Economic Value Added (EVA)
EVA is registered trademark of Stern Stewart.
Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.
Economic Profit
Take-Two Interactive Software Inc., economic profit calculation
US$ in thousands
Based on: 10-K (reporting date: 2025-03-31), 10-K (reporting date: 2024-03-31), 10-K (reporting date: 2023-03-31), 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31).
1 NOPAT. See details »
2 Cost of capital. See details »
3 Invested capital. See details »
4 2025 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= -4,540,136 – 13.46% × 7,701,100 = -5,576,647
The financial trajectory from March 2020 to March 2025 reveals a significant deterioration in economic value creation, characterized by a transition from marginal profitability to substantial economic losses. While a brief period of value creation occurred in 2021, the subsequent years show an accelerating trend of value destruction.
- Net Operating Profit After Taxes (NOPAT)
- A volatile trend is observed in operating profitability. After peaking in March 2021 at 782,700 thousand USD, NOPAT declined in 2022 before entering a period of severe contraction. From March 2023 onward, the figures shifted to deep negative territory, reaching a deficit of 4,540,136 thousand USD by March 2025. This indicates an inability to generate operating returns sufficient to cover tax obligations and operating costs in the latter half of the period.
- Invested Capital and Capital Allocation
- Invested capital remained relatively stable between 2020 and 2022, followed by a dramatic surge to 14,060,600 thousand USD in March 2023. This peak suggests a period of aggressive expansion or significant acquisition activity. However, a subsequent contraction is evident, with invested capital decreasing to 7,701,100 thousand USD by March 2025, representing a reduction of approximately 45% from the 2023 peak.
- Cost of Capital Stability
- The cost of capital has remained relatively consistent, fluctuating within a narrow band between 12.96% and 14.33%. A slight downward adjustment occurred starting in 2023, but this marginal decrease was insufficient to mitigate the impact of the plummeting NOPAT on overall economic performance.
- Economic Profit and Value Destruction
- Economic profit demonstrates a sharp downward trajectory. After a positive result of 338,180 thousand USD in 2021, the company entered a phase of accelerating value destruction. The economic profit deficit expanded from -185,249 thousand USD in 2022 to -5,576,647 thousand USD in 2025. The widening gap between the cost of capital and NOPAT indicates that the returns on invested capital are significantly below the required threshold, resulting in a substantial erosion of shareholder wealth over the analyzed period.
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Net Operating Profit after Taxes (NOPAT)
Take-Two Interactive Software Inc., NOPAT calculation
US$ in thousands
Based on: 10-K (reporting date: 2025-03-31), 10-K (reporting date: 2024-03-31), 10-K (reporting date: 2023-03-31), 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31).
1 Elimination of deferred tax expense. See details »
2 Addition of increase (decrease) in allowances.
3 Addition of increase (decrease) in deferred revenue.
4 Addition of increase (decrease) in equity equivalents to net income (loss).
5 2025 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 444,800 × 4.75% = 21,128
6 2025 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 188,428 × 21.00% = 39,570
7 Addition of after taxes interest expense to net income (loss).
8 2025 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 98,600 × 21.00% = 20,706
9 Elimination of after taxes investment income.
The financial performance exhibits a stark transition from positive profitability to substantial operating losses over the six-year period ending March 31, 2025. While the initial years showed growth and stability, the subsequent period is characterized by an accelerating downward trend in both bottom-line net income and net operating profit after taxes (NOPAT).
- Profitability Peak and Contraction (2020-2022)
- Positive operational results were maintained through March 31, 2022. NOPAT reached a peak of US$ 782,700 thousand in 2021, representing a significant increase from the US$ 331,110 thousand reported in 2020. However, a contraction occurred by March 31, 2022, where NOPAT declined to US$ 410,045 thousand, signaling the onset of a downward trajectory.
