Revenue Analysis
Total and Operating Revenue: TTWO showed a fluctuating revenue over the periods analyzed. In the most recent period (2023-12-31), the total revenue was approximately $1.37 billion, showing an increase from $1.30 billion on 2023-09-30 and $1.28 billion on 2023-06-30. This suggests a positive trend in revenue generation over the recent quarters.
Gross Profit Margins: The Gross Profit has also seen variation, with $678.1 million reported on 2023-12-31, a significant rise from $415.4 million on 2023-09-30. The gross profit margin appears to improve steadily, indicating better management of production costs or enhanced revenue performance.
Cost Management
Cost of Revenue: The cost of revenue was highest during the period ending 2023-12-31 at $688.2 million, an increase from previous periods which aligns with the increase in revenue, suggesting that revenue growth is possibly driven by volume rather than efficiency enhancements.
Operating Expense: Operating expenses have been relatively steady with $807.6 million in the most recent period compared to $793.7 million and $883.5 million in preceding periods.
Total Expenses: Total expenses have escalated over the period, reaching $1.50 billion in the latest period, compared to $1.68 billion and $1.49 billion before that. This rise might reflect increased operational or production costs aligned with scaling operations or maybe due to other non-recurring costs.
Profitability Analysis
EBITDA: EBITDA was positive at $196.3 million in the most recent period, recovering from negative figures in previous periods. This improvement could signify better operational management or cost control.
Operating Income: The operating income has been negative across all periods, registering at -$129.5 million most recently, which might indicate ongoing operational challenges despite increasing revenues.
Pretax Income and Net Income: Both metrics have shown significant losses, with net income figures standing at -$91.6 million in the latest data. Such figures may suggest substantial non-operating costs or expenses overshadowing the company’s gross profit.
Cash Flow Indicators
Reconciled Depreciation: Depreciation expenses have been significant, with the latest period showing $325.8 million which indicates substantial capital expenditure in previous periods.
Interest Expense: Interest expenses are present which impacts net profit but definitive trends are unclear as some data points are missing.
Taxation
Tax Rate: The tax rate has varied with the company facing different tax obligations due in part to its fluctuating pre-tax income levels.
Tax Provision: The tax provision has also been fluctuating, with a noticeable reduction in tax expenses in some quarters possibly due to carry-forward losses.
Tax Effect of Unusual Items: TTWO has recorded negative impacts from unusual items, which could involve restructuring costs or other one-offs influencing tax evaluations.
Shareholder Metrics
Diluted and Basic EPS: Earnings Per Share (EPS) has been consistently negative, reflecting the challenges in generating profitability. The latest EPS was recorded at -$0.54.
Average Shares: The count of average diluted shares has been fairly stable around 170 million shares.
Net Income Available to Common Stockholders: This metric has matched net income figures, reiterating the challenges in driving shareholder value in current operational circumstances.
Conclusion
TTWO has shown a capacity to increase revenues but faces significant challenges in converting this into net profitability. Improvements in gross margins are evident; however, high operating costs and other expenses continue to undermine net results. Strategic considerations might include optimizing cost structures, mitigating unusual expenditures, and perhaps a more aggressive approach towards leveraging new revenue streams.