Item 1. Financial Statements

TAKE-TWO INTERACTIVE SOFTWARE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except per share amounts)

						June 30, 2026						March 31, 2026
						(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents						$	1,364.9					$	1,545.5
Short-term investments						461.7						443.8
Restricted cash and cash equivalents						14.0						13.2
Accounts receivable, net of allowances of $0.8 and $0.9 at June 30, 2026 and March 31, 2026, respectively						606.9						737.0
Software development costs and licenses						36.0						68.8
Contract assets						69.7						89.7
Prepaid expenses and other						403.9						301.5
Total current assets						2,957.1						3,199.5
Fixed assets, net						429.6						445.4
Right-of-use assets						321.9						334.6
Software development costs and licenses, net of current portion						2,395.0						2,277.5
Goodwill						1,060.9						1,061.9
Other intangibles, net						1,493.6						1,653.2
Long-term restricted cash and cash equivalents						67.2						79.4
Other assets						338.9						331.7
Total assets						$	9,064.2					$	9,383.2
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable						$	179.5					$	211.0
Accrued expenses and other current liabilities						914.3						1,117.8
Deferred revenue						988.4						1,159.9
Lease liabilities						71.5						70.1
Short-term debt, net						629.9						30.0
Total current liabilities						2,783.6						2,588.8
Long-term debt, net						1,889.8						2,488.0
Non-current deferred revenue						26.1						29.7
Non-current lease liabilities						353.5						370.2
Non-current software development royalties						71.1						84.5
Deferred tax liabilities, net						197.9						182.3
Other long-term liabilities						133.8						128.8
Total liabilities						$	5,455.8					$	5,872.3
Commitments and contingencies (See Note 11)
Stockholders' equity:
Preferred stock, $0.01 par value, 5.0 shares authorized; no shares issued and outstanding at June 30, 2026 and March 31, 2026						—						—
Common stock, $0.01 par value, 300.0 and 300.0 shares authorized; 210.7 and 209.1 shares issued and 187.0 and 185.4 outstanding at June 30, 2026 and March 31, 2026, respectively						2.1						2.1
Additional paid-in capital						12,095.8						11,953.7
Treasury stock, at cost; 23.7 and 23.7 common shares at June 30, 2026 and March 31, 2026, respectively						(1,020.6)						(1,020.6)
Accumulated deficit						(7,391.1)						(7,357.0)
Accumulated other comprehensive loss						(77.8)						(67.3)
Total stockholders' equity						$	3,608.4					$	3,510.9
Total liabilities and stockholders' equity						$	9,064.2					$	9,383.2

See accompanying Notes.

TAKE-TWO INTERACTIVE SOFTWARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(in millions, except per share amounts)

						Three Months Ended June 30,
						2026						2025
Net revenue:
Game						$	1,422.8					$	1,382.5
Advertising						111.1						121.3
Total net revenue						1,533.9						1,503.8
Cost of revenue						651.4						558.8
Gross profit						882.5						945.0
Selling and marketing						369.7						409.2
Research and development						273.8						256.4
General and administrative						226.3						207.4
Depreciation and amortization						48.2						50.4
Total operating expenses						918.0						923.4
(Loss) income from operations						(35.5)						21.6
Interest and other, net:
Interest income						22.8						16.5
Interest expense						(30.4)						(38.9)
Other income/(expense), net						(6.2)						(13.0)
Interest and other, net						(13.8)						(35.4)
Loss before income taxes						(49.3)						(13.8)
Benefit from income taxes						(15.2)						(1.9)
Net loss						$	(34.1)					$	(11.9)
Loss per share:
Basic and diluted loss per share						$	(0.18)					$	(0.07)

See accompanying Notes.

TAKE-TWO INTERACTIVE SOFTWARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Unaudited)

(in millions)

						Three Months Ended June 30,
						2026						2025
Net loss						$	(34.1)					$	(11.9)
Other comprehensive (loss) income
Foreign currency translation adjustment						(10.5)						82.9
Other comprehensive (loss) income						(10.5)						82.9
Comprehensive (loss) income						$	(44.6)					$	71.0

See accompanying Notes.

