Stock Analysis on Net

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

Enterprise Value to FCFF (EV/FCFF)

Microsoft Excel

Free Cash Flow to The Firm (FCFF)

Take-Two Interactive Software Inc., FCFF calculation

US$ in thousands

Microsoft Excel
12 months ended: Mar 31, 2025 Mar 31, 2024 Mar 31, 2023 Mar 31, 2022 Mar 31, 2021 Mar 31, 2020
Net income (loss) (4,478,900) (3,744,200) (1,124,700) 418,022 588,886 404,459
Net noncash charges 5,677,500 4,615,200 1,981,600 521,629 348,396 521,049
Changes in assets and liabilities, net of effect from purchases of businesses (1,243,800) (887,100) (855,800) (681,667) (24,964) (239,830)
Net cash provided by (used in) operating activities (45,200) (16,100) 1,100 257,984 912,318 685,678
Interest paid, net of tax1 146,659 108,230 66,439 1,618 4,190
Purchases of fixed assets (169,400) (141,700) (204,200) (158,642) (68,923) (53,384)
Free cash flow to the firm (FCFF) (67,941) (49,570) (136,661) 99,342 845,013 636,484

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).


Net cash provided by (used in) operating activities
The net cash from operating activities showed a significant increase from 685,678 thousand USD in 2020 to a peak of 912,318 thousand USD in 2021. This was followed by a sharp decline to 257,984 thousand USD in 2022. The downward trend continued drastically in 2023, dropping to 1,100 thousand USD, and further into negative values in 2024 and 2025, recording -16,100 thousand USD and -45,200 thousand USD respectively. This reflects a severe contraction in operational cash generation over the recent years.
Free cash flow to the firm (FCFF)
Free cash flow to the firm (FCFF) exhibited a similar trend. Beginning at 636,484 thousand USD in 2020, it rose to 845,013 thousand USD in 2021. Subsequently, FCFF dramatically decreased to 99,342 thousand USD in 2022, then turned negative in 2023 at -136,661 thousand USD. Although there was a slight recovery in 2024 to -49,570 thousand USD, it remained negative and worsened somewhat in 2025, reaching -67,941 thousand USD. The pattern indicates growing challenges in generating free cash flow, impacting financial flexibility and potentially signaling increased investment or operational difficulties.

Interest Paid, Net of Tax

Take-Two Interactive Software Inc., interest paid, net of tax calculation

US$ in thousands

Microsoft Excel
12 months ended: Mar 31, 2025 Mar 31, 2024 Mar 31, 2023 Mar 31, 2022 Mar 31, 2021 Mar 31, 2020
Effective Income Tax Rate (EITR)
EITR1 0.30% 21.00% 15.90% 10.20% 13.10% 11.80%
Interest Paid, Net of Tax
Interest paid, before tax 147,100 137,000 79,000 1,862 4,750
Less: Interest paid, tax2 441 28,770 12,561 244 561
Interest paid, net of tax 146,659 108,230 66,439 1,618 4,190

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 See details »

2 2025 Calculation
Interest paid, tax = Interest paid × EITR
= 147,100 × 0.30% = 441


Effective Income Tax Rate (EITR)
The effective income tax rate exhibited variability over the observed periods. It started at 11.8% as of March 31, 2020, then increased slightly to 13.1% by the end of March 2021. Subsequently, there was a decline to 10.2% by March 31, 2022, indicating a temporary reduction in tax burden. However, the rate rose notably to 15.9% by March 31, 2023, before climbing further to 21% as of March 31, 2024. The latest figure shows a sharp decrease to 0.3% by March 31, 2025. This pattern implies significant fluctuations in tax expenses relative to taxable income throughout the years, with an especially substantial decrease in the most recent period.
Interest Paid, Net of Tax
Interest paid, net of tax, showed an irregular but overall increasing trend. Starting at US$4,190 thousand as of March 31, 2020, it decreased sharply to US$1,618 thousand by March 31, 2021. Data for March 31, 2022, is missing, thus limiting the trend analysis for that year. On resumption at March 31, 2023, interest paid increased substantially to US$66,439 thousand. This upward momentum continued with a rise to US$108,230 thousand as of March 31, 2024, and further to US$146,659 thousand by March 31, 2025. The significant escalation from 2023 onwards suggests increased borrowing costs or higher debt levels during the recent periods.

