Item 16. Form 10-K Summary

Not applicable.

TAKE-TWO INTERACTIVE SOFTWARE, INC.

FISCAL YEAR ENDED MARCH 31, 2024

INDEX TO FINANCIAL STATEMENTS

			Page
Reports of Independent Registered Public Accounting Firm (Ernst & Young LLP, New York, New York, PCAOB ID 42)			59
Consolidated Balance Sheets—At March 31, 2024 and 2023			63
Consolidated Statements of Operations—For the fiscal years ended March 31, 2024, 2023, and 2022			64
Consolidated Statements of Comprehensive (Loss) Income—For the fiscal years ended March 31, 2024, 2023, and 2022			65
Consolidated Statements of Cash Flows—For the fiscal years ended March 31, 2024, 2023, and 2022			66
Consolidated Statements of Stockholders' Equity—For the fiscal years ended March 31, 2024, 2023, and 2022			67
Notes to the Consolidated Financial Statements			68

(All other items in this report are inapplicable)

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Take-Two Interactive Software, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Take-Two Interactive Software, Inc. (the Company) as of March 31, 2024 and 2023, the related consolidated statements of operations, comprehensive (loss) income, cash flows, and stockholders’ equity for each of the three years in the period ended March 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at March 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended March 31, 2024, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of March 31, 2024, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated May 21, 2024 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

			Revenue recognition
Description of the Matter			As described in Note 1 to the consolidated financial statements, revenue for amounts allocated to the game related services for full game software products as well as virtual currency and in-game purchases is recognized ratably over an estimated service period. Significant judgment is exercised by the Company in determining the service period that should be utilized to recognize revenue over time. Auditing the judgments and estimates made by management in estimating the service period for the game related services is especially challenging as the Company must consider a variety of data points. Such data points include the weighted average number of days between players’ first day played online or first in-game purchase and last day played online, known online trends, the service periods of the Company’s previously released products, and, to the extent publicly available, the service periods of the Company’s competitors’ products that are similar in nature.
How We Addressed the Matter in Our Audit			We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s controls over the revenue recognition process. We selected a sample of transactions and tested the Company’s controls in relation to estimating the service period over which game related services revenue is recognized. Our audit procedures to test and evaluate the reasonableness of the Company’s estimated service period included, among others, testing the completeness and accuracy of management’s player data analysis, comparing to similar or historical products, analyzing competitor information and performing sensitivity analyses.
			Impairment of intangible assets that are subject to amortization
Description of the Matter			As of March 31, 2024, the Company's intangible assets that are subject to amortization included developed game technology of $2,487.4 million. As disclosed in Note 1 to the consolidated financial statements, intangible assets that are subject to amortization are tested for impairment whenever events or changes in circumstances indicate that the related carrying amount of the asset or asset group may not be recoverable. The carrying amount of the asset is compared to the estimated undiscounted future cash flows that are expected to result from the use of the asset. During the fiscal year ended March 31, 2024, the Company recorded impairment charges of $577.4 million related to certain of its developed game technology intangible assets. Auditing the Company’s impairment tests was complex due to the significant management judgment and estimation uncertainty in determining the fair value of certain intangible assets that were tested for impairment. The significant assumptions used to estimate the value of the intangible assets included forecasted revenue, EBITDA margins, long-term decay rates, and discount rates. These significant assumptions were forward-looking and could be affected by future company-specific, economic and market conditions.
How We Addressed the Matter in Our Audit			We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s controls over its process to determine the fair value of intangible assets that are subject to amortization being measured for impairment. For example, we tested controls over management’s review of the significant assumptions used to estimate the fair value of the developed game technology intangible assets that were tested for impairment. To test the estimated fair value of the developed game technology intangible assets that were impaired, our audit procedures included, among others, evaluating the valuation methodology used, evaluating the significant assumptions described above and testing the completeness and accuracy of the underlying data used by the Company in its analyses. For example, we evaluated the Company’s forecasted revenue and EBITDA margins by considering historical results and current industry and economic trends. In addition, we involved our internal valuation specialists to assist in testing the methodology and certain significant assumptions used to value the developed game technology intangible assets that were tested for impairment. We also performed a sensitivity analysis on certain of the significant assumptions to evaluate the change in the fair value estimates that would result from changes in assumptions.

			Impairment of goodwill for a certain reporting unit
Description of the Matter			As of March 31, 2024, the Company’s goodwill balance was $4,426.4 million. As disclosed in Note 1 to the consolidated financial statements, goodwill is tested for impairment annually, or more frequently if events and circumstances indicate the fair value of a reporting unit may be below its carrying amount. If the carrying value exceeds the fair value, an impairment charge is recognized equal to the difference between the carrying value of the reporting unit and its fair value. During the fiscal year ended March 31, 2024, the Company recorded impairment charges of $2,342.1 million, representing a partial impairment related to a certain reporting unit. Auditing the Company’s impairment test was complex due to the significant management judgment and estimation uncertainty involved in determining the fair value of the reporting unit that was quantitatively tested for impairment. The significant assumptions used to estimate the value of the reporting unit included forecasted revenue, EBITDA margins, long-term growth rate, and discount rate. These significant assumptions are forward-looking and could be affected by future company-specific, economic and market conditions.
How We Addressed the Matter in Our Audit			We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s controls over its process to determine the fair value of the reporting unit that was impaired. For example, we tested controls over management’s review of the significant assumptions used to estimate the fair value of the reporting unit that was impaired. To test the estimated fair value of the reporting unit that was impaired, our audit procedures included, among others, evaluating the valuation methodologies used, evaluating the significant assumptions described above and testing the completeness and accuracy of the underlying data used by the Company in its analyses. For example, we evaluated the Company’s forecasted revenue and EBITDA margins by considering historical results and current industry and economic trends. In addition, we involved our internal valuation specialists to assist in testing the methodologies and certain significant assumptions used to value the reporting unit that was impaired. We performed a sensitivity analysis on certain of the significant assumptions to evaluate the change in the fair value estimate that would result from changes in assumptions.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2006.

New York, New York

May 21, 2024

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of Take-Two Interactive Software, Inc.

Opinion on Internal Control Over Financial Reporting

We have audited Take-Two Interactive Software, Inc.’s internal control over financial reporting as of March 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Take-Two Interactive Software, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of March 31, 2024, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of March 31, 2024 and 2023, the related consolidated statements of operations, comprehensive (loss) income, cash flows and stockholders’ equity for each of the three years in the period ended March 31, 2024, and the related notes and our report dated May 21, 2024 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

New York, New York

May 21, 2024

TAKE-TWO INTERACTIVE SOFTWARE, INC.

CONSOLIDATED BALANCE SHEETS

(in millions, except per share amounts)

						March 31,
						2024						2023
ASSETS
Current assets:
Cash and cash equivalents						$	754.0					$	827.4
Short-term investments						22.0						187.0
Restricted cash and cash equivalents						252.1						307.6
Accounts receivable, net of allowances of $1.2 and $1.3 at March 31, 2024 and 2023, respectively						679.7						763.2
Software development costs and licenses						88.3						65.9
Contract assets						85.0						79.9
Prepaid expenses and other						378.6						277.1
Total current assets						2,259.7						2,508.1
Fixed assets, net						411.1						402.8
Right-of-use assets						325.7						282.7
Software development costs and licenses, net of current portion						1,446.5						1,072.2
Goodwill						4,426.4						6,767.1
Other intangibles, net						3,060.6						4,453.2
Deferred tax assets						1.9						44.8
Long-term restricted cash and cash equivalents						95.9						99.6
Other assets						189.1						231.6
Total assets						$	12,216.9					$	15,862.1
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable						$	195.9					$	140.1
Accrued expenses and other current liabilities						1,062.6						1,225.7
Deferred revenue						1,059.5						1,078.8
Lease liabilities						63.8						60.2
Short-term debt, net						24.6						1,346.8
Total current liabilities						2,406.4						3,851.6
Long-term debt, net						3,058.3						1,733.0
Non-current deferred revenue						42.9						35.5
Non-current lease liabilities						387.3						347.0
Non-current software development royalties						102.1						110.2
Deferred tax liabilities, net						340.9						534.0
Other long-term liabilities						211.1						208.3
Total liabilities						$	6,549.0					$	6,819.6
Commitments and contingencies (See Note 14)
Stockholders' equity:
Preferred stock, $0.01 par value, 5.0 shares authorized: no shares issued and outstanding at March 31, 2024 and 2023						—						—
Common stock, $0.01 par value, 300.0 and 300.0 shares authorized; 194.5 and 192.6 shares issued and 170.8 and 168.9 outstanding at March 31, 2024 and 2023, respectively						1.9						1.9
Additional paid-in capital						9,371.6						9,010.2
Treasury stock, at cost; 23.7 and 23.7 common shares at March 31, 2024 and 2023, respectively						(1,020.6)						(1,020.6)
(Accumulated Deficit) / Retained earnings						(2,579.9)						1,164.3
Accumulated other comprehensive loss						(105.1)						(113.3)
Total stockholders' equity						$	5,667.9					$	9,042.5
Total liabilities and stockholders' equity						$	12,216.9					$	15,862.1

See accompanying Notes.

TAKE-TWO INTERACTIVE SOFTWARE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share amounts)

						Fiscal Year Ended March 31,
						2024						2023						2022
Net revenue:
Game						$	4,693.5					$	4,735.6					$	3,423.2
Advertising						656.1						614.3						81.6
Total net revenue						5,349.6						5,349.9						3,504.8
Cost of revenue						3,107.8						3,064.6						1,535.4
Gross profit						2,241.8						2,285.3						1,969.4
Selling and marketing						1,550.2						1,586.5						516.4
Research and development						948.2						887.6						406.6
General and administrative						716.1						839.5						510.9
Depreciation and amortization						171.2						122.3						61.1
Goodwill impairment						2,342.1						—						—
Business reorganization						104.6						14.6						0.8
Total operating expenses						5,832.4						3,450.5						1,495.8
(Loss) income from operations						(3,590.6)						(1,165.2)						473.6
Interest and other, net						(103.6)						(141.9)						(14.2)
(Loss) gain on fair value adjustments, net						(8.6)						(31.0)						6.0
(Loss) income before income taxes						(3,702.8)						(1,338.1)						465.4
Provision for (benefit from) income taxes						41.4						(213.4)						47.4
Net (loss) income						$	(3,744.2)					$	(1,124.7)					$	418.0
(Loss) earnings per share:
Basic (loss) earnings per share						$	(22.01)					$	(7.03)					$	3.62
Diluted (loss) earnings per share						$	(22.01)					$	(7.03)					$	3.58

See accompanying Notes.

TAKE-TWO INTERACTIVE SOFTWARE, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(in millions)

						March 31,
						2024						2023						2022
Net (loss) income						$	(3,744.2)					$	(1,124.7)					$	418.0
Other comprehensive income (loss)
Foreign currency translation adjustment						6.7						(58.9)						(43.6)
Change in fair value of available-for-sale securities						1.5						2.9						(5.1)
Other comprehensive income (loss)						8.2						(56.0)						(48.7)
Comprehensive (loss) income						$	(3,736.0)					$	(1,180.7)					$	369.3

See accompanying Notes.

TAKE-TWO INTERACTIVE SOFTWARE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

						Fiscal Year Ended March 31,
						2024						2023						2022
Operating activities:
Net (loss) income						$	(3,744.2)					$	(1,124.7)					$	418.0
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Amortization and impairment of software development costs and licenses						292.7						268.3						153.3
Stock-based compensation						335.6						317.8						183.0
Noncash lease expense						61.1						81.7						34.5
Amortization and impairment of intangibles						1,418.9						1,506.7						64.8
Depreciation						135.5						90.3						61.2
Goodwill impairment						2,342.1						—						—
Interest expense						140.6						122.7						6.5
Deferred income taxes						(150.4)						(410.8)						8.1
Fair value adjustments						8.6						31.5						(6.0)
Other, net						30.5						(26.6)						16.2
Changes in assets and liabilities, net of effect from purchases of businesses:
Accounts receivable						83.7						106.8						(17.9)
Software development costs and licenses						(603.4)						(492.8)						(387.0)
Prepaid expenses, other current and other non-current assets						(154.7)						77.2						(200.2)
Deferred revenue						(11.8)						(141.9)						(30.9)
Accounts payable, accrued expenses and other liabilities						(200.9)						(405.1)						(45.6)
Net cash (used in) provided by operating activities						(16.1)						1.1						258.0
Investing activities:
Change in bank time deposits						19.8						100.0						447.0
Sale and maturities of available-for-sale securities						146.9						542.0						779.9
Purchases of available-for-sale securities						—						—						(756.3)
Purchases of fixed assets						(141.7)						(204.2)						(158.6)
Proceeds from sale of long-term investments						—						20.6						—
Purchase of long-term investments						(18.5)						(15.7)						(12.3)
Business acquisitions						(18.1)						(3,310.9)						(161.3)
Other						(16.6)						(8.1)						0.8
Net cash (used in) provided by investing activities						(28.2)						(2,876.3)						139.2
Financing activities:
Tax payment related to net share settlements on restricted stock awards						(94.1)						(108.1)						(64.1)
Repurchase of common stock						—						—						(200.0)
Issuance of common stock						39.4						65.4						19.7
Cost of debt						(10.3)						(22.4)						(12.2)
Repayment of debt						(1,339.6)						(200.0)						(0.2)
Settlement of capped calls						—						140.1						—
Payment for settlement of convertible notes						—						(1,166.8)						—
Proceeds from issuance of debt						1,348.9						3,248.9						—
Payment of contingent earn-out consideration						(35.7)						(26.8)						—
Net cash (used in) provided by financing activities						(91.4)						1,930.3						(256.8)
Effects of foreign currency exchange rates on cash, cash equivalents, and restricted cash and cash equivalents						3.1						(15.9)						(5.2)
Net change in cash, cash equivalents, and restricted cash and cash equivalents						(132.6)						(960.8)						135.2
Cash, cash equivalents, and restricted cash and cash equivalents, beginning of year (1)						1,234.6						2,195.4						2,060.2
Cash, cash equivalents, and restricted cash equivalents, end of year (1)						$	1,102.0					$	1,234.6					$	2,195.4
Supplemental data:
Interest paid						$	137.0					$	79.0					$	—
Income taxes paid						$	150.2					$	176.8					$	31.0

(1) Cash, cash equivalents and restricted cash and cash equivalents shown on our Consolidated Statements of Cash Flow includes amounts in the Cash and cash equivalents, Restricted cash and cash equivalents, and Long-term restricted cash and cash equivalents on our Consolidated Balance Sheet.

See accompanying Notes.

