What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-08-07 compared with 2025-02-07 · 143 added, 283 removed, 467 unchanged (48% of the section changed)

3 unchanged sentences

(in millions, except per share amounts)

December 31, 2024 March 31, 2024

June 30, 2025 March 31, 2025

Current assets:

2 unchanged sentences

Restricted cash and cash equivalents 14.5 14.9

Accounts receivable, net of allowances of $ 0.8 and $ 1.2 at December 31, 2024 and March 31, 2024, respectively

Accounts receivable, net of allowances of $ 2.0 and $ 1.6 at June 30, 2025 and March 31, 2025, respectively

Software development costs and licenses 61.1 80.8

28 unchanged sentences

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

no shares issued and outstanding at December 31, 2024 and March 31, 2024

no shares issued and outstanding at June 30, 2025 and March 31, 2025

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

200.1 and 194.5 shares issued and 176.4 and 170.8 outstanding at December 31, 2024 and March 31, 2024, respectively

208.1 and 200.8 shares issued and 184.4 and 177.1 outstanding at June 30, 2025 and March 31, 2025, respectively

Additional paid-in capital 11,584.1 10,312.0

Treasury stock, at cost;

23.7 and 23.7 common shares at December 31, 2024 and March 31, 2024, respectively

23.7 and 23.7 common shares at June 30, 2025 and March 31, 2025, respectively

( 1,020.6 ) ( 1,020.6 )

7 unchanged sentences

(in millions, except per share amounts)

Three Months Ended December 31, Nine Months Ended December 31,

2024 2023 2024 2023

Three Months Ended June 30,

Game $ 1,382.5 $ 1,216.7

7 unchanged sentences

Depreciation and amortization 50.4 44.8

Goodwill impairment — — — 165.4

Business reorganization ( 4.2 ) 49.5

Total operating expenses 923.4 956.0

Loss from operations ( 132.1 ) ( 129.5 ) ( 614.2 ) ( 877.5 )

Income (loss) from operations 21.6 ( 184.9 )

Interest and other, net ( 35.4 ) ( 27.3 )

Gain (loss) on fair value adjustments, net 0.2 ( 0.3 ) ( 4.1 ) ( 1.7 )

Loss before income taxes ( 13.8 ) ( 212.2 )

5 unchanged sentences

TAKE-TWO INTERACTIVE SOFTWARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)

(in millions)

Three Months Ended December 31, Nine Months Ended December 31,

2024 2023 2024 2023

Three Months Ended June 30,

Net loss $ ( 11.9 ) $ ( 262.0 )

Other comprehensive (loss) income:

Other comprehensive income (loss):

Foreign currency translation adjustment 82.9 ( 5.4 )

Change in fair value of available for sale securities — —

Other comprehensive (loss) income ( 104.3 ) 66.4 ( 38.1 ) 30.6

Comprehensive loss $ ( 229.5 ) $ ( 25.2 ) $ ( 790.8 ) $ ( 810.6 )

Other comprehensive income (loss) 82.9 ( 5.4 )

Comprehensive income (loss) $ 71.0 $ ( 267.4 )

See accompanying Notes.

2 unchanged sentences

(in millions)

Nine Months Ended December 31,

Three Months Ended June 30,

Operating activities:

6 unchanged sentences

Depreciation 42.1 35.9

Goodwill impairment — 165.4

Interest expense 38.9 37.1

Gain on debt extinguishment — ( 7.7 )

Fair value adjustments 4.1 1.7

Other, net 16.9 5.5

5 unchanged sentences

Accounts payable, accrued expenses and other liabilities ( 239.8 ) ( 191.2 )

Net cash (used in) provided by operating activities ( 324.2 ) ( 7.2 )

Net cash used in operating activities ( 44.7 ) ( 191.0 )

Investing activities:

Change in bank time deposits ( 0.7 ) 6.6

Sale and maturities of available-for-sale securities — 144.0

Purchases of fixed assets ( 25.1 ) ( 35.1 )

Divestitures 36.0 —

Purchases of long-term investments ( 6.6 ) ( 11.1 )

1 unchanged sentence

Other ( 4.4 ) ( 4.7 )

Net cash (used in) provided by investing activities ( 88.7 ) 26.5

Net cash used in investing activities ( 36.8 ) ( 34.7 )

Financing activities:

6 unchanged sentences

Payment of contingent earn-out consideration — ( 12.0 )

Net cash provided by (used in) financing activities 628.2 ( 72.0 )

Net cash provided by financing activities 618.3 596.5

Effects of foreign currency exchange rates on cash, cash equivalents, and restricted cash and cash equivalents 20.2 ( 0.9 )

9 unchanged sentences

(in millions)

Three Months Ended December 31, 2024

Three Months Ended June 30, 2025

Common Stock Additional

3 unchanged sentences

Shares Amount Shares Amount

Balance, September 30, 2024 199.2 $ 2.0 $ 10,063.4 ( 23.7 ) $ ( 1,020.6 ) $ ( 3,207.4 ) $ ( 38.9 ) $ 5,798.5

Balance, March 31, 2025 200.8 $ 2.0 $ 10,312.0 ( 23.7 ) $ ( 1,020.6 ) $ ( 7,058.8 ) $ ( 96.9 ) $ 2,137.7

Net loss — — — — — ( 11.9 ) — ( 11.9 )

Change in cumulative foreign currency translation adjustment — — — — — — 82.9 82.9

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

Stock-based compensation — — 54.3 — — — — 54.3

1 unchanged sentence

Net share settlement of restricted stock awards — — ( 1.3 ) — — — — ( 1.3 )