Enterprise Value to FCFF Ratio, Current

Take-Two Interactive Software Inc., current EV/FCFF calculation, comparison to benchmarks

Microsoft Excel
Selected Financial Data (US$ in thousands)
Enterprise value (EV) 44,862,035
Free cash flow to the firm (FCFF) (67,941)
Valuation Ratio
EV/FCFF
Benchmarks
EV/FCFF, Competitors1
Alphabet Inc. 28.09
Comcast Corp. 14.48
Meta Platforms Inc. 32.27
Netflix Inc. 73.10
Walt Disney Co. 25.17
EV/FCFF, Sector
Media & Entertainment 30.35
EV/FCFF, Industry
Communication Services 26.69

Based on: 10-K (reporting date: 2025-03-31).

1 Click competitor name to see calculations.

If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.


Enterprise Value to FCFF Ratio, Historical

Take-Two Interactive Software Inc., historical EV/FCFF calculation, comparison to benchmarks

Microsoft Excel
Mar 31, 2025 Mar 31, 2024 Mar 31, 2023 Mar 31, 2022 Mar 31, 2021 Mar 31, 2020
Selected Financial Data (US$ in thousands)
Enterprise value (EV)1 44,319,116 27,867,153 25,291,781 11,341,810 17,472,522 13,461,826
Free cash flow to the firm (FCFF)2 (67,941) (49,570) (136,661) 99,342 845,013 636,484
Valuation Ratio
EV/FCFF3 114.17 20.68 21.15
Benchmarks
EV/FCFF, Competitors4
Alphabet Inc. 31.26 24.03 20.87 27.17 29.53
Comcast Corp. 14.02 17.60 17.93 15.77 20.50
Meta Platforms Inc. 30.96 26.42 24.09 15.40 29.48
Netflix Inc. 56.17 33.81 77.11 335.37 95.41
Walt Disney Co. 23.13 31.55 90.23 78.66 63.77
EV/FCFF, Sector
Media & Entertainment 30.26 25.02 23.83 24.76 31.49
EV/FCFF, Industry
Communication Services 26.47 22.52 23.48 31.43 25.70

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 See details »

2 See details »

3 2025 Calculation
EV/FCFF = EV ÷ FCFF
= 44,319,116 ÷ -67,941 =

4 Click competitor name to see calculations.


Enterprise Value (EV)
The enterprise value demonstrates a fluctuating yet overall increasing trend across the periods. Starting at approximately $13.46 billion in March 2020, it rose to about $17.47 billion in March 2021. This was followed by a notable decline to roughly $11.34 billion in March 2022. Subsequently, a significant increase occurred, reaching approximately $25.29 billion in March 2023 and further climbing to around $27.87 billion in March 2024. The latest data point in March 2025 shows a substantial increase to about $44.32 billion, indicating aggressive valuation growth in the most recent period.
Free Cash Flow to the Firm (FCFF)
Free cash flow to the firm experienced considerable variability over time, reflecting challenges in maintaining positive operational cash generation. Beginning with a strong positive cash flow of $636.48 million in March 2020, the figure improved to $845.01 million in March 2021. However, a sharp decline occurred in March 2022, with FCFF dropping to $99.34 million. The subsequent two years, March 2023 and March 2024, recorded negative free cash flow values of -$136.66 million and -$49.57 million respectively, highlighting potential operational or investment pressures. The downward trend persisted into March 2025, with FCFF further declining to -$67.94 million.
EV to FCFF Ratio
The valuation multiple represented by the EV/FCFF ratio is characterized by a mostly stable range initially, followed by a sharp increase and incomplete data in later periods. In March 2020 and 2021, the ratio was within a comparable range at approximately 21.15 and 20.68 times, implying consistent valuation relative to cash flow. By March 2022, a dramatic surge to 114.17 times was observed, likely driven by the significant reduction in FCFF. No ratio data is available for the more recent periods, complicating further analysis. This ratio spike indicates elevated valuation levels relative to free cash flow during the downturn in cash generation, reflecting potential market expectations or distortions.
Summary
Overall, the data reveals a company experiencing substantial enterprise value growth in the later periods despite weakening free cash flow performance. The decline and eventual negative values in FCFF suggest operational or capital expenditure challenges affecting liquidity or profitability. The extreme rise in the EV/FCFF ratio in 2022 points to an elevated valuation that is not supported by underlying cash flow generation during that period. The absence of subsequent ratio data precludes a definitive conclusion about the alignment of valuation and cash flow in the most recent years. The divergent trends indicate a need for careful monitoring of cash flow health relative to the high valuation levels.