 2024, 2023, and 2022, 38.7%, 37.2%, and 40.1%, respectively, of our net revenue was earned outside the United States.

Net revenue earned outside of the U.S.

is principally generated by our operations in Europe, Asia, Australia, Canada and Latin America.

For the fiscal years ended March 31, 2025, 2024, and 2023, 39.5%, 38.7%, and 37.2%, respectively, of our net revenue was earned outside the U.S.

We are subject to risks inherent in foreign trade, including increased credit risks, tariffs and duties, fluctuations in foreign currency exchange rates, shipping delays and international political, regulatory and economic developments, all of which can have a significant effect on our operating results.

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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 7. Management’s Discussion and Analysis