Exercise of stock options 0.3 — 8.9 — — — — 8.9

Employee share purchase plan settlement 0.2 — 26.8 — — — — 26.8

Issuance of common stock 5.5 0.1 1,192.7 — — — — 1,192.8

Other changes, net — — ( 0.4 ) — — — — ( 0.4 )

Balance, December 31, 2024 200.1 $ 2.0 $ 10,196.3 ( 23.7 ) $ ( 1,020.6 ) $ ( 3,332.6 ) $ ( 143.2 ) $ 5,701.9

Three Months Ended December 31, 2023

Balance, June 30, 2025 208.1 $ 2.1 $ 11,584.1 ( 23.7 ) $ ( 1,020.6 ) $ ( 7,070.7 ) $ ( 14.0 ) $ 3,480.9

Three Months Ended June 30, 2024

Common Stock Additional

4 unchanged sentences

Shares Amount Shares Amount

Balance, September 30, 2023 193.7 $ 1.9 $ 9,183.2 ( 23.7 ) $ ( 1,020.6 ) $ 414.7 $ ( 149.1 ) $ 8,430.1

Net loss — — — — — ( 91.6 ) — ( 91.6 )

Change in cumulative foreign currency translation adjustment — — — — — — 66.3 66.3

Net unrealized gain on available-for-sale securities, net of taxes — — — — — — 0.1 0.1

Stock-based compensation — — 103.8 — — — — 103.8

Issuance of restricted stock, net of forfeitures and cancellations 0.4 — — — — — — —

Net share settlement of restricted stock awards ( 0.1 ) — ( 19.5 ) — — — — ( 19.5 )

Employee share purchase plan settlement 0.2 — 19.4 — — — — 19.4

Balance, December 31, 2023 194.2 $ 1.9 $ 9,286.9 ( 23.7 ) $ ( 1,020.6 ) $ 323.1 $ ( 82.7 ) $ 8,508.6

See accompanying Notes.

Nine Months Ended December 31, 2024

Common Stock Additional

Capital Treasury Stock Retained

Earnings/(Accumulated Deficit) Accumulated

Comprehensive

Stockholders'

Shares Amount Shares Amount

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

3 unchanged sentences

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

Employee share purchase plan settlement 0.4 — 45.5 — — — — 45.5

Exercise of stock options — — 0.3 — — — — 0.3

Issuance of shares related to Zynga convertible notes 0.1 — 16.0 — — — — 16.0

Issuance of shares related to Gearbox acquisition 2.8 — 454.3 — — — — 454.3

Exercise of stock options 0.3 — 9.3 — — — — 9.3

Other changes, net — 0.1 0.3 — — — — 0.4

Balance, December 31, 2024 200.1 $ 2.0 $ 10,196.3 ( 23.7 ) $ ( 1,020.6 ) $ ( 3,332.6 ) $ ( 143.2 ) $ 5,701.9

Nine Months Ended December 31, 2023

Common Stock Additional

Capital Treasury Stock Retained

Earnings/(Accumulated Deficit) Accumulated

Comprehensive

Stockholders'

Shares Amount Shares Amount

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 — — — — — ( 841.2 ) — ( 841.2 )

Change in cumulative foreign currency translation adjustment — — — — — — 29.2 29.2

Net unrealized gain on available-for-sale securities, net of taxes — — — — — — 1.4 1.4

Stock-based compensation — — 315.2 — — — — 315.2

Issuance of restricted stock, net of forfeitures and cancellations 1.7 — — — — — — —

Net share settlement of restricted stock awards ( 0.5 ) — ( 76.6 ) — — — — ( 76.6 )

Employee share purchase plan settlement 0.2 — 23.0 — — — — 23.0

Exercise of stock options — — 0.2 — — — — 0.2

Balance, December 31, 2023 194.2 $ 1.9 $ 9,286.9 ( 23.7 ) $ ( 1,020.6 ) $ 323.1 $ ( 82.7 ) $ 8,508.6

Other changes, net — 0.1 0.1 — — — — 0.2

Balance, June 30, 2024 198.8 $ 2.0 $ 9,962.5 ( 23.7 ) $ ( 1,020.6 ) $ ( 2,841.9 ) $ ( 110.5 ) $ 5,991.5

See accompanying Notes.

7 unchanged sentences

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

In October 2024, we sold our Private Division label, including our rights to substantially all of the label's titles.

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

Our products are 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.

12 unchanged sentences

Certain immaterial reclassifications have been made to prior period amounts to conform to the current period presentation.

Recent Accounting Pronouncements

Recently Issued Accounting Pronouncements

Expense Disaggregation Disclosures

7 unchanged sentences

and foreign jurisdictions.

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

ASU 2023-09 is effective for annual periods 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) and interim periods within fiscal years beginning after December 15, 2024 (April 1, 2025 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

6 unchanged sentences

Net revenue by timing of recognition was as follows:

Three Months Ended December 31, Nine Months Ended December 31,

2024 2023 2024 2023

Three Months Ended June 30,

Net revenue recognized:

5 unchanged sentences

Net revenue by content was as follows:

Three Months Ended December 31, Nine Months Ended December 31,

2024 2023 2024 2023

Three Months Ended June 30,

Net revenue recognized:

2 unchanged sentences

Total net revenue $ 1,503.8 $ 1,338.2

We attribute net revenue to geographic regions based on software product destination.