TAKE-TWO INTERACTIVE SOFTWARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(in millions)

						Three Months Ended June 30,
						2026						2025
Operating activities:
Net loss						$	(34.1)					$	(11.9)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization and impairment of software development costs and licenses						107.5						46.1
Stock-based compensation						86.0						40.7
Noncash lease expense						14.5						13.1
Amortization and impairment of intangibles						168.5						174.8
Depreciation						40.1						42.1
Interest expense						30.4						38.9
Other, net						6.7						16.9
Changes in assets and liabilities:
Accounts receivable						130.0						114.8
Software development costs and licenses						(173.0)						(164.6)
Prepaid expenses, other current and other non-current assets						(104.6)						(43.5)
Deferred revenue						(174.9)						(72.3)
Accounts payable, accrued expenses and other liabilities						(265.9)						(239.8)
Net cash used in operating activities						(168.8)						(44.7)
Investing activities:
Change in bank-time deposits						(17.9)						(0.7)
Purchases of fixed assets						(25.0)						(25.1)
Purchases of long-term investments						(4.9)						(6.6)
Asset acquisitions						(15.8)						(4.4)
Proceeds from sale of marketable securities						11.2						—
Net cash used in investing activities						(52.4)						(36.8)
Financing activities:
Tax payment related to net share settlements on restricted stock awards						(1.3)						(1.3)
Issuance of common stock						31.8						1,219.6
Repayment of debt						—						(600.0)
Net cash provided by financing activities						30.5						618.3
Effects of foreign currency exchange rates on cash, cash equivalents, and restricted cash and cash equivalents						(1.3)						20.2
Net change in cash, cash equivalents, and restricted cash and cash equivalents						(192.0)						557.0
Cash, cash equivalents, and restricted cash and cash equivalents, beginning of year (1)						1,638.1						1,559.2
Cash, cash equivalents, and restricted cash and cash equivalents, end of period (1)						$	1,446.1					$	2,116.2

(1) Cash, cash equivalents and restricted cash and cash equivalents shown on our Condensed 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 Condensed Consolidated Balance Sheet.

See accompanying Notes.

TAKE-TWO INTERACTIVE SOFTWARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Unaudited)

(in millions)

						Three Months Ended June 30, 2026
						Common Stock												Additional Paid-in Capital						Treasury Stock												Retained Earnings/(Accumulated Deficit)						Accumulated Other Comprehensive Loss						Total Stockholders' Equity
						Shares						Amount									Shares						Amount
Balance, March 31, 2026						209.1						$	2.1					$	11,953.7					(23.7)						$	(1,020.6)					$	(7,357.0)					$	(67.3)					$	3,510.9
Net loss						—						—						—						—						—						(34.1)						—						(34.1)
Change in cumulative foreign currency translation adjustment						—						—						—						—						—						—						(10.5)						(10.5)
Stock-based compensation						—						—						111.3						—						—						—						—						111.3
Issuance of restricted stock, net of forfeitures and cancellations						1.4						—						—						—						—						—						—						—
Net share settlement of restricted stock awards						—						—						(1.3)						—						—						—						—						(1.3)
Employee share purchase plan settlement						0.2						—						31.8						—						—						—						—						31.8
Other changes, net						—						—						0.3						—						—						—						—						0.3
Balance, June 30, 2026						210.7						$	2.1					$	12,095.8					(23.7)						$	(1,020.6)					$	(7,391.1)					$	(77.8)					$	3,608.4

						Three Months Ended June 30, 2025
						Common Stock												Additional Paid-in Capital						Treasury Stock												Retained Earnings/(Accumulated Deficit)						Accumulated Other Comprehensive Loss						Total Stockholders' Equity
						Shares						Amount									Shares						Amount
Balance, March 31, 2025						200.8						$	2.0					$	10,312.0					(23.7)						$	(1,020.6)					$	(7,058.8)					$	(96.9)					$	2,137.7
Net loss						—						—						—						—						—						(11.9)						—						(11.9)
Change in cumulative foreign currency translation adjustment						—						—						—						—						—						—						82.9						82.9
Stock-based compensation						—						—						54.3						—						—						—						—						54.3
Issuance of restricted stock, net of forfeitures and cancellations						1.6						—						—						—						—						—						—						—
Net share settlement of restricted stock awards						—						—						(1.3)						—						—						—						—						(1.3)
Employee share purchase plan settlement						0.2						—						26.8						—						—						—						—						26.8
Issuance of common stock						5.5						0.1						1,192.7						—						—						—						—						1,192.8
Other changes, net						—						—						(0.4)						—						—						—						—						(0.4)
Balance, June 30, 2025						208.1						$	2.1					$	11,584.1					(23.7)						$	(1,020.6)					$	(7,070.7)					$	(14.0)					$	3,480.9

See accompanying Notes.

