Return on Capital (ROC)
Return on capital (ROC) is after tax rate of return on net business assets. ROIC is unaffected by changes in interest rates or company debt and equity structure. It measures business productivity performance.
Return on Invested Capital (ROIC)
Take-Two Interactive Software Inc., ROIC 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) | |||||||
| Net operating profit after taxes (NOPAT)1 | (4,540,136) | (3,779,593) | (1,240,989) | 410,045) | 782,700) | 331,110) | |
| Invested capital2 | 7,701,100) | 10,727,600) | 14,060,600) | 4,181,680) | 3,102,062) | 2,825,883) | |
| Performance Ratio | |||||||
| ROIC3 | -58.95% | -35.23% | -8.83% | 9.81% | 25.23% | 11.72% | |
| Benchmarks | |||||||
| ROIC, Competitors4 | |||||||
| Alphabet Inc. | 45.21% | 41.14% | 34.45% | 25.98% | 45.36% | — | |
| Comcast Corp. | 11.39% | 8.74% | 7.81% | 3.21% | 8.38% | — | |
| Meta Platforms Inc. | 36.85% | 34.25% | 27.09% | 20.47% | 43.26% | — | |
| Netflix Inc. | 25.74% | 21.12% | 14.34% | 13.20% | 17.47% | — | |
| Walt Disney Co. | 7.38% | 3.77% | 1.96% | 3.85% | 1.28% | -1.25% | |
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 Invested capital. See details »
3 2025 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × -4,540,136 ÷ 7,701,100 = -58.95%
4 Click competitor name to see calculations.
The financial performance from March 31, 2020, through March 31, 2025, exhibits a severe transition from high capital efficiency to substantial operational losses. A period of strong profitability and optimized returns was followed by a significant expansion of the capital base and a subsequent collapse in operating margins, leading to deeply negative returns on invested capital.
- Net Operating Profit After Taxes (NOPAT)
- Operating profitability peaked in 2021 at 782.7 million USD, representing a significant increase from the previous year. However, this trend reversed sharply starting in 2022, with NOPAT becoming negative in 2023. The losses intensified each year thereafter, culminating in a deficit of 4.54 billion USD by March 31, 2025, signaling a profound deterioration in the core operational ability to generate profit.
- Invested Capital
- The capital base experienced a massive surge in 2023, increasing from 4.18 billion USD to 14.06 billion USD. This spike suggests a major strategic acquisition or a large-scale capital deployment. Following this peak, invested capital decreased incrementally to 7.70 billion USD by 2025, though the reduction in capital did not correlate with an improvement in operating performance.
- Return on Invested Capital (ROIC)
- ROIC demonstrated extreme volatility, reaching a high of 25.23% in 2021 before declining. The ratio turned negative in 2023 (-8.83%) and deteriorated rapidly to -35.23% in 2024 and -58.95% by 2025. This trajectory indicates that the capital deployed, particularly the spike observed in 2023, failed to generate positive operating returns, resulting in an accelerating destruction of shareholder value over the final three years of the period.
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Decomposition of ROIC
Take-Two Interactive Software Inc., decomposition of ROIC
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 Operating profit margin (OPM). See calculations »
2 Turnover of capital (TO). See calculations »
3 Effective cash tax rate (CTR). See calculations »
A significant deterioration in the Return on Invested Capital (ROIC) is observed over the analyzed period, transitioning from a peak of 25.23% in March 2021 to a severe deficit of -58.95% by March 2025. This trajectory indicates a profound decline in the company's ability to generate returns from its invested capital base.
- Operating Profit Margin (OPM)
- The OPM serves as the primary driver of the ROIC decline. After reaching a high of 23.61% in 2021, the margin experienced a precipitous collapse, turning negative in 2023 (-18.92%) and accelerating to -77.92% by 2025. This sustained erosion of operating profitability is the dominant factor contributing to the negative returns on capital.
- Turnover of Capital (TO)
- Capital efficiency exhibited high volatility, peaking at 1.14 in 2021 before dropping to a low of 0.39 in 2023. While a gradual recovery is noted from 2023 to 2025, reaching 0.73, the turnover remains significantly lower than the levels observed between 2020 and 2022, suggesting a period of inefficient asset utilization or increased investment that has not yet yielded proportional revenue growth.
- Effective Cash Tax Rate (CTR)
- The after-tax multiplier (1 – CTR) remained relatively stable between 91.02% and 93.87% from 2020 to 2022. From 2023 onward, this value increased to 100.00%, reflecting the absence of cash tax payments, which is consistent with the onset of substantial operating losses providing a tax shield.
