Take-Two Interactive Software, Inc. (TTWO)

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.

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.

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 .

From 10-Q filed 2026-08-07 (period ending 2026-06-30).

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

CAUTIONARY NOTE ABOUT FORWARD-LOOKING STATEMENTS

The statements contained herein, which are not historical facts, including statements relating to Take-Two Interactive Software, Inc.'s ("Take-Two," the "Company," "we," "us," or similar pronouns) outlook, are considered forward-looking statements under federal securities laws and may be identified by words such as "anticipates," "believes," "estimates," "expects," "intends," "plans," "potential," "predicts," "projects," "seeks," "should," "will," or words of similar meaning and include, but are not limited to, statements regarding the outlook for our future business and financial performance. Such forward-looking statements are based on the current beliefs of our management as well as assumptions made by and information currently available to them, which are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. Actual outcomes and results may vary materially from these forward-looking statements based on a variety of risks and uncertainties including risks relating to the timely release and significant market acceptance of our games; the risks of conducting business internationally, including as a result of unforeseen geopolitical events; the impact of changes in interest rates by the Federal Reserve and other central banks, including on our short-term investment portfolio; the impact of inflation; volatility in foreign currency exchange rates; our dependence on key management and product development personnel; our dependence on our NBA 2K and Grand Theft Auto products and our ability to develop other hit titles; our ability to leverage opportunities on PlayStation®5 and Xbox Series X|S; factors affecting our mobile business, such as player acquisition costs; the ability to maintain acceptable pricing levels on our games; and other risks included herein; as well as, but not limited to, the risks and uncertainties discussed under the heading "Risk Factors" included in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended March 31, 2026; and our other periodic filings with the Securities and Exchange Commission. All forward-looking statements are qualified by these cautionary statements and speak only as of the date they are made. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise.

Our Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is provided in addition to the accompanying Condensed Consolidated Financial Statements and notes to assist readers in understanding our results of operations, financial condition, and cash flows. The following discussion should be read in conjunction with the MD&A and our annual Consolidated Financial Statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2026. All figures are in millions, except per share amounts or as otherwise noted.

Overview

Our Business

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 selectively license several highly recognizable renowned brands, particularly in sports entertainment. We support our products with innovative marketing programs created by our global teams.

To support our content pipeline, 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.").

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 series, 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 470 million units worldwide. Our most recent installment, Grand Theft Auto V, which was released in 2013, has sold-in over 230 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 series and will release Grand Theft Auto VI on November 19, 2026, during the current fiscal year. The label released its first trailer for the title in December 2023 and the second in May 2025, and pre-orders for the title commenced in June 2026. Red Dead Redemption 2, which has been a critical and commercial success that set numerous entertainment industry records, has sold-in more than 85 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 series include the critically acclaimed, multi-million unit selling BioShock, Borderlands, Mafia, Sid Meier's Civilization, and XCOM franchises. 2K's sports simulation titles include NBA 2K, which continues to be the top-ranked NBA basketball video game, WWE 2K professional wrestling, and PGA TOUR 2K. 2K also publishes mobile titles, including WWE SuperCard and NBA 2K All-Stars.

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 series, particularly around new releases within those series, 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 12.8% of our net revenue for the three months ended June 30, 2026. The timing of our Grand Theft Auto product releases may affect our financial performance on a quarterly and annual basis. Rockstar will release Grand Theft Auto VI on November 19, 2026.

To date we have also announced that, during the remainder of fiscal year 2027, 2K plans to release NBA 2K27, PGA 2K27 and WWE 2K27.

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 41.8% of our net revenue for the three months ended June 30, 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 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 98.3% of our net revenue for the three months ended June 30, 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 Condensed 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.

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. In-depth descriptions of our other critical accounting policies and estimates can be found in our Annual Report on Form 10-K for the fiscal year ended March 31, 2026.

Recently Adopted and Recently Issued Accounting Pronouncements

See Note 1 - Basis of Presentation and Significant Accounting Policies for further discussion.

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:

	Three Months Ended June 30,
	2026		2025		Increase/ (decrease)		% Increase/ (decrease)
Net Bookings	$	1,385.9	$	1,423.1	$	(37.2)	(2.6)	%

For the three months ended June 30, 2026, Net Bookings decreased by $37.2 as compared to the prior year period. The decrease was primarily driven by lower Net Bookings from our Grand Theft Auto series and Color Block Jam partially offset by higher Net Bookings from NBA 2K.