TAKE-TWO INTERACTIVE SOFTWARE, INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(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, and Zynga. Our products are currently designed for console gaming systems, mobile, including smartphones and tablets, and personal computer ("PC"). We deliver our products through physical retail, digital download, online platforms, and cloud streaming services.

Basis of Presentation

The accompanying Condensed Consolidated Financial Statements are unaudited and include the accounts of the Company and its wholly-owned subsidiaries and, in our opinion, reflect all normal and recurring adjustments necessary for the fair presentation of our financial position, results of operations, and cash flows. Interim results may not be indicative of the results that may be expected for the full fiscal year. All intercompany accounts and transactions have been eliminated in consolidation. The preparation of these Condensed Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") requires management to make estimates and assumptions that affect the amounts reported in these Condensed Consolidated Financial Statements and accompanying notes. As permitted under U.S. GAAP, interim accounting for certain expenses, including income taxes, is based on full year assumptions when appropriate. Actual results could differ materially from those estimates, which may affect economic conditions in a number of different ways and result in uncertainty and risk.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"), although we believe that the disclosures are adequate to make the information presented not misleading. These Condensed Consolidated Financial Statements and accompanying notes should be read in conjunction with our annual Consolidated Financial Statements and the notes thereto, included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2026.

Certain immaterial reclassifications have been made to prior period amounts to conform to the current period presentation.

Recently Issued Accounting Pronouncements

Government Grants

In December 2025, the Financial Accounting Standards Board ("FASB") issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities. The ASU establishes the accounting and presentation for government grants received by a business entity. ASU 2025-10 is effective for fiscal years beginning after December 15, 2028 (April 1, 2029 for the Company) and interim periods within fiscal years beginning after December 15, 2029 (April 1, 2030 for the Company). We are currently evaluating the potential impact of adopting this guidance on our Consolidated Financial Statements and related disclosures.

Internal-Use Software

In September 2025, the FASB issued ASU 2025-06, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The ASU amends the existing standard to remove all references to prescriptive and sequential software development project stages. Under this guidance, eligible software development costs will begin capitalization when management has authorized and committed to funding the software project, and it is probable that the project will be completed and the software will be used to perform the function intended. In evaluating whether it is probable the project will be completed, management is required to consider whether there is significant uncertainty associated with the development activities of the software.

ASU 2025-06 is effective for fiscal years beginning after December 15, 2027 (April 1, 2028 for the Company) and interim periods within those annual periods. Early adoption is permitted as of the beginning of an annual reporting period. Entities may adopt the guidance using a prospective, retrospective, or modified retrospective approach. We are currently

evaluating the potential impact of adopting this guidance on our Consolidated Financial Statements and related disclosures, including the appropriate transition method.

Expense Disaggregation Disclosures

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires additional, disaggregated disclosure about certain income statement expense line items. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026 (April 1, 2027 for the Company) and interim periods within fiscal years beginning after December 15, 2027 (April 1, 2028 for the Company). 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:

						Three Months Ended June 30,
						2026						2025
Net revenue recognized:
Over time						$	1,295.0					$	1,262.9
Point in time						238.9						240.9
Total net revenue						$	1,533.9					$	1,503.8

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:

						Three Months Ended June 30,
						2026						2025
Net revenue by content:
Recurrent consumer spending						$	1,289.8					$	1,256.1
Full game and other						244.1						247.7
Total net revenue						$	1,533.9					$	1,503.8

Platform

Net revenue by platform was as follows:

						Three Months Ended June 30,
						2026						2025
Net revenue by platform:
Mobile						$	762.3					$	801.7
Console						640.5						550.6
PC and other						131.1						151.5
Total net revenue						$	1,533.9					$	1,503.8

