Take-Two Interactive Software, Inc.
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Item 1. Business
General
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, and Zynga. Our products are currently designed for console gaming systems, mobile, including smartphones and tablets, and personal computer ("PC"). We deliver our products through physical retail, digital download, online platforms, and cloud streaming services.
Our website address is www.take2games.com. We make all of our filings with the Securities and Exchange Commission ("SEC") available free of charge on our website under the caption "Investors—Financial Information—SEC Filings." Included in these filings are our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports, which are available as soon as reasonably practicable after we electronically file or furnish such materials with the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Our website and the information contained therein or connected thereto are not intended to be incorporated into this Annual Report on Form 10-K. The SEC maintains a website that contains annual, quarterly, and current reports, proxy and information statements and other information that issuers (including the Company) file electronically with the SEC. The SEC's website is www.sec.gov.
Strategy
Overview. Our strategy is to create hit entertainment experiences, delivered on every platform relevant to our audience through a variety of sound business models. Our pillars - creativity, innovation, and efficiency - guide us as we strive to create the highest quality, most captivating experiences for our consumers. We believe that our player-first approach and commitment to creativity and innovation are distinguishing strengths, enabling us to differentiate our products in the marketplace by combining advanced technology with compelling gameplay that provide unique, deeply engaging experiences.
Our teams have established a portfolio of proprietary software content for the major hardware and mobile platforms, and we aim to be at the forefront of technological innovation. We have a diverse portfolio that spans all key platforms and numerous genres, including action, adventure, family, casual, hyper-casual, role-playing, shooter, social casino, sports, and strategy. This enables us to appeal to a wide array of consumers worldwide, ranging from game enthusiasts to casual gamers. Most of our intellectual property is internally owned and developed, which we believe best positions us financially and competitively. In addition, we license selectively some highly recognizable renowned brands, particularly in sports entertainment. We support our products with innovative marketing programs created by our global teams.
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Attract and Retain the Best Talent in the Business. Our headcount includes 12,909 full-time employees as of March 31, 2026, including 9,998 in development studios. We are proud of the culture we have established and believe that it enables us to attract and retain some of the most talented individuals in our industry and consistently set new benchmarks for excellence. By empowering our colleagues to embrace an entrepreneurial mindset and to take calculated risks, we believe that we have created an environment where our people can thrive. We believe that we deploy best-in-class recruiting practices to attract new talent and encourage our people to pursue satisfying, long-term career opportunities with us by providing competitive compensation plans that align our people with our shareholders, extensive employee benefits and well-being programs, and numerous learning and development programs to encourage career growth and progression.
Develop Robust Player Relationships. Many of our releases offer a steady cadence of post-launch content to drive further engagement with our franchises, including virtual currency, add-on content, and in-game purchases. This approach enables us to maintain consistent, positive relationships with our players, sustain ongoing relevance for our intellectual properties, and enhance the performance of our titles.
We continue to invest in tools and infrastructure to deepen our understanding of our players and to strengthen our relationships with them. This includes our customer data platform and our customer insights and analytics, which inform our go-to-market strategy and allow us to maintain ongoing communications with our players that are tailored to their interests. We also engage with emerging marketing platforms, technologies, and services to enhance our reach and capabilities, including our direct-to-consumer commerce platform, through which players can purchase in-game offerings, primarily for our mobile titles.
The enjoyment and safety of our players is of paramount importance to us, and we are committed to providing safe, inclusive, and welcoming environments in which our communities can gather and enjoy our services free of harassment, hate speech, toxic behavior, abuse, and other offensive content and conduct.
Increase Scale and Profitability. A key component of our strategy is to build a portfolio and forward pipeline of commercially successful franchises across console, PC, and mobile platforms. We believe that we can increase our scale by launching new intellectual properties; growing our core franchises through high-quality, fresh sequels, relevant brand extensions, and robust live services; and expanding our intellectual property portfolio and talent base through strategic acquisitions and partnerships. We provide continuous recurrent consumer spending offerings to fuel player engagement and growth.
We use a product investment review process to evaluate potential titles for investment, review existing titles in development, and assess titles after release by measuring their performance in the market and the return on our investment. We believe that our disciplined approach to product investment will enhance the competitiveness and profitability of our titles.
