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

Receivables Turnover

The receivables turnover ratio demonstrates a generally increasing trend over the analyzed periods. Starting at 4.93 in mid-2020, it experienced fluctuations but showed an upward movement with notable peaks reaching around 9.09 by the end of 2024. The higher ratio in recent quarters suggests improved efficiency in collecting receivables.

Payables Turnover

The payables turnover ratio displays considerable volatility, with an overall declining tendency from a high of 31.51 in mid-2020 to lower levels fluctuating mostly between 13 and 25 in subsequent quarters. There are spikes and troughs, but the latest data points suggest a moderate turnover rate, indicating relatively slower payment to suppliers in recent periods compared to the earlier quarters.

Working Capital Turnover

Working capital turnover data is incomplete beyond early 2022. Initially, the ratio decreased from 2.2 in mid-2020 to approximately 1.7 by the first quarter of 2021 but then showed improvement back up to around 2.09 in late 2021. This pattern suggests some variability in the efficiency with which working capital is utilized over time, with a dip followed by recovery.

Average Receivable Collection Period

The average receivable collection period experienced a downward trend over the timeline, indicating faster collection of receivables. Starting from 74 days in mid-2020, this metric dropped to as low as 40 days by late 2024. Despite some fluctuations, the general movement towards a shorter collection period reflects enhanced credit management and improved cash flow from receivables.

Average Payables Payment Period

The average payables payment period exhibited a rising trend initially, increasing from 12 days in mid-2020 to about 44 days near mid-2022, indicating a lengthening of the time taken to settle payables. After this peak, the period shortened again, fluctuating between 14 and 28 days in more recent quarters. This suggests a strategic shift to faster payments post-2022 after previously extending payment terms.

Net Revenue Trends

The net revenue demonstrates an overall upward trend from mid-2020 through early 2025. Starting around $831 million in June 2020, revenues show steady growth with some seasonal fluctuations, notably peaking at approximately $1.4 billion in late 2022 and early 2023. After a slight dip in mid-2023, revenues once again increase towards the end of 2024 and early 2025, reaching a high point of about $1.58 billion by March 2025. This consistent growth indicates strong market performance and increasing sales over the observed quarters.

Accounts Receivable, Net of Allowances

Accounts receivable exhibit considerable volatility throughout the periods. Initial values near $685 million in mid-2020 rise sharply to over $804 million in late 2021, then fluctuate between approximately $579 million and $858 million in subsequent quarters. The variability suggests changes in credit policies, billing cycles, or customer payment behaviors that impact the collection of receivables. Despite fluctuations, there is no clear directional trend, indicating a less stable pattern relative to net revenue.

Receivables Turnover Ratio

The receivables turnover ratio varies over the timeline, reflecting how efficiently the company collects its receivables. Values fluctuate between approximately 4.19 and 9.09 times per year. Notably, the ratio reaches higher peaks in certain quarters (e.g., 8.89 in mid-2023, 9.09 in late 2024), indicating periods of improved collection efficiency. Conversely, lower ratios are observed in quarters with increased accounts receivable balances, suggesting slower collection during those times. Overall, the ratio trend reflects intermittent improvements and declines rather than a steady progression.

Integrated Analysis

The net revenue growth is accompanied by fluctuating accounts receivable and variable receivables turnover. This pattern suggests that while sales are increasing, the efficiency of converting sales into cash receipts changes over time. Higher receivables and lower turnover ratios in some quarters imply potential challenges in collections or extended payment terms. However, the ability to maintain revenue growth alongside these fluctuations indicates operational resilience and effective financial management despite varying cash flow dynamics.

Cost of Revenue

The cost of revenue exhibits considerable volatility over the analyzed periods. Initially, it decreased from a high of approximately 477 million USD in mid-2020 to a low near 280 million USD in the first quarter of 2021. Subsequently, it increased again, peaking at over 1.22 billion USD in early 2023, indicating a significant surge. After this peak, it decreased somewhat but remained elevated relative to earlier periods, with values oscillating between approximately 567 million and 930 million USD. This suggests fluctuations in production or delivery costs associated with the company's offerings, possibly reflecting changes in sales volume, product mix, or pricing strategies.

Accounts Payable

Accounts payable showed a generally rising trend from mid-2020 levels around 56 million USD to a peak exceeding 199 million USD by mid-2022. After this high point, payables tended to stabilize with some fluctuations, ranging between approximately 127 million and 195 million USD in subsequent periods. This growth and stabilization pattern indicates a possible increase in trade credit usage or timing differences in payment cycles, reflecting the company's supplier financing or operational cash management strategies.

Payables Turnover Ratio

The payables turnover ratio demonstrated a downward trend from an initial high around 31.5 in mid-2020 to a trough below 8.3 in mid-2022. This sharp decline suggests that the company took longer to pay its suppliers over time. After reaching the low point, the ratio rebounded, showing considerable volatility but remaining generally below the early period levels, fluctuating mostly between 13 and 26. This indicates variability in payment behavior and cash cycle management, with intervals of faster and slower payment activity.