Net revenue by geographic region was as follows:

Three Months Ended December 31, Nine Months Ended December 31,

2024 2023 2024 2023

Net revenue recognized:

United States $ 825.7 $ 818.3 $ 2,460.7 $ 2,417.8

International 534.1 548.0 1,590.4 1,532.4

Total net revenue $ 1,359.8 $ 1,366.3 $ 4,051.1 $ 3,950.2

Net revenue by platform was as follows:

Three Months Ended December 31, Nine Months Ended December 31,

2024 2023 2024 2023

Three Months Ended June 30,

Net revenue recognized:

6 unchanged sentences

Net revenue by distribution channel was as follows:

Three Months Ended December 31, Nine Months Ended December 31,

2024 2023 2024 2023

Three Months Ended June 30,

Net revenue recognized:

4 unchanged sentences

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

The balance of deferred revenue, including current and non-current balances as of December 31, 2024 and March 31, 2024 were $ 1,125.8 and $ 1,102.4 , respectively.

For the nine months ended December 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 three months ended December 31, 2024 and 2023, $ 142.1 and $ 153.7 , respectively, of revenue was recognized that was included in the deferred revenue balance at the beginning of the respective period.

During the nine months ended December 31, 2024 and 2023, $ 966.7 and $ 991.8 , respectively, of revenue was recognized that was included in the deferred revenue balance at the beginning of the respective period.

As of December 31, 2024, the aggregate amount of contract revenue allocated to unsatisfied performance obligations is $ 1,343.0 , which includes our deferred revenue balances and amounts to be invoiced and recognized as revenue in future periods.

The balance of deferred revenue, including current and non-current balances as of June 30, 2025 and March 31, 2025 were $ 1,039.7 and $ 1,108.9 , respectively.

For the three months ended June 30, 2025, the additions to our deferred revenue balance were primarily due to cash payments received or due in advance of satisfying our performance obligations, while the reductions to our deferred revenue balance were primarily due to the recognition of revenue upon fulfillment of our performance obligations, both of which were in the ordinary course of business.

During the three months ended June 30, 2025 and 2024, $ 533.2 and $ 523.9 , respectively, of revenue was recognized that was included in the deferred revenue balance at the beginning of the respective period.

As of June 30, 2025, the aggregate amount of contract revenue allocated to unsatisfied performance obligations is $ 1,186.1 , which includes our deferred revenue balances and amounts to be invoiced and recognized as revenue in future periods.

We expect to recognize approximately $ 1,119.9 of this balance as revenue over the next 12 months, and the remainder thereafter.

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

As of December 31, 2024 and March 31, 2024, our contract asset balances were $ 77.1 and $ 85.0 , respectively.

As of June 30, 2025 and March 31, 2025, our contract asset balances were $ 84.2 and $ 80.8 , respectively.

Accounts Receivable sale program

On May 19, 2025, we entered into an arrangement to sell designated pools of high credit quality accounts receivable under an uncommitted accounts receivables purchase facility in an initial aggregate amount of up to $ 215.0 to an unaffiliated financial institution on a true sale basis.

As these accounts receivable are sold without recourse, we do not retain the associated risks of lack of payment due to insolvency of the account debtors following the transfer of such accounts receivable to such financial institution.

We will continue to collect cash from our account debtors and remit to the financial institution.

We will derecognize the carrying value of the financial assets transferred and recognize a net gain or loss on the sale under Interest and other, net on our Consolidated Statements of Operations.

The proceeds from these arrangements will be reflected as cash provided by operating activities in the Consolidated Statement of Cash Flows.

No receivables were sold under this facility during the three months ended June 30, 2025.

We may utilize this facility in future periods depending on cash flow needs and market conditions.

MANAGEMENT AGREEMENT

In May 2022, we entered into a management agreement (the "2022 Management Agreement") with ZelnickMedia Corporation ("ZelnickMedia") that replaced our previous agreement with ZelnickMedia 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.

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.

In May 2022, we entered into a 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.

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").

2 unchanged sentences

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 have granted and expect to grant time-based and performance-based restricted units to ZMC.

In consideration for ZMC's services, we recorded consulting expense in General and administrative expenses on our Condensed Consolidated Statements of Operations of $ 2.5 and $( 0.7 ) during the three months ended December 31, 2024 and 2023, respectively, and $ 7.6 and $ 4.5 during the nine months ended December 31, 2024 and 2023, respectively.

We recorded stock-based compensation expense for restricted stock units granted to ZMC, which is also included in General and administrative expenses, of $ 14.7 and $ 14.0 during the three months ended December 31, 2024 and 2023, respectively, and $ 41.8 and $ 39.1 during the nine months ended December 31, 2024 and 2023, respectively.

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 in General and administrative expenses on our Condensed Consolidated Statements of Operations of $ 2.6 and $ 2.6 during the three months ended June 30, 2025 and 2024, respectively.

We recorded stock-based compensation expense for restricted stock units granted to ZMC, which is also included in General and administrative expenses, of $ 14.7 and $ 12.4 during the three months ended June 30, 2025 and 2024, respectively.

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

Nine Months Ended December 31,

Three Months Ended June 30,

Time-based 74 102

3 unchanged sentences

(1) Represents the maximum of shares eligible to vest

Time-based restricted stock units granted pursuant to the 2022 Management Agreement in fiscal year 2025 will vest on June 1, 2025, June 1, 2026, and June 1, 2027, and those granted in fiscal year 2024, partially vested on June 1, 2024 and will also vest June 1, 2025 and June 1, 2026.

Time-based restricted stock units granted in fiscal year 2023, partially vested on June 1, 2023 and June 1, 2024 and will also vest June 1, 2025.

Time-based restricted stock units granted pursuant to the 2022 Management Agreement in fiscal year 2026 will vest on June 1, 2026, June 1, 2027, and June 1, 2028, and those granted in fiscal year 2025, partially vested on June 1, 2025 and will also vest in part on June 1, 2026 and June 1, 2027.

Time-based restricted stock units granted in fiscal year 2024, partially vested on June 1, 2024 and June 1, 2025 and will also vest in part on June 1, 2026.