As we grow our scale, we seek to run our business in a highly efficient manner in an effort to optimize and enhance our profitability. We regularly assess opportunities to contain or reduce costs, including leveraging shared services and technology.
Identify and Lead New Paradigms and Market Trends. Our teams aspire to be at the forefront of innovation in our industry. We are constantly evaluating and investing selectively in emerging platforms, technologies, business models, and geographies that we believe will help us grow and strengthen our business. In particular, we believe that there are meaningful opportunities to expand our presence in Asia, the Middle East, and Latin America. Within these regions, China is our most established market, where we offer NBA 2K Online through our partnership with Tencent. Our NBA 2K Online business is the top online PC sports game in China.
We also direct our teams to anticipate and actively address changes in consumer behavior and technology so that we can evolve our business as new dynamics develop.
Our Businesses
We derive substantially all of our revenue from the sale of our interactive entertainment content, which includes internally developed software titles and software titles developed by third parties, in-game virtual items and advertising, and live services on console, mobile, and PC. Operating margins are dependent in part upon our ability to release new, commercially successful software products and to manage effectively their development and marketing costs. We have internal development studios located in Australia, Canada, China, Czech Republic, Finland, Germany, Hungary, India, Serbia, South Korea, Spain, Turkey, the United Kingdom ("U.K."), and the United States ("U.S."). As of March 31, 2026, we had a research and development staff of 9,998 full-time employees with the technical capabilities to develop software titles for all major consoles, PCs, and mobile platforms in multiple languages and territories.
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We engage in evolving business models such as online gaming, virtual currency, add-on content, and in-game purchases, and we expect to continue to generate incremental revenue from these opportunities. We also generate revenue from advertising primarily within our mobile software products.
Rockstar Games. Rockstar Games' strategy is to develop a limited number of titles that are known for their quality and longevity in the market for which they can create sequels and incremental revenue opportunities through virtual currency, add-on content, and in-game purchases across all key platforms. Software titles published by our Rockstar Games label are primarily internally developed. We expect Rockstar Games, our wholly-owned publisher of the Grand Theft Auto, L.A. Noire, Max Payne, Midnight Club, Red Dead Redemption, and other popular franchises, to continue to be a leader in the action/adventure product category and to create groundbreaking entertainment. We believe that Rockstar Games has established a uniquely original, popular, cultural phenomenon with its Grand Theft Auto series, which is the interactive entertainment industry's most iconic and critically acclaimed brand and has sold-in over 465 million units worldwide. Our most recent installment, Grand Theft Auto V, which was released in 2013, has sold-in over 225 million units worldwide and includes access to Grand Theft Auto Online. Rockstar Games offers its GTA+ membership program, which engages its player community with an array of rotating benefits, including access to classic Rockstar Games titles. Rockstar Games continues to invest in the franchise and announced that Grand Theft Auto VI is planned for release on November 19, 2026, during our fiscal year 2027. The label released its first trailer for the title in December 2023 and the second in May 2025, and will share more details this summer. Red Dead Redemption 2, which has been a critical and commercial success that set numerous entertainment industry records, has sold-in more than 80 million units worldwide. Rockstar Games continues to expand on its established series by developing sequels, offering downloadable episodes, and providing additional content. Rockstar Games' titles are published across all key platforms, including mobile.
2K. Our 2K label publishes a variety of popular entertainment properties across all key platforms and across a range of genres including shooter, action, role-playing, strategy, sports, and family/casual entertainment. In recent years, 2K has expanded its offerings to include several new franchises that are expected to enhance and diversify its slate of games and provide opportunities for sequels and additional content. We expect 2K to continue to develop new, successful franchises in the future. 2K's internally owned and developed franchises include the critically acclaimed, multi-million unit selling BioShock, Borderlands, Mafia, Sid Meier's Civilization, Tiny Tina's Wonderlands, and XCOM franchises. 2K's sports simulation titles include our flagship NBA 2K series, which continues to be the top-ranked NBA basketball video game, the WWE 2K professional wrestling series, PGA TOUR 2K, and TopSpin 2K. 2K also publishes mobile titles, including WWE SuperCard and NBA 2K All-Stars.
