Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | |||||
For the fiscal year ended | |||||
OR | |||||
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | |||||
For the transition period from to . |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading symbol | Name of each exchange on which registered | ||||||
Accelerated filer o | Non-accelerated filer o | Smaller reporting company | Emerging growth company |
PAGE | ||||||||
Period | Shares purchased | Average price per share | Total number of shares purchased as part of publicly announced plans or programs | Maximum number of shares that may yet be purchased under the repurchase program | ||||||||||||||||||||||
January 1 - 31, 2023 | — | — | — | 10.0 | ||||||||||||||||||||||
February 1 - 28, 2023 | — | — | — | 10.0 | ||||||||||||||||||||||
March 1 - 31, 2023 | — | — | — | 10.0 |
Fiscal Year Ended March 31, | |||||||||||||||||||||||
2023 | 2022 | Increase/(decrease) | Increase/(decrease) % | ||||||||||||||||||||
Net Bookings | $ | 5,283.6 | $ | 3,408.2 | $ | 1,875.4 | 55.0 | % |
Fiscal Year Ended March 31, | ||||||||||||||||||||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||||||||||||||||||||
Total net revenue | $ | 5,349.9 | 100.0 | % | $ | 3,504.8 | 100.0 | % | $ | 3,372.8 | 100.0 | % | ||||||||||||||||||||||||||
Cost of revenue | 3,064.6 | 57.3 | % | 1,535.4 | 43.8 | % | 1,535.1 | 45.5 | % | |||||||||||||||||||||||||||||
Gross profit | 2,285.3 | 42.7 | % | 1,969.4 | 56.2 | % | 1,837.7 | 54.5 | % | |||||||||||||||||||||||||||||
Selling and marketing | 1,592.6 | 29.8 | % | 516.4 | 14.7 | % | 445.0 | 13.2 | % | |||||||||||||||||||||||||||||
Research and development | 892.5 | 16.7 | % | 406.6 | 11.6 | % | 317.3 | 9.4 | % | |||||||||||||||||||||||||||||
General and administrative | 843.1 | 15.8 | % | 511.7 | 14.6 | % | 390.4 | 11.6 | % | |||||||||||||||||||||||||||||
Depreciation and amortization | 122.3 | 2.3 | % | 61.1 | 1.7 | % | 55.6 | 1.6 | % | |||||||||||||||||||||||||||||
Total operating expenses | 3,450.5 | 64.5 | % | 1,495.8 | 42.7 | % | 1,208.3 | 35.8 | % | |||||||||||||||||||||||||||||
(Loss) income from operations | (1,165.2) | (21.8) | % | 473.6 | 13.5 | % | 629.4 | 18.7 | % | |||||||||||||||||||||||||||||
Interest and other, net | (141.9) | (2.7) | % | (14.2) | (0.4) | % | 8.8 | 0.3 | % | |||||||||||||||||||||||||||||
(Loss) gain on fair value adjustments, net | (31.0) | (0.6) | % | 6.0 | 0.2 | % | 39.6 | 1.2 | % | |||||||||||||||||||||||||||||
(Loss) income before income taxes | (1,338.1) | (25.0) | % | 465.4 | 13.3 | % | 677.8 | 20.1 | % | |||||||||||||||||||||||||||||
(Benefit from) provision for income taxes | (213.4) | (4.0) | % | 47.4 | 1.4 | % | 88.9 | 2.6 | % | |||||||||||||||||||||||||||||
Net (loss) income | $ | (1,124.7) | (21.0) | % | $ | 418.0 | 11.9 | % | $ | 588.9 | 17.5 | % |
Fiscal Year Ended March 31, | ||||||||||||||||||||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||||||||||||||||||||
Net revenue by geographic region: | ||||||||||||||||||||||||||||||||||||||
United States | $ | 3,360.0 | 62.8 | % | $ | 2,100.2 | 59.9 | % | $ | 2,015.9 | 59.8 | % | ||||||||||||||||||||||||||
International | 1,989.9 | 37.2 | % | 1,404.6 | 40.1 | % | 1,356.9 | 40.2 | % | |||||||||||||||||||||||||||||
Net revenue by platform: | ||||||||||||||||||||||||||||||||||||||
Mobile | $ | 2,538.6 | 47.5 | % | $ | 403.4 | 11.5 | % | $ | 274.1 | 8.1 | % | ||||||||||||||||||||||||||
Console | 2,303.8 | 43.1 | % | 2,528.9 | 72.2 | % | 2,517.0 | 74.6 | % | |||||||||||||||||||||||||||||
PC and other | 507.5 | 9.5 | % | 572.5 | 16.3 | % | 581.7 | 17.2 | % | |||||||||||||||||||||||||||||
Net revenue by distribution channel: | ||||||||||||||||||||||||||||||||||||||
Digital online | $ | 5,085.7 | 95.1 | % | $ | 3,149.0 | 89.8 | % | $ | 2,972.4 | 88.1 | % | ||||||||||||||||||||||||||
Physical retail and other | 264.2 | 4.9 | % | 355.8 | 10.2 | % | 400.4 | 11.9 | % | |||||||||||||||||||||||||||||
Net revenue by content: | ||||||||||||||||||||||||||||||||||||||
Recurrent consumer spending | $ | 4,180.4 | 78.1 | % | $ | 2,271.2 | 64.8 | % | $ | 2,152.0 | 63.8 | % | ||||||||||||||||||||||||||
Full game and other | 1,169.5 | 21.9 | % | 1,233.6 | 35.2 | % | 1,220.8 | 36.2 | % |
(millions of dollars) | 2023 | % of net revenue | 2022 | % of net revenue | Increase/(decrease) | % Increase/(decrease) | ||||||||||||||||||||||||||||||||
Total net revenue | $ | 5,349.9 | 100.0 | % | $ | 3,504.8 | 100.0 | % | $ | 1,845.1 | 52.6 | % | ||||||||||||||||||||||||||
Software development costs and royalties(1) | 1,604.8 | 30.0 | % | 417.4 | 11.9 | % | 1,187.4 | 284.5 | % | |||||||||||||||||||||||||||||
Product costs | 714.0 | 13.3 | % | 243.9 | 7.0 | % | 470.1 | 192.7 | % | |||||||||||||||||||||||||||||
Internal royalties | 438.9 | 8.2 | % | 619.9 | 17.7 | % | (181.0) | (29.2) | % | |||||||||||||||||||||||||||||
Licenses | 306.9 | 5.7 | % | 254.2 | 7.3 | % | 52.7 | 20.7 | % | |||||||||||||||||||||||||||||
Cost of revenue | 3,064.6 | 57.3 | % | 1,535.4 | 43.8 | % | 1,529.2 | 99.6 | % | |||||||||||||||||||||||||||||
Gross profit | $ | 2,285.3 | 42.7 | % | $ | 1,969.4 | 56.2 | % | $ | 315.9 | 16.0 | % |
(millions of dollars) | 2023 | % of net revenue | 2022 | % of net revenue | Increase/(decrease) | % Increase/(decrease) | ||||||||||||||||||||||||||||||||
Selling and marketing | $ | 1,592.6 | 29.8 | % | $ | 516.4 | 14.7 | % | $ | 1,076.2 | 208.4 | % | ||||||||||||||||||||||||||
Research and development | 892.5 | 16.7 | % | 406.6 | 11.6 | % | 485.9 | 119.5 | % | |||||||||||||||||||||||||||||
General and administrative | 843.1 | 15.8 | % | 511.7 | 14.6 | % | 331.4 | 64.8 | % | |||||||||||||||||||||||||||||
Depreciation and amortization | 122.3 | 2.3 | % | 61.1 | 1.7 | % | 61.2 | 100.2 | % | |||||||||||||||||||||||||||||
Total operating expenses | $ | 3,450.5 | 64.5 | % | $ | 1,495.8 | 42.7 | % | $ | 1,954.7 | 130.7 | % |
2023 | 2022 | |||||||||||||
Selling and marketing | $ | 95.2 | $ | 30.0 | ||||||||||
Research and development | 116.6 | 38.1 | ||||||||||||
General and administrative | 115.5 | 66.5 | ||||||||||||
(millions of dollars) | 2023 | % of net revenue | 2022 | % of net revenue | Increase/(decrease) | % Increase/(decrease) | ||||||||||||||||||||||||||||||||
Interest income | $ | 33.8 | 0.6 | % | $ | 17.6 | 0.5 | % | $ | 16.2 | 92.0 | % | ||||||||||||||||||||||||||
Interest expense | (129.6) | (2.4) | % | (18.6) | (0.5) | % | (111.0) | 596.8 | % | |||||||||||||||||||||||||||||
Foreign currency exchange gain (loss) | (31.8) | (0.6) | % | (7.3) | (0.2) | % | (24.5) | 335.6 | % | |||||||||||||||||||||||||||||
Other | (14.3) | (0.3) | % | (5.9) | (0.2) | % | (8.4) | 142.4 | % | |||||||||||||||||||||||||||||
Interest and other, net | $ | (141.9) | (2.7) | % | $ | (14.2) | (0.4) | % | $ | (127.7) | 899.3 | % |
Fiscal Year Ended March 31, | ||||||||||||||||||||
(millions of dollars) | 2023 | 2022 | 2021 | |||||||||||||||||
Net cash provided by operating activities | $ | 1.1 | $ | 258.0 | $ | 912.3 | ||||||||||||||
Net cash (used in) provided by investing activities | (2,876.3) | 139.2 | (806.8) | |||||||||||||||||
Net cash provided by (used in) financing activities | 1,930.3 | (256.8) | (57.4) | |||||||||||||||||
Effects of foreign currency exchange rates on cash, cash equivalents, and restricted cash and cash equivalents | (15.9) | (5.2) | 18.6 | |||||||||||||||||
Net change in cash, cash equivalents, and restricted cash and cash equivalents | $ | (960.8) | $ | 135.2 | $ | 66.8 |
Incorporated by Reference | ||||||||||||||||||||||||||||||||
Exhibit Number | Exhibit Description | Form | Filing Date | Exhibit | Filed Herewith | |||||||||||||||||||||||||||
2.1 | 8-K | 1/10/2022 | 2.1 | |||||||||||||||||||||||||||||
2.2 | S-4 | 3/14/2022 | 2.2 | |||||||||||||||||||||||||||||
2.3 | 8-K | 5/5/2022 | 2.1 | |||||||||||||||||||||||||||||
3.1 | 10-K | 2/12/2004 | 3.1 | |||||||||||||||||||||||||||||
3.1.1 | 10-K | 2/12/2004 | 3.1.2 | |||||||||||||||||||||||||||||
3.1.2 | 10-K | 2/12/2004 | 3.1.3 | |||||||||||||||||||||||||||||
3.1.3 | 8-K | 4/23/2009 | 3.1 | |||||||||||||||||||||||||||||
3.1.4 | 8-K | 9/24/2012 | 3.1 | |||||||||||||||||||||||||||||
3.1.5 | 8-K | 5/26/2022 | 3.1 | |||||||||||||||||||||||||||||
3.2 | 10-K | 2/12/2004 | 3.1.1 | |||||||||||||||||||||||||||||
3.3 | 8-A12B | 3/26/2008 | 4.2 | |||||||||||||||||||||||||||||
3.4 | 8-K | 1/6/2023 | 3.1 | |||||||||||||||||||||||||||||
4.1 | 10-K | 5/22/2020 | 4.1 | |||||||||||||||||||||||||||||
4.2 | 8-K | 4/14/2022 | 4.1 | |||||||||||||||||||||||||||||
4.3 | 8-K | 4/14/2022 | 4.2 | |||||||||||||||||||||||||||||
4.4 | 8-K | 4/14/2022 | 4.3 | |||||||||||||||||||||||||||||
4.5 | 8-K | 4/14/2022 | 4.4 |
Incorporated by Reference | ||||||||||||||||||||||||||||||||
Exhibit Number | Exhibit Description | Form | Filing Date | Exhibit | Filed Herewith | |||||||||||||||||||||||||||
4.6 | 8-K | 4/14/2022 | 4.5 | |||||||||||||||||||||||||||||
4.7 | 8-K | 4/14/2023 | 4.1 | |||||||||||||||||||||||||||||
4.8 | 8-K | 4/14/2023 | 4.2 | |||||||||||||||||||||||||||||
4.9 | 8-K | 4/14/2022 | 4.6 | |||||||||||||||||||||||||||||
4.10 | 8-K | 4/14/2022 | 4.7 | |||||||||||||||||||||||||||||
4.11 | 8-K | 4/14/2022 | 4.8 | |||||||||||||||||||||||||||||
4.12 | 8-K | 4/14/2022 | 4.9 | |||||||||||||||||||||||||||||
4.13 | 8-K | 4/14/2023 | 4.3 | |||||||||||||||||||||||||||||
4.14 | 8-K | 4/14/2023 | 4.4 | |||||||||||||||||||||||||||||
4.15 | 8-K | 5/26/2022 | 4.1 | |||||||||||||||||||||||||||||
4.16 | 8-K | 5/26/2022 | 4.2 | |||||||||||||||||||||||||||||
10.1 | 8-K | 3/7/2008 | 10.1 | |||||||||||||||||||||||||||||
10.2 | 14A | 7/28/2016 | Annex A | |||||||||||||||||||||||||||||
10.3 | 10-Q | 6/5/2009 | 10.2 | |||||||||||||||||||||||||||||
10.4 | 10-Q | 6/5/2009 | 10.3 | |||||||||||||||||||||||||||||
10.5 | 10-Q | 8/1/2012 | 10.1 | |||||||||||||||||||||||||||||
10.6 | 10-Q | 10/30/2013 | 10.1 | |||||||||||||||||||||||||||||
10.7 | 10-Q | 10/30/2013 | 10.2 | |||||||||||||||||||||||||||||
10.8 | 10-Q | 10/30/2013 | 10.3 | |||||||||||||||||||||||||||||
10.9 | 10-Q | 10/30/2013 | 10.4 | |||||||||||||||||||||||||||||
10.10 | 10-Q | 10/30/2013 | 10.5 | |||||||||||||||||||||||||||||
10.11 | 14A | 7/27/2021 | Annex B | |||||||||||||||||||||||||||||
10.12 | S-8 | 9/4/2020 | 99.2 | |||||||||||||||||||||||||||||
10.13 | S-8 | 6/3/2022 | 99.2 | |||||||||||||||||||||||||||||
10.14 | 14A | 7/27/2017 | Annex C |
Incorporated by Reference | ||||||||||||||||||||||||||||||||
Exhibit Number | Exhibit Description | Form | Filing Date | Exhibit | Filed Herewith | |||||||||||||||||||||||||||
10.15 | 10-K | 5/14/2019 | 10.13 | |||||||||||||||||||||||||||||
10.16 | 10-Q | 11/8/2017 | 10.4 | |||||||||||||||||||||||||||||
10.17 | 10-Q | 11/8/2017 | 10.5 | |||||||||||||||||||||||||||||
10.18 | 10-Q | 11/8/2017 | 10.6 | |||||||||||||||||||||||||||||
10.19 | 10-Q | 11/8/2017 | 10.7 | |||||||||||||||||||||||||||||
10.20 | 8-K | 5/14/2010 | 10.1 | |||||||||||||||||||||||||||||
10.21 | 8-K | 10/25/2010 | 10.1 | |||||||||||||||||||||||||||||
10.22 | 10-Q | 10/31/2012 | 10.6 | |||||||||||||||||||||||||||||
10.23 | 10-Q | 8/3/2018 | 10.2 | |||||||||||||||||||||||||||||
10.24 | 8-K | 2/15/2008 | 10.3 | |||||||||||||||||||||||||||||
10.25 | 10-Q | 2/6/2015 | 10.1 | |||||||||||||||||||||||||||||
10.26 | 8-K | 11/22/2017 | 10.1 | |||||||||||||||||||||||||||||
10.27 | S-3 ASR | 4/13/2018 | 10.2 | |||||||||||||||||||||||||||||
10.28 | S-3 ASR | 4/15/2019 | 10.2 | |||||||||||||||||||||||||||||
10.29 | S-3 ASR | 4/13/2020 | 10.2 | |||||||||||||||||||||||||||||
10.30 | S-3 ASR | 4/13/2021 | 10.2 | |||||||||||||||||||||||||||||
10.31 | S-3 ASR | 4/13/2022 | 10.2 | |||||||||||||||||||||||||||||
10.32 | 8-K | 5/5/2022 | 10.1 | |||||||||||||||||||||||||||||
10.33 | 10-Q | 8/9/2023 | 10.3 | |||||||||||||||||||||||||||||
10.34 | 10-Q | 8/9/2023 | 10.4 |
Incorporated by Reference | ||||||||||||||||||||||||||||||||
Exhibit Number | Exhibit Description | Form | Filing Date | Exhibit | Filed Herewith | |||||||||||||||||||||||||||
10.35 | 10-Q | 8/9/2023 | 10.5 | |||||||||||||||||||||||||||||
10.36 | 8-K | 5/26/2022 | 10.1 | |||||||||||||||||||||||||||||
10.37 | 10-Q | 11/8/2011 | 10.3 | |||||||||||||||||||||||||||||
10.38 | 10-Q | 6/5/2009 | 10.1 | |||||||||||||||||||||||||||||
10.39 | 10-Q | 2/3/2012 | 10.1 | |||||||||||||||||||||||||||||
10.40 | 10-Q | 2/6/2013 | 10.2 | |||||||||||||||||||||||||||||
10.41 | 10-Q | 2/4/2014 | 10.2 | |||||||||||||||||||||||||||||
10.42 | 10-Q | 10/30/2014 | 10.1 | |||||||||||||||||||||||||||||
10.43 | 10-Q | 2/8/2018 | 10.2 | |||||||||||||||||||||||||||||
10.44 | 10-Q | 11/6/2020 | 10.1 | |||||||||||||||||||||||||||||
10.45 | 10-K | 5/24/2017 | 10.48 | |||||||||||||||||||||||||||||
10.46 | 10-Q | 11/6/2020 | 10.4 | |||||||||||||||||||||||||||||
10.47 | 10-Q | 2/8/2017 | 10.1 | |||||||||||||||||||||||||||||
10.48 | 10-Q | 11/8/2018 | 10.1 | |||||||||||||||||||||||||||||
10.49 | 10-Q | 11/4/2021 | 10.1 | |||||||||||||||||||||||||||||
21.1 | X | |||||||||||||||||||||||||||||||
23.1 | X |
Incorporated by Reference | ||||||||||||||||||||||||||||||||
Exhibit Number | Exhibit Description | Form | Filing Date | Exhibit | Filed Herewith | |||||||||||||||||||||||||||
31.1 | X | |||||||||||||||||||||||||||||||
31.2 | X | |||||||||||||||||||||||||||||||
32.1 | X | |||||||||||||||||||||||||||||||
32.2 | X | |||||||||||||||||||||||||||||||
101.INS | The Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | X | ||||||||||||||||||||||||||||||
101.SCH | XBRL Taxonomy Extension Schema Document | X | ||||||||||||||||||||||||||||||
101.CAL | XBRL Taxonomy Calculation Linkbase Document | X | ||||||||||||||||||||||||||||||
101.LAB | XBRL Taxonomy Label Linkbase Document | X | ||||||||||||||||||||||||||||||
101.PRE | XBRL Taxonomy Presentation Linkbase Document | X | ||||||||||||||||||||||||||||||
101.DEF | XBRL Taxonomy Extension Definition Document | X | ||||||||||||||||||||||||||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | X |
Page | |||||
Reports of Independent Registered Public Accounting Firm ( | |||||
Consolidated Balance Sheets—At March 31, 2023 and 2022 | |||||
Consolidated Statements of Operations—For the fiscal years ended March 31, 2023, 2022 and 2021 | |||||
Consolidated Statements of Comprehensive (Loss) Income—For the fiscal years ended March 31, 2023, 2022 and 2021 | |||||
Consolidated Statements of Cash Flows—For the fiscal years ended March 31, 2023, 2022 and 2021 | |||||
Consolidated Statements of Stockholders' Equity—For the fiscal years ended March 31, 2023, 2022 and 2021 | |||||
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 and last days 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, testing qualitative factors utilized such as reviewing online trends, comparing to similar or historical products and analyzing competitor information. | ||||
Valuation of intangible assets acquired in the Zynga acquisition | |||||
Description of the Matter | As disclosed in Note 20 to the consolidated financial statements, the Company acquired Zynga on May 23, 2022 for total purchase consideration of $9,521.8 million. The Company accounted for the business combination by recognizing the assets acquired and liabilities assumed at their fair value as of the date of acquisition, with the excess recorded to goodwill. The assets acquired included developed game technology, branding and trade names, and game engine technology which are intangible assets that were valued at $4,440 million, $384 million and $261 million, respectively, as of May 23, 2022. Auditing the Company’s acquisition of Zynga was complex due to the significant estimation uncertainty in determining the fair value of identified intangible assets including developed game technology, branding and trade names, and game engine technology. The significant assumptions used to estimate the value of the developed game technology and game engine technology intangible assets included revenue growth rates, EBITDA margins, long-term decay rates, and discount rates. The significant assumptions used to estimate the value of the branding and trade names intangible assets included revenue growth rates, royalty rates and discount rates. These significant assumptions were forward-looking and could be affected by future 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 accounting for the Zynga acquisition. For example, we tested controls over the Company’s process to measure acquired intangible assets as well as controls over management’s review of the significant assumptions described above. To test the estimated fair value of the acquired intangible assets, 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 projected revenue growth rates and EBITDA margins by considering historical results of the acquired business and current industry and economic trends. In addition, we involved our internal valuation specialists to assist in testing methodologies and certain significant assumptions used to value the acquired intangible assets. 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 intangible assets that are subject to amortization | |||||
Description of the Matter | As of March 31, 2023, the Company's intangible assets that are subject to amortization included developed game technology of $3,690.5 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 and the carrying amount of the asset exceeds estimated expected undiscounted future cash flows that are expected to result from the use of the asset. During the fiscal year ended March 31, 2023, the Company recorded an impairment charge of $465.3 million related to certain of its developed game technology intangible assets. Auditing the Company’s impairment tests was complex due to the significant estimation uncertainty in determining the fair value of the intangible assets that were tested for impairment. The significant assumptions used to estimate the value of the intangible assets included revenue growth rates, EBITDA margins, long-term decay rates, and discount rates. These significant assumptions were forward-looking and could be affected by future 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 that was impaired. 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 projected revenue growth rates 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 impaired. 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. |
March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
ASSETS | ||||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Short-term investments | ||||||||||||||
Restricted cash and cash equivalents | ||||||||||||||
Accounts receivable, net of allowances of $ | ||||||||||||||
Software development costs and licenses | ||||||||||||||
Contract assets | ||||||||||||||
Prepaid expenses and other | ||||||||||||||
Total current assets | ||||||||||||||
Fixed assets, net | ||||||||||||||
Right-of-use assets | ||||||||||||||
Software development costs and licenses, net of current portion | ||||||||||||||
Goodwill | ||||||||||||||
Other intangibles, net | ||||||||||||||
Deferred tax assets | ||||||||||||||
Long-term restricted cash and cash equivalents | ||||||||||||||
Other assets | ||||||||||||||
Total assets | $ | $ | ||||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable | $ | $ | ||||||||||||
Accrued expenses and other current liabilities | ||||||||||||||
Deferred revenue | ||||||||||||||
Lease liabilities | ||||||||||||||
Short-term debt, net | ||||||||||||||
Total current liabilities | ||||||||||||||
Long-term debt, net | ||||||||||||||
Non-current deferred revenue | ||||||||||||||
Non-current lease liabilities | ||||||||||||||
Non-current software development royalties | ||||||||||||||
Deferred tax liabilities, net | ||||||||||||||
Other long-term liabilities | ||||||||||||||
Total liabilities | $ | $ | ||||||||||||
Stockholders' equity: | ||||||||||||||
Preferred stock, $ | ||||||||||||||
Common stock, $ | ||||||||||||||
Additional paid-in capital | ||||||||||||||
Treasury stock, at cost; | ( | ( | ||||||||||||
Retained earnings | ||||||||||||||
Accumulated other comprehensive loss | ( | ( | ||||||||||||
Total stockholders' equity | $ | $ | ||||||||||||
Total liabilities and stockholders' equity | $ | $ |
Fiscal Year Ended March 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
Net revenue: | ||||||||||||||||||||
Game | $ | $ | $ | |||||||||||||||||
Advertising | ||||||||||||||||||||
Total net revenue | ||||||||||||||||||||
Cost of revenue | ||||||||||||||||||||
Gross profit | ||||||||||||||||||||
Selling and marketing | ||||||||||||||||||||
Research and development | ||||||||||||||||||||
General and administrative | ||||||||||||||||||||
Depreciation and amortization | ||||||||||||||||||||
Total operating expenses | ||||||||||||||||||||
(Loss) income from operations | ( | |||||||||||||||||||
Interest and other, net | ( | ( | ||||||||||||||||||
(Loss) gain on fair value adjustments, net | ( | |||||||||||||||||||
(Loss) income before income taxes | ( | |||||||||||||||||||
(Benefit from) provision for income taxes | ( | |||||||||||||||||||
Net (loss) income | $ | ( | $ | $ | ||||||||||||||||
(Loss) earnings per share: | ||||||||||||||||||||
Basic (loss) earnings per share | $ | ( | $ | $ | ||||||||||||||||
Diluted (loss) earnings per share | $ | ( | $ | $ |
March 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
Net (loss) income | $ | ( | $ | $ | ||||||||||||||||
Other comprehensive (loss) income | ||||||||||||||||||||
Foreign currency translation adjustment | ( | ( | ||||||||||||||||||
Cash flow hedges: | ||||||||||||||||||||
Change in unrealized gains | ( | |||||||||||||||||||
Reclassification to earnings | ( | |||||||||||||||||||
Tax effect on effective cash flow hedges | ||||||||||||||||||||
Change in fair value of cash flow hedges | ( | |||||||||||||||||||
Change in fair value of available-for-sale securities | ( | |||||||||||||||||||
Other comprehensive (loss) income | ( | ( | ||||||||||||||||||
Comprehensive (loss) income | $ | ( | $ | $ |
Fiscal Year Ended March 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
Operating activities: | ||||||||||||||||||||
Net (loss) income | $ | ( | $ | $ | ||||||||||||||||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||||||||||||||||||||
Amortization and impairment of software development costs and licenses | ||||||||||||||||||||
Stock-based compensation | ||||||||||||||||||||
Noncash lease expense | ||||||||||||||||||||
Amortization and impairment of intellectual property | ||||||||||||||||||||
Depreciation | ||||||||||||||||||||
Interest expense | ||||||||||||||||||||
Amortization of debt issuance costs | ||||||||||||||||||||
Deferred income taxes | ( | |||||||||||||||||||
Fair value adjustments | ( | ( | ||||||||||||||||||
Other, net | ( | |||||||||||||||||||
Changes in assets and liabilities, net of effect from purchases of businesses: | ||||||||||||||||||||
Accounts receivable | ( | |||||||||||||||||||
Software development costs and licenses | ( | ( | ( | |||||||||||||||||
Prepaid expenses, other current and other non-current assets | ( | ( | ||||||||||||||||||
Deferred revenue | ( | ( | ||||||||||||||||||
Accounts payable, accrued expenses and other liabilities | ( | ( | ||||||||||||||||||
Net cash provided by operating activities | ||||||||||||||||||||
Investing activities: | ||||||||||||||||||||
Change in bank time deposits | ( | |||||||||||||||||||
Proceeds from available-for-sale securities | ||||||||||||||||||||
Purchases of available-for-sale securities | ( | ( | ||||||||||||||||||
Purchases of fixed assets | ( | ( | ( | |||||||||||||||||
Proceeds from sale of long-term investment | ||||||||||||||||||||
Purchase of long-term investments | ( | ( | ( | |||||||||||||||||