Market-based restricted stock units granted pursuant to the 2022 Management Agreement in fiscal year 2026 are eligible to vest on June 1, 2028, those granted in fiscal year 2025 are eligible to vest on June 1, 2027, and those granted in fiscal year 2024 are eligible to vest on June 1, 2026.

5 unchanged sentences

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

The unvested portions of time-based, market-based and performance-based restricted stock units held by ZMC were 1.4 and 1.3 as of December 31, 2024 and March 31, 2024, respectively.

During the nine months ended December 31, 2024, 0.4 restricted stock units previously granted to ZMC vested, and 0.1 restricted stock units were forfeited by ZMC.

The unvested portions of time-based, market-based and performance-based restricted stock units held by ZMC were 1.3 and 1.4 as of June 30, 2025 and March 31, 2025, respectively.

During the three months ended June 30, 2025, 0.5 restricted stock units previously granted to ZMC vested, and 0.0 restricted stock units were forfeited by ZMC.

FAIR VALUE MEASUREMENTS

8 unchanged sentences

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

December 31, 2024

June 30, 2025

Quoted prices

17 unchanged sentences

Total financial assets $ 1,863.9 $ 0.1 $ 25.6 $ 1,889.6

Accrued expenses and other current liabilities:

Contingent earn-out consideration $ — $ — $ 0.3 $ 0.3

Other-long term liabilities:

Contingent earn-out consideration — — 2.1 2.1

Long-term debt, net:

14 unchanged sentences

Other assets:

Equity securities 7.3 — — 7.3

Private equity — — 24.3 24.3

1 unchanged sentence

Accrued expenses and other current liabilities:

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

Other long-term liabilities:

Contingent earn-out consideration — — 0.7 0.7

Short-term debt, net:

Convertible notes — 24.6 — 24.6

Foreign currency forward contracts $ — $ 0.1 $ — $ 0.1

Long-term debt, net:

1 unchanged sentence

Total financial liabilities $ — $ 28.6 $ — $ 28.6

We did not have any transfers between Level 1 and Level 2 fair value measurements, nor did we have any transfers into or out of Level 3 during the nine months ended December 31, 2024.

We did not have any transfers between Level 1 and Level 2 fair value measurements, nor did we have any transfers into or out of Level 3 during the three months ended June 30, 2025.

Nonrecurring fair value measurements

3 unchanged sentences

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

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

At June 30, 2025, and March 31, 2025, we held $ 8.0 and $ 8.0 , respectively, of such investments in Other assets within our Condensed Consolidated Balance Sheet.

SHORT-TERM INVESTMENTS

Our Short-term investments consisted of the following:

December 31, 2024

June 30, 2025

Amortized Cost Gains Losses Fair Value

7 unchanged sentences

Total Short-term investments $ 9.4 $ — $ — $ 9.4

The following table summarizes the contracted maturities of our short-term investments at December 31, 2024:

December 31, 2024

The following table summarizes the contracted maturities of our short-term investments at June 30, 2025:

June 30, 2025

Short-term investments

8 unchanged sentences

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

December 31, 2024 March 31, 2024

June 30, 2025 March 31, 2025

Forward contracts to sell foreign currencies $ 276.7 $ 299.8

Forward contracts to purchase foreign currencies 134.8 97.0

For the three months ended December 31, 2024 and 2023, we recorded a gain of $ 9.5 and a loss of $ 8.0 , respectively, and for the nine months ended December 31, 2024 and 2023, we recorded a gain of $ 9.7 and a loss of $ 0.6 , respectively, related to foreign currency forward contracts in Interest and other, net on our Condensed Consolidated Statements of Operations.

For the three months ended June 30, 2025 and 2024, we recorded a loss of $ 12.4 and a gain of $ 3.5 , respectively, related to foreign currency forward contracts in Interest and other, net on our Condensed 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.

2 unchanged sentences

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

December 31, 2024 March 31, 2024

June 30, 2025 March 31, 2025

Current Non-current Current Non-current

3 unchanged sentences

Software development costs and licenses $ 61.1 $ 2,084.6 $ 80.8 $ 1,892.6

During the three months ended December 31, 2024 and 2023, we recorded $ 1.5 and $ 0.0 , respectively, of software development impairment charges (a component of Cost of revenue).

The impairment charges recorded during the three months ended December 31, 2024 related to our cost reduction program (refer to Note 15 - Business Reorganization ).

During the nine months ended December 31, 2024 and 2023, we recorded $ 36.3 and $ 21.7 , respectively, of software development impairment charges (a component of Cost of revenue).

The impairment charges recorded during the nine months ended December 31, 2024 related to our cost reduction program (refer to Note 15 - Business Reorganization ).

The impairment charges recorded during the nine months ended December 31, 2023 related to unamortized capitalized costs for the development of titles, which were anticipated to exceed the net realizable value of the asset at the time they were impaired.

During the three months ended June 30, 2025 and 2024, we recorded $( 4.6 ) and $ 23.3 , respectively, of software development impairment charges (within Business reorganization).

The impairment charges recorded during the three months ended June 30, 2025 are primarily due to the recovery of previously incurred costs related to the termination of development of one of our titles in connection with the 2024 Plan (our cost reduction program in Fiscal 2025).

The impairment charges recorded during the three months ended June 30, 2024 related to the 2024 Plan.