- Accelerated Operating Deficits (2023-2025)
- A critical shift occurred on March 31, 2023, as NOPAT pivoted to a negative value of US$ -1,240,989 thousand. This deficit expanded aggressively over the following two years, reaching US$ -3,779,593 thousand in 2024 and further deteriorating to US$ -4,540,136 thousand by March 31, 2025. The magnitude of these losses indicates a severe erosion of operational efficiency and a negative impact on economic value added.
- Correlation between Net Income and NOPAT
- A strong positive correlation is observed between net income and NOPAT throughout the analyzed period. Both metrics followed a near-identical trajectory, peaking in 2021 and deepening in negative territory from 2023 through 2025. The close alignment of these figures suggests that the net losses are primarily driven by core operating performance rather than non-operating financial anomalies.
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Cash Operating Taxes
Take-Two Interactive Software Inc., cash operating taxes calculation
US$ in thousands
Based on: 10-K (reporting date: 2025-03-31), 10-K (reporting date: 2024-03-31), 10-K (reporting date: 2023-03-31), 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31).
The analysis of tax-related expenditures indicates a substantial shift in the relationship between reported tax provisions and actual cash outflows beginning in the 2023 fiscal year. While the provision for income taxes has fluctuated significantly, including substantial tax benefits, the cash operating taxes have maintained a higher baseline in recent years compared to the initial period analyzed.
- Cash Operating Tax Trends
- Cash operating taxes exhibited moderate volatility between 2020 and 2022, ranging from approximately 32.7 million to 51.1 million US dollars. A sharp increase occurred in 2023, with cash taxes peaking at 195.3 million US dollars. Subsequent years show a gradual downward trajectory, with 163.7 million US dollars in 2024 and 145.6 million US dollars in 2025, though levels remain significantly elevated relative to pre-2023 figures.
- Provision vs. Cash Outflow Divergence
- A pronounced discrepancy is observed between the provision for income taxes and cash operating taxes starting in 2023. In that year, a tax benefit of 213.4 million US dollars was recorded in the provisions, yet the cash operating tax outflow reached its peak of 195.3 million US dollars. This inverse relationship suggests the presence of significant non-cash tax adjustments or the recognition of deferred tax assets that did not result in immediate cash inflows.
- Recent Fiscal Stability
- From 2023 to 2025, the cash operating tax burden has stabilized at a higher plateau. Despite the provision for income taxes shifting between a positive charge in 2024 and a modest benefit in 2025, the actual cash outflow has remained consistently above 140 million US dollars, indicating a sustained increase in liquidity requirements for tax obligations.
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Invested Capital
Take-Two Interactive Software Inc., invested capital calculation (financing approach)
US$ in thousands
Based on: 10-K (reporting date: 2025-03-31), 10-K (reporting date: 2024-03-31), 10-K (reporting date: 2023-03-31), 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31).
1 Addition of capitalized operating leases.
2 Elimination of deferred taxes from assets and liabilities. See details »
3 Addition of allowance for doubtful accounts receivable.
4 Addition of deferred revenue.
5 Addition of equity equivalents to stockholders’ equity.
6 Removal of accumulated other comprehensive income.
7 Subtraction of short-term investments.
Invested capital experienced a period of aggressive expansion between 2020 and 2023, followed by a consistent contraction through 2025. The most significant volatility occurred in the 2023 fiscal year, where invested capital peaked at 14,060,600 thousand US dollars, representing a substantial increase from the 4,181,680 thousand US dollars reported in 2022.
- Debt and Lease Obligations
- A sharp escalation in total reported debt and leases is observed starting in 2023. From 2020 to 2022, debt levels remained relatively stable, growing marginally from 177,246 thousand US dollars to 250,218 thousand US dollars. However, in 2023, this figure surged to 3,487,000 thousand US dollars. This upward trajectory continued through 2025, reaching 4,105,900 thousand US dollars, indicating a strategic shift toward higher leverage to fund operations or acquisitions.
