Take-Two Interactive Software Inc. (NASDAQ:TTWO)

The financial data reveals notable fluctuations and trends across key profitability and return metrics over the observed periods.

Gross Profit Margin

The gross profit margin demonstrated an upward trajectory from 47.4% at mid-2020 to a peak above 58% in mid to late 2021, indicating improved cost efficiency or revenue quality. Subsequently, there was a decline starting early 2022, reaching a low near 37% by late 2023. However, beginning in early 2024, a recovery trend emerged, with margins climbing back above 54% by the first quarter of 2025, suggesting an improvement in gross profitability after a period of deterioration.

Operating Profit Margin

The operating profit margin paralleled the initial increase of the gross margin, rising from approximately 13.5% to over 21% by mid-2021. From that point, a steep and sustained decline occurred, turning negative by the third quarter of 2022 and worsening drastically through early 2025, reaching a negative margin near -78%. This sharp contraction implies significantly increased operating expenses or decreases in operating income, severely impacting operating profitability in recent periods.

Net Profit Margin

Net profit margin followed a similar pattern to operating margin with an initial upward trend from 13.2% in mid-2020 to 19.45% in mid-2021. Afterwards, margins turned negative starting late 2022, declining sharply to nearly -80% by early 2025. This suggests considerable net losses in the latest periods, reflecting erosion not only in operating earnings but also after accounting for interest, taxes, and other non-operating factors.

Return on Equity (ROE)

ROE initially showed stable and modestly high returns around 16-18% up to mid-2021, followed by a downward trend reaching near zero by mid-2022. Subsequently, it plunged steeply into negative territory, plummeting to approximately -210% by the first quarter of 2025. This dramatic decline signals severe deterioration in shareholder value generation, likely tied to substantial net losses and possible equity impairment or changes in balance sheet structure.

Return on Assets (ROA)

ROA started robustly in the 8-10% range through 2021, then mirrored the negative path of profitability ratios, turning negative after mid-2022 and descending to about -49% by early 2025. This indicates that the company’s asset utilization in generating profits has worsened markedly, with losses significantly outweighing asset base returns in recent periods.

Overall, the data depicts a company experiencing a peak in profitability around mid-2021, followed by a pronounced and sustained downturn across all profit and return measures. The negative margins and returns in the recent years suggest operational challenges, rising costs, or other adverse factors severely impairing financial performance. The slight recovery noted in gross profit margin in early 2024 could be an early sign of stabilization, but the continuing negative operating and net margins imply ongoing difficulties.

Gross Profit

The gross profit demonstrates a generally upward trend over the analyzed periods, with some fluctuations. Initially, gross profit increased steadily from around 355 million USD to a peak near 716 million USD at the end of 2022. A notable dip occurs in the first quarter of 2023, dropping to approximately 223 million USD, followed by recovery and variability with subsequent quarters showing values predominantly between 400 million and 770 million USD. The trend toward the most recent quarters reflects a strengthening in gross profit, reaching above 800 million USD by the first quarter of 2025.

Net Revenue

Net revenue exhibits an overall growth trajectory with minor fluctuations throughout the period. Revenue starts at roughly 831 million USD and rises gradually to more than 1.44 billion USD by the first quarter of 2023. Afterwards, there is a slight decline and some volatility, yet the revenues maintain high levels above 1.28 billion USD in most recent quarters. Notably, there is a significant increase approaching 1.58 billion USD by the first quarter of 2025, indicating ongoing expansion in sales.

Gross Profit Margin

The gross profit margin shows significant variation across the quarters. Beginning at 47.4%, it increases steadily to peak around 58.6% mid-2021. After this peak, the margin moderately declines with some oscillations, reaching a lower point near 36.98% in the last quarter of 2023. From that trough, the margin recovers subsequently, steadily rising to 54.36% by the first quarter of 2025. This pattern suggests phases of changing cost structure or pricing strategy, with margins recovering well in the latest periods.

Summary Insights

Both gross profit and net revenue generally increase over time, indicating growth and expansion, despite some periods of volatility. The gross profit margin, while fluctuating, demonstrates resilience and a capacity for recovery after downturns, implying effective management of costs relative to revenues during varying market conditions. The first quarter of 2023 appears as an anomalous low point for gross profit, suggesting possible exceptional factors affecting profitability. Overall, the data reflects a positive growth trend with improving profitability metrics by the most recent quarter analyzed.

The quarterly financial results exhibit distinct patterns and significant fluctuations over the observed periods.

Income (loss) from operations

Initial quarters demonstrate solid positive operating income, with values peaking near the end of 2020 and early 2021. A notable decline begins from mid-2021, with intermittent periods of recovery but generally trending downwards thereafter. Starting mid-2022, the company faces increasingly larger operating losses, culminating in very substantial negative amounts by early 2025. This indicates escalating operational challenges or increased costs surpassing revenue generation in recent periods.

Net revenue

Net revenue started in the range of approximately 830 million US dollars in the mid-2020 period. There is a moderate upward trend through early 2022, reaching over 1.4 billion US dollars in certain quarters. Although revenue remains generally high in subsequent periods, it exhibits some volatility with slight decreases and rebounds but ends with a peak above 1.5 billion US dollars in early 2025. This shows that despite operational losses, top-line sales performance has largely grown or held steady over time.

Operating profit margin

Margins present a clear downward trajectory. Initially, the margin is comfortably positive, ranging from about 13% up to above 21% during the first half of the timeline. However, the margin crosses into negative territory starting around mid-2022 and continues deteriorating sharply thereafter. By early 2025, margins approach nearly -78%, suggesting that costs, expenses, or other deductions heavily outweigh revenues from operations.