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consisted of the following:

December 31, 2024 March 31, 2024

Compensation and benefits $ 270.5 $ 227.3

June 30, 2025 March 31, 2025

Software development royalties $ 444.4 $ 419.8

Compensation and benefits 184.6 268.3

Licenses 78.0 91.4

Marketing and promotions 70.4 77.0

Refund liability 44.1 34.5

Deferred acquisition payments 37.8 35.9

Interest payable 27.3 39.2

Settlement accrual 23.8 1.4

Sales tax liability 19.7 19.3

Refund liability 25.2 32.8

Tax payable 13.7 41.5

Professional fees 14.0 16.7

Other 112.9 121.7

1 unchanged sentence

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

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

2026 Notes 5.00 % March 28, 2026 $ 550.0 $ 551.9

Annual Interest Rate Maturity Date June 30, 2025 Fair Value (Level 2)

2027 Notes 3.70 % April 14, 2027 600.0 595.1

10 unchanged sentences

2028 Notes 4.95 % March 28, 2028 800.0 808.5

2027 Notes 3.70 % April 14, 2027 600.0 576.5

2028 Notes 4.95 % March 28, 2028 800.0 797.8

2029 Notes 5.40 % June 12, 2029 300.0 308.3

2032 Notes 4.00 % April 14, 2032 500.0 468.6

2034 Notes 5.60 % June 12, 2034 300.0 308.9

2026 Convertible Notes 0.00 % December 15, 2026 28.5 28.5

3 unchanged sentences

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

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

2025 Notes 3.55 % April 14, 2025 $ 600.0 $ 597.7

Annual Interest Rate Maturity Date June 30, 2025 Fair Value (Level 2)

2026 Notes 5.00 % March 28, 2026 $ 550.0 $ 552.0

Total $ 550.0 $ 552.0

2 unchanged sentences

Annual Interest Rate Maturity Date March 31, 2025 Fair Value (Level 2)

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

2025 Notes 3.55 % April 14, 2025 $ 600.0 $ 599.9

2026 Notes 5.00 % March 28, 2026 550.0 552.7

Total $ 1,150.0 $ 1,152.6

1 unchanged sentence

Short-term debt, net $ 1,148.5

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

Three Months Ended December 31, Nine Months Ended December 31,

2024 2023 2024 2023

2024 Notes $ — $ 2.8 $ — $ 12.2

The interest expense as it relates to our debt is recorded within Interest and other, net in our Condensed Consolidated Statements of Operations for the three months ended June 30, 2025 and 2024, respectively, and was as follows:

Three Months Ended June 30,

2025 Notes 0.8 5.3

5 unchanged sentences

2034 Notes 4.2 0.8

Term Loan — — — 1.5

Total $ 36.5 $ 34.3

The following table outlines the aggregate amount of maturities of our borrowings, as of December 31, 2024:

The following table outlines the aggregate amount of maturities of our borrowings, as of June 30, 2025:

Fiscal Year Ending March 31, Maturities

16 unchanged sentences

We will pay interest on each of the 2029 Notes and 2034 Notes semi-annually on June 12 and December 12 of each year, commencing on December 12, 2024.

During the nine months ended December 31, 2024, we made interest payments of $ 113.6 .

During the three months ended June 30, 2025, we made interest payments of $ 48.3 .

The proceeds from the issuances of the Senior Notes in April 2022 were used to finance a portion of our acquisition of Zynga, and the proceeds from the subsequent issuance of Senior Notes were used, or are expected to be used, to repay certain of our debt or for general corporate purposes.

6 unchanged sentences

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

During the three months ended December 31, 2024 and 2023, we recognized $ 1.5 and $ 1.2 , respectively, of amortization of debt issuance costs and $ 0.1 and $ 0.1 , respectively, of amortization of the original issuance discount.

During the nine months ended December 31, 2024 and 2023, we recognized $ 4.5 and $ 4.8 , respectively, of amortization of debt issuance costs and $ 0.4 and $ 0.3 , 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 Add-On Offering Notes.

During the nine months ended December 31, 2023 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 Condensed Consolidated Statement of Operations.

During the three months ended June 30, 2025 and 2024, we recognized $ 1.3 and 1.4 , respectively, of amortization of debt issuance costs and $ 0.1 and 0.1 , respectively, of amortization of the original issuance discount.

Retirement of Senior Notes

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

Credit Agreement

On May 23, 2022, we entered into a new 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 provided 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 contained 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 ( 7.50 % at December 31, 2024) or (b) 1.000 % to 1.625 % above Secured Overnight Financing Rate ("SOFR"), approximately 4.33 % at December 31, 2024, which rates are determined by the Company's credit rating.

On May 19, 2025, we entered into an Amendment No.

3 (the "Amendment") to our credit agreement, dated as of May 23, 2022, (as amended, the "2022 Credit Agreement"), which increased the commitments to the unsecured five-year revolving credit facility (the “Revolving Credit Facility”) from $ 750.0 to $ 1,000 , with sublimits for borrowings and letters of credit denominated in Pounds Sterling, Euros and Canadian Dollars in an aggregate face amount of up to $ 200 .

The 2022 Credit Agreement will continue to provide 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).

Under the Amendment, the maturity date was extended to May 19, 2030 but retains the extension option permitting us, subject to certain requirements, to arrange to extend the Revolving Credit Facility for an additional one-year term which may be exercised no more than two times under the 2022 Credit Agreement.

Loans under the 2022 Credit Agreement will bear interest at a rate of (a) 0.000 % to 0.625 % above an alternate base rate ( 7.50 % at June 30, 2025) or (b) 1.000 % to 1.625 % above Secured Overnight Financing Rate ("SOFR"), approximately 4.33 % at June 30, 2025, which rates are determined by the Company's credit rating.

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

In addition, the 2022 Credit Agreement 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).

On June 6, 2024, we amended the 2022 Credit Agreement in order to increase the maximum leverage ratio thresholds applicable to our financial covenant, which is measured on a quarterly basis.