TAKE-TWO INTERACTIVE SOFTWARE, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(in millions)

						Common Stock												Additional Paid-in Capital						Treasury Stock												Retained Earnings/(Accumulated Deficit)						Accumulated Other Comprehensive (Loss) Income						Total Stockholders' Equity
						Shares						Amount									Shares						Amount
Balance, March 31, 2021						137.6						1.4						$	2,288.8					(22.4)						$	(820.6)					$	1,871.0					$	(8.6)					$	3,332.0
Net income						—						—						—						—						—						418.0						—						418.0
Change in cumulative foreign currency translation adjustment						—						—						—						—						—						—						(43.6)						(43.6)
Net unrealized gain on available-for-sale securities, net of taxes						—						—						—						—						—						—						(5.1)						(5.1)
Repurchased common stock						—						—						—						(1.3)						(200.0)						—						—						(200.0)
Stock-based compensation						—						—						258.7						—						—						—						—						258.7
Net share settlement of restricted stock awards						(0.4)						—						(64.1)						—						—						—						—						(64.1)
Issuance of restricted stock, net of forfeitures and cancellations						1.2						—						—						—						—						—						—						—
Issuance of shares related to Nordeus acquisition						0.5						—						94.1						—						—						—						—						94.1
Employee share purchase plan settlement						0.1						—						19.7						—						—						—						—						19.7
Balance, March 31, 2022						139.0						1.4						2,597.2						(23.7)						(1,020.6)						2,289.0						(57.3)						3,809.7
Net loss						—						—						—						—						—						(1,124.7)						—						(1,124.7)
Change in cumulative foreign currency translation adjustment						—						—						—						—						—						—						(58.9)						(58.9)
Stock-based compensation						—						—						389.3						—						—						—						—						389.3
Net unrealized gain on available-for-sale securities, net of taxes						—						—						—						—						—						—						2.9						2.9
Issuance of restricted stock, net of forfeitures and cancellations						2.7						—						—						—						—						—						—						—
Exercise of stock options						1.0						—						43.1						—						—						—						—						43.1
Net share settlement of restricted stock awards						(0.9)						—						(108.1)						—						—						—						—						(108.1)
Employee share purchase plan settlement						0.2						—						22.3						—						—						—						—						22.3
Issuance of shares related to Zynga acquisition						46.3						0.5						5,377.2						—						—						—						—						5,377.7
Issuance of shares related to Popcore acquisition						0.6						—						57.8						—						—						—						—						57.8
Stock-based compensation assumed in Zynga acquisition						—						—						151.7						—						—						—						—						151.7
Issuance of shares related to Zynga convertible notes						3.7						—						479.7						—						—						—						—						479.7
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						—						—						—						—						—						(3,744.2)						—						(3,744.2)
Change in cumulative foreign currency translation adjustment						—						—						—						—						—						—						6.7						6.7
Stock-based compensation						—						—						416.1						—						—						—						—						416.1
Net unrealized gain on available-for-sale securities, net of taxes						—						—						—						—						—						—						1.5						1.5
Issuance of restricted stock, net of forfeitures and cancellations						2.1						—						—						—						—						—						—						—
Exercise of stock options						—						—						1.5						—						—						—						—						1.5
Net share settlement of restricted stock awards						(0.6)						—						(94.1)						—						—						—						—						(94.1)
Employee share purchase plan settlement						0.4						—						37.9						—						—						—						—						37.9
Balance, March 31, 2024						194.5						1.9						$	9,371.6					(23.7)						$	(1,020.6)					$	(2,579.9)					$	(105.1)					$	5,667.9

See accompanying Notes.

TAKE-TWO INTERACTIVE SOFTWARE, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Take-Two Interactive Software, Inc. (the "Company," "we," "us," or similar pronouns) was incorporated in the state of Delaware in 1993. 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, Private Division, and Zynga. Our products are designed for console gaming systems, PC, and mobile, including smartphones and tablets. We deliver our products through physical retail, digital download, online platforms, and cloud streaming services.

Principles of Consolidation

The Consolidated Financial Statements include the financial statements of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Reclassifications

Certain immaterial amounts in the financial statements of the prior years have been reclassified to conform to the current year presentation for comparative purposes.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles ("U.S. GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, net revenue, and expense, as well as the disclosure of contingent assets and liabilities at the dates of the financial statements during the reporting periods. Our most significant estimates relate to revenue recognition (see Note 2 - Revenue from Contracts with Customers); the recoverability and amortization of software development costs, licenses, and intangible assets; assets acquired and liabilities assumed in business combinations, including the valuation of contingent earn-out consideration; the realization of deferred income taxes; the valuation of stock-based compensation; and assumptions used in our goodwill impairment tests. These estimates generally involve complex issues and require us to make judgments, involve analysis of historical and the prediction of future trends, and are subject to change from period to period. Actual amounts could differ significantly from these estimates, which may affect economic conditions in a number of different ways and result in uncertainty and risk. We consider transactions or events that occur after the balance sheet date, but before the financial statements are issued, to provide additional evidence relative to certain estimates or to identify matters that require additional disclosures.

Segments

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 internally developed and developed by third parties. Our Chief Executive Officer, who is our Chief Operating Decision Maker ("CODM"), manages our operations on a consolidated basis—supplemented by sales information by product category, major product title, and platform—for the purpose of evaluating performance and allocating resources. Financial information about our one segment and geographic areas is included in Note 2 - Revenue from Contracts with Customers and Note 8 - Fixed Assets, Net.

Concentration of Credit Risk and Accounts Receivable

We maintain cash balances at several major financial institutions. While we attempt to limit credit exposure with any single institution, balances often exceed insurable amounts.

Accounts receivable are recorded at the original invoiced amount less an allowance for credit losses. In evaluating our ability to collect outstanding receivable balances and related allowance for credit losses, we consider many factors, including the age of the balance, the customer’s payment history and current creditworthiness, as well as current and forecasted economic conditions that may affect our customers’ ability to pay. Bad debts are written off after all collection efforts have been exhausted. We do not require collateral from our customers.

If the financial condition and operations of our customers deteriorate, our risk of collection could increase substantially. A majority of our trade receivables are derived from sales to major retailers, including digital storefronts and platform partners, and distributors. Our five largest customers accounted for 79.8%, 79.6% and 79.0% of net revenue during the fiscal years ended March 31, 2024, 2023 and 2022, respectively. One customer accounted for 23.2%, 23.5% and 38.0% of net

revenue during the fiscal years ended March 31, 2024, 2023, and 2022, respectively. A second customer accounted for 21.1%, 20.7%, and 22.0% of net revenue during the fiscal years ended March 31, 2024, 2023, and 2022, respectively. As of March 31, 2024 and 2023, five customers accounted for 69.9% and 61.1% of our gross accounts receivable, respectively. Customers that individually accounted for more than 10% of our gross accounts receivable balance comprised 57.7% and 50.3% of such balances at March 31, 2024 and 2023, respectively. We had three customers who accounted for 21.8%, 18.1%, and 16.9% of our gross accounts receivable as of March 31, 2024 and three customers who accounted for 21.6%, 14.5%, and 14.2% of our gross accounts receivable as of March 31, 2023. We did not have any additional customers that exceeded 10% of our gross accounts receivable as of March 31, 2024 and 2023. Based upon performing ongoing credit evaluations, maintaining trade credit insurance on a majority of our customers who sell our physical products, and our past collection experience, we believe that the receivable balances from these largest customers do not represent a significant credit risk.

Cash and Cash Equivalents

We consider all highly liquid instruments purchased with original maturities of three months or less to be cash equivalents. Our restricted cash and cash equivalents balances are primarily related to dedicated accounts limited to the payment of certain internal royalty obligations. Balances that are restricted from use for more than one year are classified as non-current.

Short-term Investments

Short-term investments designated as available-for-sale securities are carried at fair value, which is based on quoted market prices for such securities, if available, or is estimated on the basis of quoted market prices of financial instruments with similar characteristics. Investments with original maturities greater than 90 days and remaining maturities of less than one year are normally classified within Short-term investments on our Consolidated Balance Sheets. In addition, investments with maturities beyond one year at the time of purchase that are highly liquid in nature and represent the investment of cash that is available for current operations are classified as short-term investments.

Unrealized gains and losses of available-for-sale securities are excluded from earnings and are reported as a component of Other comprehensive income (loss), net of tax, until the security is sold, the security has matured, or we determine that the fair value of the security has declined below its adjusted cost basis and the decline is not due to a credit loss. Realized gains and losses on short-term investments are calculated based on the specific identification method and would be reclassified from Accumulated other comprehensive loss to Interest and other, net.

Short-term investments are evaluated for impairment quarterly. We consider various factors in determining whether we should recognize an impairment charge, including the credit quality of the issuer, the duration that the fair value has been less than the adjusted cost basis, the severity of the impairment, the reason for the decline in value, and our intent to sell and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value. If we conclude that an investment is impaired or a portion of the unrealized loss is a result of a credit loss, we recognize the charge at that time in our Consolidated Statements of Operations. Determining whether the decline in fair value is due to a credit loss requires management judgment based on the specific facts and circumstances of each security. The ultimate value realized on these securities is subject to market price volatility until they are sold.

Software Development Costs and Licenses

Capitalized software development costs include direct costs incurred for internally developed titles and payments made to third-party software developers under development agreements.

We capitalize internal software development costs (including specifically identifiable payroll expense, employee stock-based compensation, and incentive compensation costs related to the completion and release of titles, as well as third-party production and other content costs), subsequent to establishing technological feasibility of a software title. Technological feasibility of a product includes the completion of both technical design documentation and game design documentation. Significant management judgments are made in the assessment of when technological feasibility is established. For products where proven technology exists, this may occur early in the development cycle. Technological feasibility is evaluated on a product-by-product basis. Prior to establishing technological feasibility of a product, we record any costs incurred by third-party developers as research and development expenses.

We enter into agreements with third-party developers that require us to make payments for game development and production services. In exchange for our payments, we receive the exclusive publishing and distribution rights to the finished game title as well as, in some cases, the underlying intellectual property rights. Such agreements typically allow us to fully recover these payments to the developers at an agreed upon royalty rate earned on the subsequent sales of such software, net of any agreed upon costs. Subsequent to establishing technological feasibility of a product, we capitalize all development and production service payments to third-party developers as software development costs and licenses. We typically enter into

agreements with third-party developers after completing the technical design documentation for our products and therefore record the design costs leading up to a signed development contract as research and development expense. When we contract with third-party developers, we generally select those that have proven technology and experience in the genre of the software being developed, which often allows for the establishment of technological feasibility early in the development cycle. In instances where the documentation of the design and technology are not in place prior to an executed contract, we monitor the software development process and require our third-party developers to adhere to the same technological feasibility standards that apply to our internally developed products.

Licenses consist of payments and guarantees made to holders of intellectual property rights for use of their trademarks, copyrights or other intellectual property rights in the development of our products. Agreements with license holders generally provide for guaranteed minimum payments for use of their intellectual property. Certain licenses, especially those related to our sports products, extend over multi-year periods and encompass multiple game titles. In addition to guaranteed minimum payments, these licenses frequently contain provisions that could require us to pay royalties to the license holder based on pre-agreed unit sales thresholds.

Amortization of capitalized software development costs and licenses commences when a product is available for general release and is recorded on a title-by-title basis in cost of revenue. For capitalized software development costs, annual amortization is calculated using (1) the proportion of current year revenue to the total revenue expected to be recorded over the life of the title or (2) the straight-line method over the remaining estimated life of the title, whichever is greater. For capitalized licenses, amortization is calculated as a ratio of (1) current year revenue to the total revenue expected to be recorded over the remaining estimated life of the title or (2) the contractual royalty rate based on actual net product sales as defined in the licensing agreement, whichever is greater. Amortization periods for our software products generally range from 12 to 30 months.

Certain government grants earned on qualified production spend generally either reduce the cost basis of our capitalized software development costs, which therefore results in reduced expense over the amortization period, or reduce period development expense recognized for titles that do not meet the capitalization criteria. Such incentives are accounted for by analogizing under ASC 105-10-05-2 to the grant accounting model under IAS 20.

We evaluate the future recoverability of capitalized software development costs and licenses on a quarterly basis. Recoverability is primarily assessed based on the title's actual performance. For products that are scheduled to be released in the future, recoverability is evaluated based on the expected performance of the specific products to which the cost or license relates. We use a number of criteria in evaluating expected product performance, including historical performance of comparable products developed with comparable technology, market performance of comparable titles, orders for the product prior to its release, general market conditions, and past performance of the franchise. When we determine that capitalized cost of the title is unlikely to be recovered by product sales, an impairment of software development and license costs capitalized is charged to cost of revenue in the period in which such determination is made.

We have profit and unit sales based internal royalty programs that allow selected employees to participate in the success of software titles that they assist in developing. Royalties earned under these programs are recorded as a component of Cost of revenue in the period earned. Amounts earned and not yet paid are reflected within the software development royalties component of Accrued expenses and other current liabilities on our Consolidated Balance Sheets.

Fixed Assets, net

Office equipment, furniture and fixtures are depreciated using the straight-line method over their estimated useful life of five years. Computer equipment and software are generally depreciated using the straight-line method over three to five years. Leasehold improvements are amortized over the lesser of the term of the related lease or the useful life of the underlying asset, typically seven years. Buildings are depreciated over the remaining life of the buildings, which is typically approximately 30 years. The cost of additions and improvements are capitalized, and repairs and maintenance costs are charged to operations, in the periods incurred. When depreciable assets are retired or sold, the cost and related allowances for depreciation are removed from the accounts and the gain or loss, if any, is recognized. The carrying amounts of these assets are recorded at historical cost.

Leases

We determine if an arrangement is a lease at contract inception. If there is an identified asset in the contract (either explicitly or implicitly) and we have control over its use, the contract is (or contains) a lease. In certain of our lease arrangements, primarily those related to our data center arrangements, judgment is required in determining if a contract contains a lease. For these arrangements, there is judgment in evaluating if the arrangement provides us with an asset that is physically distinct, or that represents substantially all of the capacity of the asset, and if we have the right to direct the use of the asset. Lease assets and liabilities are recognized based on the present value of future lease payments over the lease term at the

commencement date. Included in the lease liability are future lease payments that are fixed, in-substance fixed, or payments based on an index or rate known at the commencement date of the lease. Variable lease payments are recognized as lease expenses as incurred. The operating lease right-of-use (“ROU”) asset also includes any lease payments made prior to commencement, initial direct costs incurred, and lease incentives received.

As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate in determining the present value of future lease payments. The incremental borrowing rate represents the rate required to borrow funds over a similar term to purchase the leased asset and is based on an unsecured borrowing rate and risk-adjusted to approximate a collateralized rate at the commencement date of the lease.

In determining our lease liability, the lease term includes options to extend or terminate the lease when it is reasonably certain that we will exercise such option. For operating leases, the lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Lease modifications result in remeasurement of the lease liability. Leases with an initial term of twelve months or less are not recorded on the balance sheet, and we recognize lease expense for these leases on a straight-line basis over the lease term. We do not separate non-lease components from the related lease components.

Goodwill

Goodwill is the excess of purchase price paid over identified intangible and tangible net assets of acquired companies. Intangible assets consist of intellectual property, developed game technology, analytics technology, user base, trade names, and in-process research and development. Certain intangible assets acquired in a business combination are recognized as assets apart from goodwill.

We use either the income, cost, or market approach to aid in our conclusions of such fair values and asset lives. The income approach presumes that the value of an asset can be estimated by the net economic benefit to be received over the life of the asset, discounted to present value. The cost approach presumes that an investor would pay no more for an asset than its replacement or reproduction cost. The market approach estimates value based on what other participants in the market have paid for reasonably similar assets. Although each valuation approach is considered in valuing the assets acquired, the approach, or combination of approaches, ultimately selected is based on the characteristics of the asset and the availability of information.

