Summary of the Take-Two standalone projections
The following table presents a summary of the unaudited prospective financial information of Take-Two on a standalone basis prepared by Take-Two management for Take-Two’s fiscal years 2022 through 2025, which information is referred to as the “Take-Two standalone projections.” Take-Two management made various assumptions when preparing the Take-Two standalone projections based on Take-Two’s planned pipeline of titles, including title performance, which resulted in a compound annual growth rate for Net Bookings over the period of Take-Two’s fiscal years 2022 through 2025 of approximately 18%. Various assumptions were also made in determining the levels of operating expenses, including development and marketing expenses and headcount growth. Key assumptions and dependencies underlying the Take-Two standalone projections include: the timely delivery of the titles included in the projections; a stable economic environment; continued consumer acceptance of Xbox One and PlayStation 4, as well as continued growth in the installed base of PlayStation 5 and Xbox Series X|S; the ability to develop and publish products that capture market share for these current generation systems while also leveraging opportunities on PC, mobile and other platforms; stable foreign exchange rates; and the risks described herein under the section titled “Risk Factors” and in Take-Two’s filings with the SEC, as listed under the section titled “Where You Can Find More Information.”
| Fiscal year ended March 31 | ||||||||||||||||
| 2022E | 2023E | 2024E | 2025E | |||||||||||||
| (in millions) | ||||||||||||||||
| Net Bookings(1) |
$ | 3,376 | $ | 3,893 | $ | 5,205 | $ | 5,539 | ||||||||
| Adjusted Net Income(2) |
$ | 532 | $ | 476 | $ | 891 | $ | 1,180 | ||||||||
| Adjusted EBITDA(3) |
$ | 689 | $ | 626 | $ | 1,121 | $ | 1,463 | ||||||||
| Adjusted Unrestricted Operating Cash Flow(4) |
$ | 414 | $ | 518 | $ | 1,108 | $ | 1,313 | ||||||||
| Unlevered Free Cash Flow(5)(6) |
$ | (128 | ) | $ | (7 | ) | $ | 623 | $ | 928 | ||||||
| (1) | “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, strategy guides and publisher incentives. |
| (2) | Adjusted Net Income is calculated by taking GAAP net income adjusted to exclude the net effect from deferred net revenue and related costs of goods sold, stock-based compensation, impact of business reorganization, amortization and impairment of acquired intangibles, business acquisition costs and one-time gains or losses on long-term investments. |
| (3) | Adjusted EBITDA is calculated by taking GAAP net income adjusted to exclude the net effect from deferred net revenue and related costs of goods sold, stock-based compensation, impact of business reorganization, amortization and impairment of acquired intangibles, business acquisition costs, one-time gains or losses on long-term investments, interest, depreciation, and tax expenses. |
| (4) | Adjusted Unrestricted Operating Cash Flow is defined as GAAP net cash from operating activities, adjusted for changes in restricted cash. |
| (5) | Unlevered Free Cash Flow is defined as Adjusted EBITDA (management reporting), minus cash taxes, minus capital expenditures, plus or minus changes in net working capital, minus remaining contingency payments. The calculations assumed that stock-based compensation was treated as a cash expense. |
| (6) | The Adjusted Unrestricted Operating Cash Flow and Unlevered Free Cash Flow figures set forth in the table above were not provided to or utilized by Zynga or Goldman Sachs. |