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:

						Three Months Ended June 30,
						2026						2025
Net revenue by distribution channel:
Digital online						$	1,507.3					$	1,476.6
Physical retail and other						26.6						27.2
Total net revenue						$	1,533.9					$	1,503.8

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 June 30, 2026 and March 31, 2026 were $1,014.5 and $1,189.6, respectively. For the three months ended June 30, 2026, the additions to our deferred revenue balance were primarily due to cash payments received or due in advance of satisfying our performance obligations, while the reductions to our deferred revenue balance were primarily due to the recognition of revenue upon fulfillment of our performance obligations, both of which were in the ordinary course of business.

During the three months ended June 30, 2026 and 2025, $615.7 and $533.2, of revenue was recognized, respectively, that was included in the deferred revenue balance at the beginning of each respective period.

As of June 30, 2026, the aggregate amount of contract revenue allocated to unsatisfied performance obligations is $1,271.2, which includes our deferred revenue balances and amounts to be invoiced and recognized as revenue in future periods. We expect to recognize approximately $1,061.6 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 June 30, 2026 and March 31, 2026, our contract asset balances were $69.7 and $89.7, respectively.

Accounts Receivable sale program

On May 19, 2025, we entered into an arrangement to sell designated pools of high credit quality accounts receivable under an uncommitted accounts receivables purchase facility in an initial aggregate amount of up to $215.0 to an unaffiliated financial institution on a true sale basis. As these accounts receivable are sold without recourse, we do not retain the associated risks of lack of payment due to insolvency of the account debtors following the transfer of such accounts receivable to such financial institution. We will continue to collect cash from our account debtors and remit to the financial institution. We will derecognize the carrying value of the financial assets transferred and recognize a net gain or loss on the sale under Interest and other, net on our Consolidated Statements of Operations. The proceeds from these arrangements will be reflected as cash provided by operating activities in the Consolidated Statements of Cash Flows.

No receivables were sold under this facility during the three months ended June 30, 2026. We may utilize this facility in future periods depending on cash flow needs and market conditions.

3. MANAGEMENT AGREEMENT

We have a management agreement (the "2022 Management Agreement") with ZMC Advisors, L.P. (“ZMC”), which became effective May 23, 2022 and replaced our previous management agreement. Pursuant to the 2022 Management Agreement, ZMC will continue to provide financial and management consulting services to the Company through March 31, 2029, 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 for the term of the agreement and a maximum annual bonus opportunity of $13.2 for the term of the agreement, based on the Company achieving certain performance thresholds. In connection with the 2022 Management Agreement, we have granted and expect to grant time-based, market-based, and performance-based restricted units to ZMC.

In consideration for ZMC's services, we recorded consulting expense within General and administrative expenses on our Condensed Consolidated Statements of Operations of $2.5 and $2.6 during the three months ended June 30, 2026 and 2025, respectively. We recorded stock-based compensation expense for restricted stock units granted to ZMC, which is also included in General and administrative expenses, of $15.9 and $14.7 during the three months ended June 30, 2026 and 2025, respectively.

In connection with the 2022 Management Agreement, we granted restricted stock units (in thousands) to ZMC as follows:

			Three Months Ended June 30,
			2026						2025
Time-based			65						74
Market-based(1)			199						224
Performance-based(1)			66						75
Total Restricted Stock Units			330						373

(1) Represents the maximum of shares eligible to vest

Time-based restricted stock units granted pursuant to the 2022 Management Agreement in fiscal year 2027 will vest on June 1, 2027, June 1, 2028, and June 1, 2029, and those granted in fiscal year 2026, partially vested on June 1, 2026 and will also vest in part on June 1, 2027 and June 1, 2028. Time-based restricted stock units granted in fiscal year 2025, partially vested on June 1, 2025 and June 1, 2026 and will also vest in part on June 1, 2027.