Zynga. Our Zynga label publishes popular free-to-play mobile games that deliver high quality, deeply engaging entertainment experiences and generates revenue from in-game sales and advertising. Zynga's strategy is to have numerous games in concept development and to determine which titles are best suited for soft and worldwide launch based on the achievement of various milestones and key performance indicator (KPI) thresholds. Zynga's diverse portfolio of popular game franchises has been downloaded more than 10 billion times, including Color Block Jam, CSR2, Empires & Puzzles, Game of Thrones: Legends, Game of Thrones Slots Casino, Golf Rival, Harry Potter: Puzzles & Spells, Hit it Rich! Casino, Match Factory!, Merge Dragons!, Toon Blast, Toy Blast, Wizard of Oz Slots Casino, Words With Friends, and Zynga Poker.
Intellectual Property
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Overview
Our Business
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, and Zynga. Our products are currently designed for console gaming systems, mobile, including smartphones and tablets, and personal computer ("PC"). We deliver our products through physical retail, digital download, online platforms, and cloud streaming services. We are continually innovating the design and development of our products, including by investing in artificial intelligence ("AI") tools and technologies, in order to enhance game play, anticipate changes in consumer behavior, and evolve our business as new dynamics develop. Refer to Item 1 - Business for additional discussion.
Trends and Factors Affecting our Business
Product Release Schedule. Our financial results are affected by the timing of our product releases and the commercial success of our titles. 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. 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 12.4% of our net revenue for the fiscal year ended March 31, 2026. The timing of our Grand Theft Auto product releases may affect our financial performance on a quarterly and annual basis. Rockstar plans to release Grand Theft Auto VI on November 19, 2026.
Economic Environment and Retailer Performance. We continue to monitor various macroeconomic and geopolitical factors, such as global tariff policies, that may affect our business in several areas, including consumer demand, inflation, pricing pressure on our products and third party hardware platforms, 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. There has been increased consolidation in our industry, which is extremely competitive, and larger, better capitalized competitors will be in a stronger position to withstand prolonged periods of economic downturn and sustain their business through periods of financial volatility. Also, bankruptcies or consolidations of our large retail customers could hurt our business, due to uncollectible accounts receivable and the concentration of purchasing power among the remaining large retailers.
Hardware Platforms. We derive a substantial portion of our revenue from the sale of products made for video game consoles manufactured by third parties. Such console revenue comprised 39.0% of our net revenue for the fiscal year ended March 31, 2026. 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 has been and could be impacted by global economic factors, including global tariff policies. 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. However, we cannot be certain how backwards compatibility will affect demand for our products. Further, events beyond our control may impact the availability or pricing of consoles, which may also affect demand for our products. We manage our product delivery on each current and future platform in a manner we believe to be most effective to maximize our revenue opportunities and
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achieve the desired return on our investments in product development. Accordingly, our strategy for these platforms is to focus our development efforts on a select number of the highest quality titles.
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, 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 97.0% of our net revenue for the fiscal year ended March 31, 2026. We expect online delivery of games and game offerings to continue to be the primary part of our business over the long term.
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 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. Apple and Google generally have the discretion to set the amounts of their platform fees and change their platforms’ terms of service and other policies with respect to us or other developers at their sole discretion, and those changes may be unfavorable to us. These platform fees are recorded as Cost of revenue as incurred. Further, as a result of the platform fees associated with online game sales, our mobile net revenue generally generates a lower gross margin percentage than our Console or PC revenue. Accordingly, the overall product mix between mobile and other game sales may affect our gross margin percentage. We are also continuing to expand our direct-to-consumer efforts more meaningfully across our mobile portfolio to enhance profitability.
Player acquisition costs. Principally for our mobile titles, we use advertising and other forms of player acquisition and retention to grow and retain our player audience. These expenditures, which are recorded within Selling and marketing in our Consolidated Statements of Operations, generally relate to the promotion of new game launches and ongoing performance-based programs to drive new player acquisition and lapsed player reactivation. Over time, the effectiveness or cost of these acquisition and retention-related programs may change, affecting our operating results.