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

During the three months ended December 31, 2024 and 2023, we amortized $ 0.2 and $ 0.2 , respectively, and during the nine months ended December 31, 2024 and 2023, we amortized $ 0.5 and $ 0.5 , respectively, of these debt issuance costs.

As of December 31, 2024, there were no borrowings under the 2022 Credit Agreement, and we had approximately $ 747.8 available for additional borrowings.

Upon execution of the 2022 Credit Agreement, we incurred $ 4.9 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 term of the 2022 Credit Agreement, with the expense recorded within Interest and other, net in our Consolidated Statements of Operations.

During the three months ended June 30, 2025 and 2024, we amortized $ 0.2 and $ 0.2 , respectively of these debt issuance costs.

As of June 30, 2025, there were no borrowings under the 2022 Credit Agreement, and we had approximately $ 997.8 available for additional borrowings.

Information related to availability on our 2022 Credit Agreement for each period was as follows:

December 31, 2024 March 31, 2024

June 30, 2025 March 31, 2025

Available borrowings $ 997.8 $ 747.8

Outstanding letters of credit 2.2 2.2

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

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 %.

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.

Convertible Notes

3 unchanged sentences

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, in each case pursuant to the terms and procedures set forth in the applicable Indenture.

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.

5 unchanged sentences

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

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

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

As a result, the 2024 Convertible Notes and 2026 Convertible Notes are structurally senior to the indebtedness of the Company as to Zynga, its subsidiaries, and their respective assets.

After settlement of all Convertible Notes tendered or surrendered for conversion, and after giving effect to the maturity of the 2024 Convertible Notes described below, no 2024 Convertible Notes remained outstanding and $ 29.4 aggregate principal amount of the 2026 Convertible Notes remained outstanding at June 30, 2025.

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

As a result, the 2026 Convertible Notes are structurally senior to the indebtedness of the Company as to Zynga, its subsidiaries, and their respective assets.

As noted above, the Company also guaranteed the payment and other obligations of Zynga under the Convertible Notes.

The Company's guarantees of the 2024 Convertible Notes and 2026 Convertible Notes are the Company's senior unsecured obligations and rank equally with all of the Company's other existing and future senior unsecured unsubordinated obligations.

The Company's guarantees of the 2026 Convertible Notes are the Company's senior unsecured obligations and rank equally with all of the Company's other existing and future senior unsecured unsubordinated obligations.

Under the terms of the applicable Indentures, prior to the close of business on the business day immediately preceding September 15, 2026 with respect to the 2026 Convertible Notes, the Convertible Notes will be convertible only under the following circumstances:

4 unchanged sentences

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

As of December 31, 2024, the conditions allowing holders of the 2026 Convertible Notes to convert their series of the Convertible Notes have not been met, and, therefore, they are not yet convertible.

As of June 30, 2025, the conditions allowing holders of the 2026 Convertible Notes to convert their series of the Convertible Notes have not been met, and, therefore, they are not yet convertible.

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

2 unchanged sentences

The 2024 Convertible Notes matured on June 1, 2024.

During the nine months ended December 31, 2024, we paid $ 8.3 for converted 2024 Convertible Notes, including interest, and we issued 0.1 shares of our common stock upon conversion of the 2024 Convertible Notes.

During the three months ended June 30, 2024, we paid $ 8.3 for converted 2024 Convertible Notes, including interest, and we issued 0.1 shares of our common stock upon conversion of the 2024 Convertible Notes.

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.

An aggregate principal amount of $ 29.4 of the 2026 Convertible Notes remained outstanding at December 31, 2024.

We recorded $ 27.1 as the fair value of the remaining outstanding 2026 Convertible Notes, within Long-term debt, net, in our Condensed Consolidated Balance Sheet as of December 31, 2024.

During the three months ended December 31, 2024 and 2023, we recognized a loss of $ 1.1 and a gain of $ 0.0 , respectively, and during the nine months ended December 31, 2024 and 2023, we recognized a loss of $ 0.8 and loss of $ 3.2 , respectively, within Gain (loss) on fair value adjustments, net in our Condensed Consolidated Statements of Operations.

An aggregate principal amount of $ 29.4 of the 2026 Convertible Notes remained outstanding at June 30, 2025.

We recorded $ 31.1 as the fair value of the remaining outstanding 2026 Convertible Notes, within Long-term debt, net, in our Condensed Consolidated Balance Sheet as of June 30, 2025.

During the three months ended June 30, 2025 and 2024, we recognized a loss of $ 2.6 and a gain of $ 0.4 , respectively.

LOSS PER SHARE

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

Three Months Ended December 31, Nine Months Ended December 31,

2024 2023 2024 2023

Three Months Ended June 30,

Computation of Basic and diluted loss per share:

2 unchanged sentences

Basic and diluted loss per share $ ( 0.07 ) $ ( 1.52 )

We incurred a net loss for the three and nine months ended December 31, 2024 and 2023;

We incurred a net loss for the three months ended June 30, 2025 and 2024;

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

For the three months ended December 31, 2024, we had 2.1 potentially dilutive shares from share-based awards and 0.1 of shares from Convertible Notes that are excluded due to the net loss for the period.

For the nine months ended December 31, 2024, we had 2.1 potentially dilutive shares from share-based awards and 0.1 of shares from Convertible Notes that are excluded due to the net loss for the period.

During the nine months ended December 31, 2024, 2.3 restricted stock awards vested, we granted 2.1 unvested restricted stock awards, and 0.5 unvested restricted stock awards were forfeited.

For the three months ended June 30, 2025, we had 2.3 potentially dilutive shares from share-based awards and 0.1 of shares from Convertible Notes that are excluded due to the net loss for the period.

During the three months ended June 30, 2025, 1.6 restricted stock awards vested, we granted 2.7 unvested restricted stock awards, and 0.7 unvested restricted stock awards were forfeited.