Results of Operations

The following tables set forth, for the periods indicated, our Condensed Consolidated Statements of Operations, net revenue by platform, net revenue by distribution channel, and net revenue by content type:

	Three Months Ended June 30,
	2026				2025
Total net revenue	$	1,533.9	100.0	%	$	1,503.8	100.0	%
Cost of revenue	651.4		42.5	%	558.8		37.1	%
Gross profit	882.5		57.5	%	945.0		62.9	%
Selling and marketing	369.7		24.1	%	409.2		27.2	%
Research and development	273.8		17.8	%	256.4		17.1	%
General and administrative	226.3		14.8	%	207.4		13.8	%
Depreciation and amortization	48.2		3.1	%	50.4		3.4	%
Total operating expenses	918.0		59.8	%	923.4		61.5	%
(Loss) income from operations	(35.5)		(2.3)	%	21.6		1.4	%
Interest and other, net:
Interest income	22.8		1.5	%	16.5		1.1	%
Interest expense	(30.4)		(2.0)	%	(38.9)		(2.6)	%
Other income/(expense), net	(6.2)		(0.4)	%	(13.0)		(0.9)	%
Interest and other, net	(13.8)		(0.9)	%	(35.4)		(2.4)	%
Loss before income taxes	(49.3)		(3.2)	%	(13.8)		(1.0)	%
Benefit from income taxes	(15.2)		(1.0)	%	(1.9)		(0.1)	%
Net loss	$	(34.1)	(2.2)	%	$	(11.9)	(0.9)	%

	Three Months Ended June 30,
	2026				2025
Net revenue by platform:
Mobile	$	762.3	49.7	%	$	801.7	53.3	%
Console	640.5		41.8	%	550.6		36.6	%
PC and other	131.1		8.5	%	151.5		10.1	%
Net revenue by distribution channel:
Digital online	$	1,507.3	98.3	%	$	1,476.6	98.2	%
Physical retail and other	26.6		1.7	%	27.2		1.8	%
Net revenue by content:
Recurrent consumer spending	$	1,289.8	84.1	%	$	1,256.1	83.5	%
Full game and other	244.1		15.9	%	247.7		16.5	%

Three Months Ended June 30, 2026 Compared to June 30, 2025

	2026		%		2025		%		Increase/ (decrease)		% Increase/ (decrease)
Total net revenue	$	1,533.9	100.0	%	$	1,503.8	100.0	%	$	30.1	2.0	%
Product costs	187.8		12.2	%	210.4		14.0	%	(22.6)		(10.7)	%
Game intangibles	154.3		10.1	%	158.5		10.5	%	(4.2)		(2.6)	%
Software development costs and royalties (1)	135.1		8.8	%	30.1		2.0	%	105.0		348.8	%
Licenses	99.5		6.5	%	70.9		4.7	%	28.6		40.3	%
Internal royalties	74.7		4.9	%	88.9		5.9	%	(14.2)		(16.0)	%
Cost of revenue	651.4		42.5	%	558.8		37.1	%	92.6		16.6	%
Gross profit	$	882.5	57.5	%	$	945.0	62.9	%	$	(62.5)	(6.6)	%

(1) Includes $3.1 and $(41.0) of stock-based compensation expense in 2026 and 2025, respectively, in software development costs and royalties.

For the three months ended June 30, 2026, net revenue increased by $30.1 as compared to the prior year period. The increase was primarily driven by higher net revenue of $89.0 from NBA 2K, partially offset by lower net revenue of $32.8 from Color Block Jam and $24.2 from our Grand Theft Auto series.

Net revenue from mobile decreased by $39.4 and accounted for 49.7% of our total net revenue for the three months ended June 30, 2026, as compared to 53.3% for the prior year period. The decrease in net revenue from mobile was primarily driven by lower net revenue from Color Block Jam. Net revenue from console games increased by $89.9 and accounted for 41.8% of our total net revenue for the three months ended June 30, 2026, as compared to 36.6% for the prior year period. The increase in net revenue from console games was primarily driven by higher net revenue from NBA 2K and our Borderlands franchise, the latest installment of which, Borderlands 4, released in September 2025. Net revenue from PC and other decreased by $20.4 and accounted for 8.5% of our total net revenue for the three months ended June 30, 2026, as compared to 10.1% for the prior year period. The decrease in net revenue from PC and other was primarily driven by lower net revenue from our Grand Theft Auto series.

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 RCS increased by $33.7 and accounted for 84.1% of net revenue for the three months ended June 30, 2026, as compared to 83.5% of net revenue for the prior year period. The increase in net revenue from RCS was primarily driven by higher net revenue from NBA 2K, partially offset by lower net revenue from Color Block Jam. Net revenue from full game and other decreased by $3.6 and accounted for 15.9% of net revenue for the three months ended June 30, 2026 as compared to 16.5% of net revenue for the prior year period. The decrease in net revenue from full game and other was primarily driven by lower net revenue from our Grand Theft Auto series, and PGA TOUR 2K, partially offset by higher net revenue from NBA 2K and our Borderlands franchise.