Content Release Highlights
During fiscal year 2026, 2K released Mafia: The Old Country, NBA 2K26, Borderlands 4, and WWE 2K26. Rockstar plans to release Grand Theft Auto VI on November 19, 2026.
Fiscal 2026 Financial Summary
Our net revenue for the fiscal year ended March 31, 2026 was led by a variety of our top franchises, primarily NBA 2K, Grand Theft Auto, Borderlands, Red Dead Redemption, and WWE 2K, as well as our top mobile contributors, primarily Toon Blast, Match Factory!, Empires & Puzzles, and Color Block Jam. Our net revenue for the fiscal year ended March 31, 2026 was $6,656.4, an increase of $1,022.8 or 18.2% compared to the fiscal year ended March 31, 2025.
Our operating loss for the fiscal year ended March 31, 2026 was $104.2 compared to operating loss of $4,391.1 for fiscal year ended March 31, 2025, primarily driven by Goodwill impairment charges of $3,545.2 in the prior year, with no corresponding expense in the current year, as well as, higher sales of our products. For the fiscal year ended March 31, 2026, our net loss was $298.2, as compared to net loss of $4,478.9 in the prior year. Basic and diluted loss per share for the fiscal year ended March 31, 2026 was $1.62, as compared to Basic and diluted loss per share of $25.58 for the fiscal year ended March 31, 2025.
At March 31, 2026, we had $1,638.1 of Cash, cash equivalents, and restricted cash and cash equivalents, compared to $1,559.2 at March 31, 2025. This increase was primarily driven by proceeds from our May 2025 underwritten public offering of common stock (refer to Note 12 - Loss Per Share) and positive cash flow from product sales. These increases were partially offset by the repayment of our 2025 Notes and 2026 Notes (refer to Note 11 - Debt), as well as continued investments in software, fixed assets, and short-term investments.
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. 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.
Recently Adopted and Recently Issued Accounting Pronouncements
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Operating Metric
Net Bookings
We monitor Net Bookings as a key operating metric in evaluating the performance of our business. Net Bookings is defined as the net amount of products and services sold digitally or sold-in physically during the period and includes licensing fees, merchandise, in-game advertising, and publisher incentives. Net Bookings were as follows:
| Fiscal Year Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | Increase/(decrease) | Increase/(decrease) % | ||||||||||||||||||||
| Net Bookings | $ | 6,721.0 | 5,648.0 | $ | 1,073.0 | 19.0 | % | ||||||||||||||||
For the fiscal year ended March 31, 2026, Net Bookings increased by $1,073.0 as compared to the prior year period. The increase was primarily driven by higher Net Bookings from our NBA 2K franchise, our Borderlands franchise, the latest installment of which, Borderlands 4, released in September 2025; Color Block Jam, which released in November 2024; and our Grand Theft Auto franchise.
Results of Operations
In this section, we discuss the results of our operations for the fiscal year ended March 31, 2026 compared to the fiscal year ended March 31, 2025. For the comparison of fiscal year 2025 to fiscal year 2024, 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, 2025.