The forfeiture of awards resulted in the reversal of expense of $ 44.7 and amounts capitalized as software development costs of $ 11.9 .

On May 22, 2025, we issued 5.5 shares of our common stock, at a price to the public of $ 225.00 per share, resulting in $ 1,192.8 of proceeds net of underwriting fees and expenses.

We intend to use the net proceeds from this offering for general corporate purposes, which may include the repayment of outstanding debt and future acquisitions.

COMMITMENTS AND CONTINGENCIES

5 unchanged sentences

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

On May 2, 2022, IBM filed suit against Zynga, our wholly-owned subsidiary, in the United States District Court for the District of Delaware.

The suit alleged, in relevant part, that Zynga infringed its U.S.

7,072,849 and 7,702,719.

Starting on September 9, 2024, the case was tried before a jury, which, on September 13, 2024, returned a verdict finding that certain of Zynga’s games infringed each of the patents and awarding damages to IBM in the amount of $ 44.9 .

The patents at issue have expired and Zynga will not have to modify or stop operating any of the games at issue.

During the three months ended December 31, 2024, we entered into a Settlement Agreement and Patent License Agreement with IBM which, in relevant part, resolved all claims, damages, liabilities, and causes of action related to the matter.

The benefit from income taxes for the three months ended December 31, 2024 is based on our projected annual effective tax rate for fiscal year 2025, adjusted for specific items that are required to be recognized in the period in which they are incurred.

The benefit from income taxes was $ 27.7 for the three months ended December 31, 2024, as compared to the benefit from income taxes of $ 60.7 for the prior year period.

When compared to the statutory rate of 21%, the effective tax rate of 18.1 % for the three months ended December 31, 2024 was due primarily to tax benefits of $ 18.2 related to divestitures, tax benefits of $ 6.4 from employee stock-based compensation, tax benefits of $ 3.9 from tax credits, offset by tax expense of $ 18.7 related to an increase in the U.S.

and international valuation allowances and tax expense of $ 7.1 related to geographic mix of earnings.

The provision for income taxes for the nine months ended December 31, 2024 is based on our projected annual effective tax rate for fiscal year 2025, adjusted for specific items that are required to be recognized in the period in which they are incurred.

The provision for income taxes was $ 63.3 for the nine months ended December 31, 2024, as compared to the benefit from income taxes of $ 117.0 for the prior year period.

When compared to the statutory rate of 21%, the effective tax rate of ( 9.2 )% for the nine months ended December 31, 2024 was due primarily to tax expense of $ 220.5 related to an increase in the U.S.

and international valuation allowances, tax expense of $ 25.2 related to geographic mix of earnings, offset by tax benefits of $ 18.2 related to divestitures and tax benefits of $ 38.8 from tax credits.

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 is effective for taxable year ending March 31, 2024.

The benefit from income taxes for the three months ended June 30, 2025 is based on our projected annual effective tax rate for fiscal year 2026, adjusted for specific items that are required to be recognized in the period in which they are incurred.

The benefit from income taxes was $ 1.9 for the three months ended June 30, 2025, as compared to the provision for income taxes of $ 49.8 for the prior year period.

When compared to the statutory rate of 21%, the effective tax rate of 13.8 % for the three months ended June 30, 2025 was primarily due to tax expense of $ 5.6 related to an increase in the U.S.

and international valuation allowances and $ 2.9 by geographic mix of earnings and changes in reserves, offset by tax benefits of $ 4.9 from stock-based compensation, tax benefits of $ 2.6 from tax credits.

On July 4, 2025, the One Big Beautiful Bill Act was signed into law and includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework, accelerated deductions for domestic research expenditures and modifications to tax credits.

The legislation has multiple effective dates, with certain provisions effective in fiscal year ending March 31, 2026 and others implemented in future periods.

We are currently assessing its impact on our Consolidated Financial Statements.

The Inflation Reduction Act of 2022 (the “Inflation Reduction Act”) includes a 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.

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.

4 unchanged sentences

Although the model rules provide a framework for applying the minimum tax, countries may enact Pillar Two slightly differently than the model rules and on different timelines.

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

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 three and nine months ended December 31, 2024.

We will continue to evaluate the impact Pillar Two and any additional guidance may have on our operations.

The impact of Pillar Two was not material to the tax provision for the three months ended June 30, 2025.

We will continue to evaluate the impact Pillar Two and any additional guidance may have on our results and operations.

We are regularly examined by domestic and foreign taxing authorities.

3 unchanged sentences

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.

We acquired Gearbox, a leading developer of console and PC games, as part of our ongoing strategy to strengthen our industry-leading creative talent and portfolio of owned intellectual property.

The combination enhances the financial profile of our existing projects with Gearbox and unlocks the opportunities to drive increased long-term growth.

("Gearbox"), from Embracer Group AB, for an initial consideration of 2.8 shares of our common stock , as part of our ongoing strategy to strengthen our industry-leading creative talent and portfolio of owned intellectual property.

The acquisition-date fair value of the consideration totaled $ 411.4 , which consisted of the following:

3 unchanged sentences

Settlement of pre-existing relationship ( 14.6 )

Transaction bonus ( 24.6 )

Total $ 411.4

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.

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 Gearbox:

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

Fair Value Weighted average useful life

11 unchanged sentences

Goodwill, which is not deductible for 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 Gearbox included in our Condensed Consolidated Statements of Operations from the acquisition date are as follows:

Three Months Ended December 31, 2024 Nine Months Ended December 31, 2024

Net revenue $ 5.8 $ 17.7

Net loss ( 24.8 ) ( 50.1 )

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

Transaction costs of $ 0.2 and $ 5.3 fo r the three and nine months ended December 31, 2024, respectively, have been recorded within General and administrative expense in our Condensed Consolidated Statements of Operation.