Overall Insights

The data reveals a complex interaction between cost of revenue, accounts payable, and payables turnover ratio. The increase in cost of revenue, especially notable from late 2021 into early 2023, likely pressured the company's cash flows, as accounts payable also increased substantially. The declining payables turnover ratio up to mid-2022 reflects longer payment periods, possibly to manage working capital under increased cost pressures. The subsequent fluctuations in the turnover ratio could point to adjustments in supplier payment policies or operational cash flow stabilization efforts. Overall, the trends suggest dynamic operational and financial management responses to changing cost structures and working capital demands during the analyzed timeframe.

The financial data reveals several notable trends and patterns over the observed periods.

Working Capital

The working capital exhibited a positive trend from mid-2020 through early 2022, increasing from approximately $1.54 billion to a peak of around $1.77 billion. However, starting from June 2022, there is a sharp and sustained decline, with values turning negative and reaching nearly negative $800 million by the first quarter of 2025. This indicates a significant reduction in current assets relative to current liabilities over this latter period, signaling potential liquidity constraints or increased obligations.

Net Revenue

Net revenue showed consistent growth throughout the entire period. Beginning at approximately $831 million in mid-2020, revenues steadily increased with some fluctuation, reaching around $1.58 billion by the first quarter of 2025. The revenue growth is particularly pronounced from mid-2021 onward, indicating strong business expansion or improved sales performance.

Working Capital Turnover

The working capital turnover ratio declined from 2.2 in June 2020 to roughly 1.7 by March 2021, then showed some recovery, fluctuating around 2.0 in late 2021 and early 2022. Data for subsequent periods is unavailable. The initial decrease suggests that the company was generating fewer sales per unit of working capital, but the partial recovery indicates improved efficiency in utilizing working capital during that time frame.

In summary, while the company has demonstrated robust growth in net revenue, the substantial decline and eventual negative working capital is a concern, potentially reflecting changes in the company's current asset and liability management. The variations in working capital turnover emphasize a period of adjustment in operational efficiency. These dynamics suggest a need for closer monitoring of liquidity and operational resource allocation to maintain financial stability despite strong revenue growth.

Receivables Turnover Ratio Trend

The receivables turnover ratio exhibits considerable fluctuations over the analyzed periods. The ratio starts at 4.93 in June 2020, declines to 4.19 by September 2021, and then shows a general upward trajectory, reaching a peak of 9.09 in December 2024. Despite the overall upward trend from late 2021 onward, there are intermittent decreases, such as drops in September 2023 and September 2024. The pattern suggests variable efficiency in collecting receivables but indicates an improving trend in turnover rates in recent quarters.

Average Receivable Collection Period Trend

This metric generally moves inversely to the receivables turnover ratio, as expected. The collection period begins at 74 days in June 2020, rises to a high of 87 days in September 2021, then declines steadily, reaching lows near 40 to 45 days by several quarters in 2023 and 2024. Some variation occurs with intermittent increases to around 55 to 57 days. The decline over time implies improving efficiency in collecting receivables from customers, though the fluctuations highlight inconsistent collection speeds in some quarters.

Relationship and Insights

Both metrics reflect changes in the company's receivables management efficiency. The initial periods show a weakening in turnover and lengthening of collection days, peaking in late 2021. Following this, a reversal is observed with stronger turnover ratios and shorter collection periods, suggesting enhanced collection processes or improved customer payments. Despite improvements, occasional reversals emphasize that the collection environment remains somewhat variable. The data indicates a trend towards more prompt receivables conversion to cash in recent years.

Payables Turnover

The payables turnover ratio exhibits a noticeable downward trend from mid-2020 through mid-2022, declining from a high of 31.51 to a low near 8.21. This indicates that during this period, the company was settling its payables less frequently per year, which may reflect extended payment terms or slower payment practices. Following mid-2022, there is a recovery in this ratio, with values rising again and peaking near 25.83 by late 2023, suggesting a return to faster payment of payables. However, after this peak, the ratio experiences fluctuations, declining into 13–19 range through early 2025, indicating some instability or variability in payment patterns.

Average Payables Payment Period

The average payables payment period, expressed in days, inversely corresponds to the trend seen in the payables turnover ratio. Starting at 12 days in mid-2020, this metric steadily lengthens to reach a high of 44 days by mid-2022, signifying that the company took longer to pay its suppliers during this interval. Post mid-2022, the payment period shortens significantly, dropping to approximately 14 days by late 2023, reflecting quicker settlement of payables. Subsequent periods show a moderate increase, with days payable rising to around 28 days by early 2025, indicating a moderate extension in payment duration compared with the late-2023 trough.

Overall Insights

The data reveals a phase of lengthening credit terms or slower payments between mid-2020 and mid-2022, followed by a phase of quicker payment cycles from mid-2022 to late 2023. The recent period since late 2023 shows some variability with moderately extended payment durations compared to the recent low. These dynamics could reflect shifting working capital management strategies, responses to supplier negotiations, or changes in liquidity management over the observed timeframe.