Market-based restricted stock units granted pursuant to the 2022 Management Agreement in fiscal year 2027 are eligible to vest on June 1, 2029, those granted in fiscal year 2026 are eligible to vest on June 1, 2028, and those granted in fiscal year 2025 are eligible to vest on June 1, 2027. 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 the NASDAQ 100 index under the 2022 Management Agreement (as defined in the relevant grant agreement) as of the grant date measured over a 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 pursuant to the 2022 Management Agreement in fiscal year 2027 are eligible to vest on June 1, 2029, those granted in fiscal year 2026 are eligible to vest on June 1, 2028, and those granted in fiscal year 2025 are eligible to vest on June 1, 2027. The performance-based restricted stock units are tied to "RCS" (as defined in the relevant grant agreement) and are eligible to vest based on the Company's achievement of certain performance metrics (as defined in the relevant grant agreement) of "RCS" measured over a 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 portions of time-based, market-based and performance-based restricted stock units held by ZMC were 1.1 and 1.3 as of June 30, 2026 and March 31, 2026, respectively. During the three months ended June 30, 2026, 0.4 restricted stock units previously granted to ZMC vested, and 0.1 restricted stock units were forfeited by ZMC.

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.

									June 30, 2026
									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									$	774.6					$	—					$	—					$	774.6
Bank-time deposits									208.4						—						—						208.4
Short-term investments:
Bank-time deposits									461.7						—						—						461.7
Restricted cash and cash equivalents:
Money market funds									12.5						—						—						12.5
Bank-time deposits									1.5						—						—						1.5
Restricted cash and cash equivalents, long term:
Money market funds									67.2						—						—						67.2
Other assets:
Private equity									—						—						26.5						26.5
Total financial assets									$	1,525.9					$	—					$	26.5					$	1,552.4
Liabilities:
Accrued expenses and other current liabilities:
Foreign currency forward contracts									$	—					$	0.1					$	—					$	0.1
Short-term debt, net:
Convertible notes									—						30.7						—						30.7
Total financial liabilities									$	—					$	30.8					$	—					$	30.8

						March 31, 2026
						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						$	909.0					$	—					$	—					$	909.0
Bank-time deposits						204.5						—						—						204.5
Short-term investments:
Bank-time deposits						443.8						—						—						443.8
Restricted cash and cash equivalents:
Money market funds						11.9						—						—						11.9
Bank-time deposits						1.2						—						—						1.2
Prepaid expenses and other:
Foreign currency forward contracts						—						0.2						—						0.2
Restricted cash and cash equivalents, long term:
Money market funds						79.4						—						—						79.4
Other assets:
Equity securities						9.3						—						—						9.3
Private equity						—						—						23.6						23.6
Total financial assets						$	1,659.1					$	0.2					$	23.6					$	1,682.9
Liabilities:
Short-term debt, net:
Convertible notes						$	—					$	30.0					$	—					$	30.0
Total financial liabilities						$	—					$	30.0					$	—					$	30.0

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 three months ended June 30, 2026.

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 June 30, 2026, and March 31, 2026, we held $18.5 and $18.5, respectively, of such investments in Other assets within our Condensed Consolidated Balance Sheet.

5. SHORT-TERM INVESTMENTS

Our Short-term investments consisted of the following:

						June 30, 2026
												Gross Unrealized
						Cost or Amortized Cost						Gains						Losses						Fair Value
Short-term investments
Bank-time deposits						$	461.7					$	—					$	—					$	461.7
Total Short-term investments						$	461.7					$	—					$	—					$	461.7

						March 31, 2026
												Gross Unrealized
						Cost or Amortized Cost						Gains						Losses						Fair Value
Short-term investments
Bank-time deposits						$	443.8					$	—					$	—					$	443.8
Total Short-term investments						$	443.8					$	—					$	—					$	443.8

The following table summarizes the contracted maturities of our short-term investments at June 30, 2026:

						June 30, 2026
						Amortized Cost						Fair Value
Short-term investments
Due in 1 year or less						$	461.7					$	461.7
Total Short-term investments						$	461.7					$	461.7

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:

						June 30, 2026						March 31, 2026
Forward contracts to sell foreign currencies						$	338.0					$	349.2
Forward contracts to purchase foreign currencies						87.8						140.3

For the three months ended June 30, 2026 and 2025, we recorded a gain of $5.8 and a loss of $12.4, respectively, related to foreign currency forward contracts in Interest and other, net on our Condensed 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 were as follows:

						June 30, 2026												March 31, 2026
						Current						Non-current						Current						Non-current
Software development costs, internally developed						$	22.8					$	2,363.4					$	46.1					$	2,224.6
Software development costs, externally developed						0.1						28.9						1.7						52.2
Licenses						13.1						2.7						21.0						0.7
Software development costs and licenses						$	36.0					$	2,395.0					$	68.8					$	2,277.5

During the three months ended June 30, 2026, $43.4 of impairment charges were recorded within Cost of revenue and were primarily related to a decision not to proceed with further development of certain interactive entertainment software products.

8. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consisted of the following:

						June 30, 2026						March 31, 2026
Software development royalties						$	347.1					$	359.3
Compensation and benefits						231.1						371.5
Licenses						104.3						100.1
Marketing and promotions						63.1						58.5
Tax payable						39.8						36.1
Refund liability						22.4						34.0
Deferred acquisition payments						0.1						31.3
Interest payable						20.3						29.2
Other						86.0						97.8
Accrued expenses and other current liabilities						$	914.3					$	1,117.8

9. DEBT

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

						Annual Interest Rate						Maturity Date						June 30, 2026						Fair Value (Level 2)
2028 Notes						4.95%						March 28, 2028						800.0						804.1
2029 Notes						5.40%						June 12, 2029						300.0						305.7
2032 Notes						4.00%						April 14, 2032						500.0						477.0
2034 Notes						5.60%						June 12, 2034						300.0						307.1
Total																		$	1,900.0					$	1,893.9
Unamortized discount and issuance cost																		(10.2)
Long-term debt, net																		$	1,889.8

						Annual Interest Rate						Maturity Date						March 31, 2026						Fair Value (Level 2)
2027 Notes						3.70%						April 14, 2027						600.0						594.6
2028 Notes						4.95%						March 28, 2028						800.0						807.3
2029 Notes						5.40%						June 12, 2029						300.0						306.6
2032 Notes						4.00%						April 14, 2032						500.0						477.0
2034 Notes						5.60%						June 12, 2034						300.0						305.3
Total																		$	2,500.0					$	2,490.8
Unamortized discount and issuance cost																		(12.0)
Long-term debt, net																		$	2,488.0

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

						Annual Interest Rate						Maturity Date						June 30, 2026						Fair Value (Level 2)
2027 Notes						3.70%						April 14, 2027						$	600.0					$	597.0
2026 Convertible Notes						0.00%						December 15, 2026						30.7						30.7
Total																		$	630.7					$	627.7
Unamortized discount and issuance cost																		(0.8)
Short-term debt, net																		$	629.9

						Annual Interest Rate						Maturity Date						March 31, 2026						Fair Value (Level 2)
2026 Convertible Notes						—%						December 15, 2026						30.0						30.0
Total																		$	30.0					$	30.0
Unamortized discount and issuance cost																		—
Short-term debt, net																		$	30.0

The interest expense as it relates to our debt is recorded within Interest and other, net in our Condensed Consolidated Statements of Operations for the three months ended June 30, 2026 and 2025, respectively, and was as follows:

						Three Months Ended June 30,
						2026						2025
2025 Notes						—						0.8
2026 Notes						—						6.9
2027 Notes						5.6						5.6
2028 Notes						9.9						9.9
2029 Notes						4.1						4.1
2032 Notes						5.0						5.0
2034 Notes						4.2						4.2
Total						$	28.8					$	36.5

The following table outlines the aggregate amount of maturities of our borrowings, as of June 30, 2026:

Fiscal Year Ending March 31,						Maturities
2027 (remaining)						$	29.4
2028						1,400.0
2029						—
2030						300.0
2031						—
Thereafter						800.0
Total						2,529.4
Fair value adjustments						1.3
Total face value						$	2,530.7

For a complete description of the terms, conditions, and covenants governing our Senior Notes, Credit Agreement and Convertible Notes, refer to Note 11 to the Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended March 31, 2026.

Senior Notes

The Senior Notes are the Company’s senior unsecured obligations and rank equally with all of our other existing and future unsubordinated obligations. Interest is payable semi-annually. During the three months ended June 30, 2026, we made interest payments of $37.6.