GOODWILL AND INTANGIBLE ASSETS, NET

The change in our goodwill balance is as follows:

Gross balance at March 31, 2024 $ 6,768.5

Accumulated impairment at March 31, 2024 ( 2,342.1 )

Net balance at March 31, 2024 4,426.4

Gearbox Acquisition 208.4

Divestitures ( 15.8 )

Currency translation adjustment ( 16.4 )

Balance at December 31, 2024 $ 4,602.6

During the nine months ended December 31, 2023, we recognized a goodwill impairment charge of $ 165.4 , 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 decay rate, and discount rate.

Indefinite-lived intangibles

Other intangibles, net, as of December 31, 2024, included in-process research and development ("IPR&D") assets of $ 36.0 acquired as part of the Gearbox acquisition (refer to Note 13 - Acquisitions ), which are indefinite-lived intangibles and therefore not subject to amortization until the related games are released or development is abandoned.

Definite-lived intangibles

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

December 31, 2024 March 31, 2024

Amount Accumulated

Amortization Net Book

Amount Accumulated

Amortization Net Book

Value Weighted average useful life

Developed Game Technology $ 3,853.9 $ ( 1,733.1 ) $ 2,120.8 $ 3,788.8 $ ( 1,301.4 ) $ 2,487.4 6 years

Branding and Trade Names 396.8 ( 93.6 ) 303.2 395.1 ( 68.5 ) 326.6 12 years

Game Engine Technology 329.8 ( 203.0 ) 126.8 322.5 ( 147.3 ) 175.2 4 years

Intellectual Property 94.8 ( 15.6 ) 79.2 27.5 ( 23.1 ) 4.4 14 years

Developer Relationships 57.0 ( 37.2 ) 19.8 57.0 ( 26.5 ) 30.5 5 years

In Place Lease 2.0 ( 1.6 ) 0.4 2.0 ( 1.4 ) 0.6 4 years

Total intangible assets $ 4,734.3 $ ( 2,084.1 ) $ 2,650.2 $ 4,666.9 $ ( 1,606.3 ) $ 3,060.6

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

Three Months Ended December 31, Nine Months Ended December 31,

2024 2023 2024 2023

Cost of revenue $ 171.9 $ 230.4 $ 510.4 $ 827.2

Selling and marketing 1.0 1.6 4.1 49.5

Research and development 7.1 7.2 21.5 21.5

Depreciation and amortization 9.3 8.9 27.4 26.7

Total amortization of intangible assets $ 189.3 $ 248.1 $ 563.4 $ 924.9

During the three and nine months ended December 31, 2023, we recorded impairment charges of $ 53.4 and $ 273.1 , respectively, 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.

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 three and nine months ended December 31, 2024, we divested $ 6.8 , net of Advertising Technology assets, $ 15.3 , net of Customer Relationships assets, and $ 4.1 , net of Branding and Trade Names assets.

Estimated future amortization of intangible assets that will be recorded in Cost of revenue and operating expenses are as follows:

Fiscal Year Ended March 31, Amortization

2025 (remaining) $ 187.5

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 was largely completed as of December 31, 2024 but additional costs will be incurred into fiscal year 2026.

We estimated 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.

During the fiscal year ended March 31, 2024, we incurred business reorganization expenses of $ 93.3 in connection with the 2024 Plan, of which $ 88.2 related to title cancellations, $ 3.2 was for employee-related costs, and the remaining $ 1.9 consisted of professional fees.

We incurred business reorganization expenses of $ 23.1 and $ 0.7 during the three months ended December 31, 2024 and 2023, respectively, and $ 89.4 and $ 11.3 during the nine months ended December 31, 2024 and 2023, respectively.

In connection with the 2024 Plan, we incurred the following expenses:

Three Months Ended December 31, Nine Months Ended December 31,

Employee-related costs $ 8.8 $ 38.5

Title cancellations (1)

Loss on divestitures 9.8 9.8

Impairment loss of ROU asset (office closures) 1.1 3.5

Other 1.9 2.5

Total business reorganization expenses $ 23.1 $ 89.4

(1) Refer to Note 7 - Software Development Costs and Licenses

During the three and nine months ended December 31, 2024 we paid $ 11.3 and $ 53.2 , respectively, related to these reorganization activities and $ 9.0 remained accrued for in Accrued expenses and other current liabilities.

SEGMENT REPORTING AND GEOGRAPHIC INFORMATION

We have one operating and reportable segment.

Our operations involve similar products and customers worldwide.

Revenue earned is primarily derived from the sale of software titles, which are developed internally and by third parties.

Our Chief Executive Officer, who is our Chief Operating Decision Maker ("CODM"), manages our operations on a consolidated basis.

Our CODM uses consolidated net income (loss) – supplemented by sales information by product category, major product title, and platform – for the purpose of evaluating performance and allocating resources.

All significant expense categories are presented on our Condensed Consolidated Statements of Operations.

Our other segment items include Depreciation and amortization, Business reorganization, Interest and other, net, and (Benefit from) provision for income taxes.

The measure of segment assets are reported on the Condensed Consolidated Balance Sheet as Total assets.

The CODM does not review segment assets at a level other than that presented on the Condensed Consolidated Balance Sheet.

We attribute net revenue to geographic regions based on software product destination.

Net revenue by geographic region was as follows:

Three Months Ended June 30,

Net revenue recognized:

United States $ 900.4 $ 820.5

International 603.4 517.7

Total net revenue $ 1,503.8 $ 1,338.2

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

What changed 10-Q

Item 1. Financial Statements