Business acquisitions, net of cash acquired | ( | ( | ( | |||||||||||||||||
Other | ( | |||||||||||||||||||
Net cash (used in) provided by investing activities | ( | ( | ||||||||||||||||||
Financing activities: | ||||||||||||||||||||
Tax payment related to net share settlements on restricted stock awards | ( | ( | ( | |||||||||||||||||
Repurchase of common stock | ( | |||||||||||||||||||
Issuance of common stock | ||||||||||||||||||||
Cost of debt | ( | ( | ||||||||||||||||||
Repayment of debt | ( | ( | ||||||||||||||||||
Settlement of capped calls | ||||||||||||||||||||
Payment of convertible notes | ( | |||||||||||||||||||
Proceeds from issuance of debt | ||||||||||||||||||||
Payment of contingent earn-out consideration | ( | |||||||||||||||||||
Net cash provided by (used in) financing activities | ( | ( | ||||||||||||||||||
Effects of foreign currency exchange rates on cash, cash equivalents, and restricted cash and cash equivalents | ( | ( | ||||||||||||||||||
Net change in cash, cash equivalents, and restricted cash and cash equivalents | ( | |||||||||||||||||||
Cash, cash equivalents, and restricted cash and cash equivalents, beginning of year (1) | ||||||||||||||||||||
Cash, cash equivalents, and restricted cash equivalents, end of year (1) | $ | $ | $ | |||||||||||||||||
Supplemental data: | ||||||||||||||||||||
Interest paid | $ | $ | $ | |||||||||||||||||
Income taxes paid | $ | $ | $ |
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, 2020 | $ | ( | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Change in cumulative foreign currency translation adjustment | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Change in unrealized gains on cash flow hedge, net | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Net unrealized gain on available-for-sale securities, net of taxes | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of restricted stock, net of forfeitures and cancellations | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Net share settlement of restricted stock awards | ( | — | ( | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Employee share purchase plan settlement | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Issuance of shared related to Playdots, Inc. acquisitions | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2021 | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Change in cumulative foreign currency translation adjustment | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Net unrealized gain on available-for-sale securities, net of taxes | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Repurchased common stock | — | — | — | ( | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Net share settlement of restricted stock awards | ( | — | ( | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Issuance of restricted stock, net of forfeitures and cancellations | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Issuance of shares related to Nordeus. acquisition | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Employee share purchase plan settlement | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2022 | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Change in cumulative foreign currency translation adjustment | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Net unrealized gain on available-for-sale securities, net of taxes | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of restricted stock, net of forfeitures and cancellations | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Net share settlement of restricted stock awards | ( | — | ( | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Employee share purchase plan settlement | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Issuance of shares related to Zynga acquisition | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Issuance of shares related to Popcore acquisition | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation assumed in Zynga acquisition | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of shares related to Zynga convertible notes | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2023 | $ | ( | $ | ( | $ | $ | ( | $ |
Fiscal Year Ended March 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
Net revenue recognized: | ||||||||||||||||||||
Over time | $ | $ | $ | |||||||||||||||||
Point in time | ||||||||||||||||||||
Total net revenue | $ | $ | $ |
Fiscal Year Ended March 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
Net revenue recognized: | ||||||||||||||||||||
Recurrent consumer spending | $ | $ | $ | |||||||||||||||||
Full game and other | ||||||||||||||||||||
Total net revenue | $ | $ | $ |
Fiscal Year Ended March 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
Net revenue recognized: | ||||||||||||||||||||
United States | $ | $ | $ | |||||||||||||||||
International | ||||||||||||||||||||
Total net revenue | $ | $ | $ |
Fiscal Year Ended March 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
Net revenue recognized: | ||||||||||||||||||||
Mobile | $ | $ | $ | |||||||||||||||||
Console | ||||||||||||||||||||
PC and other | ||||||||||||||||||||
Total net revenue | $ | $ | $ |
Fiscal Year Ended March 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
Net revenue recognized: | ||||||||||||||||||||
Digital online | $ | $ | $ | |||||||||||||||||
Physical retail and other | ||||||||||||||||||||
Total net revenue | $ | $ | $ |
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: | ||||||||||||||||||||||||||
Money market funds | $ | $ | $ | $ | ||||||||||||||||||||||
Bank-time deposits | ||||||||||||||||||||||||||
Short-term investments: | ||||||||||||||||||||||||||
Corporate bonds | ||||||||||||||||||||||||||
Bank-time deposits | ||||||||||||||||||||||||||
Restricted cash and cash equivalents: | ||||||||||||||||||||||||||
Money market funds | ||||||||||||||||||||||||||
Bank-time deposits | ||||||||||||||||||||||||||
Restricted cash and cash equivalents, long term: | ||||||||||||||||||||||||||
Money market funds | ||||||||||||||||||||||||||
Other assets: | ||||||||||||||||||||||||||
Private equity | ||||||||||||||||||||||||||
Total financial assets | $ | $ | $ | $ | ||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||
Accrued expenses and other current liabilities: | ||||||||||||||||||||||||||
Foreign currency forward contracts | $ | $ | $ | $ | ||||||||||||||||||||||
Contingent earn-out consideration | ||||||||||||||||||||||||||
Other-long term liabilities: | ||||||||||||||||||||||||||
Contingent earn-out consideration | ||||||||||||||||||||||||||
Long-term debt, net: | ||||||||||||||||||||||||||
Convertible notes | ||||||||||||||||||||||||||
Total financial liabilities | $ | $ | $ | $ |
March 31, 2022 | ||||||||||||||||||||||||||
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 | $ | $ | $ | $ | ||||||||||||||||||||||
Money market funds | ||||||||||||||||||||||||||
Commercial paper | ||||||||||||||||||||||||||
US Treasuries | ||||||||||||||||||||||||||
Certificates of Deposit | ||||||||||||||||||||||||||
Corporate bonds | ||||||||||||||||||||||||||
Restricted cash and cash equivalents: | ||||||||||||||||||||||||||
Money market funds | ||||||||||||||||||||||||||
Bank-time deposits | ||||||||||||||||||||||||||
Short-term investments: | ||||||||||||||||||||||||||
Corporate bonds | ||||||||||||||||||||||||||
Bank-time deposits | ||||||||||||||||||||||||||
Commercial paper | ||||||||||||||||||||||||||
US Treasuries | ||||||||||||||||||||||||||
Certificates of Deposit | ||||||||||||||||||||||||||
Other assets: | ||||||||||||||||||||||||||
Private equity | ||||||||||||||||||||||||||
Restricted cash and cash equivalents, long term: | ||||||||||||||||||||||||||
Money market funds | ||||||||||||||||||||||||||
Total financial assets | $ | $ | $ | $ | ||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||
Accrued expenses and other current liabilities: | ||||||||||||||||||||||||||
Foreign currency forward contracts | $ | $ | $ | $ | ||||||||||||||||||||||
Contingent earn-out consideration | ||||||||||||||||||||||||||
Other long-term liabilities: | ||||||||||||||||||||||||||
Contingent earn-out consideration | ||||||||||||||||||||||||||
Total financial liabilities | $ | $ | $ | $ |
March 31, 2023 | ||||||||||||||||||||||||||
Cost or Amortized Cost | Gross Unrealized | |||||||||||||||||||||||||
Gains | Losses | Fair Value | ||||||||||||||||||||||||
Short-term investments | ||||||||||||||||||||||||||
Bank time deposits | $ | $ | $ | $ | ||||||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||||||||
Corporate bonds | ( | |||||||||||||||||||||||||
Total Short-term investments | $ | $ | $ | ( | $ |
March 31, 2022 | ||||||||||||||||||||||||||
Cost or Amortized Cost | Gross Unrealized | |||||||||||||||||||||||||
Gains | Losses | Fair Value | ||||||||||||||||||||||||
Short-term investments | ||||||||||||||||||||||||||
Bank time deposits | $ | $ | $ | $ | ||||||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||||||||
Corporate bonds | ( | |||||||||||||||||||||||||
US Treasuries | ||||||||||||||||||||||||||
Certificates of Deposit | ||||||||||||||||||||||||||
Commercial Paper | ||||||||||||||||||||||||||
Total Short-term investments | $ | $ | $ | ( | $ |
March 31, 2023 | ||||||||||||||
Amortized Cost | Fair Value | |||||||||||||
Short-term investments | ||||||||||||||
Due in 1 year or less | $ | $ | ||||||||||||
Due in 1-2 years | ||||||||||||||
Total Short-term investments | $ | $ |
March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Forward contracts to sell foreign currencies | $ | $ | ||||||||||||
Forward contracts to purchase foreign currencies |
March 31, | ||||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||
Current | Non-current | Current | Non-current | |||||||||||||||||||||||
Software development costs, internally developed | $ | $ | $ | $ | ||||||||||||||||||||||
Software development costs, externally developed | ||||||||||||||||||||||||||
Licenses | ||||||||||||||||||||||||||
Software development costs and licenses | $ | $ | $ | $ |
Fiscal Year Ended March 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
Amortization of software development costs and licenses | $ | $ | $ | |||||||||||||||||
Impairment of software development costs and licenses | ||||||||||||||||||||
Portion representing stock-based compensation | ( | ( | ||||||||||||||||||
Amortization and impairment, net of stock-based compensation | $ | $ | $ |
March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Computer equipment | $ | $ | ||||||||||||
Leasehold improvements | ||||||||||||||
Computer software | ||||||||||||||
Buildings | ||||||||||||||
Furniture and fixtures | ||||||||||||||
Office equipment | ||||||||||||||
Total | $ | $ | ||||||||||||
Less: accumulated depreciation | ( | ( | ||||||||||||
Fixed assets, net | $ | $ |
March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
United States | $ | $ | ||||||||||||
International | ||||||||||||||
Fixed assets, net | $ | $ |
Total | ||||||||
Balance at March 31, 2021 | $ | |||||||
Acquisition of Nordeus | ||||||||
Additions from immaterial acquisitions | ||||||||
Currency translation adjustment | ( | |||||||
Balance at March 31, 2022 | $ | |||||||
Additions from immaterial acquisitions | ||||||||
Currency translation adjustment | ( | |||||||
Balance at March 31, 2023 | $ |
March 31, | ||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Book Value | Gross Carrying Amount | Accumulated Amortization | Net Book Value | Weighted average useful life | ||||||||||||||||||||||||||||||||||||||
Developed Game Technology | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
Branding and Trade Names | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Game Engine Technology | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
User Base | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Developer Relationships | ( | |||||||||||||||||||||||||||||||||||||||||||
Advertising Technology | ( | |||||||||||||||||||||||||||||||||||||||||||
Customer Relationships | ( | |||||||||||||||||||||||||||||||||||||||||||
Intellectual Property | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
In Place Lease | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Analytics Technology | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Total intangible assets | $ | $ | ( | $ | $ | $ | ( | $ |
Fiscal Year Ended March 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
Cost of revenue | $ | $ | $ | |||||||||||||||||
Selling and marketing | ||||||||||||||||||||
Research and development | ||||||||||||||||||||
Depreciation and amortization | ||||||||||||||||||||
Total amortization of intangible assets | $ | $ | $ |
Fiscal Year Ended March 31, | Amortization | |||||||
2024 | $ | |||||||
2025 | ||||||||
2026 | ||||||||
2027 | ||||||||
2028 |
March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Software development royalties | $ | $ | ||||||||||||
Compensation and benefits | ||||||||||||||
Marketing and promotions | ||||||||||||||
Deferred acquisition payments | ||||||||||||||
Licenses | ||||||||||||||
Refund liability | ||||||||||||||
Tax payable | ||||||||||||||
Interest payable | ||||||||||||||
Sales tax liability | ||||||||||||||
Other | ||||||||||||||
Accrued expenses and other current liabilities | $ | $ |
Annual Interest Rate | Maturity Date | March 31, 2023 | Fair Value (Level 2) | |||||||||||||||||||||||
2025 Notes | April 14, 2025 | $ | $ | |||||||||||||||||||||||
2027 Notes | April 14, 2027 | |||||||||||||||||||||||||
2032 Notes | April 14, 2032 | |||||||||||||||||||||||||
2024 Convertible Notes | June 1, 2024 | |||||||||||||||||||||||||
2026 Convertible Notes | December 15, 2026 | |||||||||||||||||||||||||
Total | $ | $ | ||||||||||||||||||||||||
Unamortized discount and issuance costs | ( | |||||||||||||||||||||||||
Long-term debt, net | $ |
Annual Interest Rate | Maturity Date | March 31, 2023 | Fair Value (Level 2) | |||||||||||||||||||||||
2024 Notes | March 28, 2024 | $ | $ | |||||||||||||||||||||||
Term Loan | June 21, 2023 | |||||||||||||||||||||||||
Total | $ | $ | ||||||||||||||||||||||||
Unamortized discount and issuance costs | ( | |||||||||||||||||||||||||
Short-term debt, net | $ |
Fiscal Year Ended March 31, | ||||||||
2023 | ||||||||
2024 Notes | $ | |||||||
2025 Notes | ||||||||
2027 Notes | ||||||||
2032 Notes | ||||||||
Term Loan | ||||||||
2022 Credit Agreement | ||||||||
Total | $ |
Fiscal Year Ended March 31, | Maturities | |||||||
2024 | $ | |||||||
2025 | ||||||||
2026 | ||||||||
2027 | ||||||||
2028 | ||||||||
Thereafter | ||||||||
Total | ||||||||
Fair Value Adjustments | ( | |||||||
Total Face Value | $ |
March 31, 2023 | March 31, 2022 | |||||||||||||
Available borrowings | $ | $ | ||||||||||||
Outstanding letters of credit |
Fiscal Year Ended March 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
Computation of Basic (loss) earnings per share: | ||||||||||||||||||||
Net (loss) income | $ | ( | $ | $ | ||||||||||||||||
Weighted average common shares outstanding—basic | ||||||||||||||||||||
Basic (loss) earnings per share | ( | |||||||||||||||||||
Computation of Diluted (loss) earnings per share: | ||||||||||||||||||||
Net (loss) income | $ | ( | $ | $ | ||||||||||||||||
Weighted average common shares outstanding—basic | ||||||||||||||||||||
Add: dilutive effect of common stock equivalents | ||||||||||||||||||||
Weighted average common shares outstanding—diluted | ||||||||||||||||||||
Diluted (loss) earnings per share | $ | ( | $ | $ |
Fiscal Year Ended March 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
Lease costs | ||||||||||||||||||||
Operating lease costs | $ | $ | $ | |||||||||||||||||
Short term lease costs |
Fiscal Year Ended March 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
Supplemental operating cash flow information | ||||||||||||||||||||
Cash paid for amounts included in the measurement of lease liabilities | $ | $ | $ | |||||||||||||||||
ROU assets obtained in exchange for lease obligations |
Fiscal Year Ended March 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
Weighted average information | ||||||||||||||||||||
Remaining lease term | ||||||||||||||||||||
Discount rate | % | % | % |
For the years ending March 31, | ||||||||
2024 | $ | |||||||
2025 | ||||||||
2026 | ||||||||
2027 | ||||||||
2028 | ||||||||
Thereafter | ||||||||
Total future lease payments | $ | |||||||
Less imputed interest | ( | |||||||
Total lease liabilities | $ |
Fiscal Year Ending March 31, | Software Development and Licensing | Marketing | Purchase Obligations | Total | ||||||||||||||||||||||
2024 | $ | $ | $ | $ | ||||||||||||||||||||||
2025 | ||||||||||||||||||||||||||
2026 | ||||||||||||||||||||||||||
2027 | ||||||||||||||||||||||||||
2028 | ||||||||||||||||||||||||||
Thereafter | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
Fiscal Year Ended March 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
Domestic | $ | ( | $ | $ | ||||||||||||||||
Foreign | ( | |||||||||||||||||||
(Loss) income before income taxes | $ | ( | $ | $ |
Fiscal Year Ended March 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
Current: | ||||||||||||||||||||
U.S. federal | $ | $ | $ | |||||||||||||||||
U.S. state and local | ( | |||||||||||||||||||
Foreign | ||||||||||||||||||||
Total current income taxes | ||||||||||||||||||||
Deferred: | ||||||||||||||||||||
U.S. federal | ( | |||||||||||||||||||
U.S. state and local | ( | |||||||||||||||||||
Foreign | ( | ( | ( | |||||||||||||||||
Total deferred income taxes | ( | |||||||||||||||||||
(Benefit from) provision for income taxes | $ | ( | $ | $ |
Fiscal Year Ended March 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
U.S. federal statutory rate | % | % | % | |||||||||||||||||
State and local taxes, net of U.S. federal benefit | % | % | % | |||||||||||||||||
Foreign tax rate differential(1) | ( | % | ( | % | ( | % | ||||||||||||||
Foreign earnings(2) | ( | % | ( | % | ( | % | ||||||||||||||
Tax credits(3) | % | ( | % | ( | % | |||||||||||||||
Excess tax benefits from stock-based compensation | ( | % | ( | % | ( | % | ||||||||||||||
Earn-out adjustments | ( | % | % | % | ||||||||||||||||
Valuation allowance—domestic | ( | % | ( | % | % | |||||||||||||||
Valuation allowance—foreign | ( | % | % | % | ||||||||||||||||
Nondeductible compensation | ( | % | % | % | ||||||||||||||||
Global intangible low-taxed income | ( | % | % | % | ||||||||||||||||
Foreign-derived intangible income | % | ( | % | ( | % | |||||||||||||||
Change in reserves | ( | % | ( | % | ( | % | ||||||||||||||
Other(4) | ( | % | % | % | ||||||||||||||||
Effective tax rate | % | % | % |
March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Deferred tax assets: | ||||||||||||||
Tax credit carryforward | $ | $ | ||||||||||||
Capitalized development costs, software and depreciation | ||||||||||||||
Equity-based compensation | ||||||||||||||
Accrued compensation expense | ||||||||||||||
Operating lease liabilities | ||||||||||||||
Tax basis step up related to TRAF | ||||||||||||||
Net operating loss carryforward | ||||||||||||||
Deferred revenue | ||||||||||||||
Other | ||||||||||||||
Total deferred tax assets | ||||||||||||||
Less: Valuation allowance | ( | ( | ||||||||||||
Net deferred tax assets | $ | $ | ||||||||||||
Deferred tax liabilities: | ||||||||||||||
Intangible amortization | $ | ( | $ | ( | ||||||||||
Right of use assets | ( | ( | ||||||||||||
Deferred revenue | ( | |||||||||||||
Capitalized software and depreciation | ( | |||||||||||||
Total deferred tax liabilities | ( | ( | ||||||||||||
Net deferred tax asset (1) | $ | ( | $ |
Fiscal Year Ended March 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
Balance, beginning of period | $ | $ | $ | |||||||||||||||||
Additions: | ||||||||||||||||||||
Current year tax positions | ||||||||||||||||||||
Prior year tax positions(1) | ||||||||||||||||||||
Reduction of prior year tax positions | ( | ( | ||||||||||||||||||
Lapse of statute of limitations | ( | ( | ||||||||||||||||||
Balance, end of period | $ | $ | $ |
Fiscal Year Ended March 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
Cost of revenue | $ | ( | $ | $ | ||||||||||||||||
Selling and marketing | ||||||||||||||||||||
General and administrative | ||||||||||||||||||||
Research and development | ||||||||||||||||||||
Stock-based compensation expense before income taxes | ||||||||||||||||||||
Income tax provision/(benefit) | ( | ( | ( | |||||||||||||||||
Stock-based compensation expense, net of income tax benefit | ||||||||||||||||||||
Capitalized stock-based compensation expense | $ | $ | $ |
Fiscal Year Ended March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Time-based | ||||||||||||||
Market-based(1) | ||||||||||||||
Performance-based(1) | ||||||||||||||
IP | ||||||||||||||
Recurrent Consumer Spending ("RCS") | ||||||||||||||
Total Performance-based | ||||||||||||||
Total Restricted Stock Units |
Shares (in millions) | Weighted Average Fair Value on Grant Date | |||||||||||||
Non-vested restricted stock units at March 31, 2022 | $ | |||||||||||||
Granted | ||||||||||||||
Converted | ||||||||||||||
Vested | ( | |||||||||||||
Forfeited | ( | |||||||||||||
Non-vested restricted stock units at March 31, 2023 | $ |
Fiscal Year Ended March 31, | ||||||||||||||||||||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||||||||||||||||||||
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 | % | % | % | % | ||||||||||||||||||||||||||||||||||
Expected stock price volatility | % | % | % | % | ||||||||||||||||||||||||||||||||||
Expected service period (years) | ||||||||||||||||||||||||||||||||||||||
Dividends |
Shares (in millions) | Weighted Average Fair Value on Grant Date | |||||||||||||
Non-vested restricted stock units at March 31, 2022 | $ | |||||||||||||
Granted | ||||||||||||||
Converted | ||||||||||||||
Vested | ( | |||||||||||||
Forfeited | ||||||||||||||
Non-vested restricted stock units at March 31, 2023 | $ |
Shares (in millions) | Weighted Average Fair Value on Grant Date | |||||||||||||
Non-vested restricted stock units at March 31, 2022 | $ | |||||||||||||
Granted | ||||||||||||||
Converted | ||||||||||||||
Vested | ( | |||||||||||||
Forfeited | ( | |||||||||||||
Non-vested restricted stock units at March 31, 2023 | $ |
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, 2022 | $ | $ | — | ||||||||||||||||||||
Granted | |||||||||||||||||||||||
Converted | |||||||||||||||||||||||
Vested | ( | ||||||||||||||||||||||
Forfeited | |||||||||||||||||||||||
Balance as of March 31, 2023 | $ | $ | |||||||||||||||||||||
As of March 31, 2023 | |||||||||||||||||||||||
Exercisable options | $ | $ | |||||||||||||||||||||
Vested and expected to vest | $ | $ |
Fiscal Year Ended March 31, | ||||||||
2023 | ||||||||
Risk-free interest rate | ||||||||
Expected stock price volatility | ||||||||
Expected service period (years) | ||||||||
Dividends |
Fiscal Year Ended March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Risk-free interest rate | ||||||||||||||
Expected stock price volatility | ||||||||||||||
Expected service period (years) | ||||||||||||||
Dividends |
Fiscal Year Ended March 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
Interest income | $ | $ | $ | |||||||||||||||||
Interest expense | ( | ( | ( | |||||||||||||||||
Foreign currency exchange gain (loss) | ( | ( | ||||||||||||||||||
Other | ( | ( | ( | |||||||||||||||||
Interest and other, net | $ | ( | $ | ( | $ |
Foreign currency translation adjustments | Unrealized gain (loss) on derivative instruments | Unrealized gain (loss) on cross-currency swap | Unrealized gain (loss) on available- for-sales securities | Total | ||||||||||||||||||||||||||||