- Stockholders' Equity Trends
- Stockholders' equity exhibited a strong growth trend from 2020 to 2023, peaking at 9,042,500 thousand US dollars. Following this peak, a significant downward trend is evident, with equity declining to 5,667,900 thousand US dollars in 2024 and further dropping to 2,137,700 thousand US dollars by 2025. This contraction suggests substantial returns of capital to shareholders or the absorption of significant losses.
- Invested Capital Composition and Trajectory
- The overall trajectory of invested capital is characterized by a rapid spike in 2023, driven by simultaneous increases in both debt and equity. Subsequent years show a steady decline in total invested capital, falling to 7,701,100 thousand US dollars by 2025. Notably, the composition of this capital has shifted; while equity was the primary driver of the 2023 peak, the subsequent decline in invested capital is primarily attributed to the erosion of stockholders' equity, as debt levels continued to rise.
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Cost of Capital
Take-Two Interactive Software Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 42,138,416) | 42,138,416) | ÷ | 46,249,416) | = | 0.91 | 0.91 | × | 14.43% | = | 13.14% | ||
| Debt, net3 | 3,666,200) | 3,666,200) | ÷ | 46,249,416) | = | 0.08 | 0.08 | × | 4.46% × (1 – 21.00%) | = | 0.28% | ||
| Operating lease liability4 | 444,800) | 444,800) | ÷ | 46,249,416) | = | 0.01 | 0.01 | × | 4.75% × (1 – 21.00%) | = | 0.04% | ||
| Total: | 46,249,416) | 1.00 | 13.46% | ||||||||||
Based on: 10-K (reporting date: 2025-03-31).
1 US$ in thousands
2 Equity. See details »
3 Debt, net. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 25,812,353) | 25,812,353) | ÷ | 29,287,653) | = | 0.88 | 0.88 | × | 14.43% | = | 12.71% | ||
| Debt, net3 | 3,024,200) | 3,024,200) | ÷ | 29,287,653) | = | 0.10 | 0.10 | × | 4.22% × (1 – 21.00%) | = | 0.34% | ||
| Operating lease liability4 | 451,100) | 451,100) | ÷ | 29,287,653) | = | 0.02 | 0.02 | × | 4.56% × (1 – 21.00%) | = | 0.06% | ||
| Total: | 29,287,653) | 1.00 | 13.11% | ||||||||||
Based on: 10-K (reporting date: 2024-03-31).
1 US$ in thousands
2 Equity. See details »
3 Debt, net. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 23,533,981) | 23,533,981) | ÷ | 26,938,781) | = | 0.87 | 0.87 | × | 14.43% | = | 12.60% | ||
| Debt, net3 | 2,997,600) | 2,997,600) | ÷ | 26,938,781) | = | 0.11 | 0.11 | × | 3.52% × (1 – 21.00%) | = | 0.31% | ||
| Operating lease liability4 | 407,200) | 407,200) | ÷ | 26,938,781) | = | 0.02 | 0.02 | × | 4.33% × (1 – 21.00%) | = | 0.05% | ||
| Total: | 26,938,781) | 1.00 | 12.96% | ||||||||||
Based on: 10-K (reporting date: 2023-03-31).
1 US$ in thousands
2 Equity. See details »
3 Debt, net. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 14,253,749) | 14,253,749) | ÷ | 14,503,967) | = | 0.98 | 0.98 | × | 14.43% | = | 14.18% | ||
| Debt, net3 | —) | —) | ÷ | 14,503,967) | = | 0.00 | 0.00 | × | 0.00% × (1 – 21.00%) | = | 0.00% | ||
| Operating lease liability4 | 250,218) | 250,218) | ÷ | 14,503,967) | = | 0.02 | 0.02 | × | 4.29% × (1 – 21.00%) | = | 0.06% | ||
| Total: | 14,503,967) | 1.00 | 14.24% | ||||||||||
Based on: 10-K (reporting date: 2022-03-31).