We test our goodwill for impairment annually, or more frequently if events and circumstances indicate the fair value of a reporting unit may be below its carrying amount. A reporting unit is defined as an operating segment or one level below an operating segment. We have determined that we operate in two reporting units, which are components of our operating segment. In the evaluation of goodwill for impairment, we have the option to first perform a qualitative assessment to determine if the fair value of a reporting unit is more likely than not (i.e., a likelihood of more than 50%) less than the carrying value before performing a quantitative impairment test.

When a qualitative assessment is not used, or if the qualitative assessment is not conclusive, a quantitative impairment analysis for goodwill is performed at the reporting unit level. The quantitative goodwill impairment test is used to identify potential impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying value exceeds the fair value, an impairment charge is recognized equal to the difference between the carrying value of the reporting unit and its fair value, considering the related income tax effect of any goodwill deductible for tax purposes.

In performing the quantitative assessment, we measure the fair value of the reporting unit using a combination of the income and market approaches. The assessment requires us to make judgments and involves the use of significant estimates and assumptions. These estimates and assumptions include long-term growth rates and EBITDA margins used to calculate projected future cash flows, risk-adjusted discount rates based on our weighted average cost of capital, future economic and market conditions and the determination of appropriate, comparable market data. Our estimates for market growth are based on historical data, various internal estimates, and observable external sources when available. Those estimates are based on assumptions that are consistent with the plans and estimates we use to manage the underlying business.

During the fiscal year ended March 31, 2024, we recognized goodwill impairment charges of $2,342.1, representing a partial impairment related to one of our reporting units. The impairment was primarily due to 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. There were no goodwill impairments recorded during the fiscal years ended March 31, 2023 or 2022. As of March 31, 2024, the goodwill balance of that reporting unit is $4,131.1. Unanticipated changes in business performance or the regulatory environment, market declines, and other events impacting the fair value of the reporting units with assigned goodwill, or increases in the level of equity required to support these businesses, could cause additional goodwill impairment charges in future periods. Refer to Note 9 - Goodwill and Intangible Assets, Net.

Long-lived Assets

We review all long-lived assets, including intangible assets with finite lives, for impairment whenever events or changes in circumstances indicate that the related carrying amount of an asset or asset group may not be recoverable. We compare the carrying amount of the asset to the estimated undiscounted future cash flows expected to result from the use of the asset. If the carrying amount of the asset exceeds estimated expected undiscounted future cash flows, we record an impairment charge for the difference between the carrying amount of the asset and its fair value. The estimated fair value is generally measured by discounting expected future cash flows using an appropriate discount rate. Refer to Note 9 - Goodwill and Intangible Assets, Net for impairments that occurred in the fiscal year ended March 31, 2024. As of March 31, 2024, no indicators of impairment existed.

Derivatives and Hedging

We transact business in various foreign currencies and have significant sales and purchase transactions denominated in foreign currencies, subjecting us to foreign currency exchange rate risk. From time to time, we carry out transactions involving foreign currency exchange derivative financial instruments. The transactions are designed to hedge our exposure in currency exchange rate movements. We recognize derivative instruments as either assets or liabilities on our Consolidated Balance Sheets and we measure those instruments at fair value. The changes in fair value of derivatives that are not designated as hedges are recognized currently in earnings as Interest and other, net in our Consolidated Statements of Operations. If a derivative meets the definition of a cash flow hedge and is so designated, the effective portion of changes in the fair value of the derivative are recognized, as a component of Other comprehensive income (loss) while the ineffective portion of the changes in fair value is recorded currently in earnings as Interest and other, net in our Consolidated Statements of Operations. Amounts included in Accumulated other comprehensive loss for cash flow hedges are reclassified into earnings in the same period that the hedged item is recognized in Cost of revenue, Research and development expenses, or Interest and other, net, as appropriate.

Income Taxes

We record a tax provision for the anticipated tax consequences of the reported results of operations. Our provision for income taxes is computed using the asset and liability method, under which deferred income taxes are recognized for differences between the financial statement and tax bases of assets and liabilities at currently enacted statutory tax rates for the years in which the differences are expected to reverse. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment.

Valuation allowances are established when we determine that it is more likely than not that such deferred tax assets will not be realized. We do not record income tax expense related to foreign withholding taxes or United States income taxes that may become payable upon the repatriation of undistributed earnings of foreign subsidiaries, to the extent such earnings are expected to be reinvested indefinitely outside of the United States.

We use estimates and assumptions to compute the provision for income taxes including allocations of certain transactions to different tax jurisdictions, amounts of permanent and temporary differences, the likelihood of deferred tax assets being recovered and the outcome of contingent tax risks. These estimates and assumptions are revised as new events occur, more experience is acquired and additional information is obtained. The effect of these revisions is recorded in income tax expense or benefit in the period in which they become known.

Revenue Recognition

We derive revenue primarily from the sale of our interactive entertainment content, principally for console gaming systems, personal computers, and mobile. We also generate revenue from advertising within our software products.

Game. Our interactive entertainment content consists of full game software products that may contain offline gameplay, online gameplay, or a combination of offline and online gameplay. We may also sell separate downloadable add-on content to supplement our full game software products. Certain of our software products provide customers with the option to acquire virtual currency or make in-game purchases.

We determine revenue recognition by:

• identifying the contract, or contracts, with the customer;

• identifying the performance obligations in the contract;

• determining the transaction price;

• allocating the transaction price to performance obligations in the contract; and

• recognizing revenue when, or as, we satisfy performance obligations by transferring the promised goods or services.

We recognize revenue in the amount that reflects the consideration we expect to receive in exchange for the sales of software products and game related services when control of the promised products and services is transferred to our customers and our performance obligations under the contract have been satisfied. Revenue is recorded net of transaction taxes assessed by governmental authorities such as sales, value-added and other similar taxes.

Our software products are sold as full games, which typically provide access to the main game content, primarily for console and PC. Generally, our full game software products deliver a license of our intellectual property that provides a functional offline gaming experience (i.e., one that does not require an Internet connection to access the main game content or other significant game related services). We recognize revenue related to the license of our intellectual property that provides offline functionality at the time control of the products has been transferred to our customers (i.e. upon delivery of the software product).

In addition, some of our full game software products that provide a functional offline gaming experience may also include significant game related services delivered over time, such as online functionality that is dependent upon online support services and/or additional free content updates. For full game sales that offer offline functionality and significant game related services we evaluate whether the license of our intellectual property and the game related services are distinct and separable. This evaluation is performed for each software product sold. If we determine that our software products contain a license of intellectual property separate from the game related services (i.e. multiple performance obligations), we estimate a standalone selling price for each identified performance obligation. We allocate the transaction price to each performance obligation using a relative standalone selling price method (the transaction price is allocated to a performance obligation based on the proportion of the standalone selling price of each performance obligation to the sum of the standalone selling prices for all performance obligations in the contract). For the portion of the transaction price allocable to the license, revenue is recognized when the customer takes control of the product. For the portion of the transaction price allocated to game related services, revenue is recognized ratably over an estimated service period for the related software product. We also defer related product costs and recognize the costs as the revenues are recognized.

Certain of our full game software products are delivered primarily as an online gaming experience with substantially all gameplay requiring online access to our game related services. We recognize revenue for full game software products that are dependent on our game related services over an estimated service period. For our full game online software products, we also defer related product costs and recognize the costs as the revenue is recognized.

In addition to sales of our full game software products, certain of our software products provide customers with the option to acquire virtual currency or make in-game purchases. Revenue from the sale of virtual currency and in-game purchases is deferred and recognized ratably over an estimated service period.

We also sell separate downloadable add-on content to supplement our full game software products. Revenue from the sale of separate downloadable add-on content is evaluated for revenue recognition on the same basis as our full game software products.

In addition to sales of our full game software products, we also offer free-to-play software products, both of which may provide customers with the option to acquire virtual currency or make in-game purchases. For virtual currency and in-game purchases the satisfaction of our performance obligation is dependent on the nature of the virtual item purchased and as a result, we categorize our virtual items as follows:

• Consumable: Consumable virtual items represent items that can be consumed by a specific player action. Consumable virtual items do not result in a direct benefit that the player keeps or provide the player any continuing benefit following consumption, and they often enable a player to perform an in-game action immediately. For the sale of consumable virtual items, we recognize revenue as the items are consumed (i.e., over time), which approximates less than one month.

• Durable: Durable virtual items represent items that are accessible to the player over an extended period of time. We recognize revenue from the sale of durable virtual items ratably over the estimated service period for the applicable game (i.e., over time), which represents our best estimate of the average life of the durable virtual item.

Certain software products are sold to customers with a “street date” (the earliest date these products may be sold by these retailers). For the transaction price related to the license for these products that also provide a functional offline gaming experience, we recognize revenue on the later of the street date or the sale date as this is generally when we have transferred control of this performance obligation. For the sale of physical software products, recognition of revenue allocated to game related services does not begin until the product is sold-through by our customer to the end user. We currently estimate sell-

through to the end user for all our titles to be approximately two months after we have sold-in the software products to retailers. Determining the estimated sell-through period requires management judgment and estimates.

Our software products are sold as digital downloads. Revenue from digital downloads generally commences when the download is made available to the end user by a third-party digital storefront.

In certain countries, we use third-party licensees to distribute and host our games in accordance with license agreements, for which the licensees typically pay us a fixed minimum guarantee and sales-based royalties. These arrangements typically include multiple performance obligations, such as an upfront license of intellectual property and rights to future updates. Based on the allocated transaction price, we recognize revenue associated with the minimum guarantee when we transfer control of the upfront license of intellectual property (generally upon commercial launch) and the remaining portion ratably over the contractual term in which we provide the licensee with future update rights. Royalty payments in excess of the minimum guarantee are generally recognized when the licensed product is sold by the licensee.

Advertising. We have contractual relationships with advertising networks, agencies, advertising brokers, and directly with advertisers to display advertisements in our games. For our in-game advertising arrangements, our performance obligation is to provide the inventory for advertisements to be displayed in our games. For contracts made directly with advertisers, we are also obligated to serve the advertisements in our games. However, for those direct advertising arrangements, providing the advertising inventory and serving the advertisement is considered a single performance obligation, as the advertiser cannot benefit from the advertising space without its advertisements being displayed.

For in-game display advertisements, in-game offers, engagement advertisements, and other advertisements, our performance obligation is satisfied over the life of the contract, with revenue being recognized as advertising units are delivered.

Contract Balances

We generally record a receivable related to revenue when we have an unconditional right to invoice and receive payment, and we record deferred revenue when cash payments are received or due in advance of satisfying our performance obligations, even if amounts are refundable. Contract assets generally consist of arrangements for which we have recognized revenue to the extent it is probable that significant reversal will not occur but do not have a right to invoice as of the reporting date.

Our allowances for doubtful accounts are typically immaterial and, if required, are based on our best estimate of expected credit losses inherent in our accounts receivable balance.

Deferred revenue is comprised primarily of unsatisfied revenue related to the portion of the transaction price allocable to game related services of our full game software products, sales of virtual currency, and in-game purchases. These sales are typically invoiced at the beginning of the contract period, and revenue is recognized ratably over the estimated service period. Deferred revenue may also include amounts related to software products with future street dates.

Refer to Note 2 - Revenue from Contracts with Customers for further information, including changes in deferred revenue during the period.

Principal Agent Considerations

We offer certain software products via third-party digital storefronts, such as Microsoft’s Xbox Live, Sony’s PlayStation Network, Valve's Steam, Epic Games Store, Apple's App Store, and the Google Play Store. For sales of our software products via third-party digital storefronts, we determine whether or not we are acting as the principal in the sale to the end user, which we consider in determining if revenue should be reported based on the gross transaction price to the end user or based on the transaction price net of fees retained by the third-party digital storefront. An entity is the principal if it controls a good or service before it is transferred to the customer. Key indicators that we use in evaluating these sales transactions include, but are not limited to, the following:

• the underlying contract terms and conditions between the various parties to the transaction;

• which party is primarily responsible for fulfilling the promise to provide the specified good or service; and

• which party has discretion in establishing the price for the specified good or service.

Based on our evaluation of the above indicators, for sales arrangements via Microsoft’s Xbox Live, Sony’s PlayStation Network, Valve's Steam, and Epic Games Store we have determined we are not the principal in the sales transaction to the end user and therefore we report revenue based on the consideration received from the digital storefront. For sales arrangements via Apple's App Store and the Google Play Store, we have determined that we are the principal to the end user and thus report

revenue on a gross basis and mobile platform fees charged by these digital storefronts are expensed as incurred and reported within Cost of revenue.

Shipping and Handling

Shipping and handling costs are incurred to move physical software products to customers. We recognize all shipping and handling costs as an expense in Cost of revenue because we are responsible for delivery of the product to our customers prior to transfer of control to the customer.

Estimated Service Period

For certain performance obligations satisfied over time, we have determined that the estimated service period is the time period in which an average user plays our software products (“user life”) which most faithfully depicts the timing of satisfying our performance obligation. We consider a variety of data points when determining and subsequently reassessing the estimated service period for players of our software products. Primarily, we review the weighted average number of days between players’ first day played online or first in-game purchase and last day played online. When a new game is launched and therefore no history of online player data is available, we consider other factors to determine the user life, such as the estimated service period of other games actively being sold with similar characteristics. We also consider known online trends, the service periods of our previously released software products, and, to the extent publicly available, the service periods of our competitors’ software products that are similar in nature to ours. We believe this provides a reasonable depiction of the transfer of our game related services to our customers, as it is the best representation of the period during which our customers play our software products. Determining the estimated service period is subjective and requires significant management judgment and estimates. Future usage patterns may differ from historical usage patterns, and therefore the estimated service period may change in the future. The estimated service periods for players of our current software products are generally between six and fifteen months depending on the software product.

Revenue Arrangements with Multiple Performance Obligations

Our contracts with customers often include promises to transfer multiple products and services. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together requires significant judgment. For software products in which the software license has offline functionality and benefits from meaningful game related services, which may include online functionality that is dependent on our online support services and/or additional free content updates, we believe we have separate performance obligations for the license of the intellectual property and the game related services. Additionally, because each of our product offerings has unique features and because we do not sell our game related services separately, we typically do not have observable standalone selling prices for each performance obligation. Significant judgment and estimates are also required to determine the standalone selling price for each distinct performance obligation and whether a discount needs to be allocated based on the relative standalone selling price of our products and services.

To estimate the standalone selling price for each performance obligation, we consider, to the extent available, a variety of data points such as past selling prices of the product or other similar products, competitor pricing, and market data. If observable pricing is not available, we use an expected cost-plus margin approach taking into account relevant costs including product development, post-release support, marketing and licensing costs. This evaluation is performed on a product by product basis.

Price Protection, Allowances for Returns, and Sales Incentives

We grant price protection and accept returns in connection with our distribution arrangements. Following reductions in the price of our physical software products, we grant price protection to permit customers to take credits against amounts they owe us with respect to merchandise unsold by them. Our customers must satisfy certain conditions to entitle them to receive price protection or return products, including compliance with applicable payment terms and confirmation of field inventory levels.

At contract inception and at each subsequent reporting period, we make estimates of price protection and product returns related to current period software product revenue. We estimate the amount of price protection and returns for software products based upon, among other factors, historical experience and performance of the titles in similar genres, historical performance of the hardware platform, customer inventory levels, analysis of sell-through rates, sales force and retail customer feedback, industry pricing, market conditions, and changes in demand and acceptance of our products by consumers.