In summary, while revenues have generally increased or remained robust, operational profitability has declined markedly with steep operating losses emerging recently. This divergence between growing sales and shrinking profitability signals intensified cost pressures, efficiency issues, or other adverse operational factors impacting financial health. Immediate attention to cost management and operational restructuring may be necessary to restore positive earnings.

Net Income (Loss)

Net income showed strong performance with substantial positive values through March 31, 2022, peaking notably at 218,812 thousand US dollars at the end of Q1 2021. Following this period, a significant decline is observed, transitioning into consistent and deep losses starting June 30, 2022. The losses intensify sharply, reaching extreme negative figures such as -2,903,000 thousand US dollars by March 31, 2024, and continued substantial losses up to March 31, 2025. This indicates increasing financial challenges over recent quarters.

Net Revenue

Net revenue exhibited a steady increase from June 30, 2020, through March 31, 2023, rising from approximately 831 million US dollars to over 1.44 billion US dollars. This growth trend suggests expanding sales or service delivery despite fluctuations in profitability. Post March 2023, revenue stabilized around 1.3 to 1.6 billion US dollars per quarter, indicating relative revenue stability despite the widening losses reported.

Net Profit Margin

The net profit margin trend aligns with the net income pattern, initially presenting healthy and increasing margins from 13.22% in June 2020 to a peak near 19.45% in June 2021. Subsequently, margins experienced a marked decline, turning negative by September 2022, and progressively worsening through subsequent quarters. By March 2025, margins recorded severe negative values approaching -79.5%, reflecting deep operational losses and a challenging financial situation despite sustained revenue levels.

Summary Insight

The data reveals a paradox where revenue growth and stability coexist with deteriorating profitability and escalating losses. While the company initially demonstrated increasing profits and expanding revenue, recent periods are characterized by significantly negative earnings and profit margins. This divergence may suggest rising costs, increased investments, impairments, or other factors negatively impacting net profitability. Continuous negative margins over multiple quarters highlight the need for strategic financial review and operational adjustments to restore profitability.

The analysis of the quarterly financial data reveals significant fluctuations in net income (loss), stockholders’ equity, and return on equity (ROE) over the observed periods.

Net Income (Loss)

The net income demonstrates a generally positive trend from mid-2020 through mid-2021, reaching peaks above $180 million and $218 million in late 2020 and early 2021 respectively. However, starting from mid-2022, there is a marked decline with net income turning negative, reflecting substantial losses that deepen over time. The worst losses occur in early 2024 and continue sharply downward into 2025, with losses exceeding $3 billion in some quarters. This indicates a severe downturn in profitability during recent periods.

Total Stockholders’ Equity

Stockholders’ equity shows a steady increase from mid-2020 until early 2022, rising from approximately $2.65 billion to nearly $9.7 billion. Following this peak, equity levels fluctuate but generally maintain a downward trajectory from late 2022 through 2025. Notably, equity drops significantly starting in early 2024, shrinking to around $2.1 billion by the first quarter of 2025. This decline points to possible asset write-downs, accumulated losses, or other equity-reducing events in recent quarters.

Return on Equity (ROE)

ROE mirrors the trends seen in net income and equity. Initially, ROE is strong and positive, consistently above 10% and peaking around 18% in mid-2021. However, from mid-2022 onwards, ROE deteriorates sharply, turning negative and worsening drastically through 2024 and 2025. The nadir occurs in the first quarter of 2025 with an ROE of -209.52%, indicating an extremely poor return relative to shareholders' equity during that period.

In summary, the financial data indicates a period of robust profitability and growing equity through mid-2021, followed by a significant and sustained decline in financial performance and equity value from mid-2022 onward. The consistent and deepening net losses combined with declining equity have resulted in highly negative returns on equity, reflecting considerable challenges in recent quarters.

Net Income (Loss) Trends

The net income exhibited a general upward trend from mid-2020 through early 2021, peaking notably in the first quarter of 2021. Following this, there was significant volatility with a sharp decline beginning in mid-2022, leading to substantial net losses. These losses intensified markedly through to early 2025, reaching severe negative values. The transition from consistent profitability to deep losses indicates a substantial deterioration in earnings performance over the period analyzed.

Total Assets Evolution

Total assets steadily increased from mid-2020 up to the first quarter of 2022, indicating growth or possibly expansion efforts during this period. From mid-2022 onwards, total assets began to decline gradually, with a more pronounced decrease observed in early 2024 through to early 2025. This trend suggests a combination of possible asset disposals, write-downs, or shifts in business strategy resulting in a reduction of asset base.

Return on Assets (ROA) Dynamics

The return on assets was consistently positive and relatively strong through early 2022, with values generally above 6%, peaking near 10%. However, starting mid-2022, ROA declined sharply into negative territory and continued to worsen dramatically through to early 2025. The negative ROA values, increasingly worsening, indicate that the company’s asset base was generating losses rather than profits, highlighting significant operational or market challenges impacting asset efficiency and profitability.

Overall Financial Condition

The combined observations from net income, total assets, and ROA reveal a period of initial growth and profitability transitioning into a phase of deep financial distress. The dramatic shifts in net income and profitability ratios following mid-2022 imply strong adverse factors affecting the company’s earnings, while the asset declines reinforce a possible contraction or reorganization strategy. This trajectory demands close attention to underlying causes, including market conditions, operational issues, or structural changes within the company.