Balance at March 31, 2021 | $ | ( | $ | $ | $ | $ | ( | |||||||||||||||||||||||||
Other comprehensive (loss) income before reclassifications | ( | ( | ( | |||||||||||||||||||||||||||||
Balance at March 31, 2022 | $ | ( | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||||||
Other comprehensive (loss) income before reclassifications | ( | ( | ||||||||||||||||||||||||||||||
Balance at March 31, 2023 | $ | ( | $ | $ | $ | ( | $ | ( |
Beginning Balance | Additions | Deductions | Other | Ending Balance | ||||||||||||||||||||||||||||
Fiscal Year Ended March 31, 2023 | ||||||||||||||||||||||||||||||||
Valuation allowance for deferred income taxes | $ | ( | $ | |||||||||||||||||||||||||||||
Allowance for doubtful accounts | ||||||||||||||||||||||||||||||||
Fiscal Year Ended March 31, 2022 | ||||||||||||||||||||||||||||||||
Valuation allowance for deferred income taxes | $ | ( | $ | |||||||||||||||||||||||||||||
Allowance for doubtful accounts | ||||||||||||||||||||||||||||||||
Fiscal Year Ended March 31, 2021 | ||||||||||||||||||||||||||||||||
Valuation allowance for deferred income taxes | $ | ( | $ | |||||||||||||||||||||||||||||
Allowance for doubtful accounts |
Fair value of purchase consideration | |||||
Cash | $ | ||||
Common stock ( | |||||
Replacement equity awards | |||||
Total | $ |
Fair Value | Weighted average useful life | |||||||
Cash acquired | $ | N/A | ||||||
Accounts receivable | N/A | |||||||
Prepaid expenses and other | N/A | |||||||
Fixed assets | N/A | |||||||
Right-of-use assets | N/A | |||||||
Other tangible assets | N/A | |||||||
Accounts payable | ( | N/A | ||||||
Accrued expenses and other current liabilities | ( | N/A | ||||||
Deferred revenue | ( | N/A | ||||||
Long-term debt | ( | N/A | ||||||
Deferred tax liabilities, net | ( | N/A | ||||||
Lease liabilities | ( | N/A | ||||||
Non-current lease liabilities | ( | N/A | ||||||
Other liabilities assumed | ( | N/A | ||||||
Intangible assets | ||||||||
Developed game technology | ||||||||
Branding and trade names | ||||||||
Game engine technology | ||||||||
User base | ||||||||
Developer relationships | ||||||||
Advertising technology | ||||||||
Customer relationships | ||||||||
Goodwill | N/A | |||||||
Total | $ | |||||||
Fiscal Year Ended March 31, 2023 | |||||
Net revenue | $ | ||||
Net loss | |||||
Fiscal Year Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Pro-forma Net revenue | $ | $ | |||||||||
Pro-forma Net loss | |||||||||||
Fair value of purchase consideration | |||||
Cash | $ | ||||
Common stock ( | |||||
Contingent earn-out | |||||
Total | $ |
Fair Value | Weighted average useful life | |||||||
Cash acquired | $ | N/A | ||||||
Other tangible assets | N/A | |||||||
Other liabilities assumed | ( | N/A | ||||||
Intangible assets | ||||||||
Developed game technology | ||||||||
Game engine technology | ||||||||
Branding and trade names | ||||||||
Goodwill | N/A | |||||||
Total | $ | |||||||
Fiscal Year Ended March 31, 2023 | |||||
Net revenue | $ | ||||
Net loss | |||||
TAKE-TWO INTERACTIVE SOFTWARE, INC. | ||||||||
By: | /s/ STRAUSS ZELNICK | |||||||
Strauss Zelnick Chairman and Chief Executive Officer | ||||||||
May 25, 2023 |
Signature | Title | Date | ||||||||||||
/s/ STRAUSS ZELNICK | Chairman and Chief Executive Officer (Principal Executive Officer) | |||||||||||||
Strauss Zelnick | May 25, 2023 | |||||||||||||
/s/ LAINIE GOLDSTEIN | Chief Financial Officer (Principal Financial and Accounting Officer) | |||||||||||||
Lainie Goldstein | May 25, 2023 | |||||||||||||
/s/ MICHAEL DORNEMANN | ||||||||||||||
Michael Dornemann | Lead Independent Director | May 25, 2023 | ||||||||||||
/s/ WILLIAM "BING" GORDON | ||||||||||||||
William "Bing" Gordon | Director | May 25, 2023 | ||||||||||||
/s/ ROLAND HERNANDEZ | ||||||||||||||
Roland Hernandez | Director | May 25, 2023 | ||||||||||||
/s/ J MOSES | ||||||||||||||
J Moses | Director | May 25, 2023 | ||||||||||||
/s/ MICHAEL SHERESKY | ||||||||||||||
Michael Sheresky | Director | May 25, 2023 | ||||||||||||
/s/ ELLEN SIMINOFF | ||||||||||||||
Ellen Siminoff | Director | May 25, 2023 | ||||||||||||
/s/ LAVERNE SRINIVASAN | ||||||||||||||
LaVerne Srinivasan | Director | May 25, 2023 | ||||||||||||
/s/ SUSAN TOLSON | ||||||||||||||
Susan Tolson | Director | May 25, 2023 | ||||||||||||
/s/ PAUL VIERA | ||||||||||||||
Paul Viera | Director | May 25, 2023 |
Name | Jurisdiction of Incorporation | |||||||
2K Czech, s.r.o. | Czech Republic | |||||||
2K Games (Chengdu) Co., Ltd. | China | |||||||
2K Games Dublin Limited | Ireland | |||||||
2K Games Madrid S.L. | Spain | |||||||
2K Games (Shanghai) Co., Ltd. | China | |||||||
2K Games, Inc. | Delaware | |||||||
2K, Inc. | New York | |||||||
2K Marin, Inc. | Delaware | |||||||
2K Play, Inc. | Delaware | |||||||
2K Games Songs LLC | Delaware | |||||||
2K Games Sounds LLC | Delaware | |||||||
2K Games Tunes LLC | Delaware | |||||||
2K Studios Montreal, Inc. | Quebec | |||||||
2K Vegas, Inc. | Delaware | |||||||
2KSports, Inc. | Delaware | |||||||
A.C.N. 617 406 550 Pty Ltd. | Australia | |||||||
A.C.N. 633 146 291 Pty Ltd. | Australia | |||||||
Almost There Entertainment Limited | Ireland | |||||||
Anomotion Interactive Inc. | British Columbia | |||||||
Beijing StarLark Technology, Co., Ltd | China | |||||||
Big Dog Holdings LLC | Delaware | |||||||
Blue Shift, Inc. | California | |||||||
Bytetyper Yazilim Ticaret Anonim Sirketi | Turkey | |||||||
Cat Daddy Games, L.L.C. | Washington | |||||||
Chartboost B.V. | Netherlands | |||||||
Chartboost Tech, S.L. | Spain | |||||||
Chartboost, Inc. | Delaware | |||||||
Creasaur Teknoloji Ticaret Anonim Sirketi | Turkey | |||||||
Dhruva Interactive Private Limited | India | |||||||
Dimple Games SAS | France | |||||||
DMA Design Holdings Limited | United Kingdom | |||||||
Double Take LLC | Delaware | |||||||
Dynamixyz SAS | France | |||||||
Echtra Games, Inc. | Delaware | |||||||
Firaxis Games, Inc. | Delaware | |||||||
Frog City Software, Inc. | Delaware | |||||||
GameClub Inc. | Delaware | |||||||
Gathering of Developers, Inc. | Texas | |||||||
Gearhead Entertainment, Inc. | Pennsylvania | |||||||
Ghost Story Games, LLC | Delaware | |||||||
Glennco Games, LLC | Delaware | |||||||
Gram Games Limited | United Kingdom |
Name | Jurisdiction of Incorporation | |||||||
Gram Games Teknoloji A.S. | Turkey | |||||||
Hangar 13 UK Limited | United Kingdom | |||||||
Indie Built, Inc. | Delaware | |||||||
Inventory Management Systems, Inc. | Delaware | |||||||
Joytech Europe Limited | United Kingdom | |||||||
Joytech Ltd. | Hong Kong | |||||||
Kush Games, Inc. | California | |||||||
LILW12TH, Inc. | Delaware | |||||||
Little Dog Domestic Holdings LLC | Delaware | |||||||
LVY Technology Limited | Hong Kong | |||||||
Maxcorp Ltd. | Bermuda | |||||||
Nanotribe GmbH | Germany | |||||||
NaturalMotion Limited | United Kingdom | |||||||
NaturalMotion Games Limited | United Kingdom | |||||||
NaturalMotion Software Limited | United Kingdom | |||||||
Nom Nom Nom d.o.o Beograd | Serbia | |||||||
Nordeus d.o.o Beograd | Serbia | |||||||
Nordeus Limited | Ireland | |||||||
Parrot Games, S.L.U. | Spain | |||||||
Peak Oyun Yazilim ve Pazarlama Anonim Şirketi | Turkey | |||||||
Playdots, LLC | Delaware | |||||||
Popcore GmbH | Germany | |||||||
Popcore S.L. | Spain | |||||||
Puffmais App Manufaktur UG | Germany | |||||||
RDIP Limited | United Kingdom | |||||||
Rockstar Dundee Limited | United Kingdom | |||||||
Rockstar Events Inc. | New York | |||||||
Rockstar Games, Inc. | Delaware | |||||||
Rockstar Games Songs LLC | Delaware | |||||||
Rockstar Games Sounds LLC | Delaware | |||||||
Rockstar Games Toronto ULC | British Columbia | |||||||
Rockstar Games Tunes LLC | Delaware | |||||||
Rockstar Games UK Limited | United Kingdom | |||||||
Rockstar Interactive India LLP | India | |||||||
Rockstar International Limited | United Kingdom | |||||||
Rockstar Leeds Limited | United Kingdom | |||||||
Rockstar Lincoln Limited | United Kingdom | |||||||
Rockstar London Limited | United Kingdom | |||||||
Rockstar New England, Inc. | Delaware | |||||||
Rockstar Records, LLC | Delaware | |||||||
Rockstar San Diego, Inc. | Virginia | |||||||
Rollic Games Germany GmbH | Germany | |||||||
Rollic Games Oyun Yazilim ve Pazarlama Anonim Şirketi | Turkey | |||||||
Rollingmedia Limited | United Kingdom |
Name | Jurisdiction of Incorporation | |||||||
Segmatic Services (US), Inc. | Delaware | |||||||
Small Giant Games Oy | Finland | |||||||
Social Point, S.L. | Spain | |||||||
Storemaven Ltd | Israel | |||||||
T2 Developer, Inc. | Delaware | |||||||
Take 2 Interactive Software Pty. Ltd. | Australia | |||||||
Take 2 Productions, Inc. | Delaware | |||||||
Take-Two Asia Pte. Ltd. | Singapore | |||||||
Take-Two Chile SpA | Chile | |||||||
Take-Two Contracting, LLC | Delaware | |||||||
Take-Two Esports Holdings, LLC | Delaware | |||||||
Take-Two Europe (Holdings) Limited | United Kingdom | |||||||
Take-Two Games Songs LLC | Delaware | |||||||
Take-Two Games Sounds LLC | Delaware | |||||||
Take-Two Games Tunes LLC | Delaware | |||||||
Take-Two GB Limited. | United Kingdom | |||||||
Take-Two Holdings III LLC | Delaware | |||||||
Take-Two Holdings II LLC | Delaware | |||||||
Take Two Holdings LLC | Delaware | |||||||
Take-Two Hong Kong Limited | Hong Kong | |||||||
Take-Two Interactive Benelux B.V. | Netherlands | |||||||
Take-Two Interactive Canada Holdings, Inc. | Ontario | |||||||
Take-Two Interactive Canada, Inc. | Ontario | |||||||
Take-Two Interactive Espana S.L. | Spain | |||||||
Take-Two Interactive France SAS | France | |||||||
Take-Two Interactive GmbH | Germany | |||||||
Take-Two Interactive Japan G.K. | Japan | |||||||
Take-Two Interactive Korea Ltd. | South Korea | |||||||
Take-Two Interactive India Private Limited | India | |||||||
Take-Two Interactive Software Europe Limited | United Kingdom | |||||||
Take-Two Interactive Software Ireland Limited | Ireland | |||||||
Take-Two Interactive Software ME Limited | United Kingdom | |||||||
Take-Two Interactive Software UK Limited | United Kingdom | |||||||
Take-Two Interactive Software Vancouver ULC dba Visual Concepts Blue Shift | British Columbia | |||||||
Take-Two International B.V. | Netherlands | |||||||
Take Two International GmbH | Switzerland | |||||||
Take-Two Talent, LLC | Delaware | |||||||
Take-Two UK Holdings Limited | United Kingdom | |||||||
Take-Two Vegas, LLC | Delaware | |||||||
Talonsoft, Inc. | Delaware | |||||||
Techcorp Ltd. | Hong Kong | |||||||
Venom Games Limited | United Kingdom | |||||||
Venues I, LLC | Delaware | |||||||
Visual Concepts China Co., Ltd. | China |
Name | Jurisdiction of Incorporation | |||||||
Visual Concepts Entertainment | California | |||||||
Visual Concepts Hungary Kft | Hungary | |||||||
VLM Entertainment Group, Inc. | Delaware | |||||||
WC Holdco, Inc. | New York | |||||||
Zero Sum Teknoloji Yazilim ve Pazarlama Anonim Sirketi | Turkey | |||||||
ZINT HOLDINGS LLC | Delaware | |||||||
Zynga Finland Oy | Finland | |||||||
Zynga Game Canada Ltd. | British Columbia | |||||||
Zynga Game Ireland Limited | Ireland | |||||||
Zynga Game Network India Private Limited | India | |||||||
Zynga Inc. | Delaware | |||||||
Zynga Israel Ltd | Israel | |||||||
Zynga Turkey Oyun Anonim Sirketi | Turkey |
May 22, 2023 | /s/ STRAUSS ZELNICK Strauss Zelnick Chairman and Chief Executive Officer |
May 22, 2023 | /s/ LAINIE GOLDSTEIN Lainie Goldstein Chief Financial Officer |
May 22, 2023 | /s/ STRAUSS ZELNICK Strauss Zelnick Chairman and Chief Executive Officer |
May 22, 2023 | /s/ LAINIE GOLDSTEIN Lainie Goldstein Chief Financial Officer |
AUDIT INFORMATION |
12 Months Ended |
---|---|
Mar. 31, 2023 | |
Audit Information [Abstract] | |
Auditor Name | Ernst & Young LLP |
Auditor Location | New York, New York |
Auditor Firm ID | 42 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Millions, $ in Millions |
Mar. 31, 2023 |
Mar. 31, 2022 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowances | $ 1.3 | $ 0.4 |
Preferred stock, par value (in dollars per share) | $ 10,000.00 | $ 10,000.00 |
Preferred stock, shares authorized (in shares) | 5.0 | 5.0 |
Preferred stock shares issued (in shares) | 0.0 | 0.0 |
Preferred stock, shares outstanding (in shares) | 0.0 | 0.0 |
Common stock, par value (in dollars per share) | $ 10,000.00 | $ 10,000.00 |
Common stock, shares authorized (in shares) | 200.0 | 300.0 |
Common stock, shares issued (in shares) | 192.6 | 139.0 |
Ending balance (in shares) | 168.9 | 115.4 |
Treasury stock, shares (in shares) | 23.7 | 23.7 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Statement of Comprehensive Income [Abstract] | |||
Net (loss) income | $ (1,124.7) | $ 418.0 | $ 588.9 |
Other comprehensive (loss) income | |||
Foreign currency translation adjustment | (58.9) | (43.6) | 51.3 |
Cash flow hedges: | |||
Change in unrealized gains | 0.0 | 0.0 | (3.8) |
Reclassification to earnings | 0.0 | 0.0 | (1.9) |
Tax effect on effective cash flow hedges | 0.0 | 0.0 | 0.8 |
Change in fair value of cash flow hedges | 0.0 | 0.0 | (4.9) |
Change in fair value of available-for-sale securities | 2.9 | (5.1) | 3.4 |
Other comprehensive (loss) income | (56.0) | (48.7) | 49.8 |
Comprehensive (loss) income | $ (1,180.7) | $ 369.3 | $ 638.7 |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Millions, $ in Millions |
Total |
Zynga Inc |
Popcore Limited |
Cumulative Effect, Period of Adoption, Adjustment |
Common Stock |
Common Stock
Zynga Inc
|
Common Stock
Popcore Limited
|
Additional Paid-in Capital |
Additional Paid-in Capital
Zynga Inc
|
Additional Paid-in Capital
Popcore Limited
|
Treasury Stock |
Retained Earnings/(Accumulated Deficit) |
Accumulated Other Comprehensive (Loss) Income |
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Beginning balance (in shares) at Mar. 31, 2020 | 136.0 | ||||||||||||
Beginning balance (in shares) at Mar. 31, 2020 | (22.4) | ||||||||||||
Beginning balance at Mar. 31, 2020 | $ 2,539.3 | $ 1.4 | $ 2,134.8 | $ (820.6) | $ 1,282.1 | $ (58.4) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Net (loss) income | 588.9 | 588.9 | |||||||||||
Change in cumulative foreign currency translation adjustment | 51.3 | 51.3 | |||||||||||
Change in unrealized gains on cash flow hedge, net | (4.9) | (4.9) | |||||||||||
Net unrealized gain on available-for-sale securities, net of taxes | 3.4 | 3.4 | |||||||||||
Stock-based compensation | 113.7 | 113.7 | |||||||||||
Issuance of restricted stock, net of forfeitures and cancellations (in shares) | 1.4 | ||||||||||||
Net share settlement of restricted stock awards (in shares) | (0.5) | ||||||||||||
Net share settlement of restricted stock awards | (71.5) | (71.5) | |||||||||||
Employee share purchase plan settlement (in shares) | 0.1 | ||||||||||||
Employee share purchase plan settlement | $ 14.2 | 14.2 | |||||||||||
Issuance of shares (in shares) | 0.6 | ||||||||||||
Issuance of shares related to acquisition | 97.6 | 97.6 | |||||||||||
Ending balance (in shares) at Mar. 31, 2021 | 137.6 | ||||||||||||
Ending balance (in shares) at Mar. 31, 2021 | (22.4) | ||||||||||||
Ending balance at Mar. 31, 2021 | 3,332.0 | $ 1.4 | 2,288.8 | $ (820.6) | 1,871.0 | (8.6) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Net (loss) 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 (in shares) | (1.3) | ||||||||||||
Repurchased common stock | (200.0) | $ (200.0) | |||||||||||
Stock-based compensation | 258.7 | 258.7 | |||||||||||
Issuance of restricted stock, net of forfeitures and cancellations (in shares) | 1.2 | ||||||||||||
Net share settlement of restricted stock awards (in shares) | (0.4) | ||||||||||||
Net share settlement of restricted stock awards | (64.1) | (64.1) | |||||||||||
Employee share purchase plan settlement (in shares) | 0.1 | ||||||||||||
Employee share purchase plan settlement | 19.7 | 19.7 | |||||||||||
Issuance of shares (in shares) | 0.5 | ||||||||||||
Issuance of shares related to acquisition | $ 94.1 | 94.1 | |||||||||||
Ending balance (in shares) at Mar. 31, 2022 | 115.4 | 139.0 | |||||||||||
Ending balance (in shares) at Mar. 31, 2022 | (23.7) | (23.7) | |||||||||||
Ending balance at Mar. 31, 2022 | $ 3,809.7 | $ 1.4 | 2,597.2 | $ (1,020.6) | 2,289.0 | (57.3) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Net (loss) income | (1,124.7) | (1,124.7) | |||||||||||
Change in cumulative foreign currency translation adjustment | (58.9) | (58.9) | |||||||||||
Net unrealized gain on available-for-sale securities, net of taxes | 2.9 | 2.9 | |||||||||||
Stock-based compensation | 389.3 | 389.3 | |||||||||||
Issuance of restricted stock, net of forfeitures and cancellations (in shares) | 2.7 | ||||||||||||
Exercise of stock options (in shares) | 1.0 | ||||||||||||
Exercise of stock options | 43.1 | 43.1 | |||||||||||
Net share settlement of restricted stock awards (in shares) | (0.9) | ||||||||||||
Net share settlement of restricted stock awards | (108.1) | (108.1) | |||||||||||
Employee share purchase plan settlement (in shares) | 0.2 | ||||||||||||
Employee share purchase plan settlement | 22.3 | 22.3 | |||||||||||
Issuance of shares (in shares) | 46.3 | 0.6 | |||||||||||
Issuance of shares related to acquisition | $ 5,377.7 | $ 57.8 | $ 0.5 | $ 5,377.2 | $ 57.8 | ||||||||
Stock-based compensation assumed in Zynga acquisition | $ 151.7 | $ 151.7 | |||||||||||
Issuance of shares for conversion of Convertible Notes (in shares) | 3.7 | ||||||||||||
Issuance of shares related to Zynga convertible notes | $ 479.7 | 479.7 | |||||||||||
Ending balance (in shares) at Mar. 31, 2023 | 168.9 | 192.6 | |||||||||||
Ending balance (in shares) at Mar. 31, 2023 | (23.7) | (23.7) | |||||||||||
Ending balance at Mar. 31, 2023 | $ 9,042.5 | $ 1.9 | $ 9,010.2 | $ (1,020.6) | $ 1,164.3 | $ (113.3) |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES |
12 Months Ended |
---|---|
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 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 currently 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. Acquisition of Zynga On May 23, 2022, we completed our acquisition of Zynga Inc. ("Zynga"), a leading developer of mobile games. Refer to Note 20 - Acquisitions for additional information. 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 79.6%, 79.0% and 78.4% of net revenue during the fiscal years ended March 31, 2023, 2022 and 2021, respectively. One customer accounted for 23.5%, 38.0% and 38.9% of net revenue during the fiscal years ended March 31, 2023, 2022, and 2021, respectively. A second customer accounted for 20.7%, 22.0%, and 22.2% of net revenue during the fiscal years ended March 31, 2023, 2022, and 2021, respectively. As of March 31, 2023 and 2022, five customers accounted for 61.1% and 72.8% of our gross accounts receivable, respectively. Customers that individually accounted for more than 10% of our gross accounts receivable balance comprised 50.3% and 63.8% of such balances at March 31, 2023 and 2022, respectively. We had three customers who accounted for 21.6%, 14.5%, and 14.2% of our gross accounts receivable as of March 31, 2023 and two customers who accounted for 43.5% and 20.3% of our gross accounts receivable as of March 31, 2022. We did not have any additional customers that exceeded 10% of our gross accounts receivable as of March 31, 2023 and 2022. 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 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 operating 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. Based on our annual impairment assessment process for goodwill, no impairments were recorded during the fiscal years ended March 31, 2023, 2022, or 2021. As of March 31, 2023, the goodwill balance of one of our reporting units is $6,377.0, and a moderate reduction in its fair value may result in an impairment charge, which would be equal to the excess carrying value over the fair value of such assets. Such a reduction in fair value could result from a reduction in our long-term growth rates and operating margins used to calculate projected future cash flows or a change in any of the estimates mentioned above. 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. As of March 31, 2023, no indicators of impairment existed. Refer to Note 9 - Goodwill and Intangible Assets, Net and Note 13 - Leases for impairments that occurred in the fiscal year ended March 31, 2023. 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 (loss) income 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) income 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, as 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. In addition, some of 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 and sales of virtual currency. 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 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 many of the determinations described above, such as estimating the fair value allocation to distinct and separable performance obligations, the service period over which to defer recognition of revenue, and the amounts of price protection. 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, 2023, 2022 and 2021 amounted to $1,212.5, $297.3 and $241.1, 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 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) income. 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) income 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 Accounting for Government Assistance In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance, which requires annual disclosures that increase the transparency of transactions involving government grants, including (1) the types of transactions, (2) the accounting for those transactions, and (3) the effect of those transactions on any entity's financial statements. The new guidance is effective for fiscal years beginning after December 15, 2021, with the new disclosures required on an annual basis, and can be applied either prospectively or retrospectively. We adopted the new guidance on April 1, 2022 and included the required disclosures with respect to any government assistance or grants subject to the scope of the guidance to the extent material. Refer to Note 7 - Software Development Costs and Licenses. Accounting for Contract Assets and Contract Liabilities In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. Under this new standard, deferred revenue acquired in a business combination is measured pursuant to ASC 606, Revenue from Contracts with Customers, rather than its assumed acquisition date fair value under the current guidance. We adopted this effective April 1, 2022. The adoption of this update did not have an impact on our Consolidated Financial Statements and was applied to our acquisition of Zynga. Refer to Note 20 - Acquisitions. Accounting for Convertible Debt In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40), which simplifies the accounting for convertible instruments by reducing the number of accounting models and generally requiring that a convertible instrument be accounted for as a single liability measured at amortized cost, with no conversion feature separately recorded in equity. Similarly, no portion of issuance costs will be allocated to equity under the ASU. Further, the ASU amends the earnings per share guidance by requiring the diluted earnings per share calculation for convertible instruments to follow the if-converted method, with use of the treasury stock method no longer permitted. We adopted this effective April 1, 2022. The adoption of this update did not have an impact on our Consolidated Financial Statements.