We enter into various sales incentive arrangements with our customers, such as rebates, discounts, and cooperative marketing. These incentives are considered adjustments to the transaction price of our software products and are reflected as reductions to revenue. Sales incentives incurred by us for distinct goods or services received, such as the appearance of our

products in a customer’s national circular ad, are included in Selling and marketing expense if there is a separate identifiable benefit and the benefit’s fair value can be established. Otherwise, such sales incentives are reflected as a reduction to revenue.

Revenue is recognized after deducting the estimated price protection, allowances for returns, and sales incentives, which are accounted for as variable consideration. Price protection, allowances for returns, and sales incentives are considered refund liabilities and are reported within Accrued expenses and other current liabilities on our Consolidated Balance Sheet.

Significant Estimates

Significant management judgment and estimates must be used in connection with certain of the determinations described above, such as estimating the fair value allocation to distinct and separable performance obligations, and the service period over which to defer recognition of revenue. We believe we can make reliable estimates. However, actual results may differ from initial estimates due to changes in circumstances, market conditions, and assumptions. Adjustments to estimates are recorded in the period in which they become known.

Payment Terms

Our payment terms and conditions vary by customer and typically provide net 30- to 60-day terms. In instances where the timing of revenue recognition differs from the timing of invoicing, we do not adjust the promised amount of consideration for the effects of a significant financing component when we expect, at contract inception, that the period between our transfer of a promised product or service to our customer and payment for that product or service will be one year or less.

Marketing

We expense marketing costs as incurred, except for production costs associated with media advertising, which are deferred and charged to expense when the related advertisement is run for the first time. Advertising, marketing, and other promotional expenses for the fiscal years ended March 31, 2024, 2023 and 2022 amounted to $1,132.4, $1,212.5 and $297.3, respectively, and are included in Selling and marketing expense in our Consolidated Statements of Operations.

Stock-based Compensation

We have stock-based compensation plans that are broad-based long-term retention programs intended to attract and retain talented employees and align stockholder and employee interests, which allows for awards of restricted stock, restricted stock units and other stock-based awards of our common stock to employees and non-employees. Our plans include time-based, market-based, and performance-based awards of our common stock to employees and non-employees. In connection with the Zynga Acquisition, we assumed replacement equity awards, including restricted stock units and the outstanding and unexercised options to purchase Zynga common stock, and converted them into stock-based awards for shares of Take-Two common stock. Refer to Note 16 - Stock-Based Compensation.

We account for stock-based awards under the fair value method of accounting. The fair value of all stock-based compensation is either capitalized and amortized in accordance with our software development cost accounting policy or recognized as expense on a straight-line basis over the full vesting period of the awards for time-based stock awards and on an accelerated attribution method for market-based and performance-based stock awards.

We estimate the fair value of time-based and performance-based awards using our closing stock price on the date of grant. We estimate the fair value of market-based awards using a Monte Carlo Simulation method, which takes into account assumptions such as the expected volatility of our common stock, the risk-free interest rate based on the contractual term of the award, expected dividend yield, vesting schedule and the probability that the market conditions of the awards will be achieved. For performance-based shares, we do not record expense until the performance criteria are considered probable.

We estimate the fair value of stock options using the Black-Scholes option-pricing model. This model requires the use of the following assumptions: expected volatility of our common stock, which is based on our own calculated historical rate; expected life of the option award; expected dividend yield, which is 0%, as we have not paid and do not have any plans to pay dividends on our common stock; and the risk-free interest rate, which is based on the U.S. Treasury rate in effect at the time of grant with maturities commensurate to the stock option award’s expected life. If any of the assumptions used in the Black-Scholes model changes significantly, stock-based compensation expense for future awards may differ materially compared to awards granted previously. We record stock-based compensation expense for stock options based on the grant date fair value on a straight-line basis over the requisite service period of the award.

Stock-based compensation expense is recorded net of forfeitures as they occur.

Earnings (loss) per Share ("EPS")

Basic EPS is computed by dividing the net (loss) income applicable to common stockholders for the period by the weighted average number of shares of common stock outstanding during the same period. Diluted EPS is computed by dividing the net income applicable to common stockholders for the period by the weighted average number of shares of common stock and common stock equivalents outstanding. Common stock equivalents are measured using the treasury stock method and represent unvested stock-based awards.

Foreign Currency

The functional currency for our foreign operations is primarily the applicable local currency. Accounts of foreign operations are translated into U.S. dollars using exchange rates for assets and liabilities at the balance sheet date and average prevailing exchange rates for the period for revenue and expense accounts. Adjustments resulting from translation are included in Accumulated other comprehensive loss. Realized and unrealized transaction gains and losses are included in our Consolidated Statements of Operations in the period in which they occur.

Comprehensive (Loss) Income

Comprehensive (loss) income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Accumulated other comprehensive loss includes foreign currency translation adjustments, which relate to investments that are permanent in nature and therefore do not require tax adjustments, and the amounts for unrealized gains (losses), net on derivative instruments designated as cash flow hedges, as well as any associated tax impact, and available for sale securities.

Recently Adopted Accounting Pronouncements

Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands disclosures in an entity’s income tax rate reconciliation table and regarding cash taxes paid both in the U.S. and foreign jurisdictions. ASU 2023-09 is effective for fiscal years 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). 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.

2. REVENUE FROM CONTRACTS WITH CUSTOMERS

Disaggregation of Revenue

Timing of recognition

Net revenue recognized at a point in time is primarily comprised of the portion of revenue from software products that is recognized when the customer takes control of the product (i.e. upon delivery of the software product).

Net revenue recognized over time is primarily comprised of revenue from our software products that include game related services, separate virtual currency transactions, and in-game purchases, which are recognized over an estimated service period. Net revenue recognized over time also includes in-game advertising, which is recognized over a contractual term.

Net revenue by timing of recognition was as follows:

						Fiscal Year Ended March 31,
						2024						2023						2022
Net revenue recognized:
Over time						$	4,312.2					$	4,208.0					$	2,214.8
Point in time						1,037.4						1,141.9						1,290.0
Total net revenue						$	5,349.6					$	5,349.9					$	3,504.8

Content

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.

Full game and other revenue primarily includes the initial sale of full game software products, which may include offline and/or significant game related services.

Net revenue by content was as follows:

						Fiscal Year Ended March 31,
						2024						2023						2022
Net revenue recognized:
Recurrent consumer spending						$	4,213.5					$	4,180.4					$	2,271.2
Full game and other						1,136.1						1,169.5						1,233.6
Total net revenue						$	5,349.6					$	5,349.9					$	3,504.8

Geography

We attribute net revenue to geographic regions based on software product destination. Net revenue by geographic region was as follows:

						Fiscal Year Ended March 31,
						2024						2023						2022
Net revenue recognized:
United States						$	3,279.2					$	3,360.0					$	2,100.2
International						2,070.4						1,989.9						1,404.6
Total net revenue						$	5,349.6					$	5,349.9					$	3,504.8

Platform

Net revenue by platform was as follows:

						Fiscal Year Ended March 31,
						2024						2023						2022
Net revenue recognized:
Mobile						$	2,748.0					$	2,538.6					$	403.4
Console						2,167.3						2,303.8						2,528.9
PC and other						434.3						507.5						572.5
Total net revenue						$	5,349.6					$	5,349.9					$	3,504.8

Distribution Channel

Our products are delivered through digital online services (digital download, online platforms, and cloud streaming) and physical retail and other. Net revenue by distribution channel was as follows:

						Fiscal Year Ended March 31,
						2024						2023						2022
Net revenue recognized:
Digital online						$	5,112.2					$	5,085.7					$	3,149.0
Physical retail and other						237.4						264.2						355.8
Total net revenue						$	5,349.6					$	5,349.9					$	3,504.8

Deferred Revenue

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 March 31, 2024 and March 31, 2023 were $1,102.4 and $1,114.3, respectively. For the fiscal year ended March 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 fiscal year ended March 31, 2024, $1,065.1 of revenue was recognized that was included in the deferred revenue balance at the beginning of the respective period. As of March 31, 2024, the aggregate amount of contract revenue allocated to unsatisfied performance obligations is $1,238.7, which includes our deferred revenue balances and amounts to be invoiced and recognized as revenue in future periods. We expect to recognize approximately $1,152.0 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 March 31, 2024 and March 31, 2023, our contract asset balances were $85.0 and $79.9, respectively.

3. MANAGEMENT AGREEMENT

In November 2017, we entered into a management agreement (the "2017 Management Agreement") with ZelnickMedia Corporation ("ZelnickMedia"), which replaced our previous agreement with ZelnickMedia and pursuant to which ZelnickMedia provided financial and management consulting services to the Company through March 31, 2024. The 2017 Management Agreement became effective January 1, 2018. As part of the 2017 Management Agreement, Strauss Zelnick, the President of ZelnickMedia, continued to serve as Executive Chairman and Chief Executive Officer of the Company, and Karl Slatoff, a partner of ZelnickMedia, continued to serve as President of the Company. The 2017 Management Agreement provided for an annual management fee of $3.1 over the term of the agreement and a maximum annual bonus opportunity of $7.4 over the term of the agreement, based on the Company achieving certain performance thresholds.

In May 2022, we entered into a new 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 (refer to Note 20 - Acquisitions). 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"). References to "ZMC" herein shall mean either ZelnickMedia or ZMC Advisors, as appropriate. As part of the 2022 Management Agreement, Strauss Zelnick continues to serve as Executive Chairman and Chief Executive Officer of the Company, and Karl Slatoff continues to serve as President of the Company. 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 and expect to grant time-based and performance-based restricted units to ZMC.

In consideration for ZMC's services, we recorded consulting expense (a component of General and administrative expenses) of $6.5, $3.5, and $9.9 for the fiscal years ended March 31, 2024, 2023, and 2022, respectively.

Pursuant to the 2022 Management Agreement and 2017 Management Agreement, we also issued stock-based awards to ZMC. During the fiscal years ended March 31, 2024, 2023, and 2022, we recorded $52.8, $47.1, and $29.2, respectively, of

stock-based compensation expense for non-employee awards, which is included in General and administrative expenses. See Note 16 - Stock-Based Compensation for a discussion of such awards.

4. FAIR VALUE MEASUREMENTS

Recurring fair value measurements

The carrying amounts of our financial instruments, including cash and cash equivalents, restricted cash and cash equivalents, accounts receivable, prepaid expenses and other, accounts payable, and accrued expenses and other current liabilities, approximate fair value because of their short maturities.

We follow a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of "observable inputs" and minimize the use of "unobservable inputs." The three levels of inputs used to measure fair value are as follows:

• Level 1—Quoted prices in active markets for identical assets or liabilities.

• Level 2—Observable inputs other than quoted prices included in Level 1, such as quoted prices for markets that are not active or other inputs that are observable or can be corroborated by observable market data.

• Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies, and similar techniques that use significant unobservable inputs.

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.

						March 31, 2024
						Quoted prices in active markets for identical assets (level 1)						Significant other observable inputs (level 2)						Significant unobservable inputs (level 3)						Total
Assets:
Cash and cash equivalents:
Money market funds						$	177.5					$	—					$	—					$	177.5
Bank-time deposits						64.8						—						—						64.8
Short-term investments:
Bank-time deposits						22.0						—						—						22.0
Restricted cash and cash equivalents:
Money market funds						238.3						—						—						238.3
Bank-time deposits						0.5						—						—						0.5
Restricted cash and cash equivalents, long term:
Money market funds						95.9						—						—						95.9
Other assets:
Private equity						—						—						26.8						26.8
Total financial assets						$	599.0					$	—					$	26.8					$	625.8
Liabilities:
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
Long-term debt, net:
Convertible notes						—						25.9						—						25.9
Total financial liabilities						$	—					$	50.5					$	13.1					$	63.6

						March 31, 2023
						Quoted prices in active markets for identical assets (level 1)						Significant other observable inputs (level 2)						Significant unobservable inputs (level 3)						Total
Assets
Cash and cash equivalents:
Bank-time deposits						$	368.0					$	—					$	—					$	368.0
Money market funds						145.8						—						—						145.8
Short-term investments:
Corporate bonds						—						145.2						—						145.2
Bank-time deposits						41.8						—						—						41.8
Restricted cash and cash equivalents:
Money market funds						306.1						—						—						306.1
Bank-time deposits						0.5						—						—						0.5
Restricted cash and cash equivalents, long term:
Money market funds						99.6						—						—						99.6
Other assets:
Private equity						—						—						26.5						26.5
Total financial assets						$	961.8					$	145.2					$	26.5					$	1,133.5
Liabilities
Accrued expenses and other current liabilities:
Foreign currency forward contracts						$	—					$	2.5					$	—					$	2.5
Contingent earn-out consideration						—						—						66.6						66.6
Other long-term liabilities:
Contingent earn-out consideration						—						—						27.3						27.3
Long-term debt, net:
Convertible notes						—						44.1						—						44.1
Total financial liabilities						$	—					$	46.6					$	93.9					$	140.5

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 fiscal year ended March 31, 2024.

In connection with the Nordeus acquisition we completed on June 1, 2021, our consideration included a contingent earn-out consideration arrangement that requires us to pay an aggregate of $153.0 in cash if Nordeus achieves certain performance measures over the 12- and 24-month periods following the closing. We recorded $61.1 as the initial fair value of contingent earn-out consideration. The fair value was estimated using a Monte-Carlo simulation model, which included significant unobservable Level 3 inputs, such as projected financial performance over the earn-out period along with estimates for market volatility and the discount rate applicable to potential cash payouts.

During the fiscal years ended March 31, 2024, March 31, 2023, and March 31, 2022, we recognized General and administrative expense of $4.5, $26.5, and $48.0, respectively, within our Consolidated Statements of Operations for the increase in fair value of the contingent earn-out consideration liability associated with the Nordeus acquisition, which increased the fair value of the contingent consideration liability related to the second earn-out period to $69.5. During the fiscal year ended March 31, 2024, we paid $69.5 related to the second earn-out period. During the fiscal year ended March 31, 2023, we paid $70.1 related to the first earn-out period.

In connection with our acquisition of Popcore on November 16, 2022, consideration included a contingent earn-out consideration arrangement that requires us to pay an aggregate of $105.0 in cash if Popcore achieves certain performance measures over each of the three calendar years following the closing. We recorded $23.3 as the initial fair value of contingent earn-out consideration. The fair value was estimated using a Monte-Carlo simulation model, which included significant

unobservable Level 3 inputs, such as projected financial performance over the earn-out period along with estimates for market volatility and the discount rate applicable to potential cash payouts.

During the fiscal years ended March 31, 2024 and March 31, 2023 we recognized General and administrative expense of $(12.9) and $26.5, respectively, within our Consolidated Statements of Operations for the change in fair value of the contingent earn-out consideration liability associated with the Popcore acquisition. The fair value of the contingent consideration liability related to the earn-out period is $12.7, with $12.0 and $0.7 being recorded within Accrued expenses and other current liabilities and Other long-term liabilities, respectively, in our Consolidated Balance Sheet as of March 31, 2024. The change resulted from a lower probability of Popcore achieving certain performance measures in the remaining two 12-month periods.