The decomposition of ROIC reveals that while capital turnover is currently in a recovery phase, this improvement is completely offset by the severe contraction in operating profit margins. The transition to a 100% after-tax multiplier underscores the shift into a loss-making operational phase, resulting in the compounding negative ROIC observed in the final three years of the period.
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Operating Profit Margin (OPM)
Take-Two Interactive Software Inc., OPM 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) | |||||||
| Net operating profit after taxes (NOPAT)1 | (4,540,136) | (3,779,593) | (1,240,989) | 410,045) | 782,700) | 331,110) | |
| Add: Cash operating taxes2 | 145,564) | 163,663) | 195,321) | 37,943) | 51,128) | 32,663) | |
| Net operating profit before taxes (NOPBT) | (4,394,572) | (3,615,930) | (1,045,668) | 447,988) | 833,828) | 363,773) | |
| 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) | |
| Profitability Ratio | |||||||
| OPM3 | -77.92% | -67.74% | -18.92% | 12.89% | 23.61% | 12.00% | |
| Benchmarks | |||||||
| OPM, Competitors4 | |||||||
| Alphabet Inc. | 39.03% | 33.67% | 27.50% | 25.43% | 34.97% | — | |
| Comcast Corp. | 24.91% | 18.88% | 20.88% | 10.68% | 20.21% | — | |
| Meta Platforms Inc. | 42.91% | 42.33% | 34.35% | 25.55% | 40.15% | — | |
| Netflix Inc. | 29.83% | 27.00% | 20.30% | 19.10% | 22.76% | — | |
| Walt Disney Co. | 14.54% | 10.13% | 7.31% | 10.16% | 5.56% | -1.34% | |
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 Cash operating taxes. See details »
3 2025 Calculation
OPM = 100 × NOPBT ÷ Adjusted net revenue
= 100 × -4,394,572 ÷ 5,640,100 = -77.92%
4 Click competitor name to see calculations.
An analysis of the operating profit margin reveals a significant divergence between revenue growth and operational profitability over the six-year period ending March 31, 2025. While adjusted net revenue has trended upward, the operating profit margin has experienced a severe contraction, transitioning from positive margins to substantial losses.
- Revenue Growth Trends
- Adjusted net revenue exhibited a consistent long-term upward trajectory, increasing from 3.03 billion USD in 2020 to 5.64 billion USD by 2025. Despite a slight fluctuation between 2022 and 2024, the overall trend indicates an expansion in top-line scale.
- Operating Profitability and NOPBT
- Net operating profit before taxes (NOPBT) demonstrated extreme volatility. After peaking at 833.8 million USD in 2021, NOPBT shifted from a positive 448 million USD in 2022 to deeply negative values. The operating loss accelerated annually, reaching 4.39 billion USD by March 31, 2025, indicating a critical increase in operating costs relative to earnings.
- Operating Profit Margin (OPM) Compression
- The OPM peaked at 23.61% in 2021 before entering a period of rapid deterioration. The margin crossed into negative territory in 2023 at -18.92% and continued a steep decline to -67.74% in 2024, ultimately reaching -77.92% by 2025. This pattern suggests that the costs associated with generating revenue have scaled disproportionately, leading to a collapse in operational efficiency.
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Turnover of Capital (TO)
Take-Two Interactive Software Inc., TO 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) | |||||||
| 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) | |
| Invested capital1 | 7,701,100) | 10,727,600) | 14,060,600) | 4,181,680) | 3,102,062) | 2,825,883) | |
| Efficiency Ratio | |||||||
| TO2 | 0.73 | 0.50 | 0.39 | 0.83 | 1.14 | 1.07 | |
| Benchmarks | |||||||
| TO, Competitors3 | |||||||
| Alphabet Inc. | 1.30 | 1.54 | 1.62 | 1.40 | 1.51 | — | |
| Comcast Corp. | 0.53 | 0.58 | 0.58 | 0.57 | 0.51 | — | |
| Meta Platforms Inc. | 0.93 | 0.99 | 0.96 | 1.15 | 1.27 | — | |
| Netflix Inc. | 1.04 | 0.96 | 0.89 | 0.84 | 0.86 | — | |
| Walt Disney Co. | 0.57 | 0.55 | 0.51 | 0.49 | 0.39 | 0.37 | |
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 Invested capital. See details »
2 2025 Calculation
TO = Adjusted net revenue ÷ Invested capital
= 5,640,100 ÷ 7,701,100 = 0.73
3 Click competitor name to see calculations.
The analysis of capital efficiency reveals a significant period of volatility in the relationship between invested capital and revenue generation, characterized by a sharp decline in turnover followed by a gradual recovery phase.