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REVENUE FROM CONTRACTS WITH CUSTOMERS |
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REVENUE FROM CONTRACTS WITH CUSTOMERS | 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. Over time net revenue includes in-game advertising. Net revenue by timing of recognition was as follows:
Content Recurrent consumer spending revenue 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:
Geography We attribute net revenue to geographic regions based on software product destination. Net revenue by geographic region was as follows:
Platform Net revenue by platform was as follows:
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:
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, 2023 and March 31, 2022 were $1,114.3 and $936.2, respectively. For the fiscal year ended March 31, 2023, the additions to our deferred revenue balance were primarily due to the acquisition of Zynga (Note 20 - Acquisitions), which added $333.1 to our deferred revenue balance and 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, 2023, $860.1 of revenue was recognized that was included in the deferred revenue balance at the beginning of the period. During the fiscal year ended March 31, 2023, $332.1 of revenue was recognized from the deferred revenue balance acquired from the Zynga acquisition. As of March 31, 2023, the aggregate amount of contract revenue allocated to unsatisfied performance obligations is $1,272.2, which includes our deferred revenue balances and amounts to be invoiced and recognized as revenue in future periods. We expect to recognize approximately $1,190.9 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, 2023 and March 31, 2022, our contract asset balances were $79.9 and $104.9, respectively.
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MANAGEMENT AGREEMENT |
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Mar. 31, 2023 | |
MANAGEMENT AGREEMENT | |
MANAGEMENT AGREEMENT | MANAGEMENT AGREEMENT In November 2017, we entered into a management agreement (the "2017 Management Agreement") with ZelnickMedia Corporation ("ZelnickMedia") that replaced our previous agreement with ZelnickMedia and pursuant to which ZelnickMedia provides 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, continues to serve as Executive Chairman and Chief Executive Officer of the Company, and Karl Slatoff, a partner of ZelnickMedia, continues to serve as President of the Company. The 2017 Management Agreement provides 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 expect to grant time-based and performance-based restricted units to ZelnickMedia. In consideration for ZelnickMedia's services, we recorded consulting expense (a component of General and administrative expenses) of $3.5, $9.9, and $10.5 for the fiscal years ended March 31, 2023, 2022, and 2021, respectively. Pursuant to the 2022 Management Agreement and 2017 Management Agreement, we also issued stock-based awards to ZelnickMedia. During the fiscal years ended March 31, 2023, 2022, and 2021, we recorded $47.1, $29.2, and $27.3, 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.
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FAIR VALUE MEASUREMENTS |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | 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 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.
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, 2023. 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 year ended March 31, 2023, we paid $70.1 related to these earn-out consideration arrangements. During the fiscal year ended March 31, 2023, we recognized General and administrative expense of $26.5 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 $65.4 and is recorded within Accrued expenses and other current liabilities in our Consolidated Balance Sheet as of March 31, 2023. The increase resulted from a higher probability of Nordeus achieving certain performance measures in the second 12-month period. In connection with our acquisition of Popcore we completed on November 16, 2022, our 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 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. At March 31, 2023, $25.6 is recorded within Other long-term liabilities in our Consolidated Balance Sheet. The remaining contingent earn-out consideration liability of $1.2 recorded within Accrued expenses and other current liabilities and $1.7 recorded within Other long-term liabilities in our Consolidated Balance Sheet as of March 31, 2023, 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, 2023 and March 31, 2022, we held $8.0 and $20.0, respectively, of such investments in Other assets within our Consolidated Balance Sheet.
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SHORT-TERM INVESTMENTS |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHORT-TERM INVESTMENTS | SHORT-TERM INVESTMENTS Our short-term investments consisted of the following as of March 31, 2023:
The following table summarizes the contracted maturities of our short-term investments at March 31, 2023:
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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 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:
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SOFTWARE DEVELOPMENT COSTS AND LICENSES |
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SOFTWARE DEVELOPMENT COSTS AND LICENSES | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SOFTWARE DEVELOPMENT COSTS AND LICENSES | SOFTWARE DEVELOPMENT COSTS AND LICENSES Details of our capitalized software development costs and licenses are as follows:
Software development costs and licenses, net of current portion as of March 31, 2023 and 2022 included $1,010.2 and $738.0, respectively, related to titles that have not been released. Amortization and impairment of software development costs and licenses are as follows:
During the fiscal year ended March 31, 2023, the impairment charges 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, which were anticipated to exceed the 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 $108.1 and $96.9 as of March 31, 2023 and 2022, respectively. Also, we had $0.0 and $10.0 current receivable within Prepaid expenses and other, and $256.8 and $256.5 non-current receivable within Other assets on our Consolidated Balance Sheets relating to such government grants as of March 31, 2023 and 2022, respectively. In addition, within our Consolidated Statements of Operations, amortization of software development costs and licenses, which is a component of Cost of Revenue, for fiscal years ended March 31, 2023, 2022, and 2021, were reduced by $41.2, $46.8, and $43.3, respectively, and Research and development expense was reduced by $4.5 for the fiscal year ended March 31, 2023, with no such reduction in fiscal years ended in March 31, 2022, and 2021
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FIXED ASSETS, NET |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FIXED ASSETS, NET | FIXED ASSETS, NET Fixed asset balances by category are as follows:
Depreciation expense related to fixed assets for the fiscal years ended March 31, 2023, 2022 and 2021 was $88.8, $59.1 and $54.8, respectively. The following represents our fixed assets, net by location:
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GOODWILL AND INTANGIBLE ASSETS, NET |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND INTANGIBLE ASSETS, NET | GOODWILL AND INTANGIBLE ASSETS, NET Goodwill The change in our goodwill balance is as follows:
Intangibles The following table sets forth the intangible assets that are subject to amortization:
Amortization of intangible assets, including impairments, is included in our Consolidated Statements of Operations as follows:
During the fiscal year ended March 31, 2023, we recorded impairment charges of $465.3 for acquisition-related Developed Game Technology intangible assets within as a result of (i) a reduction in the forecasted performance of certain games due 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 rate, and discount rate. During the fiscal years ended March 31, 2022 and 2021, 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:
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ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES |
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Liabilities, Current [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consisted of:
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DEBT |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEBT | DEBT The components of Long-term debt, net on our Consolidated Balance Sheet were as follows:
The components of Short-term debt, net on our Consolidated Balance Sheet were as follows:
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, 2023 and was as follows:
The following table outlines the aggregate amount of maturities of our borrowings, as of March 31, 2023:
Bridge Loan During the fiscal year ended March 31, 2022, in connection with our acquisition of Zynga (refer to Note 20 - Acquisitions), we received a bridge loan commitment of $2,700.0. The bridge loan commitment was terminated in April 2022 in connection with our Senior Notes debt offering discussed below. During the fiscal year ended March 31, 2023, we recognized expense related to interest and fees of $6.1 related to the bridge loan commitment within Interest and other, net in our Consolidated Statements of Operations. At April 30, 2022, all deferred financing costs related to the bridge loan commitment were fully amortized. Senior Notes On April 14, 2022, we completed our offering and sale of 2,700.00 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, the 2025 Notes and the 2027 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 and (iv) a fourth supplemental indenture, with respect to the 2032 Notes (collectively, the “Supplemental Indentures” and together with the Base Indenture, the “Indenture”), each dated as of April 14, 2022, 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 semi-annually on March 28 and September 28 of each year, commencing September 28, 2022. During the fiscal year ended March 31, 2023, we made interest payments of $31.5 on the 2024 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, 2023, we made interest payments of $31.8 on the 2025 Notes, 2027 Notes, and 2032 Notes. The proceeds were used to finance a portion of our acquisition of Zynga. 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 $19.1 and original issuance discount of $1.3 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 and Short-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, 2023, we recognized $5.5 of amortization of debt issuance costs and $0.4 of amortization of the original issuance discount. Credit Agreement On May 23, 2022, we entered into a new unsecured Credit Agreement (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). Loans under the 2022 Credit Agreement will bear interest at a rate of (a) 0.000% to 0.625% above an alternate base rate (8.00% at March 31, 2023) or (b) 1.000% to 1.625% above Secured Overnight Financing Rate ("SOFR"), approximately 4.80% at March 31, 2023, 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, 2023, we amortized $0.6 of these debt issuance costs. On June 22, 2022, we drew down $200.0 at approximately 3.28% from our facility under the 2022 Credit Agreement, which constitute senior unsecured indebtedness of the Company, ranking equally with all of our other existing and future senior unsecured unsubordinated obligations, and recorded interest within Interest and other, net in our Consolidated Statement of Operations. This borrowing has a maturity date of May 23, 2027. On September 22, 2022, we repriced our outstanding borrowing at approximately 4.84%. The proceeds were used to finance a portion of the repurchase of the Convertible Notes (see below). In December 2022, we fully repaid the $200.0 drawdown. As of March 31, 2023, there were no borrowings under the 2022 Credit Agreement, and we had approximately $499.5 available for additional borrowings. During the fiscal year ended March 31, 2023, we made interest payments of $4.1. Information related to availability on our respective credit agreements for each period was as follows:
Term Loan On June 22, 2022, we entered into an unsecured 364-Day Term Loan Credit Agreement ("Term Loan"). The Term Loan provides for an unsecured 364-day term loan credit facility in the aggregate principal amount of $350.0 and matures on June 21, 2023, and will bear interest at our election at a margin of (a) 0.000% to 0.375% above an alternate base rate (defined on the basis of prime rate) or (b) 0.750% to 1.375% above SOFR, which rates are determined by reference to our credit rating. The Term Loan constitutes senior unsecured indebtedness of the Company, ranking equally with all of our other existing and future senior unsecured unsubordinated obligations. The Term Loan 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 Term Loan 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). We fully drew down on the Term Loan on June 22, 2022 at approximately 3.60%. We repriced our outstanding borrowing at approximately 5.62% in December 2022 and 5.91% in March 2023. The proceeds were used to finance a portion of the repurchase of the Convertible Notes (see below). During the fiscal year ended March 31, 2023, we made interest payments of $11.6. Convertibles 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 “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 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 were outstanding and approximately $874.5 aggregate principal amount of the 2026 Convertible Notes were 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 of the Zynga Acquisition, 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 (the “Convertible Notes Effective Date”), 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, 2023. 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, 2023, 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, 2023, we recorded $20.8 as the fair value of the remaining outstanding 2024 Convertible Notes, and $23.3 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, 2023, we recognized a loss of $37.6 within (Loss) gain on fair value adjustments, net in our Consolidated Statements of Operations, which includes the loss recognized on the converted Convertible Notes. Capped Calls In connection with the Convertible Notes, Zynga also previously entered into privately negotiated Capped Call options with certain counterparties. These Capped Call options were intended to reduce the potential economic dilution of Zynga shares upon any conversion of the Convertible Notes and/or offset any cash payments made in excess of the principal amount of converted notes with such reduction and/or offset, as the case might have been, subject to a maximum based on the cap price. Following the acquisition of Zynga, we entered into Termination Agreements with each counterparty related to the acquired Capped Call arrangements to be settled in cash. Pursuant to the terms of the Termination Agreements, the Capped Call options will be terminated over a period of time specified in each Termination Agreement and each counterparty will owe a cash payment to the Company, as applicable, as a result of the termination of the Capped Call options that will be calculated based on their fair market value calculated by each counterparty during a termination valuation period. We have accounted for these Capped Calls as derivatives under ASC 815. We initially recorded $131.3 as the acquisition date fair value of these Capped Calls, and, as of June 30, 2022, the fair value of $140.1 is recorded on our Consolidated Balance Sheet. The fair value (Level 2), in each instance, was determined based on negotiated termination agreements with the counterparties, which are dependent on our stock price over a certain period of time as further defined in the respective agreements. During the fiscal year ended March 31, 2023, we recognized a gain of $8.8 within (Loss) gain on fair value adjustments, net in our Consolidated Statements of Operations. In July 2022, we received $140.1 in cash for settlement of these Capped Calls.
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(LOSS) EARNINGS PER SHARE ("EPS") |
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(LOSS) EARNINGS PER SHARE ("EPS") | (LOSS) EARNINGS PER SHARE ("EPS") The following table sets forth the computation of basic and diluted (loss) earnings per share:
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LEASES |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LEASES | 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 to years. In certain instances, such leases include one or more options to renew, with renewal terms that generally extend the lease term by 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:
As part of our acquisition of Zynga (refer to Note 20 - Acquisitions), we recognized 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, we recognized a $30.0 impairment loss related to the ROU asset during the fourth quarter of fiscal year 2023, which 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.
Future undiscounted lease payments for our operating lease liabilities, and a reconciliation of these payments to our operating lease liabilities at March 31, 2023, are as follows:
As of March 31, 2023, we have entered into facility leases that have not yet commenced with future lease payments of approximately $13.6. These leases are expected to commence within the next twelve months and will have lease terms ranging from to seven years.
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COMMITMENTS AND CONTINGENCIES |
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COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES A summary of annual minimum contractual obligations and commitments as of March 31, 2023 is as follows:
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 July 2031. 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 2029 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 October 2027. 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, 2023, 2022, and 2021 were $36.1, $22.4, and $17.7, 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.
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INCOME TAXES |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | INCOME TAXES Components of (Loss) income before income taxes are as follows:
Provision for (benefit from) current and deferred income taxes consists of the following:
A reconciliation of our effective tax rate to the U.S. statutory federal income tax rate is as follows:
(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 years ended March 31, 2023 and March 31, 2022 include effects of an increase of the deferred tax asset related to the Federal Act on Tax Reform and AVH Financing ("TRAF") enacted on January 1, 2020. (3) Tax benefits were recorded for fiscal years ended March 31, 2023, 2022, and 2021 attributable to certain tax credits related to software development activities. (4) Includes nondeductible expense of $8.2 relating to loss on the redemption of convertible debt for the fiscal year ended March 31, 2023. The effects of temporary differences that gave rise to our deferred tax assets and liabilities were as follows:
(1) As of March 31, 2023, $44.8 is included in Deferred tax assets and $534.0 is included in Other long-term liabilities. As of March 31, 2022, $73.8 is included in Deferred tax assets and $21.8 is included in Other long-term liabilities. The valuation allowance is primarily attributable to deferred tax assets for which no benefit is provided due to uncertainty with respect to their realization. At March 31, 2023, we had domestic net operating loss carryforwards totaling $652.5 of which $53.7 will expire from 2024 to 2029, $217.5 will expire from 2030 to 2040, $179.9 will expire from 2041 to 2043, and the remainder will be carried forward indefinitely. In addition, we had foreign net operating loss carryforwards of $84.5, of which $39.4 will expire from 2026 to 2030, $7.2 will expire from 2041 to 2043 and the remainder may be carried forward indefinitely. At March 31, 2023, we had domestic tax credit carryforwards totaling $359.9, of which $8.4 expire in 2024 to 2028, $67.3 expire from 2032 to 2042, and the remainder may be carried forward indefinitely. The total amount of undistributed earnings of foreign subsidiaries was approximately $64.6 at March 31, 2023 and $392.6 at March 31, 2022. As of March 31, 2023, 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, 2023, 2022 and 2021, we recognized an increase of interest and penalties of $8.9, $1.9 and $2.6, respectively. The gross amount of interest and penalties accrued as of March 31, 2023 and 2022 was $20.2 and $11.2, respectively. As of March 31, 2023, we had gross unrecognized tax benefits, including interest and penalties, of $294.8, of which $137.2 would affect our effective tax rate if realized. For the fiscal year ended March 31, 2023, gross unrecognized tax benefits increased by $118.8. We are no longer subject to audit for U.S. federal income tax returns for periods prior to our fiscal year ended March 31, 2020 and state income tax returns for periods prior to the fiscal year ended March 31, 2019. 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, 2021. 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 $61.3 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:
(1) Increase in prior year tax positions of $109.9 relates 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.
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION | 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 29.3, subject to adjustment as set forth in the 2017 Plan, and, as of March 31, 2023, there were approximately 15.5 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:
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. During the fiscal year ended March 31, 2021, the forfeiture of awards resulted in the reversal of expense of $69.8 and amounts capitalized as software development costs of $10.8. As of March 31, 2023, the total future unrecognized compensation cost related to outstanding unvested restricted stock was $833.2 and will be either recognized as compensation expense over a weighted-average period of approximately 2.8 years or capitalized as software development costs. For the fiscal years ended March 31, 2023, 2022 and 2021, the total fair values of restricted stock units that vested were $321.8, $208.6 and $205.9, 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, 2023, the future expense for the Converted RSUs and Converted PSUs was approximately $236.7, which will be recognized over a weighted average service period of approximately 1.4 years. As of March 31, 2023, the future expense for the Converted Options was approximately $0.9, which will be recognized over a weighted average service period of approximately 0.7 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 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 2017 Management Agreement and the 2022 Management Agreement, we granted restricted stock units (in thousands) to ZMC (see Note 3 - Management Agreement) as follows:
(1) Represents the maximum number of shares eligible to vest. Time-based restricted stock units granted in fiscal year 2023 pursuant to the 2017 Management Agreement will vest on April 13, 2024, and those granted in fiscal year 2022 vested on April 13, 2023. Time-based restricted stock units granted in fiscal year 2023 pursuant to the 2022 Management Agreement will vest on June 1, 2023, June 1, 2024, and June 1, 2025. Market-based restricted stock units granted in fiscal year 2023 pursuant to the 2017 Management Agreement are eligible to vest on April 13, 2024, and those granted in fiscal year 2022 that were eligible to vest vested on April 13, 2023. Market-based restricted stock units granted in fiscal year 2023 pursuant to the 2022 Management Agreement are eligible to vest on June 1, 2024 and June 1, 2025. 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 2023 pursuant to the 2017 Management Agreement are eligible to vest on April 13, 2024, and those granted in fiscal year 2022 vested on April 13, 2023. Performance-based restricted stock units granted in fiscal year 2023 pursuant to the 2022 Management Agreement are eligible to vest on June 1, 2024 and June 1, 2025. 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 - 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, 2023 and 2022 were 1.1 and 0.4, respectively. During the fiscal year ended March 31, 2023, 0.2 restricted stock units previously granted to ZMC vested, and 0.1 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, 2023, 2022 and 2021 was $118.17, $180.97 and $171.58 per share, respectively. For the fiscal years ended March 31, 2023, 2022 and 2021, 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 $128.90, $182.66 and $120.00 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:
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:
The estimated value of market-based restricted stock awards granted to employees during the fiscal years ended March 31, 2023, 2022, and 2021 was $179.93, $292.76, and $279.09 per share, respectively. For the fiscal years ended March 31, 2023, 2022, and 2021, the estimated value of the market-based restricted stock awards granted to ZMC was $175.12, $293.32, and $200.34 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:
Performance-Based Awards The estimated value of performance-based restricted stock awards granted to employees during the fiscal year ended March 31, 2023, 2022, and 2021 was $125.03, $176.05, and $176.42, respectively. For the fiscal years ended March 31, 2023, 2022, and 2021, the estimated value of the performance-based restricted stock awards granted to ZMC was $125.90, $182.66, and $120.00 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:
Fair Value of Stock Options All Converted Options generally vest over to five years, with 25% to 20% 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, 2023:
The following table presents the weighted-average grant date fair value and related assumptions used to estimate the fair value of our stock options:
The aggregate intrinsic value of stock options exercised during the fiscal year ended March 31, 2023 was $66.3. For the fiscal year ended March 31, 2023, the amount of cash received from exercise of stock options was $43.5. The total fair value of options that vested during the fiscal year ended March 31, 2023 was $43.5. During the fiscal year ended March 31, 2023, total unrecognized stock-based compensation expense of $0.9 related to unvested stock options is expected to be recognized over a weighted-average recognition period of approximately 0.73 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, 2023, there were approximately 8.3 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:
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. For the fiscal year ended March 31, 2022, our employees purchased 0.1 shares for $19.7 with a weighted-average fair value of $137.84.