The remaining contingent earn-out consideration liability of $0.4 recorded within Accrued expenses and other current liabilities in our Consolidated Balance Sheet as of March 31, 2024, relates to immaterial earn-out arrangements from Zynga's historical acquisitions. For these acquisitions, we estimated the acquisition date fair value of the contingent consideration obligations using a discounted cash flow model.

Nonrecurring fair value measurements

We hold equity investments in certain unconsolidated entities without a readily determinable fair value. These strategic investments represent less than a 20% ownership interest in each of the privately-held affiliates, and we do not maintain significant influence over or control of the entities. We have elected the practical expedient in Topic 321, Investments-Equity Securities, to measure these investments at cost less any impairment, adjusted for observable price changes, if any. Based on these considerations, we estimate that the carrying value of the acquired shares represents the fair value of the investment. At March 31, 2024 and March 31, 2023, we held $8.0 and $8.0, respectively, of such investments in Other assets within our Consolidated Balance Sheet.

See Note 9 - Goodwill and Intangible Assets, Net for goodwill and intangible related fair value measurements.

5. SHORT-TERM INVESTMENTS

Our short-term investments consisted of the following as of March 31, 2024:

						March 31, 2024
						Cost or Amortized Cost						Gross Unrealized
									Gains						Losses						Fair Value
Short-term investments
Bank time deposits						$	22.0					$	—					$	—					$	22.0
Total Short-term investments						$	22.0					$	—					$	—					$	22.0

						March 31, 2023
						Cost or Amortized Cost						Gross Unrealized
									Gains						Losses						Fair Value
Short-term investments
Bank time deposits						$	41.8					$	—					$	—					$	41.8
Available-for-sale securities:
Corporate bonds						147.2						—						(2.0)						145.2
Total Short-term investments						$	189.0					$	—					$	(2.0)					$	187.0

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

						March 31, 2024
						Amortized Cost						Fair Value
Short-term investments
Due in 1 year or less						$	22.0					$	22.0
Total Short-term investments						$	22.0					$	22.0

6. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

Our risk management strategy includes the use of derivative financial instruments to reduce the volatility associated with changes in foreign currency exchange rates on earnings, cash flows, and certain balance sheet amounts. We do not enter

into derivative financial contracts for speculative or trading purposes. We recognize derivative instruments as either assets or liabilities on our Consolidated Balance Sheets, and we measure those instruments at fair value. We classify cash flows from derivative transactions as cash flows from operating activities in our Consolidated Statements of Cash Flows.

Foreign currency forward contracts

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

						March 31,
						2024						2023
Forward contracts to sell foreign currencies						$	243.0					$	224.3
Forward contracts to purchase foreign currencies						72.2						51.2

For the fiscal years ended March 31, 2024, 2023, and 2022, we recorded a gain of $5.3, a loss of $15.1, and a gain of $5.9, respectively, related to foreign currency forward contracts in Interest and other, net on our 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. These instruments are generally short-term in nature, with typical maturities of less than one year, and are subject to fluctuations in foreign exchange rates.

7. SOFTWARE DEVELOPMENT COSTS AND LICENSES

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

						March 31,
						2024												2023
						Current						Non-current						Current						Non-current
Software development costs, internally developed						$	53.4					$	1,237.0					$	47.4					$	882.0
Software development costs, externally developed						6.1						198.5						2.2						169.7
Licenses						28.8						11.0						16.3						20.5
Software development costs and licenses						$	88.3					$	1,446.5					$	65.9					$	1,072.2

Software development costs and licenses, net of current portion as of March 31, 2024 and 2023 included $1,433.8 and $1,010.2, respectively, related to titles that have not been released.

Amortization and impairment of software development costs and licenses are as follows:

						Fiscal Year Ended March 31,
						2024						2023						2022
Amortization of software development costs and licenses						$	207.2					$	179.7					$	131.1
Impairment of software development costs and licenses						109.9						79.1						70.6
Portion representing stock-based compensation						(24.4)						9.5						(48.4)
Amortization and impairment, net of stock-based compensation						$	292.7					$	268.3					$	153.3

During the fiscal year ended March 31, 2024, $88.2 of the impairment charges relate to our cost reduction program (refer to Note 21 - Business Reorganization), the remaining $21.7 related to (i) a decision not to proceed with further development of certain interactive entertainment software products, and (ii) recognizing unamortized capitalized costs for the development of a title that exceed the anticipated net realizable value of the asset at the time they were impaired.

As a result of government grants earned on qualified production spend to date, our software development costs and licenses were reduced by $108.3 and $108.1 as of March 31, 2024 and 2023, respectively. We had $198.5 and $0.0 current receivable within Prepaid expenses and other, and $109.3 and $256.8 non-current receivable within Other assets on our Consolidated Balance Sheets relating to such government grants as of March 31, 2024 and 2023, respectively. Within our Consolidated Statements of Operations, Cost of revenue, for fiscal years ended March 31, 2024, 2023, and 2022, was reduced by $45.3, $41.2, and $46.8, respectively, and Research and development expense was reduced by $5.9 for the fiscal year ended March 31, 2024, $4.5 for the fiscal year ended March 31, 2023, with no such reduction in the fiscal year ended March 31, 2022.

8. FIXED ASSETS, NET

Fixed asset balances by category are as follows:

						March 31,
						2024						2023
Computer equipment						$	298.2					$	266.9
Leasehold improvements						270.6						235.1
Computer software						89.0						102.0
Buildings						63.7						62.1
Furniture and fixtures						35.5						35.2
Office equipment						20.6						16.4
Total						$	777.6					$	717.7
Less: accumulated depreciation						(366.5)						(314.9)
Fixed assets, net						$	411.1					$	402.8

Depreciation expense related to fixed assets for the fiscal years ended March 31, 2024, 2023, and 2022 was $135.5, $88.8, and $59.1, respectively.

The following represents our fixed assets, net by location:

						March 31,
						2024						2023
United States						$	242.6					$	234.1
International						168.5						168.7
Fixed assets, net						$	411.1					$	402.8

9. GOODWILL AND INTANGIBLE ASSETS, NET

Goodwill

The change in our goodwill balance is as follows:

						Total
Balance at March 31, 2022						$	674.6
Acquisition of Zynga (see Note 20)						5,994.4
Acquisition of Popcore (see Note 20)						72.1
Additions from immaterial acquisitions						26.5
Currency translation adjustment						(0.5)
Balance at March 31, 2023						$	6,767.1
Impairment						(2,342.1)
Additions from immaterial acquisitions						9.7
Currency translation adjustment						(8.3)
Balance at March 31, 2024						$	4,426.4

During the fiscal year ended March 31, 2024, we recognized goodwill impairment charges of $2,342.1, 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 growth rate, and discount rate. There were no goodwill impairment charges for the fiscal years ended March 31, 2023 and March 31, 2022.

Intangibles

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

						March 31,
						2024																		2023
						Gross Carrying Amount						Accumulated Amortization						Net Book Value						Gross Carrying Amount						Accumulated Amortization						Net Book Value						Weighted average useful life
Developed Game Technology						$	3,788.8					$	(1,301.4)					$	2,487.4					$	4,434.5					$	(744.0)					$	3,690.5					7 years
Branding and Trade Names						395.1						(68.5)						326.6						395.2						(33.1)						362.1						12 years
Game Engine Technology						322.5						(147.3)						175.2						323.2						(73.5)						249.7						4 years
User Base						319.2						(319.2)						—						319.2						(274.4)						44.8						0 years
Developer Relationships						57.0						(26.5)						30.5						57.0						(12.2)						44.8						5 years
Advertising Technology						43.0						(26.6)						16.4						43.0						(12.3)						30.7						3 years
Customer Relationships						31.0						(11.5)						19.5						31.0						(5.3)						25.7						5 years
Intellectual Property						27.5						(23.1)						4.4						22.3						(18.2)						4.1						6 years
In Place Lease						2.0						(1.4)						0.6						1.9						(1.1)						0.8						4 years
Analytics Technology						30.1						(30.1)						—						30.1						(30.1)						—						0 years
Total intangible assets						$	5,016.2					$	(1,955.6)					$	3,060.6					$	5,657.4					$	(1,204.2)					$	4,453.2

Amortization of intangible assets, including impairments, is included in our Consolidated Statements of Operations as follows:

						Fiscal Year Ended March 31,
						2024						2023						2022
Cost of revenue						$	1,303.5					$	1,171.5					$	52.0
Selling and marketing						51.0						277.1						5.3
Research and development						28.7						24.6						5.5
Depreciation and amortization						35.7						33.5						2.0
Total amortization of intangible assets						$	1,418.9					$	1,506.7					$	64.8

During the fiscal year ended March 31, 2024, we recorded impairment charges of $577.4 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. During the fiscal year ended March 31, 2023, we recorded impairment charges of $465.3 for acquisition-related Developed Game Technology intangible assets within Cost of revenue as a result of (i) a reduction in the forecasted performance of certain games due to macroeconomic conditions and changes in our strategies for those games and (ii) our decision not to proceed with further development of a certain interactive entertainment software product. 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 rates, and discount rates. During the fiscal year ended March 31, 2022, there were no impairment charges for intangible assets.

Estimated future amortization of intangible assets that will be recorded in Cost of revenue and operating expenses for the years ending March 31, are as follows:

Fiscal Year Ended March 31,						Amortization
2025						$	706.4
2026						681.6
2027						620.1
2028						579.5
2029						234.7

10. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consisted of:

						March 31,
						2024						2023
Software development royalties						$	413.1					$	510.7
Compensation and benefits						227.3						177.5
Marketing and promotions						94.5						132.7
Licenses						64.4						63.0
Refund liability						34.5						52.4
Tax payable						32.4						33.0
Interest payable						29.4						29.6
Sales tax liability						19.3						14.0
Deferred acquisition payments						17.6						82.7
Professional fees						16.7						9.5
Other						113.4						120.7
Accrued expenses and other current liabilities						$	1,062.6					$	1,225.7

11. DEBT

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

						Annual Interest Rate						Maturity Date						March 31, 2024						Fair Value (Level 2)
2025 Notes						3.55%						April 14, 2025						$	600.0					$	588.9
2026 Notes						5.00%						March 28, 2026						550.0						547.6
2027 Notes						3.70%						April 14, 2027						600.0						576.5
2028 Notes						4.95%						March 28, 2028						800.0						797.8
2032 Notes						4.00%						April 14, 2032						500.0						462.9
2026 Convertible Notes						0.00%						December 15, 2026						25.9						25.9
Total																		$	3,075.9					$	2,999.6
Unamortized discount and issuance costs																		(17.6)
Long-term debt, net																		$	3,058.3

						Annual Interest Rate						Maturity Date						March 31, 2023						Fair Value (Level 2)
2025 Notes						3.55%						April 14, 2025						$	600.0					$	583.8
2027 Notes						3.70%						April 14, 2027						600.0						580.9
2032 Notes						4.00%						April 14, 2032						500.0						460.6
2024 Convertible Notes						0.25%						June 1, 2024						20.8						20.8
2026 Convertible Notes						0.00%						December 15, 2026						23.3						23.3
Total																		$	1,744.1					$	1,669.4
Unamortized discount and issuance costs																		(11.1)
Long-term debt, net																		$	1,733.0

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

						Annual Interest Rate						Maturity Date						March 31, 2024						Fair Value (Level 2)
2024 Convertible Notes						0.25%						June 1, 2024						$	24.6					$	24.6
Total																		$	24.6					$	24.6
Unamortized discount and issuance costs																		—
Short-term debt, net																		$	24.6

						Annual Interest Rate						Maturity Date						March 31, 2023						Fair Value (Level 2)
2024 Notes						3.30%						March 28, 2024						$	1,000.0					$	978.2
Term Loan						3.60%						June 21, 2023						350.0						350.0
Total																		$	1,350.0					$	1,328.2
Unamortized discount and issuance costs																		(3.2)
Short-term debt, net																		$	1,346.8

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

						Fiscal Year Ended March 31,						Fiscal Year Ended
						2024						2023
2024 Notes						$	15.1					$	31.5
2025 Notes						21.3						20.5
2026 Notes						24.7						—
2027 Notes						22.2						21.4
2028 Notes						27.2						—
2032 Notes						20.0						19.2
Term Loan						1.5						11.9
2022 Credit Agreement						—						4.1
Total						$	132.0					$	108.6

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

Fiscal Year Ended March 31,						Maturities
2025						21.4
2026						1,150.0
2027						29.4
2028						1,400.0
2029						—
Thereafter						500.0
Total						3,100.8
Fair Value Adjustments						(0.3)
Total Face Value						$	3,100.5

Senior Notes

On April 14, 2023, we completed our offering and sale of $1,000.0 aggregate principal amount of our senior notes, consisting of $500.0 principal amount of our 5.000% Senior Notes due 2026 (the "2026 Notes") and $500.0 principal amount of our 4.950% Senior Notes due 2028 ("the 2028 Notes"). On January 8, 2024, we completed our add-on offering and sale of $350.0 aggregate principal amount of our senior notes, consisting of $50.0 principal amount of additional 2026 Notes and $300.0 principal amount of additional 2028 Notes. The additional 2026 Notes and 2028 Notes (the “New Notes”) were issued as additional notes under the existing Indenture.

On April 14, 2022, we completed our offering and sale of $2,700.0 aggregate principal amount of our senior notes, consisting of $1,000.0 principal amount of our 3.300% Senior Notes due 2024 (the “2024 Notes”), $600.0 principal amount of our 3.550% Senior Notes due 2025 (the “2025 Notes”), $600.0 principal amount of our 3.700% Senior Notes due 2027 (the “2027 Notes”), and $500.0 principal amount of our 4.000% Senior Notes due 2032 (the “2032 Notes” and together with the 2024 Notes, 2025 Notes, 2026 Notes, 2027 Notes, and 2028 Notes, the "Senior Notes").

The Senior Notes were issued under an indenture, dated as of April 14, 2022 (the “Base Indenture”), between the Company and The Bank of New York Mellon, as trustee (the “Trustee”) and (i) a first supplemental indenture, with respect to the 2024 Notes, (ii) a second supplemental indenture, with respect to the 2025 Notes, (iii) a third supplemental indenture, with respect to the 2027 Notes, (iv) a fourth supplemental indenture, with respect to the 2032 Notes, (v) a fifth supplemental indenture, with respect to the 2026 Notes, and (vi) a sixth supplemental indenture, with respect to the 2028 Notes (collectively, the “Supplemental Indentures” and together with the Base Indenture, the “Indenture”), between the Company and the Trustee.

The Senior Notes are the Company’s senior unsecured obligations and rank equally with all of our other existing and future unsubordinated obligations. We will pay interest on the 2024 Notes, 2026 Notes, and 2028 Notes semi-annually on March 28 and September 28 of each year, commencing September 28, 2022 for the 2024 Notes and September 28, 2023 for the 2026 Notes and 2028 Notes. We will pay interest on each of the 2025 Notes, 2027 Notes, and 2032 Notes semi-annually on April 14 and October 14 of each year, commencing October 14, 2022. During the fiscal year ended March 31, 2024, we made interest payments of $135.2. The proceeds from the issuances of the Senior Notes were used to finance a portion of our acquisition of Zynga and repay certain of our debt.