The following tables set forth, for the periods indicated, our Consolidated Statements of Operations, net revenue by platform, net revenue by distribution channel, and net revenue by content type:
| Fiscal Year Ended March 31, | |||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||||||||||||||||||||||
| Total net revenue | $ | 6,656.4 | 100.0 | % | $ | 5,633.6 | 100.0 | % | $ | 5,349.6 | 100.0 | % | |||||||||||||||||||||||||
| Cost of revenue | 2,846.7 | 42.8 | % | 2,571.4 | 45.7 | % | 3,107.8 | 58.1 | % | ||||||||||||||||||||||||||||
| Gross profit | 3,809.7 | 57.2 | % | 3,062.2 | 54.3 | % | 2,241.8 | 41.9 | % | ||||||||||||||||||||||||||||
| Selling and marketing | 1,770.8 | 26.6 | % | 1,683.7 | 29.9 | % | 1,550.2 | 29.0 | % | ||||||||||||||||||||||||||||
Research and development | 1,074.6 | 16.1 | % | 1,005.2 | 17.8 | % | 948.2 | 17.7 | % | ||||||||||||||||||||||||||||
General and administrative | 874.4 | 13.1 | % | 883.3 | 15.7 | % | 716.1 | 13.4 | % | ||||||||||||||||||||||||||||
| Depreciation and amortization | 198.5 | 3.0 | % | 229.4 | 4.1 | % | 171.2 | 3.2 | % | ||||||||||||||||||||||||||||
| Goodwill impairment | — | — | % | 3,545.2 | 62.9 | % | 2,342.1 | 43.8 | % | ||||||||||||||||||||||||||||
| Business reorganization | (4.4) | (0.1) | % | 106.5 | 1.9 | % | 104.6 | 1.9 | % | ||||||||||||||||||||||||||||
| Total operating expenses | 3,913.9 | 58.7 | % | 7,453.3 | 132.3 | % | 5,832.4 | 109.0 | % | ||||||||||||||||||||||||||||
| Income (loss) from operations | (104.2) | (1.5) | % | (4,391.1) | (78.0) | % | (3,590.6) | (67.1) | % | ||||||||||||||||||||||||||||
| Interest and other, net | (93.6) | (1.4) | % | (100.2) | (1.8) | % | (112.2) | (2.1) | % | ||||||||||||||||||||||||||||
| Loss before income taxes | (197.8) | (2.9) | % | (4,491.3) | (79.8) | % | (3,702.8) | (69.2) | % | ||||||||||||||||||||||||||||
| Provision for (benefit from) income taxes | 100.4 | 1.5 | % | (12.4) | (0.2) | % | 41.4 | 0.8 | % | ||||||||||||||||||||||||||||
| Net loss | (298.2) | (4.4) | % | (4,478.9) | (80.0) | % | (3,744.2) | (70.0) | % | ||||||||||||||||||||||||||||
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| Fiscal Year Ended March 31, | |||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||||||||||||||||||||||
| Net revenue by content: | |||||||||||||||||||||||||||||||||||||
| Recurrent consumer spending | $ | 5,196.6 | 78.1 | % | $ | 4,474.6 | 79.4 | % | $ | 4,213.5 | 78.8 | % | |||||||||||||||||||||||||
| Full game and other | 1,459.8 | 21.9 | % | 1,159.0 | 20.6 | % | 1,136.1 | 21.2 | % | ||||||||||||||||||||||||||||
| Net revenue by platform: | |||||||||||||||||||||||||||||||||||||
| Mobile | $ | 3,333.0 | 50.1 | % | $ | 2,942.0 | 52.2 | % | $ | 2,748.0 | 51.4 | % | |||||||||||||||||||||||||
| Console | 2,597.3 | 39.0 | % | 2,099.1 | 37.3 | % | 2,167.3 | 40.5 | % | ||||||||||||||||||||||||||||
| PC and other | 726.1 | 10.9 | % | 592.5 | 10.5 | % | 434.3 | 8.1 | % | ||||||||||||||||||||||||||||
| Net revenue by distribution channel: | |||||||||||||||||||||||||||||||||||||
| Digital online | $ | 6,459.7 | 97.0 | % | $ | 5,431.8 | 96.4 | % | $ | 5,112.2 | 95.6 | % | |||||||||||||||||||||||||
| Physical retail and other | 196.7 | 3.0 | % | 201.8 | 3.6 | % | 237.4 | 4.4 | % | ||||||||||||||||||||||||||||
Fiscal Years ended March 31, 2026 and 2025
| 2026 | % of net revenue | 2025 | % of net revenue | Increase/(decrease) | % Increase/(decrease) | |||||||||||||||||||||||||||
| Total net revenue | $ | 6,656.4 | 100.0 | % | $ | 5,633.6 | 100.0 | % | $ | 1,022.8 | 18.2 | % | ||||||||||||||||||||
| Product costs | 863.8 | 13.0 | % | 821.1 | 14.6 | % | 42.7 | 5.2 | % | |||||||||||||||||||||||
| Game intangibles | 662.2 | 9.9 | % | 811.0 | 14.4 | % | (148.8) | (18.3) | % | |||||||||||||||||||||||
| Licenses | 463.5 | 7.0 | % | 365.8 | 6.5 | % | 97.7 | 26.7 | % | |||||||||||||||||||||||
Software development costs and royalties(1) | 439.8 | 6.6 | % | 168.1 | 3.0 | % | 271.7 | 161.6 | % | |||||||||||||||||||||||
| Internal royalties | 417.4 | 6.3 | % | 405.4 | 7.2 | % | 12.0 | 3.0 | % | |||||||||||||||||||||||
| Cost of revenue | 2,846.7 | 42.8 | % | 2,571.4 | 45.7 | % | 275.3 | 10.7 | % | |||||||||||||||||||||||
| Gross profit | $ | 3,809.7 | 57.2 | % | $ | 3,062.2 | 54.3 | % | $ | 747.5 | 24.4 | % | ||||||||||||||||||||
(1) Includes $(27.9) and $9.4 of stock-based compensation expense in fiscal year 2026 and 2025, respectively.