During the three months ended June 30, 2026 and 2025, we recognized $0.9 and $1.3, respectively, of amortization of debt issuance costs and $0.1 and $0.1, respectively, of amortization of the original issuance discount, within Interest and other, net.

On March 28, 2026, we repaid our 2026 Notes with a principal amount of $550.0, with proceeds from our May 2025 equity issuance.

On April 14, 2025, we repaid our 2025 Notes with a principal amount of $600.0, with proceeds from our June 2024 note offering.

Credit Agreement

Our credit agreement dated as of May 23, 2022, (as amended on May 19, 2025, the "2022 Credit Agreement"), provides a $1,000.0 unsecured five-year revolving credit facility that matures on May 19, 2030, subject to certain extension options.

Loans under the 2022 Credit Agreement will bear interest at a rate of (a) 0.000% to 0.625% above an alternate base rate (6.75% at June 30, 2026) or (b) 1.000% to 1.625% above Secured Overnight Financing Rate ("SOFR"), approximately 3.65% at June 30, 2026, which rates are determined by the Company's credit rating.

As of June 30, 2026, there were no borrowings under the 2022 Credit Agreement, and we had approximately $997.5 available for additional borrowings.

Information related to availability on our 2022 Credit Agreement for each period was as follows:

						June 30, 2026						March 31, 2026
Available borrowings						$	997.5					$	997.7
Outstanding letters of credit						2.5						2.3

Convertible Notes

In conjunction with the acquisition of Zynga on May 23, 2022, we assumed Zynga's outstanding 0.25% Convertible Senior Notes due 2024 (the “2024 Convertible Notes”) and 0.00% Convertible Senior Notes due 2026 (the “2026 Convertible Notes” and, together with the 2024 Convertible Notes, the “Convertible Notes”). 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 acquisition of Zynga and we do not expect significant fluctuations in fair value through maturity. Any subsequent adjustments are recorded within Interest and other, net.

2026 Convertible Notes. The 2026 Convertible Notes mature on December 15, 2026, unless earlier converted, redeemed, or repurchased in accordance with their terms, prior to the maturity date. The 2026 Convertible Notes do not bear regular interest, and the principal amount does not accrete. An aggregate principal amount of $29.4 of the 2026 Convertible Notes remained outstanding at June 30, 2026. We recorded $30.7 as the fair value of the remaining outstanding 2026 Convertible Notes, within Short-term debt, net, in our Condensed Consolidated Balance Sheet as of June 30, 2026. During the three months ended June 30, 2026 and 2025, we recognized a loss of $0.7 and a loss of $2.6, respectively, within Interest and other, net in our Condensed Consolidated Statements of Operations.

10. LOSS PER SHARE

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

						Three Months Ended June 30,
						2026						2025
Computation of Basic and diluted loss per share
Net loss						$	(34.1)					$	(11.9)
Weighted average shares outstanding—basic						186.2						180.8
Basic and diluted loss per share						$	(0.18)					$	(0.07)

We incurred a net loss for the three months ended June 30, 2026 and 2025; therefore, the diluted weighted average shares outstanding excludes the effect of unvested common stock equivalents because their effect would be antidilutive.

For the three months ended June 30, 2026, we had 1.5 potentially dilutive shares from share-based awards and 0.1 of shares from Convertible Notes that are excluded due to the net loss for the period.

During the three months ended June 30, 2026, 1.4 restricted stock awards vested, we granted 1.9 unvested restricted stock awards, and 0.1 unvested restricted stock awards were forfeited.

11. COMMITMENTS AND CONTINGENCIES

We have entered into various agreements in the ordinary course of business that require substantial cash commitments over the next several years. Other than agreements entered into in the ordinary course of business and in addition to the agreements requiring known cash commitments as reported in Note 14 to the Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended March 31, 2026, we did not have any significant changes to our commitments since March 31, 2026.

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.

12. INCOME TAXES

The benefit from income taxes for the three months ended June 30, 2026 is based on our projected annual effective tax rate for fiscal year 2027, adjusted for specific items that are required to be recognized in the period in which they are incurred. The benefit from income taxes was $15.2 for the three months ended June 30, 2026, as compared to the benefit from income taxes of $1.9 for the prior year period.