- Adjusted Net Revenue Trends
- Revenue exhibited a general upward trajectory over the six-year period, growing from 3,030,733 thousand USD in 2020 to 5,640,100 thousand USD in 2025. A substantial increase was observed between March 2022 and March 2023, where revenue rose from 3,475,650 thousand USD to 5,528,000 thousand USD, establishing a new higher baseline for subsequent years.
- Invested Capital Dynamics
- Invested capital remained relatively stable between 2020 and 2022 before experiencing a massive surge in March 2023, peaking at 14,060,600 thousand USD. This spike represents a more than three-fold increase within a single fiscal year. Following this peak, a consistent reduction in invested capital is observed, falling to 10,727,600 thousand USD in 2024 and further to 7,701,100 thousand USD by March 2025.
- Turnover of Capital (TO) Performance
- The capital turnover ratio demonstrates a strong inverse correlation with the surge in invested capital. Efficiency peaked in 2021 at 1.14, indicating high revenue generation per unit of capital. The ratio declined sharply to a trough of 0.39 in 2023, coinciding with the peak in invested capital. However, a recovery trend is evident in the final two years, with the ratio improving to 0.50 in 2024 and 0.73 in 2025. This recovery is driven by the simultaneous reduction of the invested capital base and the maintenance of elevated revenue levels.
In summary, the period was marked by a significant expansion of the capital base in 2023 which temporarily diluted capital turnover. The subsequent trend shows an improvement in operational efficiency as the company optimized its capital structure while sustaining revenue growth.
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Effective Cash Tax Rate (CTR)
Take-Two Interactive Software Inc., CTR 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) | |||||||
| Net operating profit after taxes (NOPAT)1 | (4,540,136) | (3,779,593) | (1,240,989) | 410,045) | 782,700) | 331,110) | |
| Add: Cash operating taxes2 | 145,564) | 163,663) | 195,321) | 37,943) | 51,128) | 32,663) | |
| Net operating profit before taxes (NOPBT) | (4,394,572) | (3,615,930) | (1,045,668) | 447,988) | 833,828) | 363,773) | |
| Tax Rate | |||||||
| CTR3 | — | — | — | 8.47% | 6.13% | 8.98% | |
| Benchmarks | |||||||
| CTR, Competitors4 | |||||||
| Alphabet Inc. | 11.20% | 20.64% | 22.81% | 27.09% | 13.97% | — | |
| Comcast Corp. | 14.25% | 19.73% | 35.33% | 47.01% | 18.38% | — | |
| Meta Platforms Inc. | 7.81% | 18.41% | 17.45% | 30.06% | 15.37% | — | |
| Netflix Inc. | 17.05% | 18.50% | 21.00% | 17.52% | 10.36% | — | |
| Walt Disney Co. | 11.25% | 32.27% | 47.64% | 22.01% | 41.25% | — | |
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 Cash operating taxes. See details »
3 2025 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × 145,564 ÷ -4,394,572 = —
4 Click competitor name to see calculations.
A significant divergence is observed between operating profitability and cash tax obligations over the analyzed period. While the company maintained positive operating results through 2022, it entered a period of substantial operating losses starting in 2023, which intensified through 2025. Concurrently, cash tax payments increased sharply during the onset of these losses, indicating a decoupling of current tax outflows from current-period operating performance.
- Net Operating Profit Before Taxes (NOPBT) Trends
- Operating profitability peaked on March 31, 2021, at 833,828 thousand US dollars. This was followed by a decline in 2022 and a sharp reversal into negative territory in 2023. The losses accelerated significantly in subsequent years, reaching 3,615,930 thousand US dollars in 2024 and 4,394,572 thousand US dollars by March 31, 2025.
- Cash Operating Taxes Analysis
- Cash tax payments remained relatively low and stable between 2020 and 2022, ranging from 32,663 thousand to 51,128 thousand US dollars. However, a substantial increase occurred on March 31, 2023, where payments rose to 195,321 thousand US dollars. Despite the deepening operating losses in 2024 and 2025, cash taxes remained elevated at 163,663 thousand and 145,564 thousand US dollars, respectively.
- Effective Cash Tax Rate (CTR) Interpretation
- During the period of positive NOPBT (2020-2022), the effective cash tax rate remained low and stable, fluctuating between 6.13% and 8.98%. The absence of a calculated CTR for the period between 2023 and 2025 corresponds with the transition to negative NOPBT, as the relationship between cash taxes and operating profit became inverted.
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