For the fiscal year ended March 31, 2026, net revenue increased by $1,022.8, as compared to the prior year period. The increase was primarily driven by higher net revenue of $416.9 from our NBA 2K franchise; $210.3 from our Borderlands franchise, the latest installment of which, Borderlands 4, released in September 2025; $206.6 from Color Block Jam, which released in November 2024; $121.9 from Toon Blast; and $115.1 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 $722.0 and accounted for 78.1% of net revenue for the fiscal year ended March 31, 2026, as compared to 79.4% for the prior year period. The increase was primarily driven by higher net revenue from our NBA 2K franchise and Color Block Jam. Net revenue from full game and other increased by $300.8 and accounted for 21.9% of net revenue for the fiscal year ended March 31, 2026, as compared to 20.6% for the prior year period. The increase was primarily driven by higher net revenue from our Borderlands and Grand Theft Auto franchises, and our Mafia franchise, the latest installment of which, Mafia: The Old Country released in August 2025, partially offset by lower net revenue from our Sid Meier's Civilization franchise, the latest installment of which, Civilization VII, released in February 2025.
Net revenue from mobile increased by $391.0 and accounted for 50.1% of our total net revenue in the fiscal year ended March 31, 2026, as compared to 52.2% in the prior year period. The increase was primarily driven by higher net revenue from Color Block Jam and Toon Blast. Net revenue from console games increased by $498.2 and accounted for 39.0% of our total net revenue in the fiscal year ended March 31, 2026, as compared to 37.3% in the prior year period. The increase was primarily driven by higher net revenue from our NBA 2K and Borderlands franchises. Net revenue from PC and other increased by $133.6 and accounted for 10.9% of our total net revenue in the fiscal year ended March 31, 2026, as compared to 10.5% in the prior year period. The increase was primarily driven by higher net revenue from our Borderlands, Grand Theft Auto, and NBA 2K franchises, partially offset by lower net revenue from our Sid Meier's Civilization franchise.
Net revenue from digital online channels increased by $1,027.9 and accounted for 97.0% of our total net revenue for the fiscal year ended March 31, 2026, as compared to 96.4% in the prior year period. The increase was primarily driven by higher net revenue from our NBA 2K franchise, Color Block Jam, our Borderlands and Grand Theft Auto franchises, and Toon Blast. Net revenue from physical retail and other channels decreased by $5.1 and accounted for 3.0% of our total net revenue for the fiscal year ended March 31, 2026, as compared to 3.6% for the prior year period.
Gross profit as a percentage of net revenue for the fiscal year ended March 31, 2026 was 57.2%, as compared to 54.3% in the prior year period. The increase in gross profit as a percentage of net revenue was primarily driven by (i) lower
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amortization of intangible assets primarily due to higher impairments in the prior year and (ii) lower product costs as a percentage of net revenue, partially offset by higher amortization of capitalized software and development costs primarily due to the timing of releases.
Changes in foreign currency exchange rates increased net revenue by $9.9 and increased gross profit by $45.4, respectively, in the fiscal year ended March 31, 2026 as compared to the prior year period.