The Senior Notes are not entitled to any sinking fund payments. We may redeem each series of the Senior Notes at any time in whole or from time to time in part at the applicable redemption prices set forth in each Supplemental Indenture. Upon the occurrence of a Change of Control Repurchase Event (as defined in each of the Supplemental Indentures) with respect to a series of the Senior Notes, each holder of the Senior Notes of such series will have the right to require the Company to purchase that holder’s Notes of such series at a price equal to 101% of the aggregate principal amount thereof, plus accrued and unpaid interest to, but excluding, the date of repurchase, unless the Company has exercised its option to redeem all the Senior Notes.

In the case of an event of default arising from certain events of bankruptcy or insolvency with respect to the Company, all outstanding Senior Notes will become due and payable immediately. If any other event of default specified in the Indenture occurs and is continuing with respect to any series of the Senior Notes, the Trustee or the holders of at least 25% in aggregate principal amount of that series of the outstanding Notes may declare the principal of such series of Senior Notes immediately due and payable.

The Indenture contains certain limitations on the ability of the Company and its subsidiaries to grant liens without equally securing the Senior Notes, or to enter into certain sale and lease-back transactions. These covenants are subject to a number of important exceptions and limitations, as further provided in the Indenture.

Debt issuance costs of $29.4 and original issuance discount of $2.4 were incurred in connection with the Senior Notes. These debt issuance costs and original issuance discount are included as a reduction of the debt within Long-term debt, net on our Consolidated Balance Sheet and will be amortized into Interest and other, net in our Consolidated Statements of Operations over the contractual term of the Senior Notes. During the fiscal year ended March 31, 2024 and 2023, we recognized $6.2 and $5.5, respectively, of amortization of debt issuance costs and $0.4 and $0.4, 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 New Notes. During the fiscal year ended March 31, 2024, 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 Consolidated Statement of Operations.

Credit Agreement

On May 23, 2022, we entered into an 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 provides 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 contains 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 (8.50% at March 31, 2024) or (b) 1.000% to 1.625% above Secured Overnight Financing Rate ("SOFR"), approximately 5.33% at March 31, 2024, 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).

Upon execution of the 2022 Credit Agreement, we incurred $3.5 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 five-year term of the 2022 Credit Agreement, with the expense recorded within Interest and other, net in our Consolidated Statements of Operations. During the fiscal year ended March 31, 2024, and 2023, we amortized $0.7 and $0.6, respectively, of these debt issuance costs.

As of March 31, 2024, there were no borrowings under the 2022 Credit Agreement, and we had approximately $497.7 available for additional borrowings.

Information related to availability on our respective credit agreements for each period was as follows:

						March 31, 2024						March 31, 2023
Available borrowings						$	497.7					$	499.5
Outstanding letters of credit						2.3						2.8

Term Loan

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. During the fiscal year ended March 31, 2024, we made interest payments of $1.8.

Convertible Notes

In conjunction with the acquisition of Zynga on May 23, 2022 (refer to Note 20 - Acquisitions), we entered into (a) the First Supplemental Indenture (the “2024 Supplemental Indenture”) to the Indenture, dated as of June 14, 2019 (the “2024 Indenture”), between Zynga and Computershare Trust Company, N.A. (as successor to Wells Fargo Bank, National Association) (the “Convertible Notes Trustee”), relating to Zynga’s 0.25% Convertible Senior Notes due 2024 (the “2024 Convertible Notes”), and (b) the First Supplemental Indenture (the “2026 Supplemental Indenture” and, together with the 2024 Supplemental Indenture, the “Supplemental Indentures”) to the Indenture, dated as of December 17, 2020 (the “2026 Indenture” and, together with the 2024 Indenture, the “Indentures”), between Zynga and the Convertible Notes Trustee, relating to Zynga’s 0.00% Convertible Senior Notes due 2026 (the “2026 Convertible Notes” and, together with the 2024 Convertible Notes, the “Convertible Notes”). As of the closing date of the acquisition, approximately $690.0 aggregate principal amount of the 2024 Convertible Notes was outstanding and approximately $874.5 aggregate principal amount of the 2026 Convertible Notes was outstanding.

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. 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.

The 2024 Convertible Notes and 2026 Convertible Notes mature on June 1, 2024, and December 15, 2026, respectively, unless earlier converted, redeemed, or repurchased in accordance with their terms, respectively, prior to the

maturity date. Interest is payable semiannually on the 2024 Convertible Notes in arrears on March 1 and September 1 of each year. The 2026 Convertible Notes do not bear regular interest, and the principal amount does not accrete.

The acquisition of Zynga constituted a Fundamental Change, a Make-Whole Fundamental Change, and a Share Exchange Event (each as defined in the Indentures) under the Indentures. The effective date of the Fundamental Change, Make-Whole Fundamental Change and Share Exchange Event in respect of the Convertible Notes was May 23, 2022, and the related tender and conversion periods expired on June 22, 2022. As a result, each holder of Convertible Notes had the right to tender its Convertible Notes to the Company for cash or surrender its Convertible Notes for conversion into the Reference Property at the applicable conversion rate, in each case pursuant to the terms and procedures set forth in the applicable Indenture.

As of the expiration of the Fundamental Change, Make-Whole Fundamental Change, and Share Exchange Event, (a) $0.3 aggregate principal amount of the 2024 Convertible Notes and (b) $845.1 aggregate principal amount of the 2026 Convertible Notes were tendered for cash. In addition, (a) $668.3 aggregate principal amount of the 2024 Convertible Notes, and (b) no 2026 Convertible Notes were surrendered for conversion into the applicable Reference Property. 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 at March 31, 2024.

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. 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.

Under the terms of the applicable Indentures, prior to the close of business on the business day immediately preceding March 1, 2024 with respect to the 2024 Convertible Notes and September 15, 2026 with respect to the 2026 Convertible Notes, the Convertible Notes will be convertible only under the following circumstances:

• during any calendar quarter, if the value of a unit of Reference Property (based on the last reported sales price of our common stock), for at least 20 trading days in a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price of the applicable series of the 2024 Convertible Notes or 2026 Convertible Notes, respectively, on each applicable trading day;

• during the five business-day period after any five consecutive trading-day period in which the trading price per one thousand dollar principal amount of each applicable series of the 2024 Convertible Notes or 2026 Convertible Notes for such trading day was less than 98% of the product of the value of a unit of Reference Property (based on the last reported sale price of our common stock) and the conversion rate of the applicable series of the 2024 Convertible Notes or 2026 Convertible Notes, respectively, on each such trading day;

• if we call the 2024 Convertible Notes or 2026 Convertible Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the respective redemption date; or

• upon the occurrence of specified corporate events described in the respective Indentures.

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 March 31, 2024, the conditions allowing holders of the Convertible Notes to convert their respective series of the Convertible Notes have not been met, and, therefore, both the Convertible Notes 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 (refer to Note 20 - Acquisitions) and we do not expect significant fluctuations in fair value through maturity. We initially recorded $778.6 as the acquisition date fair value for the 2024 Convertible Notes and $874.5 for the 2026 Convertible Notes. The fair value was determined as the expected cash payment and value of shares to be issued to settle the Convertible Notes. As of March 31, 2024, we recorded $24.6 as the fair value of the remaining outstanding 2024 Convertible Notes, within Short-term debt, net, and $25.9 as the fair value of the remaining outstanding 2026 Convertible Notes, within Long-term debt, net, in our Consolidated Balance Sheet. During the fiscal year

ended March 31, 2024 and 2023, we recognized a loss of $6.4 and a loss of $37.6, respectively, within (Loss) gain on fair value adjustments, net in our Consolidated Statements of Operations.

12. (LOSS) EARNINGS PER SHARE ("EPS")

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

						Fiscal Year Ended March 31,
						2024						2023						2022
Computation of Basic (loss) earnings per share:
Net (loss) income						$	(3,744.2)					$	(1,124.7)					$	418.0
Weighted average common shares outstanding—basic						170.1						159.9						115.5
Basic (loss) earnings per share						(22.01)						(7.03)						3.62
Computation of Diluted (loss) earnings per share:
Net (loss) income						$	(3,744.2)					$	(1,124.7)					$	418.0
Weighted average common shares outstanding—basic						170.1						159.9						115.5
Add: dilutive effect of common stock equivalents						—						—						1.3
Weighted average common shares outstanding—diluted						170.1						159.9						116.8
Diluted (loss) earnings per share						$	(22.01)					$	(7.03)					$	3.58

We incurred a net loss for the fiscal year ended March 31, 2024 and 2023; therefore, the diluted weighted average shares outstanding exclude the effect of unvested common stock equivalents because their effect would be antidilutive. For the fiscal year ended March 31, 2024, we had 2.4 potentially dilutive shares from share-based awards and 0.2 of shares from Convertible Notes that are excluded due to the net loss for the period.

13. LEASES

Our lease arrangements are primarily for (1) corporate, administrative, and development studio offices and (2) data centers and server equipment. Our existing leases have remaining lease terms ranging from one to fourteen years. In certain instances, such leases include one or more options to renew, with renewal terms that generally extend the lease term by one to five years for each option. The exercise of lease renewal options is generally at our sole discretion. Additionally, the majority of our leases are classified as operating leases.

Information related to our operating leases are as follows:

						Fiscal Year Ended March 31,
						2024						2023						2022
Lease costs
Operating lease costs						$	80.5					$	109.8					$	46.3
Short-term lease costs						4.9						4.1						1.4

During the fiscal year ended March 31, 2023, we recognized a $30.0 impairment loss related to an ROU asset related to Zynga's office space lease in San Francisco, which is available for sublease and not currently used by us due to the continued deterioration of the sublease market, unsuccessful negotiations with a potential sub-tenant, and our decision to change our sublease marketing strategy. This impairment loss is included in General and administrative expense within our Consolidated Statement of Operations and in the Operating lease costs in the table above.

The fair value of the San Francisco Office was estimated using a risk-adjusted, discounted cash flow model with Level 3 inputs. The significant assumptions used in estimating the fair value included the projected sublease income over the remaining lease term, expected downtime prior to the commencement of future subleases, expected rent concessions offered to future tenants and discount rates that reflected the level of risk associated with these future cash flows.

						Fiscal Year Ended March 31,
						2024						2023						2022
Supplemental operating cash flow information
Cash paid for amounts included in the measurement of lease liabilities						$	73.9					$	55.9					$	32.8
ROU assets obtained in exchange for lease obligations						89.5						145.3						74.0

						Fiscal Year Ended March 31,
						2024						2023						2022
Weighted average information
Remaining lease term						8.40 years						8.93 years						10.09 years
Discount rate						4.56		%				4.33		%				4.29		%

Future undiscounted lease payments for our operating lease liabilities, and a reconciliation of these payments to our operating lease liabilities at March 31, 2024, are as follows:

For the years ending March 31,
2025						$	83.9
2026						69.2
2027						67.2
2028						63.6
2029						60.4
Thereafter						199.6
Total future lease payments						$	543.9
Less imputed interest						(92.8)
Total lease liabilities						$	451.1

As of March 31, 2024, we have entered into facility leases that have not yet commenced with future lease payments of approximately $11.6. These leases are expected to commence within the next twelve months and will have lease terms ranging from three to ten years.

14. COMMITMENTS AND CONTINGENCIES

A summary of annual minimum contractual obligations and commitments as of March 31, 2024 is as follows:

Fiscal Year Ending March 31,						Software Development and Licensing						Marketing						Purchase Obligations						Total
2025						$	333.0					$	32.4					$	146.3					$	511.7
2026						133.3						74.5						67.7						275.5
2027						33.3						28.2						12.6						74.1
2028						8.5						6.3						0.3						15.1
2029						13.8						6.5						—						20.3
Thereafter						1.0						6.5						—						7.5
Total						$	522.9					$	154.4					$	226.9					$	904.2

Software Development and Licensing Agreements: We make payments to third-party software developers that include contractual payments to developers under several software development agreements that expire at various times through October 2030. Our aggregate outstanding software development commitments assume satisfactory performance by third-party software developers. We also have licensing commitments that primarily consist of obligations to holders of intellectual property rights for use of their trademarks, copyrights, technology or other intellectual property rights in the development of our products.

Marketing Agreements: We have certain minimum marketing support commitments where we commit to spend specified amounts related to marketing our products. Marketing commitments expire at various times through March 2030 and primarily reflect our agreements with major sports leagues and players' associations.

Purchase Obligations: These obligations are primarily related to agreements to purchase services that are enforceable and legally binding on us that specifies all significant terms, including fixed, minimum or variable pricing provisions; and the approximate timing of the transactions, expiring at various times through August 2028.

Employee Savings Plans: For our United States employees we maintain a 401(k) retirement savings plan and trust. Our 401(k) plan is offered to all eligible employees and participants may make voluntary contributions. We also have various pension plans for our non-U.S. employees, some of which are required by local laws, and allow or require employer contributions. Employer contributions under all defined contribution and pension plans during the fiscal years ended March 31, 2024, 2023, and 2022 were $43.0, $36.1, and $22.4, respectively.

Legal and Other Proceedings: We are, or may become, subject to demands and claims (including intellectual property and employment related claims) and are involved in routine litigation in the ordinary course of business which we do not believe to be material to our business or financial condition or results of operations. We have appropriately accrued amounts related to certain of these claims and legal and other proceedings. 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.

15. INCOME TAXES

Components of (Loss) income before income taxes are as follows:

						Fiscal Year Ended March 31,
						2024						2023						2022
Domestic						$	(2,081.8)					$	(937.0)					$	357.5
Foreign						(1,621.0)						(401.1)						107.9
(Loss) income before income taxes						$	(3,702.8)					$	(1,338.1)					$	465.4

Provision for (benefit from) current and deferred income taxes consists of the following:

						Fiscal Year Ended March 31,
						2024						2023						2022
Current:
U.S. federal						$	23.0					$	70.2					$	12.0
U.S. state and local						12.4						3.3						(0.6)
Foreign						107.5						98.0						24.1
Total current income taxes						142.9						171.5						35.5
Deferred:
U.S. federal						24.6						(175.4)						34.8
U.S. state and local						(22.6)						(31.4)						2.9
Foreign						(103.5)						(178.1)						(25.8)
Total deferred income taxes						(101.5)						(384.9)						11.9
Provision for (benefit from) income taxes						$	41.4					$	(213.4)					$	47.4

A reconciliation of our effective tax rate to the U.S. statutory federal income tax rate is as follows:

						Fiscal Year Ended March 31,
						2024						2023						2022
U.S. federal statutory rate						21.0		%				21.0		%				21.0		%
State and local taxes, net of U.S. federal benefit						0.6		%				2.0		%				1.2		%
Foreign tax rate differential(1)						0.2		%				(0.3)		%				(1.8)		%
Foreign earnings(2)						(1.5)		%				(1.3)		%				(2.3)		%
Tax credits(3)						1.7		%				5.7		%				(6.6)		%
Excess tax benefits from stock-based compensation						(0.1)		%				(0.5)		%				(3.1)		%
Earn-out adjustments						0.1		%				(0.4)		%				2.2		%
Valuation allowance—domestic(4)						(9.1)		%				(6.3)		%				(0.1)		%
Valuation allowance—foreign(4)						(1.1)		%				(0.1)		%				0.4		%
Nondeductible compensation						(0.1)		%				(0.9)		%				0.4		%
Global intangible low-taxed income						(1.0)		%				(3.1)		%				0.1		%
Foreign-derived intangible income						0.5		%				1.8		%				(0.9)		%
Change in reserves						0.9		%				(0.1)		%				(0.9)		%
Goodwill impairment						(12.8)		%				—		%				—		%
Other(5)						(0.4)		%				(1.6)		%				0.6		%
Effective tax rate						(1.1)		%				15.9		%				10.2		%

(1) The foreign rate differentials in relation to foreign earnings, for all periods presented, are primarily driven by changes in the mix of our foreign earnings and the difference between the foreign and U.S. income tax rates.