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INTEREST AND OTHER, NET |
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ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME | ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME The following table provides the components of accumulated other comprehensive (loss) income:
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SUPPLEMENTARY FINANCIAL INFORMATION |
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SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUPPLEMENTARY FINANCIAL INFORMATION | SUPPLEMENTARY FINANCIAL INFORMATION The following table provides details of our valuation and qualifying accounts:
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ACQUISITIONS |
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Business Combination and Asset Acquisition [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACQUISITIONS | ACQUISITIONS Zynga Acquisition On May 23, 2022, we completed our acquisition of 100% of the issued and outstanding shares of Zynga, a leading developer of mobile games (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 (see below). 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. Transaction costs of $139.5, $14.2, and $8.1 for the fiscal year ended March 31, 2023 have been recorded within General and administrative expense, Research and development, and Selling and marketing, respectively, in our Consolidated Statements of Operations. 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:
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. As we finalize our estimation of the fair value of the assets acquired and liabilities assumed, additional adjustments may be recorded during the measurement period (a period not to exceed 12 months from the acquisition date). The following table summarizes the preliminary acquisition date fair value of net tangible and intangible assets acquired, net of liabilities assumed from Zynga:
Convertible Notes and Related Capped Calls Refer to Note 11 - Debt for a discussion of the Convertible Notes and related Capped Calls that were previously issued by Zynga. Identifiable Intangible Assets Acquired and Goodwill The preliminary fair value estimates of Developed game technology, certain Game engine technology, and Advertising technology were estimated using the multi-period excess earnings method. The excess earnings methodology is an income approach methodology that estimates the projected cash flows of the business attributable to the Developed game technology, Advertising technology, and Game engine technology intangible assets, respectively, net of charges for the use of other identifiable assets of the business including working capital, fixed assets and other intangible assets. Key assumptions and estimates used in deriving the projected cash flows are forecasted revenue, EBITDA margin growth, long-term decay rate, and discount rate. The amortization for these intangible assets has been recorded to Cost of revenue in our Consolidated Statements of Operations. The preliminary fair value estimate of Branding and trade names was estimated using the relief-from-royalty method, which presumes the owner of the asset avoids hypothetical royalty payments that would need to be made for the use of the asset if the asset was not owned. Key assumptions and estimates used are forecasted revenue, royalty rates, and discount rate. The amortization for the Branding and trade names intangible asset has been recorded to Depreciation and amortization in our Consolidated Statements of Operations. The preliminary fair value estimate of User base and certain Game engine technology was estimated using the replacement cost method. The replacement cost methodology is a cost approach methodology based on replacement or reproduction cost of the User Base as an indicator of fair value. The key assumption and estimate used is the hypothetical replacement or reproduction cost. The amortization for the User base intangible asset has been recorded to Selling and marketing in our Consolidated Statements of Operations. The preliminary fair value estimate of Developer relationships and Customer relationships were estimated using the with and without method, which is a form of the income approach. The with and without method considers the hypothetical impact to the projected cash flows of the business if the asset were not in place. Key assumptions and estimates used are forecasted revenue and expenses as well as discount rate. The amortization for the Developer relationships and Customer relationships intangible assets have been recorded to Research and development and Selling and marketing, respectively, in our Consolidated Statements of Operations. The $5,994.4 of goodwill recognized, 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. Zynga Revenue and Earnings The amounts of revenue and earnings of Zynga included in our Consolidated Statement of Operations from the acquisition date are as follows:
Pro-forma Financial Information The following table summarizes the pro-forma consolidated results of operations (unaudited) for the fiscal year ended March 31, 2023 and 2022, as though the acquisition had occurred on April 1, 2021, the beginning of fiscal year 2022, and Zynga had been included in our consolidated results for the entire periods subsequent to that date.
The unaudited pro-forma consolidated results above are based on the historical financial statements of Take-Two and Zynga and are not necessarily indicative of the results of operations that would have been achieved if the acquisition was completed at the beginning of fiscal year 2022 and are not indicative of the future operating results of the combined company. The unaudited pro-forma information for all periods presented includes the following adjustments, where applicable, for business combination accounting effects resulting from the acquisition: (i) alignment of Zynga's accounting policy with Take-Two’s revenue accounting policy regarding the timing of recognition of consumable and durable virtual items, (ii) additional interest expense related to financing for the acquisition, (iii) additional incremental stock-based compensation expense for the replacement of Zynga’s outstanding equity awards with Take-Two replacement equity awards, (iv) alignment of Zynga's accounting policy with Take-Two’s policy to expense certain royalty prepayments until technological feasibility is established, (v) additional amortization expense related to finite-lived intangible assets acquired, and (vi) the related tax effects assuming that the business combination occurred on April 1, 2021. The significant nonrecurring adjustments reflected in the unaudited pro-forma consolidated information above include the reclassification of the transaction costs and the related tax effects incurred after the acquisition to the earliest period presented. Popcore Acquisition On November 16, 2022, we completed the acquisition of 100% of Popcore GmbH ("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 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:
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 preliminary fair values of net tangible and intangible assets are management’s estimates based on the information available at the acquisition date and may change over the measurement period, which will end no later than one year from the acquisition date, as additional information is received. The following table summarizes the preliminary acquisition date fair value of net tangible and intangible assets acquired, net of liabilities assumed from Popcore:
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. The amounts of revenue and earnings of Popcore included in our Consolidated Statement of Operations from the acquisition date are as follows:
Supplemental pro-forma financial information has not been provided as the historical results of Popcore were not material to us. Transaction costs of $2.9 for the fiscal year ended March 31, 2023 have been recorded within General and administrative expense in our Consolidated Statements of Operations.
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SUBSEQUENT EVENTS |
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Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS 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 5.000% Senior Notes due 2026 (the "2026 Notes") and $500.00 principal amount of 4.950% Senior Notes due 2028 (the "2028 Notes"). The 2026 Notes mature on March 28, 2026 and bear interest at an annual rate of 5.000%. The 2028 Notes mature on March 28, 2028 and bear interest at an annual rate of 4.950%. We will pay interest on the 2026 Notes and 2028 Notes semi-annually on March 28 and September 28 of each year, commencing September 28, 2023. The 2026 Notes and 2028 Notes were issued under an indenture between the Company and The Bank of New York Mellon, as trustee. The proceeds were used to fully repay the $350.0 Term Loan on April 27, 2023. The remaining proceeds will be used to partially pay down other outstanding debt. On May 18, 2023, we announced that we have commenced a tender offer to purchase for cash up to $500.0 aggregate principal amount of our 2024 Notes. The tender offer is being conducted on the terms and conditions set forth in the offer to purchase dated May 18, 2023.
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BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | 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.
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Reclassifications | 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.
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Use of Estimates | 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.
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Segments | 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. |
Concentration of Credit Risk and Accounts Receivable | 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.
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Cash and Cash Equivalents | 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.
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Short-term Investments | 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.
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Software Development Costs and Licenses | 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.
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Fixed Assets, net | 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 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.
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Leases | 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.
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Goodwill | 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 operating 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.
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Long-lived Assets | 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. |
Derivatives and Hedging | 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 (loss) income 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) income 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.
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Income Taxes | 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, as 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.
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Revenue Recognition | 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. In addition, some of 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 and sales of virtual currency. 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 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 many of the determinations described above, such as estimating the fair value allocation to distinct and separable performance obligations, the service period over which to defer recognition of revenue, and the amounts of price protection. 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.
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Advertising | 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. |
Stock-based Compensation | 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 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.
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Earnings (loss) per Share ("EPS") | 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.
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Foreign Currency | 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) income. Realized and unrealized transaction gains and losses are included in our Consolidated Statements of Operations in the period in which they occur.
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Comprehensive Income (Loss) | 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) income 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.
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Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements Accounting for Government Assistance In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance, which requires annual disclosures that increase the transparency of transactions involving government grants, including (1) the types of transactions, (2) the accounting for those transactions, and (3) the effect of those transactions on any entity's financial statements. The new guidance is effective for fiscal years beginning after December 15, 2021, with the new disclosures required on an annual basis, and can be applied either prospectively or retrospectively. We adopted the new guidance on April 1, 2022 and included the required disclosures with respect to any government assistance or grants subject to the scope of the guidance to the extent material. Refer to Note 7 - Software Development Costs and Licenses. Accounting for Contract Assets and Contract Liabilities In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. Under this new standard, deferred revenue acquired in a business combination is measured pursuant to ASC 606, Revenue from Contracts with Customers, rather than its assumed acquisition date fair value under the current guidance. We adopted this effective April 1, 2022. The adoption of this update did not have an impact on our Consolidated Financial Statements and was applied to our acquisition of Zynga. Refer to Note 20 - Acquisitions. Accounting for Convertible Debt In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40), which simplifies the accounting for convertible instruments by reducing the number of accounting models and generally requiring that a convertible instrument be accounted for as a single liability measured at amortized cost, with no conversion feature separately recorded in equity. Similarly, no portion of issuance costs will be allocated to equity under the ASU. Further, the ASU amends the earnings per share guidance by requiring the diluted earnings per share calculation for convertible instruments to follow the if-converted method, with use of the treasury stock method no longer permitted. We adopted this effective April 1, 2022. The adoption of this update did not have an impact on our Consolidated Financial Statements.
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REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) |
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Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | Net revenue by timing of recognition was as follows:
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Net Revenue by Geographic Region | Net revenue by geographic region was as follows:
|
FAIR VALUE MEASUREMENTS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segregation of All Assets and Liabilities Measured at Fair Value on a Recurring Basis | The table below segregates all assets 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.
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SHORT-TERM INVESTMENTS (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Short-Term Investments | Our short-term investments consisted of the following as of March 31, 2023:
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Schedule of the Contracted Maturities of Short-Term Investments | The following table summarizes the contracted maturities of our short-term investments at March 31, 2023:
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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Gross Notional Amounts of Foreign Currency Forward Contracts | The following table shows the gross notional amounts of foreign currency forward contracts:
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SOFTWARE DEVELOPMENT COSTS AND LICENSES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SOFTWARE DEVELOPMENT COSTS AND LICENSES | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Capitalized Software Development Costs and Licenses | Details of our capitalized software development costs and licenses are as follows:
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Schedule of Amortization and Impairment of Software Development Costs and Licenses | Amortization and impairment of software development costs and licenses are as follows:
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FIXED ASSETS, NET (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fixed Asset Balances by Category | Fixed asset balances by category are as follows:
The following represents our fixed assets, net by location:
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GOODWILL AND INTANGIBLE ASSETS, NET (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Change in Goodwill Balance | The change in our goodwill balance is as follows:
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Schedule of Components of the Intangible Assets Subject to Amortization | The following table sets forth the intangible assets that are subject to amortization:
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Schedule of Amortization of Intangible Assets | Amortization of intangible assets, including impairments, is included in our Consolidated Statements of Operations as follows:
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Schedule of Estimated Future Amortization of 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:
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ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Liabilities, Current [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of:
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DEBT (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-Term Debt Instruments | The components of Long-term debt, net on our Consolidated Balance Sheet were as follows:
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Schedule of Short-Term Debt | The components of Short-term debt, net on our Consolidated Balance Sheet were as follows:
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Schedule of Debt | 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, 2023 and was as follows:
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Schedule Of Maturities Of Debt | The following table outlines the aggregate amount of maturities of our borrowings, as of March 31, 2023:
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Schedule of Information Related to Availability on Credit Agreement | Information related to availability on our respective credit agreements for each period was as follows:
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(LOSS) EARNINGS PER SHARE ("EPS") (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Computation of Basic and Diluted EPS | The following table sets forth the computation of basic and diluted (loss) earnings per share:
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LEASES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Lease Costs and Supplemental Information | Information related to our operating leases are as follows:
As part of our acquisition of Zynga (refer to Note 20 - Acquisitions), we recognized 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, we recognized a $30.0 impairment loss related to the ROU asset during the fourth quarter of fiscal year 2023, which 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.
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Schedule of Operating Lease Liability Maturities | Future undiscounted lease payments for our operating lease liabilities, and a reconciliation of these payments to our operating lease liabilities at March 31, 2023, are as follows:
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COMMITMENTS AND CONTINGENCIES (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Annual Minimum Contractual Obligations | A summary of annual minimum contractual obligations and commitments as of March 31, 2023 is as follows:
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INCOME TAXES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of (Loss) Income from Continuing Operations Before Income Taxes | Components of (Loss) income before income taxes are as follows:
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Schedule of Provision for Current and Deferred Income Taxes | Provision for (benefit from) current and deferred income taxes consists of the following:
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Schedule of Reconciliation of Effective Tax Rate to the U.S. Statutory Federal Income Tax Rate | A reconciliation of our effective tax rate to the U.S. statutory federal income tax rate is as follows:
(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 years ended March 31, 2023 and March 31, 2022 include effects of an increase of the deferred tax asset related to the Federal Act on Tax Reform and AVH Financing ("TRAF") enacted on January 1, 2020. (3) Tax benefits were recorded for fiscal years ended March 31, 2023, 2022, and 2021 attributable to certain tax credits related to software development activities. (4) Includes nondeductible expense of $8.2 relating to loss on the redemption of convertible debt for the fiscal year ended March 31, 2023.
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Schedule of Effects of Temporary Differences that Gave Rise to Deferred Tax Assets and Liabilities | The effects of temporary differences that gave rise to our deferred tax assets and liabilities were as follows:
(1) As of March 31, 2023, $44.8 is included in Deferred tax assets and $534.0 is included in Other long-term liabilities. As of March 31, 2022, $73.8 is included in Deferred tax assets and $21.8 is included in Other long-term liabilities.
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Schedule of Aggregate Changes to the Liability for Gross Uncertain Tax Positions, Excluding Interest and Penalties | The aggregate changes to the liability for gross uncertain tax positions, excluding interest and penalties, were as follows:
(1) Increase in prior year tax positions of $109.9 relates to purchase accounting for the Zynga acquisition.
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STOCK-BASED COMPENSATION (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock-based Compensation Expenses | The following table summarizes stock-based compensation expense included in our Consolidated Statements of Operations:
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Schedule of Restricted Stock Awarded Activity to Zelnickmedia | In connection with the 2017 Management Agreement and the 2022 Management Agreement, we granted restricted stock units (in thousands) to ZMC (see Note 3 - Management Agreement) as follows:
(1) Represents the maximum number of shares eligible to vest.
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Schedule of Activity in Non-Vested Restricted Stock Awards to Employees and Zelnickmedia | 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:
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Schedule of Weighted-Average Assumptions Used to Value Outstanding Market-Based Restricted Shares | The following table summarizes the weighted-average assumptions used in the Monte Carlo Simulation to estimate the fair value of market-based awards:
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Fair Value Measurement and Valuation Techniques | The following table summarizes the assumptions used in the Black-Scholes valuation model to value our purchase rights:
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Share-Based Payment Arrangement, Option, Activity | The following table shows stock option activity for the fiscal year ended March 31, 2023:
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Schedule of Share-Based Payment Award, Stock Options, Valuation Assumptions | The following table presents the weighted-average grant date fair value and related assumptions used to estimate the fair value of our stock options:
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INTEREST AND OTHER, NET (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Interest and Other, Net |
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ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Accumulated Other Comprehensive (loss) income | The following table provides the components of accumulated other comprehensive (loss) income:
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SUPPLEMENTARY FINANCIAL INFORMATION (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Details of Valuation and Qualifying Accounts | The following table provides details of our valuation and qualifying accounts:
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ACQUISITIONS (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination and Asset Acquisition [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Acquisitions, by Acquisition | The acquisition-date fair value of the consideration totaled $9,521.8, which consisted of the following:
The acquisition-date fair value of the consideration totaled $198.0, which consisted of the following:
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Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary acquisition date fair value of net tangible and intangible assets acquired, net of liabilities assumed from Zynga:
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Business Acquisition, Pro Forma Information | The amounts of revenue and earnings of Zynga included in our Consolidated Statement of Operations from the acquisition date are as follows:
Pro-forma Financial Information The following table summarizes the pro-forma consolidated results of operations (unaudited) for the fiscal year ended March 31, 2023 and 2022, as though the acquisition had occurred on April 1, 2021, the beginning of fiscal year 2022, and Zynga had been included in our consolidated results for the entire periods subsequent to that date.