When compared to the statutory rate of 21%, the effective tax rate of 30.8% for the three months ended June 30, 2026 was primarily driven by tax benefits of $16.9 related to geographic mix of earnings and changes in reserves.

On July 4, 2025, the One Big Beautiful Bill Act ("OBBB") was signed into law. OBBB includes significant provisions, including but not limited to (1) permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act of 2017 ("TCJA"), (2) modifications to the international provisions relating to Base Erosion Anti Abuse Act ("BEAT"), Global Intangible Low-Tax Income ("GILTI") and Foreign Derived Deduction Eligible Income ("FDDEI"), (3) permanent reinstatement deduction for domestic research expenditures and 100% bonus depreciation for certain qualified property, and (4) modifications to tax credits. The legislation has multiple effective dates, with certain provisions effective in the fiscal year ended March 31, 2026 and others implemented in future periods. We have estimated the accounting for income tax effects of OBBB in our projected annual effective tax rate. We are continuing to evaluate the impact of OBBB on the Company. It is possible that these changes could have an adverse impact on our effective tax rate, tax payments, financial condition, or results of operations. The tax law is complex and additional interpretive guidance may be issued that could affect the interpretations and assumptions we have made, as well as actions we may take as a result of OBBB.

The Inflation Reduction Act of 2022 (the “Inflation Reduction Act”) includes a corporate alternative minimum tax ("CAMT") of 15% on the adjusted financial statement income ("AFSI") of corporations with an average AFSI exceeding $1.0 billion over a consecutive three-year period. It is possible that the CAMT could result in an additional tax liability over the regular federal corporate tax liability in a particular year based on differences between book and taxable income. We do not estimate any tax liability relating to CAMT for the current fiscal year. We will continue to evaluate the potential impact the Inflation Reduction Act may have on our operations and Consolidated Financial Statements in future periods.

The Organization for Economic Co-operation and Development ("OECD") has proposed a global minimum tax of 15% of reported profits, referred to as Pillar Two. Many countries have already implemented or are taking steps to implement Pillar Two. Although the model rules provide a framework for applying the minimum tax, countries may enact Pillar Two slightly differently than the model rules and on different timelines. Pillar Two could result in additional tax liability over the regular corporate tax liability in a particular jurisdiction to the extent tax expense is less than a 15% minimum rate. The impact of Pillar Two was not material to the three months ended June 30, 2026. On January 5, 2026, the OECD released new administrative guidance outlining a “side-by-side” arrangement following agreement on key elements by the OECD/G20 Inclusive Framework on Pillar Two. It provides new safe harbors for U.S. multinational companies which would exempt U.S.-parented groups from two of the three Pillar Two top up taxes, extend the current Transitional Country-by-Country Reporting Safe Harbor by one year through the end of fiscal year ending March 31, 2028, and make the Simplified Effective Tax Rate Safe Harbor permanent. We will continue to evaluate the impact Pillar Two and any additional guidance may have on our results and operations.

We are regularly examined by domestic and foreign taxing authorities. Examinations may result in tax assessments in excess of amounts claimed and the payment of additional taxes. We believe our tax positions comply with applicable tax law, and that we have adequately provided for reasonably foreseeable tax assessments. 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.

13. SEGMENT REPORTING AND GEOGRAPHIC INFORMATION

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 developed internally and by third parties. Our Chief Executive Officer, who is our Chief Operating Decision Maker ("CODM"), manages our operations on a consolidated basis. Our CODM uses consolidated net income (loss) – supplemented by sales information by product category, major product title, and platform – for the purpose of evaluating performance and allocating resources. All significant expense categories are presented on our Condensed Consolidated Statements of Operations. Our other segment items include Depreciation and amortization, Interest and other, net, and Benefit from income taxes. The measure of segment assets are reported on the Condensed Consolidated Balance Sheet as Total assets. The CODM does not review segment assets at a level other than that presented on the Condensed Consolidated Balance Sheet.

Geography

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

						Three Months Ended June 30,
						2026						2025
Net revenue recognized:
United States						$	920.0					$	900.4
International						613.9						603.4
Total net revenue						$	1,533.9					$	1,503.8