Net revenue from digital online channels increased by $30.7 and accounted for 98.3% of our total net revenue for the three months ended June 30, 2026, as compared to 98.2% for the prior year period. The increase was primarily driven by higher net revenue from NBA 2K, partially offset by lower net revenue from Color Block Jam and our Grand Theft Auto series. Net revenue from physical retail and other channels decreased by $0.6 and accounted for 1.7% of our total net revenue for the three months ended June 30, 2026, as compared to 1.8% for the same period in the prior year period.

Gross profit as a percentage of net revenue for the three months ended June 30, 2026 was 57.5% as compared to 62.9% for the prior year period. The decrease in gross profit as a percentage of net revenue was primarily driven by the reversal of expense related to the forfeiture of awards in the prior year.

Changes in foreign currency exchange rates increased net revenue by $0.6 and increased gross profit by $1.7 for the three months ended June 30, 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	$	369.7	24.1	%	$	409.2	27.2	%	$	(39.5)	(9.7)	%
Research and development	273.8		17.8	%	256.4		17.1	%	17.4		6.8	%
General and administrative	226.3		14.8	%	207.4		13.8	%	18.9		9.1	%
Depreciation and amortization	48.2		3.1	%	50.4		3.4	%	(2.2)		(4.4)	%
Total operating expenses(1)	$	918.0	59.8	%	$	923.4	61.5	%	$	(5.4)	(0.6)	%

(1) Includes stock-based compensation expense, which was allocated as follows:

	2026		2025
Selling and marketing	$	23.8	$	24.4
Research and development	19.4		21.1
General and administrative	39.7		36.2

Changes in foreign currency exchange rates increased total operating expenses by $2.7 for the three months ended June 30, 2026, as compared to the prior year period.

Selling and marketing

Selling and marketing expenses decreased by $39.5 for the three months ended June 30, 2026, as compared to the prior year period, primarily driven by lower marketing expense for Color Block Jam, Match Factory!, and our Sid Meier's Civilization and Borderlands franchises. This was partially offset by higher personnel expense.

Research and development

Research and development expenses increased by $17.4 for the three months ended June 30, 2026, as compared to the prior year period, primarily driven by higher personnel expense, partially offset by the timing of additional R&D-related credits related to certain titles.

General and administrative

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Held by

holders ( registered funds via N-PORT, institutional investors via 13F). Showing top by dollar value.

Holder	Type	ETF	MF	Position ($)	% of holder	Δ % of holder	Holder AUM

Recent insider activity

Last 90 days. Open-market trades (purchases & sales) by directors, officers, and 10%+ owners. 12 transactions across 7 insiders. Net: -53,993 shares, -$13,239,104.

Date	Insider	Role	Action	Shares	Price	Value
2026-09-03	Emerson Daniel P	Chief Legal Officer	Sell	-744	$217.03	-$161,470
2026-09-02	Emerson Daniel P	Chief Legal Officer	Sell	-917	$217.65	-$199,585
2026-09-02	Goldstein Lainie	Chief Financial Officer	Sell	-1,335	$217.65	-$290,563
2026-08-17	Srinivasan LaVerne Evans	Director	Sell	-362	$245.01	-$88,694
2026-08-17	Sheresky Michael	Director	Sell	-127	$245.01	-$31,116
2026-08-14	Siminoff Ellen F indirect	Director	Sell	-334 ×2	$242.34	-$80,942
2026-08-10	ZELNICK STRAUSS indirect	Chairman, CEO	Sell	-40,000 ×11	$252.64	-$10,105,592
2026-07-01	Siminoff Ellen F indirect	Director	Sell	-334 ×2	$252.53	-$84,345
2026-06-22	Moses Jon J	Director	Sell	-500	$244.61	-$122,305
2026-06-16	Emerson Daniel P	Chief Legal Officer	Sell	-4,419	$230.00	-$1,016,370
2026-06-15	Moses Jon J	Director	Sell	-500	$215.22	-$107,608
2026-06-15	Emerson Daniel P	Chief Legal Officer	Sell	-4,421	$215.00	-$950,515

Source: SEC Form 4 filings.

Next expected filings

~2026-11-07 10-Q expected by 2026-11-09 (in 58 days)
~2027-02-04 10-Q expected by 2027-02-06 (in 147 days)
~2027-05-20 10-K expected by 2027-05-29 (in 252 days)
~2027-08-07 10-Q expected by 2027-08-09 (in 331 days)

Predicted from historical filing cadence; not an SEC commitment.

Recent SEC filings

2026-08-07 8-K Earnings Release; Financial Statements and Exhibits
2026-08-07 10-Q Quarterly Report
2026-07-27 DEF 14A Proxy Statement
2026-07-17 PRE 14A Preliminary Proxy Statement
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

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