The amounts of revenue and earnings of Popcore included in our Consolidated Statement of Operations from the acquisition date are as follows:
|
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2023
USD ($)
unit
segment
|
Mar. 31, 2022
USD ($)
|
Mar. 31, 2021
USD ($)
|
|
Goodwill [Line Items] | |||
Number of operating segments | segment | 1 | ||
Number of reportable segments | segment | 1 | ||
Weighted average useful life | |||
Number of reporting units | unit | 2 | ||
Goodwill and intangible asset impairment | $ 0.0 | $ 0.0 | $ 0.0 |
Estimated service period minimum | 6 months | ||
Estimated service period maximum | 15 months | ||
Advertising expense | $ 1,212.5 | $ 297.3 | $ 241.1 |
Expected dividend yield | 0.00% | ||
One Reporting Unit | |||
Goodwill [Line Items] | |||
Number of reporting units | unit | 1 | ||
Goodwill gross | $ 6,377.0 | ||
Office equipment | |||
Goodwill [Line Items] | |||
Property, plant and equipment, useful life | 5 years | ||
Leasehold improvements | |||
Goodwill [Line Items] | |||
Property, plant and equipment, useful life | 7 years | ||
Buildings | |||
Goodwill [Line Items] | |||
Property, plant and equipment, useful life | 30 years | ||
Minimum | Computer equipment | |||
Goodwill [Line Items] | |||
Property, plant and equipment, useful life | 3 years | ||
Minimum | Software products | |||
Goodwill [Line Items] | |||
Weighted average useful life | 12 months | ||
Maximum | Computer equipment | |||
Goodwill [Line Items] | |||
Property, plant and equipment, useful life | 5 years | ||
Maximum | Software products | |||
Goodwill [Line Items] | |||
Weighted average useful life | 30 months | ||
Five largest customers | Net revenue | Customer concentration risk | |||
Goodwill [Line Items] | |||
Concentration risk rate | 79.60% | 79.00% | 78.40% |
Five largest customers | Gross accounts receivable | Credit concentration risk | |||
Goodwill [Line Items] | |||
Concentration risk rate | 61.10% | 72.80% | |
One Customer | Net revenue | Customer concentration risk | |||
Goodwill [Line Items] | |||
Concentration risk rate | 23.50% | 38.00% | 38.90% |
One Customer | Gross accounts receivable | Credit concentration risk | |||
Goodwill [Line Items] | |||
Concentration risk rate | 21.60% | 43.50% | |
Second Customer | Net revenue | Customer concentration risk | |||
Goodwill [Line Items] | |||
Concentration risk rate | 20.70% | 22.00% | 22.20% |
Second Customer | Gross accounts receivable | Credit concentration risk | |||
Goodwill [Line Items] | |||
Concentration risk rate | 14.50% | 20.30% | |
Customers individually accounting for more than 10% | Gross accounts receivable | Credit concentration risk | |||
Goodwill [Line Items] | |||
Concentration risk rate | 50.30% | 63.80% | |
Third Customer | Gross accounts receivable | Credit concentration risk | |||
Goodwill [Line Items] | |||
Concentration risk rate | 14.20% |
REVENUE FROM CONTRACTS WITH CUSTOMERS - Disaggregated Revenue (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Revenue from External Customer [Line Items] | |||
Total net revenue | $ 5,349.9 | $ 3,504.8 | $ 3,372.8 |
Recurrent consumer spending | |||
Revenue from External Customer [Line Items] | |||
Total net revenue | 4,180.4 | 2,271.2 | 2,152.0 |
Full game and other | |||
Revenue from External Customer [Line Items] | |||
Total net revenue | 1,169.5 | 1,233.6 | 1,220.8 |
Mobile | |||
Revenue from External Customer [Line Items] | |||
Total net revenue | 2,538.6 | 403.4 | 274.1 |
Console | |||
Revenue from External Customer [Line Items] | |||
Total net revenue | 2,303.8 | 2,528.9 | 2,517.0 |
PC and other | |||
Revenue from External Customer [Line Items] | |||
Total net revenue | 507.5 | 572.5 | 581.7 |
Digital online | |||
Revenue from External Customer [Line Items] | |||
Total net revenue | 5,085.7 | 3,149.0 | 2,972.4 |
Physical retail and other | |||
Revenue from External Customer [Line Items] | |||
Total net revenue | 264.2 | 355.8 | 400.4 |
Over time | |||
Revenue from External Customer [Line Items] | |||
Total net revenue | 4,208.0 | 2,214.8 | 2,063.7 |
Point in time | |||
Revenue from External Customer [Line Items] | |||
Total net revenue | $ 1,141.9 | $ 1,290.0 | $ 1,309.1 |
REVENUE FROM CONTRACTS WITH CUSTOMERS - Geographical (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Disaggregation of Revenue [Line Items] | |||
Total net revenue | $ 5,349.9 | $ 3,504.8 | $ 3,372.8 |
United States | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | 3,360.0 | 2,100.2 | 2,015.9 |
International | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | $ 1,989.9 | $ 1,404.6 | $ 1,356.9 |
REVENUE FROM CONTRACTS WITH CUSTOMERS - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Contract with liability | $ 1,114.3 | $ 936.2 |
Contract with liability, increase from acquisition | 333.1 | |
Contract with liability recognized | 860.1 | |
Remaining obligation | 1,272.2 | |
Contract asset | 79.9 | $ 104.9 |
Zynga Inc | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Contract with liability recognized | 332.1 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining obligation | $ 1,190.9 | |
Remaining obligation period | 12 months |
MANAGEMENT AGREEMENT (Details) - ZMC - USD ($) $ in Millions |
1 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
May 31, 2022 |
Nov. 30, 2017 |
Mar. 31, 2023 |
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Related Party Transaction [Line Items] | |||||
Consulting expense benefit | $ 3.5 | $ 9.9 | $ 10.5 | ||
2017 Management Agreement | |||||
Related Party Transaction [Line Items] | |||||
Annual management fee | $ 3.3 | $ 3.1 | |||
Stock-based compensation expense for non-employee awards | $ 47.1 | $ 29.2 | $ 27.3 | ||
2017 Management Agreement | Maximum | |||||
Related Party Transaction [Line Items] | |||||
Annual management fee | $ 7.4 | ||||
Bonus per fiscal year based on the achievement of certain performance thresholds | $ 13.2 |
FAIR VALUE MEASUREMENTS - Assets Measured at Fair Value (Details) - USD ($) $ in Millions |
Mar. 31, 2023 |
Mar. 31, 2022 |
---|---|---|
Assets: | ||
Short-term investments | $ 187.0 | $ 820.1 |
Total financial assets | 1,133.5 | 2,619.1 |
Liabilities: | ||
Contingent earn-out consideration | 66.6 | 66.0 |
Contingent earn-out consideration | 27.3 | 43.0 |
Convertible notes | 44.1 | |
Total financial liabilities | 140.5 | 109.2 |
Money market funds | ||
Assets: | ||
Cash and cash equivalents | 368.0 | 501.9 |
Restricted cash and cash equivalents | 306.1 | 356.8 |
Restricted cash and cash equivalents, long term | 99.6 | 103.5 |
Bank-time deposits | ||
Assets: | ||
Cash and cash equivalents | 145.8 | 636.0 |
Short-term investments | 41.8 | 131.8 |
Restricted cash and cash equivalents | 0.5 | 0.5 |
Corporate bonds | ||
Assets: | ||
Cash and cash equivalents | 2.8 | |
Short-term investments | 145.2 | 538.5 |
Certificates of Deposit | ||
Assets: | ||
Cash and cash equivalents | 10.0 | |
Short-term investments | 1.0 | |
Private equity | ||
Assets: | ||
Private equity | 26.5 | 16.1 |
Foreign currency forward contracts | ||
Liabilities: | ||
Foreign currency forward contracts | 2.5 | 0.2 |
US Treasuries | ||
Assets: | ||
Cash and cash equivalents | 52.0 | |
Short-term investments | 23.4 | |
Commercial Paper [Member] | ||
Assets: | ||
Cash and cash equivalents | 119.4 | |
Short-term investments | 125.4 | |
Quoted prices in active markets for identical assets (level 1) | ||
Assets: | ||
Total financial assets | 961.8 | 1,805.9 |
Liabilities: | ||
Contingent earn-out consideration | 0.0 | 0.0 |
Contingent earn-out consideration | 0.0 | 0.0 |
Convertible notes | 0.0 | |
Total financial liabilities | 0.0 | 0.0 |
Quoted prices in active markets for identical assets (level 1) | Money market funds | ||
Assets: | ||
Cash and cash equivalents | 368.0 | 501.9 |
Restricted cash and cash equivalents | 306.1 | 356.8 |
Restricted cash and cash equivalents, long term | 99.6 | 103.5 |
Quoted prices in active markets for identical assets (level 1) | Bank-time deposits | ||
Assets: | ||
Cash and cash equivalents | 145.8 | 636.0 |
Short-term investments | 41.8 | 131.8 |
Restricted cash and cash equivalents | 0.5 | 0.5 |
Quoted prices in active markets for identical assets (level 1) | Corporate bonds | ||
Assets: | ||
Cash and cash equivalents | 0.0 | |
Short-term investments | 0.0 | 0.0 |
Quoted prices in active markets for identical assets (level 1) | Certificates of Deposit | ||
Assets: | ||
Cash and cash equivalents | 0.0 | |
Short-term investments | 0.0 | |
Quoted prices in active markets for identical assets (level 1) | Private equity | ||
Assets: | ||
Private equity | 0.0 | 0.0 |
Quoted prices in active markets for identical assets (level 1) | Foreign currency forward contracts | ||
Liabilities: | ||
Foreign currency forward contracts | 0.0 | 0.0 |
Quoted prices in active markets for identical assets (level 1) | US Treasuries | ||
Assets: | ||
Cash and cash equivalents | 52.0 | |
Short-term investments | 23.4 | |
Quoted prices in active markets for identical assets (level 1) | Commercial Paper [Member] | ||
Assets: | ||
Cash and cash equivalents | 0.0 | |
Short-term investments | 0.0 | |
Significant other observable inputs (level 2) | ||
Assets: | ||
Total financial assets | 145.2 | 797.1 |
Liabilities: | ||
Contingent earn-out consideration | 0.0 | 0.0 |
Contingent earn-out consideration | 0.0 | 0.0 |
Convertible notes | 44.1 | |
Total financial liabilities | 46.6 | 0.2 |
Significant other observable inputs (level 2) | Money market funds | ||
Assets: | ||
Cash and cash equivalents | 0.0 | 0.0 |
Restricted cash and cash equivalents | 0.0 | 0.0 |
Restricted cash and cash equivalents, long term | 0.0 | 0.0 |
Significant other observable inputs (level 2) | Bank-time deposits | ||
Assets: | ||
Cash and cash equivalents | 0.0 | 0.0 |
Short-term investments | 0.0 | 0.0 |
Restricted cash and cash equivalents | 0.0 | 0.0 |
Significant other observable inputs (level 2) | Corporate bonds | ||
Assets: | ||
Cash and cash equivalents | 2.8 | |
Short-term investments | 145.2 | 538.5 |
Significant other observable inputs (level 2) | Certificates of Deposit | ||
Assets: | ||
Cash and cash equivalents | 10.0 | |
Short-term investments | 1.0 | |
Significant other observable inputs (level 2) | Private equity | ||
Assets: | ||
Private equity | 0.0 | 0.0 |
Significant other observable inputs (level 2) | Foreign currency forward contracts | ||
Liabilities: | ||
Foreign currency forward contracts | 2.5 | 0.2 |
Significant other observable inputs (level 2) | US Treasuries | ||
Assets: | ||
Cash and cash equivalents | 0.0 | |
Short-term investments | 0.0 | |
Significant other observable inputs (level 2) | Commercial Paper [Member] | ||
Assets: | ||
Cash and cash equivalents | 119.4 | |
Short-term investments | 125.4 | |
Significant unobservable inputs (level 3) | ||
Assets: | ||
Total financial assets | 26.5 | 16.1 |
Liabilities: | ||
Contingent earn-out consideration | 66.6 | 66.0 |
Contingent earn-out consideration | 27.3 | 43.0 |
Convertible notes | 0.0 | |
Total financial liabilities | 93.9 | 109.0 |
Significant unobservable inputs (level 3) | Money market funds | ||
Assets: | ||
Cash and cash equivalents | 0.0 | 0.0 |
Restricted cash and cash equivalents | 0.0 | 0.0 |
Restricted cash and cash equivalents, long term | 0.0 | 0.0 |
Significant unobservable inputs (level 3) | Bank-time deposits | ||
Assets: | ||
Cash and cash equivalents | 0.0 | 0.0 |
Short-term investments | 0.0 | 0.0 |
Restricted cash and cash equivalents | 0.0 | 0.0 |
Significant unobservable inputs (level 3) | Corporate bonds | ||
Assets: | ||
Cash and cash equivalents | 0.0 | |
Short-term investments | 0.0 | 0.0 |
Significant unobservable inputs (level 3) | Certificates of Deposit | ||
Assets: | ||
Cash and cash equivalents | 0.0 | |
Short-term investments | 0.0 | |
Significant unobservable inputs (level 3) | Private equity | ||
Assets: | ||
Private equity | 26.5 | 16.1 |
Significant unobservable inputs (level 3) | Foreign currency forward contracts | ||
Liabilities: | ||
Foreign currency forward contracts | $ 0.0 | 0.0 |
Significant unobservable inputs (level 3) | US Treasuries | ||
Assets: | ||
Cash and cash equivalents | 0.0 | |
Short-term investments | 0.0 | |
Significant unobservable inputs (level 3) | Commercial Paper [Member] | ||
Assets: | ||
Cash and cash equivalents | 0.0 | |
Short-term investments | $ 0.0 |
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Nov. 16, 2022 |
Jun. 01, 2021 |
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Contingent consideration, current | $ 66.6 | $ 66.0 | ||
Contingent consideration, noncurrent | 27.3 | 43.0 | ||
Investments in other assets | 8.0 | $ 20.0 | ||
Nordeus Limited | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Contingent earn-out required | $ 153.0 | |||
Contingent consideration liability | $ 61.1 | 65.4 | ||
Amount paid related to earn-out consideration arrangements | 70.1 | |||
General and administrative | $ 26.5 | |||
Nordeus Limited | Performance Period One | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Performance period | 12 months | |||
Nordeus Limited | Performance Period Two | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Performance period | 24 months | 12 months | ||
Popcore Limited | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Contingent earn-out required | $ 105.0 | |||
Performance period | 3 years | |||
Contingent consideration liability | $ 25.6 | |||
Zynga Inc | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Contingent consideration, current | 1.2 | |||
Contingent consideration, noncurrent | $ 1.7 |
SHORT-TERM INVESTMENTS - Schedule of Short-Term Investments (Details) - USD ($) $ in Millions |
Mar. 31, 2023 |
Mar. 31, 2022 |
---|---|---|
Debt Securities, Available-for-sale, Maturity, Amortized Cost, Rolling Maturity [Abstract] | ||
Cost or Amortized Cost | $ 189.0 | $ 825.9 |
Gross Unrealized Gains | 0.0 | 0.0 |
Gross Unrealized Losses | (2.0) | (5.8) |
Fair Value | 187.0 | 820.1 |
Bank-time deposits | ||
Debt Securities, Available-for-sale, Maturity, Amortized Cost, Rolling Maturity [Abstract] | ||
Cost or Amortized Cost | 41.8 | 131.8 |
Gross Unrealized Gains | 0.0 | 0.0 |
Gross Unrealized Losses | 0.0 | 0.0 |
Fair Value | 41.8 | 131.8 |
Corporate bonds | ||
Debt Securities, Available-for-sale, Maturity, Amortized Cost, Rolling Maturity [Abstract] | ||
Cost or Amortized Cost | 147.2 | 544.3 |
Gross Unrealized Gains | 0.0 | 0.0 |
Gross Unrealized Losses | (2.0) | (5.8) |
Fair Value | $ 145.2 | 538.5 |
US Treasuries | ||
Debt Securities, Available-for-sale, Maturity, Amortized Cost, Rolling Maturity [Abstract] | ||
Cost or Amortized Cost | 23.4 | |
Gross Unrealized Gains | 0.0 | |
Gross Unrealized Losses | 0.0 | |
Fair Value | 23.4 | |
Certificates of Deposit | ||
Debt Securities, Available-for-sale, Maturity, Amortized Cost, Rolling Maturity [Abstract] | ||
Cost or Amortized Cost | 1.0 | |
Gross Unrealized Gains | 0.0 | |
Gross Unrealized Losses | 0.0 | |
Fair Value | 1.0 | |
Commercial paper | ||
Debt Securities, Available-for-sale, Maturity, Amortized Cost, Rolling Maturity [Abstract] | ||
Cost or Amortized Cost | 125.4 | |
Gross Unrealized Gains | 0.0 | |
Gross Unrealized Losses | 0.0 | |
Fair Value | $ 125.4 |
SHORT-TERM INVESTMENTS - Short Term Maturities (Details) - USD ($) $ in Millions |
Mar. 31, 2023 |
Mar. 31, 2022 |
---|---|---|
Debt Securities, Available-for-sale, Maturity, Amortized Cost, Rolling Maturity [Abstract] | ||
Amortized cost, Due in 1 year or less | $ 189.0 | |
Amortized cost, Due in 1-2 years | 0.0 | |
Cost or Amortized Cost | 189.0 | $ 825.9 |
Debt Securities, Available-for-sale, Maturity, Fair Value, Rolling Maturity [Abstract] | ||
Fair value, Due in 1 year or less | 187.0 | |
Fair value, Due in 1-2 years | 0.0 | |
Total Short-term investments | $ 187.0 | $ 820.1 |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||
Forward contracts to sell foreign currencies | $ 224.3 | $ 132.8 | |
Forward contracts to purchase foreign currencies | 51.2 | 75.8 | |
Derivative instrument not designated as hedging instruments, (loss) gain, net | $ (15.1) | $ 5.9 | $ (3.6) |
SOFTWARE DEVELOPMENT COSTS AND LICENSES (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Capitalized software development costs and licenses | |||
Software development costs and licenses, Current | $ 65.9 | $ 81.4 | |
Software development costs and licenses, Non-current | 1,072.2 | 755.9 | |
Software development costs and licenses related to titles not released | 1,010.2 | 738.0 | |
Amortization and impairment of software development costs and licenses | |||
Amortization of software development costs and licenses | 179.7 | 131.1 | $ 113.9 |
Impairment charges | 79.1 | 70.6 | 39.1 |
Portion representing stock-based compensation | 9.5 | (48.4) | (8.7) |
Amortization and impairment, net of stock-based compensation | 268.3 | 153.3 | 144.3 |
Software Development Costs And Licenses | |||
Amortization and impairment of software development costs and licenses | |||
Amortization of software development costs and licenses | 41.2 | 46.8 | $ 43.3 |
Software development costs and licenses reduced | 108.1 | 96.9 | |
Research and development expense | 4.5 | ||
Software development costs, internally developed | |||
Capitalized software development costs and licenses | |||
Software development costs and licenses, Current | 47.4 | 59.2 | |
Software development costs and licenses, Non-current | 882.0 | 599.3 | |
Software development costs, externally developed | |||
Capitalized software development costs and licenses | |||
Software development costs and licenses, Current | 2.2 | 19.3 | |
Software development costs and licenses, Non-current | 169.7 | 145.2 | |
Licenses | |||
Capitalized software development costs and licenses | |||
Software development costs and licenses, Current | 16.3 | 2.9 | |
Software development costs and licenses, Non-current | 20.5 | 11.4 | |
Software Development Costs And Licenses, Government Grants | |||
Capitalized software development costs and licenses | |||
Software development costs and licenses, Current | 0.0 | 10.0 | |
Software development costs and licenses, Non-current | $ 256.8 | $ 256.5 |
FIXED ASSETS, NET (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Fixed assets | |||
Fixed assets, gross | $ 717.7 | $ 506.1 | |
Less: accumulated depreciation | (314.9) | (264.1) | |
Fixed assets, net | 402.8 | 242.0 | |
Depreciation expense | 90.3 | 61.2 | $ 56.3 |
United States | |||
Fixed assets | |||
Fixed assets, net | 234.1 | 110.8 | |
International | |||
Fixed assets | |||
Fixed assets, net | 168.7 | 131.2 | |
Computer equipment | |||
Fixed assets | |||
Fixed assets, gross | 266.9 | 174.1 | |
Leasehold improvements | |||
Fixed assets | |||
Fixed assets, gross | 235.1 | 158.0 | |
Computer software | |||
Fixed assets | |||
Fixed assets, gross | 102.0 | 67.2 | |
Buildings | |||
Fixed assets | |||
Fixed assets, gross | 62.1 | 66.1 | |
Furniture and fixtures | |||
Fixed assets | |||
Fixed assets, gross | 35.2 | 25.3 | |
Office equipment | |||
Fixed assets | |||
Fixed assets, gross | 16.4 | 15.4 | |
Fixed assets, net | |||
Fixed assets | |||
Depreciation expense | $ 88.8 | $ 59.1 | $ 54.8 |
GOODWILL AND INTANGIBLE ASSETS, NET - Goodwill (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Change in the goodwill balance | ||
Balance at the beginning of the period | $ 674.6 | $ 535.3 |
Currency translation adjustment | (0.5) | (11.5) |
Balance at the end of the period | 6,767.1 | 674.6 |
Nordeus | ||
Change in the goodwill balance | ||
Additions from acquisitions | 115.5 | |
Series of Individually Immaterial Business Acquisitions | ||
Change in the goodwill balance | ||
Additions from acquisitions | 26.5 | $ 35.3 |
Zynga | ||
Change in the goodwill balance | ||
Additions from acquisitions | 5,994.4 | |
Popcore Limited | ||
Change in the goodwill balance | ||
Additions from acquisitions | $ 72.1 |
GOODWILL AND INTANGIBLE ASSETS, NET - Schedule of Intangibles (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Components of the intangible assets subject to amortization | ||
Gross Carrying Amount | $ 5,657.4 | $ 435.8 |
Accumulated Amortization | (1,204.2) | (169.3) |
Net Book Value | $ 4,453.2 | 266.5 |
Weighted average useful life | ||
Developed Game Technology | ||
Components of the intangible assets subject to amortization | ||
Gross Carrying Amount | $ 4,434.5 | 122.5 |
Accumulated Amortization | (744.0) | (69.5) |
Net Book Value | $ 3,690.5 | 53.0 |
Weighted average useful life | 7 years | |
Branding and Trade Names | ||
Components of the intangible assets subject to amortization | ||
Gross Carrying Amount | $ 395.2 | 11.1 |
Accumulated Amortization | (33.1) | (3.5) |
Net Book Value | $ 362.1 | 7.6 |
Weighted average useful life | 12 years | |
Game Engine Technology | ||
Components of the intangible assets subject to amortization | ||
Gross Carrying Amount | $ 323.2 | 30.0 |
Accumulated Amortization | (73.5) | (13.7) |
Net Book Value | $ 249.7 | 16.3 |
Weighted average useful life | 4 years | |
User Base | ||
Components of the intangible assets subject to amortization | ||
Gross Carrying Amount | $ 319.2 | 9.4 |
Accumulated Amortization | (274.4) | (8.9) |
Net Book Value | $ 44.8 | 0.5 |
Weighted average useful life | 1 year | |
Developer Relationships | ||
Components of the intangible assets subject to amortization | ||
Gross Carrying Amount | $ 57.0 | 0.0 |
Accumulated Amortization | (12.2) | 0.0 |
Net Book Value | $ 44.8 | 0.0 |
Weighted average useful life | 5 years | |
Advertising Technology | ||
Components of the intangible assets subject to amortization | ||
Gross Carrying Amount | $ 43.0 | 0.0 |
Accumulated Amortization | (12.3) | 0.0 |
Net Book Value | $ 30.7 | 0.0 |
Weighted average useful life | 3 years | |
Customer Relationships | ||
Components of the intangible assets subject to amortization | ||
Gross Carrying Amount | $ 31.0 | 0.0 |
Accumulated Amortization | (5.3) | 0.0 |
Net Book Value | $ 25.7 | 0.0 |
Weighted average useful life | 5 years | |
Intellectual Property | ||
Components of the intangible assets subject to amortization | ||
Gross Carrying Amount | $ 22.3 | 229.8 |
Accumulated Amortization | (18.2) | (42.3) |
Net Book Value | $ 4.1 | 187.5 |
Weighted average useful life | 6 years | |
In Place Lease | ||
Components of the intangible assets subject to amortization | ||
Gross Carrying Amount | $ 1.9 | 2.3 |
Accumulated Amortization | (1.1) | (0.7) |
Net Book Value | $ 0.8 | 1.6 |
Weighted average useful life | 4 years | |
Analytics Technology | ||
Components of the intangible assets subject to amortization | ||
Gross Carrying Amount | $ 30.1 | 30.7 |
Accumulated Amortization | (30.1) | (30.7) |
Net Book Value | $ 0.0 | $ 0.0 |
Weighted average useful life | 0 years |
GOODWILL AND INTANGIBLE ASSETS, NET - Amortization of Intangible Assets (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Capitalized software development costs and licenses | |||
Total amortization of intangible assets | $ 1,506.7 | $ 64.8 | $ 32.2 |