(2) Fiscal year ended March 31, 2024 include tax expense of $29.2 from a decrease in the deferred tax assets related to Switzerland's Federal Act on Tax Reform and AVH Financing ("TRAF") enacted on January 1, 2020. Fiscal years ended March 31, 2023, and March 31, 2022, include tax benefit of $5.6 and $11.6, respectively, from the effects of an increase in the deferred tax asset.

(3) Tax benefits were recorded for fiscal years ended March 31, 2024, 2023, and 2022 attributable to certain tax credits related to software development activities.

(4) The change in domestic and foreign valuation allowance includes an increase in our valuation allowance on deferred tax assets as a result of a determination in the fiscal year ended March 31, 2024 that it was more likely than not that such deferred tax assets would not be realized.

(5) For the fiscal year ended March 31, 2023, includes nondeductible expense of $8.2 relating to loss on the redemption of convertible debt

The effects of temporary differences that gave rise to our deferred tax assets and liabilities were as follows:

						March 31,
						2024						2023
Deferred tax assets:
Capitalized development costs, software and depreciation						$	365.1					$	157.8
Tax credit carryforward						174.4						159.5
Equity-based compensation						143.0						109.8
Tax basis step up related to TRAF						131.1						79.1
Operating lease liabilities						101.9						90.6
Accrued compensation expense						72.6						96.6
Net operating loss carryforward						63.2						50.3
Other						2.7						26.0
Total deferred tax assets						1,054.0						769.7
Less: Valuation allowance						(799.1)						(338.2)
Net deferred tax assets						$	254.9					$	431.5
Deferred tax liabilities:
Intangible amortization						$	(513.2)					$	(841.0)
Right-of-use assets						(75.7)						(64.7)
Deferred revenue						(5.0)						(15.0)
Total deferred tax liabilities						(593.9)						(920.7)
Net deferred tax liability(1)						$	(339.0)					$	(489.2)

(1) As of March 31, 2024, $1.9 is included in Deferred tax assets and $340.9 is included in Deferred tax liabilities, net. As of March 31, 2023, $44.8 is included in Deferred tax assets and $534.0 is included in Deferred tax liabilities, net.

We assess the realizability of the deferred tax assets based on the available positive and negative evidence in order to determine the amount which is more likely than not to be realized and record a valuation allowance as necessary. Due to our cumulative loss position, which provides significant negative evidence, we recognized a tax expense of $378.8 from an increase in our valuation allowance on U.S. and foreign deferred tax assets, as a result of a determination that it was more likely than not that such deferred tax assets would not be realized. The remaining net deferred tax liability is primarily related to a basis difference in intangibles as a result of the acquisition of Zynga in May 2022.

At March 31, 2024, we had domestic net operating loss carryforwards totaling $367.5 of which $28.3 will expire from 2024 to 2029, $187.3 will expire from 2030 to 2040, $136.8 will expire from 2041 to 2043, and the remainder will be carried forward indefinitely. In addition, we had foreign net operating loss carryforwards of $201.7, of which $127.6 will expire from 2026 to 2030, $13.9 will expire from 2041 to 2044 and the remainder may be carried forward indefinitely.

At March 31, 2024, we had domestic tax credit carryforwards totaling $300.5, of which $1.4 expire in 2031 to 2038, $2.6 expire from 2041 to 2044, and the remainder may be carried forward indefinitely.

The total amount of undistributed earnings of foreign subsidiaries was approximately $492.5 at March 31, 2024 and $64.6 at March 31, 2023. The amount of undistributed earnings of foreign subsidiaries of $456.0 as of March 31, 2023 was offset by a deficit of $391.4 relating to Zynga, while the amount at March 31, 2024 does not include amounts relating to foreign subsidiaries with deficits. As of March 31, 2024, it is our intention to reinvest indefinitely undistributed earnings of our foreign subsidiaries. Accordingly, no provision has been made for foreign withholding taxes or U.S. income taxes which may become payable if undistributed earnings of foreign subsidiaries are repatriated. It is not practicable to estimate the tax liability that would arise if these earnings were remitted.

We are regularly audited by domestic and foreign taxing authorities. Audits may result in tax assessments in excess of amounts claimed and the payment of additional taxes. We believe that our tax return positions comply with applicable tax law and that we have adequately provided for reasonably foreseeable assessments of additional taxes. Additionally, we believe that any assessments in excess of the amounts provided for will not have a material adverse effect on our Consolidated Financial Statements. It is possible that settlement of audits or the expiration of the statute of limitations may have an impact on our effective tax rate in future periods.

We recognize interest and penalties related to uncertain tax positions in the provision for income taxes in our Consolidated Statements of Operations. For the fiscal years ended March 31, 2024, 2023, and 2022, we recognized an increase

of interest and penalties of $13.5, $8.9, and $1.9, respectively. The gross amount of interest and penalties accrued as of March 31, 2024 and 2023 was $33.6 and $20.2, respectively.

As of March 31, 2024, we had gross unrecognized tax benefits, including interest and penalties, of $276.3, of which $167.9 would affect our effective tax rate if realized. For the fiscal year ended March 31, 2024, gross unrecognized tax benefits decreased by $18.5.

We are no longer subject to audit for U.S. federal income tax returns for periods prior to our fiscal year ended March 31, 2021 and state income tax returns for periods prior to the fiscal year ended March 31, 2020. With few exceptions, we are no longer subject to income tax examinations in non-U.S. jurisdictions for years prior to fiscal year ended March 31, 2016. Certain U.S. state and foreign taxing authorities are currently examining our income tax returns for the fiscal years ended March 31, 2016 through March 31, 2022.

The timing of the resolution of income tax examinations is highly uncertain, and the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities may differ materially from the amounts accrued for each year. Although potential resolution of uncertain tax positions involve multiple tax periods and jurisdictions, it is reasonably possible that a reduction of $38.6 of unrecognized tax benefits may occur within the next 12 months, some of which, depending on the nature of the settlement or expiration of statutes of limitations, may affect our income tax provision and therefore benefit the resulting effective tax rate. The actual amount could vary significantly depending on the ultimate timing and nature of any settlements.

The aggregate changes to the liability for gross uncertain tax positions, excluding interest and penalties, were as follows:

						Fiscal Year Ended March 31,
						2024						2023						2022
Balance, beginning of period						$	274.7					$	164.8					$	158.3
Additions:
Current year tax positions						41.4						26.5						10.3
Prior year tax positions(1)						2.3						109.7						4.2
Reduction of prior year tax positions						—						(26.3)						—
Lapse of statute of limitations						(76.2)						—						(8.0)
Other						0.6						—						—
Balance, end of period						$	242.8					$	274.7					$	164.8

(1) For the fiscal year ended March 31, 2023, the increase in prior year tax positions of $109.7 related to purchase accounting for the Zynga acquisition.

We believe that we have provided for any reasonably foreseeable outcomes related to our tax audits and that any settlement will not have a material adverse effect on our consolidated financial statements. However, there can be no assurances as to the possible outcomes.

16. STOCK-BASED COMPENSATION

Stock Incentive Plan

In September 2017, our stockholders approved our 2017 Stock Incentive Plan (the "2017 Plan"). The aggregate number of shares issuable under the 2017 Plan is 25.7, subject to adjustment as set forth in the 2017 Plan, and, as of March 31, 2024, there were approximately 10.5 shares available for issuance. The 2017 Plan is administered by the Compensation Committee of the Board of Directors and allows for awards of restricted stock units and other stock-based awards of our common stock to employees and non-employees, including to ZMC in connection with their contract to provide executive management service to us. Subject to the provisions of the plans, the Board of Directors, or any Committee appointed by the Board of Directors, has the authority to determine the individuals to whom the equity awards are to be granted, the number of shares to be covered by each equity award, the vesting period, restrictions, if any, on the equity award and the terms and conditions of the equity award. Upon the vesting of certain stock-based awards, employees have the option to have us withhold shares to satisfy the employee's federal and state tax withholding requirements.

Stock-Based Compensation Expense

The following table summarizes stock-based compensation expense included in our Consolidated Statements of Operations:

						Fiscal Year Ended March 31,
						2024						2023						2022
Cost of revenue						$	24.4					$	(9.5)					$	48.4
Selling and marketing						95.3						95.2						30.0
General and administrative						111.5						115.5						66.5
Research and development						104.4						116.6						38.1
Stock-based compensation expense before income taxes						335.6						317.8						183.0
Provision for (benefit from) income taxes						(12.2)						(45.8)						(35.4)
Stock-based compensation expense, net of income tax benefit						323.4						272.0						147.6
Capitalized stock-based compensation expense						$	85.4					$	74.4					$	82.1

During the fiscal year ended March 31, 2024, the forfeiture of awards resulted in the reversal of expense of $2.4 and amounts capitalized as software development costs of $7.4. During the fiscal year ended March 31, 2023, the forfeiture of awards resulted in the reversal of expense of $49.5 and amounts capitalized as software development costs of $11.9. During the fiscal year ended March 31, 2022, the forfeiture of awards resulted in the reversal of expense of $0.7 and amounts capitalized as software development costs of $3.2.

As of March 31, 2024, the total future unrecognized compensation cost related to outstanding unvested restricted stock was $684.2 and will be either recognized as compensation expense over a weighted-average period of approximately 2.4 years or capitalized as software development costs.

For the fiscal years ended March 31, 2024, 2023, and 2022, the total fair values of restricted stock units that vested were $309.3, $321.8, and $208.6, respectively.

In connection with the Zynga Acquisition (see Note 20 - Acquisitions), (i) the outstanding and unexercised options to purchase Zynga common stock were assumed by the Company and automatically converted into options exercisable for shares of Take-Two common stock (the “Converted Options”), (ii) the issued and outstanding restricted stock unit awards with respect to Zynga common stock were assumed by the Company and automatically converted into a Take-Two restricted stock unit award with respect to shares of Take-Two common stock (the “Converted RSUs”), and (iii) the issued and outstanding performance stock unit awards with respect to Zynga common stock were assumed by the Company and automatically converted into a Take-Two restricted stock unit award with respect to shares of Take-Two common stock (the “Converted PSUs” and together with the Converted Options and the Converted RSUs, the “Converted Awards”). As a result, we issued replacement equity options and PSU/RSU awards of 1.5 and 4.2, respectively. The portion of the fair value related to pre-combination services of $151.7 was included in the purchase price, and $28.6 was recognized as day-one post-combination expense for acceleration of awards, while the remaining fair value will be recognized over the remaining service periods. As of March 31, 2024, the future expense for the Converted RSUs and Converted PSUs was approximately $114.9, which will be recognized over a weighted average service period of approximately 1.0 years. As of March 31, 2024, the future expense for the Converted Options was approximately $0.1, which will be recognized over a weighted average service period of approximately 0.3 years.

Restricted Stock Units

Employee Awards

Time-based restricted stock units granted to employees under our stock-based compensation plans generally vest either annually or quarterly over three years or four years from the date of grant. Certain restricted stock units granted to key officers, senior-level employees, or key employees vest based on market conditions, primarily related to the performance of the price of our common stock. Certain restricted stock units granted to key officers, senior-level employees, or key employees vest based on performance conditions, primarily related to performance metrics around certain of our titles.

ZMC Non-Employee Awards

In connection with the 2022 Management Agreement and the 2017 Management Agreement, we granted restricted stock units (in thousands) to ZMC (see Note 3 - Management Agreement) as follows:

						Fiscal Year Ended March 31,
						2024						2023
Time-based						97						192
Market-based(1)						295						510
Performance-based(1)
IP						—						18
Recurrent Consumer Spending ("RCS")						98						153
Total Performance-based						98						171
Total Restricted Stock Units						490						873

(1) Represents the maximum number of shares eligible to vest.

Time-based restricted stock units granted in fiscal year 2024 pursuant to the 2022 Management Agreement will vest on May 31, 2024, May 30, 2025, and June 1, 2026, and those granted in fiscal year 2023 pursuant to the 2022 Management Agreement, vested in part on June 1, 2023 and will also vest in part on May 31, 2024, and May 30, 2025. Time-based restricted stock units granted in fiscal year 2023 pursuant to the 2017 Management Agreement vested on April 12, 2024.

Market-based restricted stock units granted in fiscal year 2024 pursuant to the 2022 Management Agreement are eligible to vest on June 1, 2026, and those granted in fiscal year 2023 pursuant to the 2022 Management Agreement are eligible to vest on May 31, 2024 and May 30, 2025. Market-based restricted stock units granted in fiscal year 2023 pursuant to the 2017 Management Agreement vested on April 12, 2024. Market-based restricted stock units are eligible to vest based on the Company's Total Shareholder Return (as defined in the relevant grant agreement) relative to the Total Shareholder Return (as defined in the relevant grant agreement) of the companies that constitute either the NASDAQ Composite Index under the 2017 Management Agreement or the NASDAQ 100 index under the 2022 Management Agreement (as defined in the relevant grant agreement) as of the grant date measured over a two-year period or three-year period, as applicable. To earn the target number of market-based restricted stock units (which represents 50% of the number of the market-based restricted stock units set forth in the table above), the Company must perform at the 50th percentile, with the maximum number of market-based restricted stock units earned if the Company performs at the 75th percentile.

Performance-based restricted stock units granted in fiscal year 2024 pursuant to the 2022 Management Agreement are eligible to vest on June 1, 2026, and those granted in fiscal year 2023 pursuant to the 2022 Management Agreement are eligible to vest on May 31, 2024 and May 30, 2025. Performance-based restricted stock units granted in fiscal year 2023 pursuant to the 2017 Management Agreement vested on April 12, 2024. The performance-based restricted stock units, of which certain are tied to "IP" and "RCS" (as defined in the relevant grant agreement), are eligible to vest based on the Company's achievement of certain performance metrics (as defined in the relevant grant agreement) of either individual product releases of "IP" measured over a two-year period or "RCS" measured over a two-year or three-year period. The target number of performance-based restricted stock units that may be earned pursuant to these grants is equal to 50% of the grant amounts set forth in the above table (the numbers in the table represent the maximum number of performance-based restricted stock units that may be earned). 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 portion of time-based, market-based and performance-based restricted stock units held by ZMC as of March 31, 2024 and 2023 were 1.3 and 1.1, respectively. During the fiscal year ended March 31, 2024, 0.2 restricted stock units previously granted to ZMC vested, and 0.0 restricted stock units were forfeited by ZMC.

Fair Value of Stock-Based Awards

Time-Based Awards

The estimated value, based on the closing price of our stock on the grant date, of time-based restricted stock units granted to employees during the fiscal years ended March 31, 2024, 2023, and 2022 was $138.25, $118.17, and $180.97 per share, respectively.