1 US$ in thousands
2 Equity. See details »
3 Debt, net. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 20,742,920) | 20,742,920) | ÷ | 20,934,186) | = | 0.99 | 0.99 | × | 14.43% | = | 14.29% | ||
| Debt, net3 | —) | —) | ÷ | 20,934,186) | = | 0.00 | 0.00 | × | 0.00% × (1 – 21.00%) | = | 0.00% | ||
| Operating lease liability4 | 191,266) | 191,266) | ÷ | 20,934,186) | = | 0.01 | 0.01 | × | 4.91% × (1 – 21.00%) | = | 0.04% | ||
| Total: | 20,934,186) | 1.00 | 14.33% | ||||||||||
Based on: 10-K (reporting date: 2021-03-31).
1 US$ in thousands
2 Equity. See details »
3 Debt, net. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 16,010,097) | 16,010,097) | ÷ | 16,187,343) | = | 0.99 | 0.99 | × | 14.43% | = | 14.27% | ||
| Debt, net3 | —) | —) | ÷ | 16,187,343) | = | 0.00 | 0.00 | × | 0.00% × (1 – 21.00%) | = | 0.00% | ||
| Operating lease liability4 | 177,246) | 177,246) | ÷ | 16,187,343) | = | 0.01 | 0.01 | × | 4.98% × (1 – 21.00%) | = | 0.04% | ||
| Total: | 16,187,343) | 1.00 | 14.31% | ||||||||||
Based on: 10-K (reporting date: 2020-03-31).
1 US$ in thousands
2 Equity. See details »
3 Debt, net. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
Take-Two Interactive Software Inc., economic spread ratio calculation, comparison to benchmarks
| Mar 31, 2025 | Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Economic profit1 | (5,576,647) | (5,186,419) | (3,063,803) | (185,249) | 338,180) | (73,310) | |
| Invested capital2 | 7,701,100) | 10,727,600) | 14,060,600) | 4,181,680) | 3,102,062) | 2,825,883) | |
| Performance Ratio | |||||||
| Economic spread ratio3 | -72.41% | -48.35% | -21.79% | -4.43% | 10.90% | -2.59% | |
| Benchmarks | |||||||
| Economic Spread Ratio, Competitors4 | |||||||
| Alphabet Inc. | 26.50% | 22.38% | 15.74% | 7.35% | 26.64% | — | |
| Comcast Corp. | 1.86% | -1.34% | -3.23% | -7.70% | -2.70% | — | |
| Meta Platforms Inc. | 16.62% | 13.77% | 6.68% | 0.43% | 22.71% | — | |
| Netflix Inc. | 0.78% | -3.92% | -10.17% | -10.70% | -6.10% | — | |
| Walt Disney Co. | -12.54% | -15.95% | -17.46% | -15.27% | -18.26% | -20.51% | |
Based on: 10-K (reporting date: 2025-03-31), 10-K (reporting date: 2024-03-31), 10-K (reporting date: 2023-03-31), 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31).
1 Economic profit. See details »
2 Invested capital. See details »
3 2025 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -5,576,647 ÷ 7,701,100 = -72.41%
4 Click competitor name to see calculations.
The analysis of economic value added metrics reveals a severe deterioration in value creation efficiency between March 31, 2020, and March 31, 2025. While a brief period of positive economic profit was recorded in 2021, the subsequent years are characterized by escalating deficits and a sharply declining economic spread ratio, indicating that the returns on invested capital have failed to meet the required cost of capital.
- Economic Profit
- A volatile trend is observed, starting with a modest deficit of $73.31 million in 2020 and reaching a peak positive value of $338.18 million in 2021. However, from 2022 onward, economic profit declined precipitously, with losses expanding to $3.06 billion in 2023 and further widening to $5.58 billion by March 31, 2025.
- Invested Capital
- Invested capital remained relatively stable from 2020 to 2022, ranging between $2.83 billion and $4.18 billion. A significant surge occurred in 2023, where capital peaked at $14.06 billion. This was followed by a consistent reduction in the following two years, descending to $7.70 billion by March 31, 2025.