Impairment charges | $ 465.3 | 0.0 | 0.0 |
Impairment, Intangible Asset, Finite-Lived, Statement of Income or Comprehensive Income [Extensible Enumeration] | Cost of revenue | ||
Cost of revenue | |||
Capitalized software development costs and licenses | |||
Total amortization of intangible assets | $ 1,171.5 | 52.0 | 21.2 |
Selling and marketing | |||
Capitalized software development costs and licenses | |||
Total amortization of intangible assets | 277.1 | 5.3 | 3.6 |
Research and development | |||
Capitalized software development costs and licenses | |||
Total amortization of intangible assets | 24.6 | 5.5 | 6.7 |
Depreciation and amortization | |||
Capitalized software development costs and licenses | |||
Total amortization of intangible assets | $ 33.5 | $ 2.0 | $ 0.7 |
GOODWILL AND INTANGIBLE ASSETS, NET - Estimated Future Amortization (Details) $ in Millions |
Mar. 31, 2023
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
2024 | $ 862.1 |
2025 | 809.2 |
2026 | 788.2 |
2027 | 725.4 |
2028 | $ 659.3 |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Millions |
Mar. 31, 2023 |
Mar. 31, 2022 |
---|---|---|
Liabilities, Current [Abstract] | ||
Software development royalties | $ 510.7 | $ 615.7 |
Compensation and benefits | 177.5 | 134.0 |
Marketing and promotions | 132.7 | 30.6 |
Deferred acquisition payments | 82.7 | 78.6 |
Licenses | 63.0 | 81.1 |
Refund liability | 52.4 | 51.7 |
Tax payable | 33.0 | 14.1 |
Interest payable | 29.6 | 0.0 |
Sales tax liability | 14.0 | 17.2 |
Other | 130.1 | 51.9 |
Accrued expenses and other current liabilities | $ 1,225.7 | $ 1,074.9 |
DEBT - Long-term Debt, Net (Details) - USD ($) $ in Millions |
Mar. 31, 2023 |
May 23, 2022 |
---|---|---|
Debt Instrument [Line Items] | ||
Total | $ 1,744.1 | |
Unamortized discount and issuance costs | (11.1) | |
Long-term debt, net | 1,733.0 | |
Significant other observable inputs (level 2) | ||
Debt Instrument [Line Items] | ||
Total | $ 1,669.4 | |
2025 Notes | ||
Debt Instrument [Line Items] | ||
Annual Interest Rate | 3.55% | |
Total | $ 600.0 | |
2025 Notes | Significant other observable inputs (level 2) | ||
Debt Instrument [Line Items] | ||
Total | $ 583.8 | |
2027 Notes | ||
Debt Instrument [Line Items] | ||
Annual Interest Rate | 3.70% | |
Total | $ 600.0 | |
2027 Notes | Significant other observable inputs (level 2) | ||
Debt Instrument [Line Items] | ||
Total | $ 580.9 | |
2032 Notes | ||
Debt Instrument [Line Items] | ||
Annual Interest Rate | 4.00% | |
Total | $ 500.0 | |
2032 Notes | Significant other observable inputs (level 2) | ||
Debt Instrument [Line Items] | ||
Total | $ 460.6 | |
2024 Convertible Notes | ||
Debt Instrument [Line Items] | ||
Annual Interest Rate | 0.25% | 0.25% |
Total | $ 20.8 | |
2024 Convertible Notes | Significant other observable inputs (level 2) | ||
Debt Instrument [Line Items] | ||
Total | $ 20.8 | |
2026 Convertible Notes | ||
Debt Instrument [Line Items] | ||
Annual Interest Rate | 0.00% | 0.00% |
Total | $ 23.3 | |
2026 Convertible Notes | Significant other observable inputs (level 2) | ||
Debt Instrument [Line Items] | ||
Total | $ 23.3 |
DEBT - Short-term Debt (Details) - USD ($) $ in Millions |
Mar. 31, 2023 |
Mar. 31, 2022 |
---|---|---|
Short-Term Debt [Line Items] | ||
Total | $ 1,350.0 | |
Unamortized discount and issuance costs | (3.2) | |
Short-term debt, net | 1,346.8 | $ 0.0 |
Significant other observable inputs (level 2) | ||
Short-Term Debt [Line Items] | ||
Total | $ 1,328.2 | |
2024 Notes | ||
Short-Term Debt [Line Items] | ||
Annual Interest Rate | 3.30% | |
Total | $ 1,000.0 | |
2024 Notes | Significant other observable inputs (level 2) | ||
Short-Term Debt [Line Items] | ||
Total | $ 978.2 | |
2023 Term Loan | ||
Short-Term Debt [Line Items] | ||
Annual Interest Rate | 3.60% | |
Total | $ 350.0 | |
2023 Term Loan | Significant other observable inputs (level 2) | ||
Short-Term Debt [Line Items] | ||
Total | $ 350.0 |
DEBT - Interest and Other, Net (Details) $ in Millions |
12 Months Ended |
---|---|
Mar. 31, 2023
USD ($)
| |
Debt Instrument [Line Items] | |
Interest expense | $ 108.6 |
2024 Notes | |
Debt Instrument [Line Items] | |
Interest expense | 31.5 |
2025 Notes | |
Debt Instrument [Line Items] | |
Interest expense | 20.5 |
2027 Notes | |
Debt Instrument [Line Items] | |
Interest expense | 21.4 |
2032 Notes | |
Debt Instrument [Line Items] | |
Interest expense | 19.2 |
Term Loan | |
Debt Instrument [Line Items] | |
Interest expense | 11.9 |
2022 Credit Agreement | |
Debt Instrument [Line Items] | |
Interest expense | $ 4.1 |
DEBT - Debt Maturities (Details) $ in Millions |
Mar. 31, 2023
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
2024 | $ 1,350.0 |
2025 | 21.4 |
2026 | 600.0 |
2027 | 29.4 |
2028 | 600.0 |
Thereafter | 500.0 |
Total | 3,100.8 |
Fair Value Adjustments | (6.7) |
Total | $ 3,094.1 |
DEBT - Bridge Loan (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Apr. 14, 2022 |
|
Debt Instrument [Line Items] | ||
Interest expense | $ 108.6 | |
Zynga Inc | Bridge Loan | ||
Debt Instrument [Line Items] | ||
Principal amount at issuance | $ 2,700.0 | |
Interest expense | $ 6.1 |
DEBT - Senior Notes (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2023 |
Mar. 31, 2022 |
Mar. 31, 2021 |
Apr. 14, 2022 |
|
Debt Instrument [Line Items] | |||||
Total | $ 1,744.1 | $ 1,744.1 | |||
Amortization of debt issuance costs | $ 14.1 | $ 6.5 | $ 0.0 | ||
2024 Notes | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, percentage rate | 3.30% | 3.30% | |||
2025 Notes | |||||
Debt Instrument [Line Items] | |||||
Total | $ 600.0 | $ 600.0 | |||
Debt instrument, percentage rate | 3.55% | 3.55% | |||
2027 Notes | |||||
Debt Instrument [Line Items] | |||||
Total | $ 600.0 | $ 600.0 | |||
Debt instrument, percentage rate | 3.70% | 3.70% | |||
2032 Notes | |||||
Debt Instrument [Line Items] | |||||
Total | $ 500.0 | $ 500.0 | |||
Debt instrument, percentage rate | 4.00% | 4.00% | |||
Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, change of control, purchase price, percent | 101.00% | ||||
Debt instrument, event of default, percent of principal threshold | 25.00% | ||||
Deferred financing costs | $ 19.1 | ||||
Debt instrument, unamortized discount | 1.3 | ||||
Amortization of debt issuance costs | $ 5.5 | ||||
Amortization of debt discount (premium) | 0.4 | ||||
Senior Notes | 2024 Notes | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, periodic payment, interest | $ 31.5 | ||||
Senior Notes | 2025, 2027, And 2032 Notes | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, periodic payment, interest | $ 31.8 | ||||
Zynga Inc | Bridge Loan | |||||
Debt Instrument [Line Items] | |||||
Principal amount at issuance | $ 2,700.0 |
DEBT - Credit Agreement (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|
Sep. 22, 2022 |
Jun. 22, 2022 |
May 23, 2022 |
Mar. 31, 2023 |
Mar. 31, 2023 |
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Debt Instrument [Line Items] | |||||||
Amortization of debt issuance costs | $ 14.1 | $ 6.5 | $ 0.0 | ||||
Total | $ 1,744.1 | 1,744.1 | |||||
Payment of convertible notes | 1,166.8 | 0.0 | $ 0.0 | ||||
Credit Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Amount of additional borrowings by which maximum borrowing capacity may be increased | $ 250.0 | ||||||
Line Of Credit Facility, Optional Increase Additional Borrowings, Percent | 35.00% | ||||||
Deferred financing costs | 3.5 | 3.5 | |||||
Amortization of debt issuance costs | 0.6 | ||||||
Available borrowings | 499.5 | 499.5 | 247.5 | ||||
Outstanding letters of credit | 2.8 | 2.8 | $ 2.5 | ||||
Credit Agreement | 2022 Credit Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Total | $ 200.0 | ||||||
Line Of Credit Facility, Percent Drawn | 3.28% | ||||||
Outstanding Borrowing Percentage | 4.84% | ||||||
Available borrowings | 499.5 | $ 499.5 | |||||
Interest expense and fees | $ 4.1 | ||||||
Credit Agreement | Base rate | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate at end of period | 8.00% | 8.00% | |||||
Credit Agreement | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate at end of period | 4.80% | 4.80% | |||||
Credit Agreement | Minimum | Base rate | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate added to base rate | 0.00% | ||||||
Credit Agreement | Minimum | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate added to base rate | 1.00% | ||||||
Credit Agreement | Maximum | Base rate | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate added to base rate | 0.625% | ||||||
Credit Agreement | Maximum | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate added to base rate | 1.625% | ||||||
Revolving Credit Facility | Credit Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Debt term | 5 years | ||||||
Maximum borrowing capacity | $ 500.0 | ||||||
Letter of Credit | Credit Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 100.0 |
DEBT - Term Loan (Details) - USD ($) $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Jun. 22, 2022 |
Mar. 31, 2023 |
Dec. 31, 2022 |
Mar. 31, 2022 |
|
Short-Term Debt [Line Items] | ||||
Short-term debt, net | $ 1,346.8 | $ 0.0 | ||
2023 Term Loan | ||||
Short-Term Debt [Line Items] | ||||
Debt instrument, percentage rate | 3.60% | |||
Term Loan | ||||
Short-Term Debt [Line Items] | ||||
Debt term | 364 days | |||
Debt instrument, percentage rate | 3.60% | 5.91% | 5.62% | |
Debt instrument, periodic payment, interest | $ 11.6 | |||
Term Loan | Minimum | Base rate | ||||
Short-Term Debt [Line Items] | ||||
Interest rate added to base rate | 0.00% | |||
Term Loan | Minimum | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | ||||
Short-Term Debt [Line Items] | ||||
Interest rate added to base rate | 0.75% | |||
Term Loan | Maximum | Base rate | ||||
Short-Term Debt [Line Items] | ||||
Interest rate added to base rate | 0.375% | |||
Term Loan | Maximum | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | ||||
Short-Term Debt [Line Items] | ||||
Interest rate added to base rate | 1.375% |
DEBT - Convertibles Notes (Details) $ / shares in Units, $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jun. 22, 2022
USD ($)
day
shares
|
May 23, 2022
USD ($)
$ / shares
shares
|
Mar. 31, 2023
USD ($)
|
|
Debt Instrument [Line Items] | |||
Short-term debt | $ 1,733.0 | ||
Total | 1,744.1 | ||
Convertible Debt | |||
Debt Instrument [Line Items] | |||
Loss on fair value adjustments, net | $ 37.6 | ||
Convertible Debt | Debt Instrument, Redemption, Period One | |||
Debt Instrument [Line Items] | |||
Number of trading days | day | 20 | ||
Number of consecutive trading days | day | 30 | ||
Redemption price, percentage | 130.00% | ||
Convertible Debt | Debt Instrument, Redemption, Period Two | |||
Debt Instrument [Line Items] | |||
Number of trading days | day | 5 | ||
Number of consecutive trading days | day | 5 | ||
Redemption price, percentage | 98.00% | ||
Zynga Inc | |||
Debt Instrument [Line Items] | |||
Exchange ratio (in shares) | shares | 0.0406 | ||
Cash consideration, per share (in dollars per share) | $ / shares | $ 3.50 | ||
Zynga Inc | Convertible Debt | |||
Debt Instrument [Line Items] | |||
Exchange ratio (in shares) | shares | 0.0406 | ||
Cash consideration, per share (in dollars per share) | $ / shares | $ 3.50 | ||
2024 Convertible Notes | |||
Debt Instrument [Line Items] | |||
Annual Interest Rate | 0.25% | 0.25% | |
Total | $ 20.8 | ||
2026 Convertible Notes | |||
Debt Instrument [Line Items] | |||
Annual Interest Rate | 0.00% | 0.00% | |
Total | $ 23.3 | ||
0.25% Convertible Senior Notes due 2024 | Convertible Debt | |||
Debt Instrument [Line Items] | |||
Principal tendered for cash | $ 0.3 | ||
Principal surrendered for conversion | 668.3 | ||
Amount paid for tendered or conversion of notes | $ 321.6 | ||
Shares issued (in shares) | shares | 3,700,000 | ||
Short-term debt | $ 21.4 | $ 778.6 | |
0.25% Convertible Senior Notes due 2024 | Zynga Inc | Convertible Debt | |||
Debt Instrument [Line Items] | |||
Principal amount at issuance | 690.0 | ||
0% Convertible Senior Notes due 2026 | Convertible Debt | |||
Debt Instrument [Line Items] | |||
Principal tendered for cash | 845.1 | ||
Principal surrendered for conversion | 0.0 | ||
Amount paid for tendered or conversion of notes | 845.1 | ||
Short-term debt | $ 29.4 | 874.5 | |
0% Convertible Senior Notes due 2026 | Zynga Inc | Convertible Debt | |||
Debt Instrument [Line Items] | |||
Principal amount at issuance | $ 874.5 |
DEBT - Capped Calls (Details) - Capped Call Options - USD ($) $ in Millions |
1 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Jul. 31, 2022 |
Mar. 31, 2023 |
Jun. 30, 2022 |
May 23, 2022 |
|
Derivative [Line Items] | ||||
Derivative Asset | $ 140.1 | $ 131.3 | ||
Gain from fair value adjustments | $ 8.8 | |||
Cash for settlement of capped calls | $ 140.1 |
(LOSS) EARNINGS PER SHARE ("EPS") (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2023 |
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Computation of Basic (loss) earnings per share: | ||||
Net (loss) income | $ (1,124.7) | $ 418.0 | $ 588.9 | |
Weighted average common shares outstanding - basic (in shares) | 159.9 | 115.5 | 114.6 | |
Basic (loss) earnings per share (in dollars per share) | $ (7.03) | $ 3.62 | $ 5.14 | |
Computation of Diluted (loss) earnings per share: | ||||
Net (loss) income | $ (1,124.7) | $ 418.0 | $ 588.9 | |
Weighted average common shares outstanding - basic (in shares) | 159.9 | 115.5 | 114.6 | |
Add: dilutive effect of common stock equivalents (in shares) | 0.0 | 1.3 | 1.1 | |
Weighted average common shares outstanding—diluted (in shares) | 159.9 | 116.8 | 115.7 | |
Diluted (loss) earnings per share (in dollars per share) | $ (7.03) | $ 3.58 | $ 5.09 | |
Share-Based Payment Arrangement | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potentially dilutive shares (in shares) | 1.6 | |||
Convertible Debt Securities | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potentially dilutive shares (in shares) | 0.6 |
LEASES - Narrative (Details) $ in Millions |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2023
USD ($)
renewal_option
|
Mar. 31, 2023
USD ($)
renewal_option
|
Mar. 31, 2022
USD ($)
|
Mar. 31, 2021
USD ($)
|
|
Lessee, Lease, Description [Line Items] | ||||
Number of renewal options | renewal_option | 1 | 1 | ||
Operating lease costs | $ 109.8 | $ 46.3 | $ 37.3 | |
Short term lease costs | 4.1 | 1.4 | 1.1 | |
Cash paid for amounts included in the measurement of lease liabilities | 55.9 | 32.8 | 35.5 | |
ROU assets obtained in exchange for lease obligations | $ 145.3 | $ 74.0 | $ 34.6 | |
Remaining lease term | 8 years 11 months 4 days | 8 years 11 months 4 days | 10 years 1 month 2 days | 8 years 7 months 9 days |
Discount rate | 4.33% | 4.33% | 4.29% | 4.91% |
Operating lease liability | $ 13.6 | $ 13.6 | ||
General and administrative | ||||
Lessee, Lease, Description [Line Items] | ||||
Impairment loss | $ 30.0 | |||
Minimum | ||||
Lessee, Lease, Description [Line Items] | ||||
Remaining lease terms | 1 year | 1 year | ||
Lease renewal terms | 1 year | 1 year | ||
Terms of operating leases | 5 years | 5 years | ||
Maximum | ||||
Lessee, Lease, Description [Line Items] | ||||
Remaining lease terms | 15 years | 15 years | ||
Lease renewal terms | 5 years | 5 years | ||
Terms of operating leases | 7 years | 7 years |
LEASES - Operating Lease Maturities (Details) $ in Millions |
Mar. 31, 2023
USD ($)
|
---|---|
Leases [Abstract] | |
2024 | $ 67.5 |
2025 | 70.1 |
2026 | 52.8 |
2027 | 48.4 |
2028 | 45.7 |
Thereafter | 201.3 |
Total future lease payments | 485.8 |
Less imputed interest | (78.6) |
Total lease liabilities | $ 407.2 |
COMMITMENTS AND CONTINGENCIES - Annual Minimum Obligations (Details) $ in Millions |
Mar. 31, 2023
USD ($)
|
---|---|
Purchase Obligations | |
2024 | $ 165.8 |
2025 | 89.3 |
2026 | 40.8 |
2027 | 4.0 |
2028 | 0.2 |
Thereafter | 0.0 |
Total | 300.1 |
2024 | 497.2 |
2025 | 340.9 |
2026 | 252.8 |
2027 | 29.4 |
2028 | 16.6 |
Thereafter | 13.0 |
Total | 1,149.9 |
Software Development and Licensing | |
Unrecorded Unconditional Purchase Obligation | |
2024 | 299.9 |
2025 | 196.2 |
2026 | 140.8 |
2027 | 9.3 |
2028 | 8.0 |
Thereafter | 0.0 |
Total | 654.2 |
Marketing | |
Unrecorded Unconditional Purchase Obligation | |
2024 | 31.5 |
2025 | 55.4 |
2026 | 71.2 |
2027 | 16.1 |
2028 | 8.4 |
Thereafter | 13.0 |
Total | $ 195.6 |
COMMITMENTS AND CONTINGENCIES - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Commitments and Contingencies Disclosure [Abstract] | |||
Matching contribution expense incurred by the company | $ 36.1 | $ 22.4 | $ 17.7 |
INCOME TAXES - Current Income Tax (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Components of (loss) income before income taxes | |||
Domestic | $ (937.0) | $ 357.5 | $ 468.0 |
Foreign | (401.1) | 107.9 | 209.8 |
(Loss) income before income taxes | (1,338.1) | 465.4 | 677.8 |
Current: | |||
U.S. federal | 70.2 | 12.0 | 18.4 |
U.S. state and local | 3.3 | (0.6) | 6.0 |
Foreign | 98.0 | 24.1 | 27.4 |
Total current income taxes | 171.5 | 35.5 | 51.8 |
Deferred: | |||
U.S. federal | (175.4) | 34.8 | 43.6 |
U.S. state and local | (31.4) | 2.9 | 1.1 |
Foreign | (178.1) | (25.8) | (7.6) |
Total deferred income taxes | (384.9) | 11.9 | 37.1 |
(Benefit from) provision for income taxes | $ (213.4) | $ 47.4 | $ 88.9 |
Reconciliation of effective tax rate to the U.S. statutory federal income tax rate | |||
U.S. federal statutory rate | 21.00% | 21.00% | 21.00% |
State and local taxes, net of U.S. federal benefit | 2.00% | 1.20% | 1.10% |
Foreign tax rate differential | (0.30%) | (1.80%) | (2.90%) |
Foreign earnings | (1.30%) | (2.30%) | (0.10%) |
Tax credits | 5.70% | (6.60%) | (4.30%) |
Excess tax benefits from stock-based compensation | (0.50%) | (3.10%) | (2.00%) |
Earn-out adjustments | (0.40%) | 2.20% | 0.00% |
Valuation allowance—domestic | (6.30%) | (0.10%) | 0.10% |
Valuation allowance—foreign | (0.10%) | 0.40% | 0.00% |
Nondeductible compensation | (0.90%) | 0.40% | 0.30% |
Global intangible low-taxed income | (3.10%) | 0.10% | 0.30% |
Foreign-derived intangible income | 1.80% | (0.90%) | (0.80%) |
Change in reserves | (0.10%) | (0.90%) | (0.40%) |
Other | (1.60%) | 0.60% | 0.80% |
Effective tax rate | 15.90% | 10.20% | 13.10% |
Nondeductible expense | $ 8.2 |
INCOME TAXES - Deferred Taxes (Details) - USD ($) $ in Millions |
Mar. 31, 2023 |
Mar. 31, 2022 |
---|---|---|
Deferred tax assets: | ||
Tax credit carryforward | $ 159.5 | $ 71.6 |
Capitalized development costs, software and depreciation | 157.8 | 0.0 |
Equity-based compensation | 109.8 | 88.4 |
Accrued compensation expense | 96.6 | 106.0 |
Operating lease liabilities | 90.6 | 54.3 |
Tax basis step up related to TRAF | 79.1 | 58.5 |
Net operating loss carryforward | 50.3 | 10.3 |
Deferred revenue | 0.0 | 13.0 |
Other | 26.0 | 12.0 |
Total deferred tax assets | 769.7 | 414.1 |
Less: Valuation allowance | (338.2) | (121.9) |
Net deferred tax assets | 431.5 | 292.2 |
Deferred tax liabilities: | ||
Intangible amortization | (841.0) | (45.1) |
Right of use assets | (64.7) | (50.0) |
Deferred revenue | (15.0) | 0.0 |
Capitalized software and depreciation | 0.0 | (145.1) |
Total deferred tax liabilities | (920.7) | (240.2) |
Deferred tax liabilities, net | (489.2) | |
Net deferred tax asset | 52.0 | |
Deferred tax assets | 44.8 | 73.8 |
Deferred tax liabilities | 534.0 | 21.8 |
Deferred tax assets | ||
Deferred tax liabilities: | ||
Deferred tax assets | 44.8 | 73.8 |
Other long term liabilities | ||
Deferred tax liabilities: | ||
Deferred tax liabilities | $ 534.0 | $ 21.8 |
INCOME TAXES - Loss Carryforwards (Details) - USD ($) $ in Millions |
Mar. 31, 2023 |
Mar. 31, 2022 |
---|---|---|
Operating loss carryforwards | ||
Total amount of undistributed earnings of foreign subsidiaries | $ 64.6 | $ 392.6 |
Domestic | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | 652.5 | |
Domestic | Expire from 2023 to 2028 | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | 53.7 | |
Domestic | Expire in 2029 to 2032 | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | 217.5 | |
Domestic | Expire 2041 to 2042 | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | 179.9 | |
Foreign | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | 84.5 | |
Foreign | Expire in 2026 to 2028 | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | 39.4 | |
Foreign | Expire 2041 to 2042 | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | 7.2 | |
Domestic Tax Authority | ||
Operating loss carryforwards | ||
Tax credit carryforward | 359.9 | |
Domestic Tax Authority | Expire 2039 to 2043 | ||
Operating loss carryforwards | ||
Tax credit carryforward | 8.4 | |
Domestic Tax Authority | Expire 2032 to 2042 | ||
Operating loss carryforwards | ||
Tax credit carryforward | $ 67.3 |
INCOME TAXES - Uncertain Tax Positions (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Income Tax Contingency [Line Items] | |||
Increase in interest and penalties | $ 8.9 | $ 1.9 | $ 2.6 |
Gross amount of interest and penalties accrued | 20.2 | 11.2 | |
Gross unrecognized tax benefits including interest and penalties | 294.8 | ||
Gross unrealized tax benefits, which would affect effective tax rate, if realized | 137.2 | ||
Increase (decrease) in unrecognized tax benefits | 118.8 | ||
Possible reduction of unrecognized tax benefits within the next 12 months | 61.3 | ||
Aggregate changes to the liability for gross uncertain tax position, excluding interest and penalties | |||
Balance, beginning of period | 164.8 | 158.3 | 127.5 |
Additions: | |||
Current year tax positions | 26.5 | 10.3 | 18.9 |
Prior year tax positions | 109.7 | 4.2 | 21.0 |
Reduction of prior year tax positions | (26.3) | 0.0 | (1.0) |
Lapse of statute of limitations | 0.0 | (8.0) | (8.1) |
Balance, end of period | 274.7 | $ 164.8 | $ 158.3 |
Zynga Inc | |||
Additions: | |||
Prior year tax positions | $ 109.9 |
STOCK-BASED COMPENSATION - Stock Incentive Plan Narrative (Details) - 2017 Plan - shares shares in Millions |
Mar. 31, 2023 |
Sep. 30, 2017 |
---|---|---|
Stock-based compensation | ||
Number of shares authorized (in shares) | 29.3 | |
Number of shares available for grant (in shares) | 15.5 |
STOCK-BASED COMPENSATION - Compensation Expense (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Stock-based compensation expense | |||
Stock-based compensation expense before income taxes | $ 317.8 | $ 183.0 | $ 110.5 |
Income tax provision/(benefit) | (45.8) | (35.4) | (21.7) |
Stock-based compensation expense, net of income tax benefit | 272.0 | 147.6 | 88.8 |
Capitalized stock-based compensation expense | 74.4 | 82.1 | 30.1 |
Cost of revenue | |||
Stock-based compensation expense | |||
Stock-based compensation expense before income taxes | (9.5) | 48.4 | 8.7 |
Selling and marketing | |||
Stock-based compensation expense | |||
Stock-based compensation expense before income taxes | 95.2 | 30.0 | 18.3 |
General and administrative | |||
Stock-based compensation expense | |||