For the fiscal years ended March 31, 2024, 2023, and 2022, the estimated value, based on the closing price of our stock on the grant date, of time-based restricted stock awards granted to ZMC was $137.59, $128.90, and $182.66 per share, respectively.

The following table summarizes the activity in non-vested restricted stock units to employees and ZMC under our stock-based compensation plans with time-based restricted stock awards presented at 100% of target number of shares that may potentially vest:

						Shares (in millions)						Weighted Average Fair Value on Grant Date
Non-vested restricted stock units at March 31, 2023						5.1						$	126.34
Granted						1.6						138.21
Vested						(1.9)						130.24
Forfeited						(0.4)						123.03
Non-vested restricted stock units at March 31, 2024						4.4						$	129.33

Market-Based Awards

The following table summarizes the weighted-average assumptions used in the Monte Carlo Simulation to estimate the fair value of market-based awards:

						Fiscal Year Ended March 31,
						2024												2023												2022
						Employee Market-Based						Non-Employee Market-Based						Employee Market-Based						Non-Employee Market-Based						Employee Market-Based						Non-Employee Market-Based
Risk-free interest rate						4.0%						4.0%						2.6-2.8%						2.4-2.8%						0.1		%				0.2		%
Expected stock price volatility						36.6%						36.6%						35.9-37.6%						34.2-37.6%						37.3		%				36.3		%
Expected service period (years)						2.8						2.8						1.8-2.8						1.8-2.8						1.5						1.0
Dividends						None						None						None						None						None						None

The estimated value of market-based restricted stock awards granted to employees during the fiscal years ended March 31, 2024, 2023, and 2022 was $195.85, $179.93, and $292.76 per share, respectively. For the fiscal years ended March 31, 2024, 2023, and 2022, the estimated value of the market-based restricted stock awards granted to ZMC was $193.41, $175.12, and $293.32 per share, respectively.

The following table summarizes the activity in non-vested restricted stock units to employees and ZMC under our stock-based compensation plans with market-based restricted stock awards presented at 100% of target number of shares that may potentially vest:

						Shares (in millions)						Weighted Average Fair Value on Grant Date
Non-vested restricted stock units at March 31, 2023						0.7						$	183.72
Granted						0.5						195.03
Vested						(0.2)						276.07
Forfeited						(0.1)						218.49
Non-vested restricted stock units at March 31, 2024						0.9						$	172.66

Performance-Based Awards

The estimated value of performance-based restricted stock awards granted to employees during the fiscal year ended March 31, 2024, 2023, and 2022 was $139.21, $125.03, and $176.05, respectively. For the fiscal years ended March 31, 2024, 2023, and 2022, the estimated value of the performance-based restricted stock awards granted to ZMC was $148.42, $125.90, and $182.66 per share, respectively.

The following table summarizes the activity in non-vested restricted stock units to employees and ZMC under our stock-based compensation plans with performance restricted stock awards presented at 100% of target number of shares that may potentially vest:

						Shares (in millions)						Weighted Average Fair Value on Grant Date
Non-vested restricted stock units at March 31, 2023						3.9						$	113.28
Granted						0.2						141.90
Vested						(0.1)						166.02
Forfeited						(0.1)						151.67
Non-vested restricted stock units at March 31, 2024						3.9						$	113.58

Fair Value of Stock Options

All Converted Options generally vest over four to five years, with 20% to 25% vesting after one year and the remainder vesting monthly thereafter over 26 to 48 months, respectively. The stock options have a contract term of 10 years and the related expense is determined using the Black-Scholes option pricing model on the date of grant.

The following table shows stock option activity for the fiscal year ended March 31, 2024:

						Shares (in millions)						Weighted Average Fair Value on Grant Date			Aggregate Intrinsic Value of Stock Options Outstanding						Weighted Average Contractual Term (In Years)
Balance as of March 31, 2023						0.7						$	49.54		$	46.51					4.53
Granted						—						—
Vested						(0.1)						38.68
Forfeited						—						34.68
Balance as of March 31, 2024						0.6						$	50.50		$	61.85					3.45
As of March 31, 2024
Exercisable options						0.6						$	50.02		$	61.72					3.45
Vested and expected to vest						—						$	44.59		$	0.13					6.51

The following table presents the weighted-average grant date fair value and related assumptions used to estimate the fair value of our stock options converted during the fiscal year ended March 31, 2023. We had no stock options converted or granted in the fiscal year ended March 31, 2024:

						Fiscal Year Ended March 31,
						2023
Risk-free interest rate						0.6-2.8%
Expected stock price volatility						36.0-46.5%
Expected service period (years)						0.1-5.1
Dividends						None

The aggregate intrinsic value of stock options exercised during the fiscal year ended March 31, 2024 was $4.6. For the fiscal year ended March 31, 2024, the amount of cash received from exercise of stock options was $1.5. The total fair value of options that vested during the fiscal year ended March 31, 2024 was $1.5. The total fair value of options that were exercised during the fiscal year ended March 31, 2024 was $6.1.

During the fiscal year ended March 31, 2024, total unrecognized stock-based compensation expense of $0.1 related to unvested stock options is expected to be recognized over a weighted-average recognition period of approximately 0.28 years.

Employee Stock Purchase Plans

In September 2017, our stockholders approved our 2017 Global Employee Stock Purchase Plan as amended and restated ("ESPP"). The maximum aggregate number of shares of common stock that may be issued under the plan is 9.0, and as of March 31, 2024, there were approximately 7.9 shares available for issuance. The ESPP is administered by the Compensation Committee of the Board of Directors and allows for eligible employees an option to purchase shares of our common stock, which the employee may or may not exercise during an offering period. Eligible employees may authorize payroll deductions of between 1% and 15% of their compensation to purchase shares of common stock at 85% of the lower of the market price of

our common stock on the date of commencement of the applicable offering period or on the last day of each six-month purchase period.

The fair value is determined using the Black-Scholes valuation model. Key assumptions of the Black-Scholes valuation model are the risk-free interest rate, expected volatility, expected term, and expected dividends. The risk-free interest rate is based on U.S. Treasury yields in effect at the time of grant for the expected term of the option. Expected volatility is based on historical stock price volatility. Expected term is determined based on historical exercise behavior, post-vesting termination patterns, options outstanding and future expected exercise behavior. The following table summarizes the assumptions used in the Black-Scholes valuation model to value our purchase rights:

						Fiscal Year Ended March 31,
						2024						2023
Risk-free interest rate						5.14-5.51%						1.4-4.6%
Expected stock price volatility						26.3-39.1%						27.7%
Expected service period (years)						0.5						0.5
Dividends						None						None

For the fiscal year ended March 31, 2024, our employees purchased 0.4 shares for $37.9 with a weighted-average fair value of $102.19. For the fiscal year ended March 31, 2023, our employees purchased 0.2 shares for $22.1 with a weighted-average fair value of $101.15.

17. INTEREST AND OTHER, NET

						Fiscal Year Ended March 31,
						2024						2023						2022
Interest income						$	62.3					$	33.8					$	17.6
Interest expense						(140.6)						(129.6)						(18.6)
Foreign currency exchange gain (loss)						(28.6)						(31.8)						(7.3)
Other						3.3						(14.3)						(5.9)
Interest and other, net						$	(103.6)					$	(141.9)					$	(14.2)

18. ACCUMULATED OTHER COMPREHENSIVE (LOSS)

The following table provides the components of Accumulated other comprehensive loss:

						Foreign currency translation adjustments						Unrealized gain (loss) on available- for-sales securities						Total
Balance at March 31, 2022						$	(52.8)					$	(4.5)					$	(57.3)
Other comprehensive income (loss) before reclassifications						(58.9)						2.9						(56.0)
Balance at March 31, 2023						$	(111.7)					$	(1.6)					$	(113.3)
Other comprehensive income (loss) before reclassifications						6.7						1.5						8.2
Balance at March 31, 2024						$	(105.0)					$	(0.1)					$	(105.1)

19. SUPPLEMENTARY FINANCIAL INFORMATION

The following table provides details of our valuation and qualifying accounts:

						Beginning Balance						Additions						Deductions						Other						Ending Balance
Fiscal Year Ended March 31, 2024
Valuation allowance for deferred income taxes						$	338.2					488.0						(27.1)						—						$	799.1
Fiscal Year Ended March 31, 2023
Valuation allowance for deferred income taxes						$	121.9					218.5						(2.2)						—						$	338.2
Fiscal Year Ended March 31, 2022
Valuation allowance for deferred income taxes						$	95.7					27.9						(1.7)						—						$	121.9

20. ACQUISITIONS

Zynga Acquisition

On May 23, 2022, we completed the Zynga Acquisition. Under the terms and conditions of the merger agreement, each Zynga stockholder received $3.50 in cash and 0.0406 shares of our common stock and cash in lieu of fractional shares for each share of Zynga common stock outstanding at closing. Our consideration consisted of an aggregate of $3,992.4 in cash, 46.3 shares of our common stock, and $151.7 of replacement equity awards attributable to the pre-acquisition service period. In connection with the transaction, on April 14, 2022, we completed our offering and sale of $2,700.0 aggregate principal amount of our Senior Notes (refer to Note 11 - Debt). The cash portion of the merger consideration was funded from our cash on hand, including the proceeds from our senior notes offering.

We acquired Zynga as part of our ongoing strategy to expand selectively our portfolio of owned intellectual property and to diversify and strengthen further our mobile offerings.

The acquisition-date fair value of the consideration totaled $9,521.8, which consisted of the following:

			Fair value of purchase consideration
Cash			$	3,992.4
Common stock (46.3 shares)			5,377.7
Replacement equity awards			151.7
Total			$	9,521.8

We used the acquisition method of accounting and recognized assets acquired and liabilities assumed at their fair value as of the date of acquisition, with the excess recorded to goodwill. The following table summarizes the acquisition date fair value of net tangible and intangible assets acquired, net of liabilities assumed from Zynga:

			Fair Value			Weighted average useful life
Cash acquired			$	864.9		N/A
Accounts receivable			271.2			N/A
Prepaid expenses and other			194.4			N/A
Fixed assets			54.3			N/A
Right-of-use assets			92.7			N/A
Other tangible assets			67.1			N/A
Accounts payable			(78.5)			N/A
Accrued expenses and other current liabilities			(352.8)			N/A
Deferred revenue			(333.1)			N/A
Lease liabilities			(15.7)			N/A
Long-term debt			(1,653.1)			N/A
Non-current lease liabilities			(131.6)			N/A
Deferred tax liabilities, net			(922.9)			N/A
Other liabilities assumed			(61.5)			N/A
Intangible assets
Developed game technology			4,440.0			7
Branding and trade names			384.0			12
Game engine technology			261.0			4
User base			316.0			1
Developer relationships			57.0			4
Advertising technology			43.0			3
Customer relationships			31.0			5
Goodwill			5,994.4			N/A
Total			$	9,521.8

Popcore Acquisition

On November 16, 2022, we completed the acquisition of 100% of Popcore, a privately-held Germany-based free-to-play mobile game developer, for initial consideration of $116.9 in cash, 0.6 shares of our common stock, and a contingent earn-out consideration arrangement that requires us to pay up to an aggregate of $105.0 in cash if Popcore achieves certain performance measures over each of the three calendar years following the closing. The cash portion was funded from our cash on hand.

We acquired Popcore as part of our ongoing strategy to expand selectively our portfolio of owned intellectual property and to diversify and strengthen further our mobile offerings.

The acquisition-date fair value of the consideration totaled $198.0, which consisted of the following:

			Fair value of purchase consideration
Cash			$	116.9
Common stock (0.6 shares)			57.8
Contingent earn-out			23.3
Total			$	198.0

The fair value of the contingent earn-out consideration arrangement at the acquisition date was $23.3. We estimated the fair value of the contingent earn-out consideration using a Monte Carlo simulation model. This fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement as defined in ASC 820 (refer to Note 4 - Fair Value Measurements).

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

			Fair Value			Weighted average useful life
Cash acquired			$	37.1		N/A
Other tangible assets			22.4			N/A
Other liabilities assumed			(81.2)			N/A
Intangible assets
Developed game technology			113.0			5
Game engine technology			27.7			7
Branding and trade names			3.4			4
Goodwill			75.6			N/A
Total			$	198.0

Goodwill, which is not deductible for U.S. income tax purposes, is primarily attributable to the assembled workforce of the acquired business and expected synergies at the time of the acquisition.

Gearbox Acquisition

On March 27, 2024, we entered into a Share Purchase Agreement to purchase 100% of the issued and outstanding capital stock of The Gearbox Entertainment Company, Inc. ("Gearbox"), from Embracer Group AB. The purchase price is $460.0, consisting of newly issued shares of Take-Two common stock, valued based on the volume weighted average closing price per share of our common stock on the Nasdaq Global Select Market for the five consecutive trading days ending on (and including) the trading day immediately preceding the closing date, subject to adjustments as defined in the Share Purchase Agreement. The transaction, which is currently anticipated to close during the first quarter in fiscal 2025, is subject to the satisfaction or waiver of customary closing conditions for both parties.

21. 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 is expected to be largely completed by December 31, 2024. We estimate 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.

We incurred business reorganization expenses of $104.6, $14.6, and $0.8 during the fiscal year ended March 31, 2024, 2023, and 2022, respectively. Of these amounts, $93.3 was incurred in connection with the 2024 Plan during the fiscal year

ended March 31, 2024, of which $88.2 related to title cancellations (refer to Note 7 - Software Development Costs and Licenses), $3.2 was for employee-related costs, and the remaining $1.9 consisted of professional fees.

Through March 31, 2024, we paid $1.9 related to these reorganization activities and $13.1 remained accrued for in Accrued expenses and other current liabilities.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

			TAKE-TWO INTERACTIVE SOFTWARE, INC.
			By:			/s/ STRAUSS ZELNICK
						Strauss Zelnick Chairman and Chief Executive Officer
May 21, 2024

POWER OF ATTORNEY

Each individual whose signature appears below constitutes and appoints Strauss Zelnick and Lainie Goldstein and each of them, his or her true and lawful attorneys-in-fact and agents with full power of substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto and all documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or his, her or their substitute or substitutes, may lawfully do or cause to be done or by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant in the capacities and on the date indicated.

Signature						Title						Date
/s/ STRAUSS ZELNICK						Chairman and Chief Executive Officer (Principal Executive Officer)
Strauss Zelnick									May 21, 2024
/s/ LAINIE GOLDSTEIN						Chief Financial Officer (Principal Financial and Accounting Officer)
Lainie Goldstein									May 21, 2024
/s/ MICHAEL DORNEMANN
Michael Dornemann						Lead Independent Director						May 21, 2024
/s/ WILLIAM "BING" GORDON
William "Bing" Gordon						Director						May 21, 2024
/s/ ROLAND HERNANDEZ
Roland Hernandez						Director						May 21, 2024
/s/ J MOSES
J Moses						Director						May 21, 2024
/s/ MICHAEL SHERESKY
Michael Sheresky						Director						May 21, 2024
/s/ ELLEN SIMINOFF
Ellen Siminoff						Director						May 21, 2024
/s/ LAVERNE SRINIVASAN
LaVerne Srinivasan						Director						May 21, 2024
/s/ SUSAN TOLSON
Susan Tolson						Director						May 21, 2024
/s/ PAUL VIERA
Paul Viera						Director						May 21, 2024