Operating Expenses
| 2026 | % of net revenue | 2025 | % of net revenue | Increase/(decrease) | % Increase/(decrease) | |||||||||||||||||||||||||||
| Selling and marketing | $ | 1,770.8 | 26.6 | % | $ | 1,683.7 | 29.9 | % | $ | 87.1 | 5.2 | % | ||||||||||||||||||||
Research and development | 1,074.6 | 16.1 | % | 1,005.2 | 17.8 | % | 69.4 | 6.9 | % | |||||||||||||||||||||||
General and administrative | 874.4 | 13.1 | % | 883.3 | 15.7 | % | (8.9) | (1.0) | % | |||||||||||||||||||||||
| Depreciation and amortization | 198.5 | 3.0 | % | 229.4 | 4.1 | % | (30.9) | (13.5) | % | |||||||||||||||||||||||
| Goodwill impairment | — | — | % | 3,545.2 | 62.9 | % | (3,545.2) | (100.0) | % | |||||||||||||||||||||||
| Business reorganization | (4.4) | (0.1) | % | $ | 106.5 | 1.9 | % | (110.9) | (104.1) | % | ||||||||||||||||||||||
Total operating expenses(1) | $ | 3,913.9 | 58.7 | % | $ | 7,453.3 | 132.3 | % | $ | (3,539.4) | (47.5) | % | ||||||||||||||||||||
(1)Includes stock-based compensation expense, which was allocated as follows:
Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-06-08 | Emerson Daniel P | Chief Legal Officer | Sell | -8,840 | $214.00 | -$1,891,760 |
| 2026-06-04 | Dornemann Michael | Director | Sell | -1,151 | $217.02 | -$249,790 |
| 2026-06-03 | Slatoff Karl | President | Sell | -40,358 ×6 | $216.09 | -$8,720,906 |
| 2026-06-01 | Slatoff Karl indirect | President | Sell | -208,969 ×8 | $227.34 | -$47,507,973 |
| 2026-06-01 | ZELNICK STRAUSS indirect | Chairman, CEO | Sell | -208,969 ×8 | $227.34 | -$47,507,973 |
| 2026-06-02 | Goldstein Lainie | Chief Financial Officer | Sell | -31,060 | $219.61 | -$6,821,087 |
| 2026-06-02 | Emerson Daniel P | Chief Legal Officer | Sell | -21,102 | $219.61 | -$4,634,210 |
| 2026-06-01 | Srinivasan LaVerne Evans | Director | Sell | -373 | $229.35 | -$85,548 |
| 2026-05-29 | Sheresky Michael | Director | Sell | -131 | $218.26 | -$28,592 |
| 2026-05-26 | ZELNICK STRAUSS indirect | Chairman, CEO | Sell | -70,000 ×11 | $222.20 | -$15,554,130 |
| 2026-04-15 | Siminoff Ellen F indirect | Director | Sell | -413 ×2 | $207.66 | -$85,764 |
| 2026-03-16 | Siminoff Ellen F indirect | Director | Sell | -413 ×2 | $209.36 | -$86,466 |
Source: SEC Form 4 filings.
Next expected filings
- ~2026-08-07 10-Q expected by 2026-08-09 (in 57 days)
- ~2026-11-07 10-Q expected by 2026-11-09 (in 149 days)
- ~2027-02-04 10-Q expected by 2027-02-06 (in 238 days)
- ~2027-05-20 10-K expected by 2027-05-29 (in 343 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-06-01 S-3ASR S-3ASR
- 2026-05-22 10-K Annual Report
- 2026-05-21 8-K Earnings Release; Financial Statements and Exhibits
- 2026-02-04 10-Q Quarterly Report
- 2026-02-03 8-K Earnings Release; Financial Statements and Exhibits
- 2025-11-07 10-Q Quarterly Report
- 2025-11-06 8-K Earnings Release; Financial Statements and Exhibits
- 2025-09-19 8-K Officer/Director Change; Shareholder Vote Results; Financial Statements and Exhibits
- 2025-09-10 8-K Other Events; Financial Statements and Exhibits
- 2025-09-05 8-K Officer/Director Change; Financial Statements and Exhibits
- 2025-08-07 10-Q Quarterly Report
- 2025-08-07 8-K Earnings Release; Financial Statements and Exhibits
- 2025-05-22 8-K Other Events; Financial Statements and Exhibits
- 2025-05-20 10-K Annual Report
- 2025-05-15 8-K Earnings Release; Financial Statements and Exhibits