Stock-based compensation expense before income taxes | 115.5 | 66.5 | 56.9 |
Research and development | |||
Stock-based compensation expense | |||
Stock-based compensation expense before income taxes | $ 116.6 | $ 38.1 | $ 26.6 |
STOCK-BASED COMPENSATION - Stock-Based Compensation Expense Narrative (Details) - USD ($) shares in Millions, $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
May 23, 2022 |
Mar. 31, 2023 |
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Stock-based compensation | ||||
Reversal of forfeiture awards | $ 49.5 | $ 0.7 | $ 69.8 | |
Reversal of capitalized costs | 11.9 | 3.2 | 10.8 | |
Zynga Inc | ||||
Stock-based compensation | ||||
Replacement equity awards | $ 151.7 | |||
Acceleration of awards, cost | 28.6 | |||
Performance and market-based restricted stock awards | ||||
Stock-based compensation | ||||
Fair values of restricted stock units vested | 321.8 | $ 208.6 | $ 205.9 | |
Restricted Stock Units And Performance Share Units | Zynga Inc | ||||
Stock-based compensation | ||||
Future unrecognized compensation cost, net of estimated forfeitures | $ 236.7 | |||
Number of awards issued (in shares) | 4.2 | |||
Unrecognized share-based compensation cost, period of recognition | 1 year 4 months 24 days | |||
Stock Options | Zynga Inc | ||||
Stock-based compensation | ||||
Future unrecognized compensation cost, net of estimated forfeitures | $ 0.9 | |||
Number of awards issued (in shares) | 1.5 | |||
Unrecognized share-based compensation cost, period of recognition | 8 months 12 days | |||
Restricted Stock | ||||
Stock-based compensation | ||||
Future unrecognized compensation cost, net of estimated forfeitures | $ 833.2 | |||
Weighted average remaining contractual terms | 2 years 9 months 18 days |
STOCK-BASED COMPENSATION - Restricted Stock Units Narrative (Details) - shares shares in Thousands |
12 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Minimum | ZMC | 2017 Management Agreement | ||
Stock-based compensation | ||
Share Based Compensation Arrangement By Share Based Payment Award, Award Measurement Period | 2 years | |
Maximum | ZMC | 2017 Management Agreement | ||
Stock-based compensation | ||
Share Based Compensation Arrangement By Share Based Payment Award, Award Measurement Period | 3 years | |
Total Performance-based | ZMC | 2017 Management Agreement | ||
Stock-based compensation | ||
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments other than Option Percentage of Grants Tied to Performance Measure As Defined In Agreement | 50.00% | |
Market Based Restricted Stock | ZMC | 2017 Management Agreement | ||
Stock-based compensation | ||
Vesting percentage | 50.00% | |
Market Based Restricted Stock | Maximum | 2017 Management Agreement | ||
Stock-based compensation | ||
Vesting percentage | 75.00% | |
Restricted Stock | ||
Stock-based compensation | ||
Award vesting period | 3 years | |
Restricted Stock | 2017 Management Agreement | ||
Stock-based compensation | ||
Nonvested shares (in shares) | 1,100 | 400 |
Vested (in shares) | 200 | |
Forfeited (in shares) | 100 |
STOCK-BASED COMPENSATION - Stock Activity (Details) - USD ($) $ / shares in Units, shares in Millions |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Additional Disclosures [Abstract] | |||
Aggregate intrinsic value, options outstanding | $ 66,300,000 | ||
ZMC | 2017 Management Agreement | |||
Shares | |||
Granted (in shares) | 873.0 | 176.0 | |
Employee Market-Based | |||
Weighted-average assumptions | |||
Risk-free interest rate | 0.10% | 0.20% | |
Expected stock price volatility | 37.30% | 40.70% | |
Expected service period (years) | 1 year 6 months | 1 year 6 months | |
Dividends | $ 0 | $ 0 | $ 0 |
Employee Market-Based | Minimum | |||
Weighted-average assumptions | |||
Risk-free interest rate | 2.60% | ||
Expected stock price volatility | 35.90% | ||
Expected service period (years) | 1 year 9 months 18 days | ||
Employee Market-Based | Maximum | |||
Weighted-average assumptions | |||
Risk-free interest rate | 2.80% | ||
Expected stock price volatility | 37.60% | ||
Expected service period (years) | 2 years 9 months 18 days | ||
Non-Employee Market-Based | |||
Weighted-average assumptions | |||
Risk-free interest rate | 0.20% | 0.20% | |
Expected stock price volatility | 36.30% | 40.80% | |
Expected service period (years) | 1 year | 1 year | |
Dividends | $ 0 | $ 0 | $ 0 |
Non-Employee Market-Based | Minimum | |||
Weighted-average assumptions | |||
Risk-free interest rate | 2.40% | ||
Expected stock price volatility | 34.20% | ||
Expected service period (years) | 1 year 9 months 18 days | ||
Non-Employee Market-Based | Maximum | |||
Weighted-average assumptions | |||
Risk-free interest rate | 2.80% | ||
Expected stock price volatility | 37.60% | ||
Expected service period (years) | 2 years 9 months 18 days | ||
Time-based | |||
Shares | |||
Non-vested restricted stock units at the beginning of the year (in shares) | 1.8 | ||
Granted (in shares) | 2.1 | ||
Converted ( in shares) | 4.0 | ||
Vested (in shares) | (2.2) | ||
Forfeited (in shares) | (0.6) | ||
Non-vested restricted stock units at the end of the year (in shares) | 5.1 | 1.8 | |
Weighted Average Fair Value on Grant Date | |||
Non-vested restricted stock at the beginning of the year (in dollars per share) | $ 155.36 | ||
Granted (in dollars per share) | 119.17 | ||
Converted (in dollars per share) | 116.12 | ||
Vested (in dollars per share) | 126.71 | ||
Forfeited (in dollars per share) | 121.59 | ||
Non-vested restricted stock at the end of the year (in dollars per share) | $ 126.34 | $ 155.36 | |
Time-based | ZMC | 2017 Management Agreement | |||
Shares | |||
Granted (in shares) | 192.0 | 51.0 | |
Market-based | ZMC | 2017 Management Agreement | |||
Shares | |||
Granted (in shares) | 510.0 | 93.0 | |
IP | ZMC | 2017 Management Agreement | |||
Shares | |||
Granted (in shares) | 18.0 | 16.0 | |
Recurrent consumer spending | ZMC | 2017 Management Agreement | |||
Shares | |||
Granted (in shares) | 153.0 | 16.0 | |
Total Performance-based | ZMC | 2017 Management Agreement | |||
Shares | |||
Granted (in shares) | 171.0 | 32.0 | |
Market-based restricted shares | |||
Shares | |||
Non-vested restricted stock units at the beginning of the year (in shares) | 0.3 | ||
Granted (in shares) | 0.5 | ||
Converted ( in shares) | 0.1 | ||
Vested (in shares) | (0.2) | ||
Forfeited (in shares) | 0.0 | ||
Non-vested restricted stock units at the end of the year (in shares) | 0.7 | 0.3 | |
Weighted Average Fair Value on Grant Date | |||
Non-vested restricted stock at the beginning of the year (in dollars per share) | $ 242.90 | ||
Granted (in dollars per share) | 177.51 | ||
Converted (in dollars per share) | 116.12 | ||
Vested (in dollars per share) | 209.82 | ||
Forfeited (in dollars per share) | 208.56 | ||
Non-vested restricted stock at the end of the year (in dollars per share) | $ 183.72 | $ 242.90 | |
Performance Based Awards | |||
Shares | |||
Non-vested restricted stock units at the beginning of the year (in shares) | 3.6 | ||
Granted (in shares) | 1.0 | ||
Converted ( in shares) | 0.2 | ||
Vested (in shares) | (0.2) | ||
Forfeited (in shares) | (0.7) | ||
Non-vested restricted stock units at the end of the year (in shares) | 3.9 | 3.6 | |
Weighted Average Fair Value on Grant Date | |||
Non-vested restricted stock at the beginning of the year (in dollars per share) | $ 112.81 | ||
Granted (in dollars per share) | 125.13 | ||
Converted (in dollars per share) | 86.09 | ||
Vested (in dollars per share) | 117.36 | ||
Forfeited (in dollars per share) | 119.63 | ||
Non-vested restricted stock at the end of the year (in dollars per share) | $ 113.28 | $ 112.81 | |
Stock Options | |||
Shares | |||
Non-vested restricted stock units at the beginning of the year (in shares) | 0.0 | ||
Granted (in shares) | 0.0 | ||
Converted ( in shares) | 1.6 | ||
Vested (in shares) | (0.9) | ||
Forfeited (in shares) | 0.0 | ||
Non-vested restricted stock units at the end of the year (in shares) | 0.7 | 0.0 | |
Exercisable Option - (in shares) | 0.7 | ||
Vested and expected to vest (in shares) | 0.0 | ||
Weighted Average Fair Value on Grant Date | |||
Non-vested restricted stock at the beginning of the year (in dollars per share) | $ 0 | ||
Granted (in dollars per share) | 0 | ||
Converted (in dollars per share) | 71.66 | ||
Vested (in dollars per share) | 50.50 | ||
Forfeited (in dollars per share) | 70.41 | ||
Non-vested restricted stock at the end of the year (in dollars per share) | 49.54 | $ 0 | |
Exercisable Option - (in dollars per share) | 49.65 | ||
Vested and expected to vest (in dollar per share) | $ 43.51 | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Additional Disclosures [Abstract] | |||
Aggregate intrinsic value, options outstanding | $ 46,500,000 | $ 0 | |
Aggregate intrinsic value, exercisable options outstanding | 45,500,000 | ||
Aggregate intrinsic value, Vested and expected to vest outstanding | $ 1,000,000.0 | ||
Weighted average remaining contractual life, options outstanding | 4 years 6 months 10 days | ||
Weighted average remaining contractual life, exercisable options outstanding | 4 years 5 months 19 days | ||
Weighted average remaining contractual life, vested and expected to vest, options outstanding | 7 years 5 months 1 day | ||
Weighted-average assumptions | |||
Dividends | $ 0 | ||
Stock Options | Minimum | |||
Weighted-average assumptions | |||
Risk-free interest rate | 0.60% | ||
Expected stock price volatility | 36.00% | ||
Expected service period (years) | 1 month 6 days | ||
Stock Options | Maximum | |||
Weighted-average assumptions | |||
Risk-free interest rate | 2.80% | ||
Expected stock price volatility | 46.50% | ||
Expected service period (years) | 5 years 1 month 6 days | ||
Employee Stock Purchase Plan | 2017 Global Employee Stock Purchase Plan | |||
Weighted-average assumptions | |||
Expected service period (years) | 6 months | 6 months | |
Dividends | $ 0 | $ 0 | |
Employee Stock Purchase Plan | 2017 Global Employee Stock Purchase Plan | Minimum | |||
Weighted-average assumptions | |||
Risk-free interest rate | 1.40% | 0.00% | |
Expected stock price volatility | 27.70% | 27.70% | |
Employee Stock Purchase Plan | 2017 Global Employee Stock Purchase Plan | Maximum | |||
Weighted-average assumptions | |||
Risk-free interest rate | 4.60% | ||
Expected stock price volatility | 33.20% |
STOCK-BASED COMPENSATION - Fair Value of Stock-Based Awards Narrative (Details) - USD ($) $ / shares in Units, $ in Millions |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Stock-based compensation | |||
Aggregate intrinsic value, options outstanding | $ 66.3 | ||
Proceeds from exercise of stock options | 43.5 | ||
Total grant date fair value of options vested | $ 43.5 | ||
Performance Based Awards | |||
Stock-based compensation | |||
Options granted in period (in dollars per shares) | $ 125.03 | $ 176.05 | $ 176.42 |
Stock Options | |||
Stock-based compensation | |||
Contract term | 10 years | ||
Aggregate intrinsic value, options outstanding | $ 46.5 | $ 0.0 | |
Stock Options | Minimum | |||
Stock-based compensation | |||
Award vesting period | 4 years | ||
Stock Options | Maximum | |||
Stock-based compensation | |||
Award vesting period | 5 years | ||
Stock Options | Share-Based Payment Arrangement, Tranche One | |||
Stock-based compensation | |||
Award vesting period | 1 year | ||
Stock Options | Share-Based Payment Arrangement, Tranche One | Minimum | |||
Stock-based compensation | |||
Vesting percentage | 20.00% | ||
Stock Options | Share-Based Payment Arrangement, Tranche One | Maximum | |||
Stock-based compensation | |||
Vesting percentage | 25.00% | ||
Stock Options | Share-Based Payment Arrangement, Tranche Two | Minimum | |||
Stock-based compensation | |||
Award vesting period | 26 months | ||
Stock Options | Share-Based Payment Arrangement, Tranche Two | Maximum | |||
Stock-based compensation | |||
Award vesting period | 48 months | ||
Restricted Stock Units (RSUs) | |||
Stock-based compensation | |||
Unrecognized stock-based compensation expense | $ 0.9 | ||
Weighted-average recognition period | 8 months 23 days | ||
ZMC | Performance Based Awards | |||
Stock-based compensation | |||
Options granted in period (in dollars per shares) | $ 125.90 | $ 182.66 | 120.00 |
Time Based | |||
Stock-based compensation | |||
Intrinsic value (in dollars per share) | 118.17 | 180.97 | 171.58 |
Time Based | ZMC | |||
Stock-based compensation | |||
Intrinsic value (in dollars per share) | 128.90 | 182.66 | 120.00 |
Employee Market-Based | |||
Stock-based compensation | |||
Options granted in period (in dollars per shares) | 179.93 | 292.76 | 279.09 |
Market-based restricted shares | ZMC | |||
Stock-based compensation | |||
Options granted in period (in dollars per shares) | $ 175.12 | $ 293.32 | $ 200.34 |
STOCK-BASED COMPENSATION - Employee Stock Purchase Plan Narrative (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
12 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Stock-based compensation | ||
ESPP shares purchase period | 6 months | |
2017 Global Employee Stock Purchase Plan | Employee Stock Purchase Plan | ||
Stock-based compensation | ||
Shares reserved for future issuance (in shares) | 9.0 | |
Shares available for issuance (in shares) | 8.3 | |
Employee payroll deduction, minimum | 1.00% | |
Employee payroll deduction, maximum | 15.00% | |
Purchase shares of common stock | 85.00% | |
ESPP shares purchased by employees (in shares) | 0.2 | 0.1 |
ESPP shares purchased by employees | $ 22.1 | $ 19.7 |
Weighted-average fair value of shares purchased by employees (in dollars per share) | $ 101.15 | $ 137.84 |
INTEREST AND OTHER, NET (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Other Income and Expenses [Abstract] | |||
Interest income | $ 33.8 | $ 17.6 | $ 18.7 |
Interest expense | (129.6) | (18.6) | (6.2) |
Foreign currency exchange gain (loss) | (31.8) | (7.3) | 0.7 |
Other | (14.3) | (5.9) | (4.4) |
Interest and other, net | $ (141.9) | $ (14.2) | $ 8.8 |
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | $ 3,809.7 | |
Other comprehensive (loss) income before reclassifications | (56.0) | $ (48.7) |
Ending balance | 9,042.5 | 3,809.7 |
Foreign currency translation adjustments | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (52.8) | (9.2) |
Other comprehensive (loss) income before reclassifications | (58.9) | (43.6) |
Ending balance | (111.7) | (52.8) |
Unrealized gain (loss) on derivative instruments | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | 0.0 | 0.0 |
Other comprehensive (loss) income before reclassifications | 0.0 | 0.0 |
Ending balance | 0.0 | 0.0 |
Unrealized gain (loss) on cross-currency swap | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | 0.0 | 0.0 |
Other comprehensive (loss) income before reclassifications | 0.0 | 0.0 |
Ending balance | 0.0 | 0.0 |
Unrealized gain (loss) on available- for-sales securities | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (4.5) | 0.6 |
Other comprehensive (loss) income before reclassifications | 2.9 | (5.1) |
Ending balance | (1.6) | (4.5) |
Total | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (57.3) | (8.6) |
Ending balance | $ (113.3) | $ (57.3) |
SUPPLEMENTARY FINANCIAL INFORMATION (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Valuation allowance for deferred income taxes | |||
Movement in valuation and qualifying accounts | |||
Beginning Balance | $ 121.9 | $ 95.7 | $ 86.9 |
Additions | 218.5 | 27.9 | 11.5 |
Deductions | (2.2) | (1.7) | (2.7) |
Other | 0.0 | 0.0 | 0.0 |
Ending Balance | 338.2 | 121.9 | 95.7 |
Allowance for doubtful accounts | |||
Movement in valuation and qualifying accounts | |||
Beginning Balance | 0.4 | 0.4 | 0.4 |
Additions | 0.0 | 0.0 | 0.0 |
Deductions | 0.0 | 0.0 | 0.0 |
Other | 0.9 | 0.0 | 0.0 |
Ending Balance | $ 1.3 | $ 0.4 | $ 0.4 |
ACQUISITIONS - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|
Nov. 16, 2022 |
May 23, 2022 |
Mar. 31, 2023 |
Mar. 31, 2023 |
Mar. 31, 2022 |
Mar. 31, 2021 |
Apr. 14, 2022 |
|
Business Acquisition [Line Items] | |||||||
Cash | $ 3,310.9 | $ 161.3 | $ 102.5 | ||||
Goodwill | $ 6,767.1 | $ 6,767.1 | $ 674.6 | $ 535.3 | |||
Zynga Inc | |||||||
Business Acquisition [Line Items] | |||||||
Business acquisition, percentage of voting interests acquired | 100.00% | ||||||
Cash consideration, per share (in dollars per share) | $ 3.50 | ||||||
Exchange ratio (in shares) | 0.0406 | ||||||
Cash | $ 3,992.4 | ||||||
Replacement equity awards | 151.7 | ||||||
Consideration | 9,521.8 | ||||||
Goodwill | $ 5,994.4 | ||||||
Zynga Inc | General and administrative | |||||||
Business Acquisition [Line Items] | |||||||
Transaction costs | 139.5 | ||||||
Zynga Inc | Research and development | |||||||
Business Acquisition [Line Items] | |||||||
Transaction costs | 14.2 | ||||||
Zynga Inc | Selling and marketing | |||||||
Business Acquisition [Line Items] | |||||||
Transaction costs | 8.1 | ||||||
Zynga Inc | Bridge Loan | |||||||
Business Acquisition [Line Items] | |||||||
Principal amount at issuance | $ 2,700.0 | ||||||
Zynga Inc | Common Stock | |||||||
Business Acquisition [Line Items] | |||||||
Issuance of common stock in connection with acquisition (in shares) | 46,300,000 | ||||||
Popcore Limited | |||||||
Business Acquisition [Line Items] | |||||||
Business acquisition, percentage of voting interests acquired | 100.00% | ||||||
Cash | $ 116.9 | ||||||
Transaction costs | $ 2.9 | ||||||
Consideration | 198.0 | ||||||
Goodwill | 72.1 | ||||||
Contingent earn-out required | $ 105.0 | ||||||
Performance period | 3 years | ||||||
Popcore Limited | Common Stock | |||||||
Business Acquisition [Line Items] | |||||||
Issuance of common stock in connection with acquisition (in shares) | 600,000 |
ACQUISITIONS - Schedule of Consideration at Fair Value (Details) - USD ($) shares in Millions, $ in Millions |
12 Months Ended | ||||
---|---|---|---|---|---|
Nov. 16, 2022 |
May 23, 2022 |
Mar. 31, 2023 |
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Business Acquisition [Line Items] | |||||
Cash | $ 3,310.9 | $ 161.3 | $ 102.5 | ||
Zynga Inc | |||||
Business Acquisition [Line Items] | |||||
Cash | $ 3,992.4 | ||||
Common stock (46.3 shares) | 5,377.7 | ||||
Replacement equity awards | 151.7 | ||||
Total | $ 9,521.8 | ||||
Zynga Inc | Common Stock | |||||
Business Acquisition [Line Items] | |||||
Issuance of common stock in connection with acquisition (in shares) | 46.3 | ||||
Popcore Limited | |||||
Business Acquisition [Line Items] | |||||
Cash | $ 116.9 | ||||
Common stock (46.3 shares) | 57.8 | ||||
Contingent earn-out | 23.3 | ||||
Total | $ 198.0 | ||||
Popcore Limited | Common Stock | |||||
Business Acquisition [Line Items] | |||||
Issuance of common stock in connection with acquisition (in shares) | 0.6 |
ACQUISITIONS - Schedule of Assets and Liabilities Assumed (Details) - USD ($) $ in Millions |
Nov. 16, 2022 |
May 23, 2022 |
Mar. 31, 2023 |
Mar. 31, 2022 |
Mar. 31, 2021 |
---|---|---|---|---|---|
Business Acquisition [Line Items] | |||||
Goodwill | $ 6,767.1 | $ 674.6 | $ 535.3 | ||
Zynga Inc | |||||
Business Acquisition [Line Items] | |||||
Cash acquired | $ 864.9 | ||||
Accounts receivable | 271.2 | ||||
Prepaid expenses and other | 194.4 | ||||
Fixed assets | 54.3 | ||||
Right-of-use assets | 92.7 | ||||
Other tangible assets | 67.1 | ||||
Accounts payable | (78.5) | ||||
Accrued expenses and other current liabilities | (352.8) | ||||
Deferred revenue | (333.1) | ||||
Long-term debt | (1,653.1) | ||||
Deferred tax liabilities, net | (922.9) | ||||
Lease liabilities | (15.7) | ||||
Non-current lease liabilities | (131.6) | ||||
Other liabilities assumed | (61.5) | ||||
Goodwill | 5,994.4 | ||||
Total | 9,521.8 | ||||
Zynga Inc | Branding and Trade Names | |||||
Business Acquisition [Line Items] | |||||
Intangible assets, excluding goodwill | $ 4,440.0 | ||||
Weighted average useful life | 7 years | ||||
Zynga Inc | Analytics Technology | |||||
Business Acquisition [Line Items] | |||||
Intangible assets, excluding goodwill | $ 316.0 | ||||
Weighted average useful life | 1 year | ||||
Zynga Inc | Intellectual Property | |||||
Business Acquisition [Line Items] | |||||
Intangible assets, excluding goodwill | $ 384.0 | ||||
Weighted average useful life | 12 years | ||||
Zynga Inc | Game Engine Technology | |||||
Business Acquisition [Line Items] | |||||
Intangible assets, excluding goodwill | $ 261.0 | ||||
Weighted average useful life | 4 years | ||||
Zynga Inc | Developer Relationship | |||||
Business Acquisition [Line Items] | |||||
Intangible assets, excluding goodwill | $ 57.0 | ||||
Weighted average useful life | 4 years | ||||
Zynga Inc | Advertising Technology | |||||
Business Acquisition [Line Items] | |||||
Intangible assets, excluding goodwill | $ 43.0 | ||||
Weighted average useful life | 3 years | ||||
Zynga Inc | Customer Relationships | |||||
Business Acquisition [Line Items] | |||||
Intangible assets, excluding goodwill | $ 31.0 | ||||
Weighted average useful life | 5 years | ||||
Popcore Limited | |||||
Business Acquisition [Line Items] | |||||
Cash acquired | $ 32.5 | ||||
Other tangible assets | 23.6 | ||||
Other liabilities assumed | (74.3) | ||||
Goodwill | 72.1 | ||||
Total | 198.0 | ||||
Popcore Limited | Branding and Trade Names | |||||
Business Acquisition [Line Items] | |||||
Intangible assets, excluding goodwill | $ 113.0 | ||||
Weighted average useful life | 5 years | ||||
Popcore Limited | Intellectual Property | |||||
Business Acquisition [Line Items] | |||||
Intangible assets, excluding goodwill | $ 3.4 | ||||
Weighted average useful life | 7 years | ||||
Popcore Limited | Game Engine Technology | |||||
Business Acquisition [Line Items] | |||||
Intangible assets, excluding goodwill | $ 27.7 | ||||
Weighted average useful life | 4 years |
ACQUISITIONS - Schedule of Revenue and Earnings Included in Statement of Operations (Details) $ in Millions |
12 Months Ended |
---|---|
Mar. 31, 2023
USD ($)
| |
Popcore Limited | |
Business Acquisition [Line Items] | |
Net revenue | $ 73.3 |
Net loss | 8.3 |
Zynga Inc | |
Business Acquisition [Line Items] | |
Net revenue | 2,159.2 |
Net loss | $ 1,139.7 |
ACQUISITIONS - Schedule of Pro Forma Information (Details) - Zynga Inc - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Business Acquisition [Line Items] | ||
Pro-forma Net revenue | $ 5,728.1 | $ 6,313.1 |
Pro-forma Net loss | $ 766.7 | $ 621.5 |
SUBSEQUENT EVENTS (Details) - Senior Notes - Subsequent Event - USD ($) $ in Millions |
Apr. 14, 2023 |
May 18, 2023 |
---|---|---|
Subsequent Event [Line Items] | ||
Principal amount at issuance | $ 1,000.0 | |
2026 Notes | ||
Subsequent Event [Line Items] | ||
Principal amount at issuance | $ 500.0 | |
Debt instrument, percentage rate | 5.00% | |
2028 Notes | ||
Subsequent Event [Line Items] | ||
Principal amount at issuance | $ 500.0 | |
Debt instrument, percentage rate | 4.95% | |
2024 Notes | ||
Subsequent Event [Line Items] | ||
Principal amount at issuance | $ 500.0 | |
Debt repaid | $ 350.0 |