- Economic Spread Ratio
- The economic spread ratio demonstrates a steep downward trajectory. After achieving a positive peak of 10.90% in 2021, the ratio turned negative and plummeted rapidly. The decline accelerated from -4.43% in 2022 to -72.41% by March 31, 2025, signaling a profound widening of the gap between the actual return on capital and the cost of that capital.
The synthesis of these metrics suggests that the increase in invested capital observed in 2023 did not translate into proportional economic gains. Instead, the period from 2023 to 2025 is marked by a collapse in the economic spread ratio, coinciding with substantial increases in economic losses despite the overall reduction in the invested capital base.
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Economic Profit Margin
Take-Two Interactive Software Inc., economic profit margin calculation, comparison to benchmarks
| Mar 31, 2025 | Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Economic profit1 | (5,576,647) | (5,186,419) | (3,063,803) | (185,249) | 338,180) | (73,310) | |
| Net revenue | 5,633,600) | 5,349,600) | 5,349,900) | 3,504,800) | 3,372,772) | 3,088,970) | |
| Add: Increase (decrease) in deferred revenue | 6,500) | (11,900) | 178,100) | (29,150) | 159,208) | (58,237) | |
| Adjusted net revenue | 5,640,100) | 5,337,700) | 5,528,000) | 3,475,650) | 3,531,980) | 3,030,733) | |
| Performance Ratio | |||||||
| Economic profit margin2 | -98.87% | -97.17% | -55.42% | -5.33% | 9.57% | -2.42% | |
| Benchmarks | |||||||
| Economic Profit Margin, Competitors3 | |||||||
| Alphabet Inc. | 20.31% | 14.53% | 9.70% | 5.25% | 17.67% | — | |
| Comcast Corp. | 3.49% | -2.33% | -5.58% | -13.59% | -5.32% | — | |
| Meta Platforms Inc. | 17.84% | 13.88% | 6.99% | 0.38% | 17.84% | — | |
| Netflix Inc. | 0.75% | -4.08% | -11.38% | -12.76% | -7.12% | — | |
| Walt Disney Co. | -21.95% | -29.02% | -34.10% | -31.42% | -46.53% | -55.17% | |
Based on: 10-K (reporting date: 2025-03-31), 10-K (reporting date: 2024-03-31), 10-K (reporting date: 2023-03-31), 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31).
1 Economic profit. See details »
2 2025 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted net revenue
= 100 × -5,576,647 ÷ 5,640,100 = -98.87%
3 Click competitor name to see calculations.
The financial data indicates a severe divergence between revenue growth and economic value creation over the analyzed period. While adjusted net revenue expanded significantly, economic profit shifted from a brief period of positive value creation to substantial and accelerating losses, suggesting a period of significant capital destruction or intensified investment costs that exceed the generated returns.
- Economic Profit Trends
- A brief peak in value creation occurred on March 31, 2021, with a positive economic profit of US$ 338.18 million. However, a sharp reversal followed, with losses expanding from US$ 185.25 million in 2022 to US$ 5.58 billion by March 31, 2025. This trajectory demonstrates an accelerating downward trend in absolute economic value.
- Revenue Growth Performance
- Adjusted net revenue grew from US$ 3.03 billion in 2020 to US$ 5.64 billion in 2025. A notable surge is observed between March 31, 2022, and March 31, 2023, where revenue increased from US$ 3.48 billion to US$ 5.53 billion. Despite this increase in scale, the growth in top-line revenue did not correlate with an improvement in economic profit.
- Economic Profit Margin Deterioration
- The economic profit margin exhibits a collapse from a peak of 9.57% in 2021 to -98.87% in 2025. The acceleration of the margin decline is particularly acute after 2022, dropping from -5.33% to -55.42% within one fiscal year. By March 31, 2025, the margin indicates that the costs associated with capital and operations have almost entirely offset the adjusted net revenue.
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