10-K – 2026-05-22 – ttwo-20260331.htm

Many of our Rockstar titles and certain of our 2K titles have been rated "M" (age 17 and older) by the ESRB. If we are unable to obtain "M" ratings and instead receive "AO" ratings on future versions of those or similar titles as a result of changes in the ESRB's ratings standards or for other reasons, including the adoption of legislation in this area, our business and prospects could be negatively affected. If any of our games are re-rated by the ESRB or other foreign-based ratings organizations, we could be exposed to litigation, administrative fines and penalties and other potential liabilities, and our operating results and financial condition could be significantly affected.
    We have implemented processes to comply with the requirements of the ESRB and other ratings organizations and properly display the designated rating symbols and content descriptions. Nonetheless, these processes are subject to human error, circumvention, overriding, and reasonable resource constraints. If a video game we publish were found to contain undisclosed pertinent content, the ESRB could re-rate that game and change the associated content descriptors originally assigned, require us to recall the game and/or change the game or game packaging, and/or impose a fine on us. In addition, retailers could refuse to sell the game and demand that we accept the return of any unsold copies or returns from customers, and consumers could refuse to buy such game, or demand that we refund their money and/or refrain from buying other games published by us. This could have a material negative effect on our operating results and financial condition. In addition, we may be exposed to litigation, administrative fines, and penalties, and our reputation could be harmed, which could affect sales of our other video games. If any of these were to occur, our business and financial performance could be significantly harmed.
Certain other countries have also established content rating systems as prerequisites for product sales in those countries. In addition, certain stores use other ratings systems, such as Apple’s use of its proprietary “App Rating System” and Google Play’s use of the IARC rating system. If we are unable to obtain the ratings we have targeted for our products, it could have a negative impact on our business. In some instances, we may be required to modify our products to meet the requirements of the rating systems, which could delay or disrupt the release of any given product or may prevent its sale altogether in certain territories. Further, if one of our games is re‑rated for any reason, a ratings organization could require corrective actions, which could include a recall, retailers could refuse to sell it and demand that we accept the return of any unsold or returned copies or consumers could demand a refund for copies previously purchased.
Additionally, retailers may decline to sell interactive entertainment software containing what they judge to be graphic violence or sexually explicit material or other content that they deem inappropriate for their businesses, whether because a product received a certain rating by the ESRB or other content rating system, or otherwise. If retailers decline to sell our products based upon their opinion that they contain objectionable themes, graphic violence or sexually explicit material, or other generally objectionable content, we might be required to modify particular titles or forfeit the revenue opportunity of selling such titles with that retailer.
If we are unable to protect the intellectual property relating to our software, the commercial value of our products will be adversely affected, and our competitive position could be harmed.
    We develop proprietary software and have obtained the rights to publish and distribute software developed by third parties. We attempt to protect our software and production techniques under patent, copyright, trademark and trade secret laws as well as through contractual restrictions on disclosure, copying and distribution. Nonetheless, our software is susceptible to piracy and unauthorized copying, and third parties may potentially exploit or misappropriate our intellectual property and proprietary information, causing significant reputational damage. Unauthorized third parties, for example, may be able to copy or to reverse engineer our software to obtain and use programming or production techniques that we regard as proprietary. Well organized piracy operations have also proliferated in recent years, resulting in the ability to download pirated copies of our software over the Internet. Although we attempt to incorporate protective measures into our software, piracy of our products could negatively affect our future profitability.
In addition, "cheating" programs or other unauthorized software tools and modifications that enable consumers to cheat in games harm the experience of players who play fairly and could negatively impact the volume of microtransactions or purchases of downloadable content which may disrupt the virtual economies of our games and reduce the demand for virtual items, disrupting our in-game economy. In addition, unrelated third parties have attempted to scam our players with fake offers for virtual items or other game benefits. We devote significant resources to discovering, discouraging, and disabling these cheating and scam programs and activities, including by "taking down" offending content and by initiating litigation where appropriate. Despite our efforts, if we are unable to do so quickly, our operations may be disrupted, our reputation may be damaged, players may stop playing our games and our ability to reliably validate our audience metrics may be negatively affected. These cheating programs and scam offers result in lost revenue from paying players, disrupt our in-game economies, divert time from our personnel, increase costs of developing technological measures to combat these programs and activities, increase our customer service costs needed to respond to dissatisfied players, and may lead to legal claims.
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Also, vulnerabilities in the design of our applications and of the platforms upon which they run could be discovered after their release. This may lead to lost revenues from paying consumers or increased cost of developing technological measures to respond to these, either of which could negatively affect our business.
The value of our virtual items is highly dependent on how we manage the economies in our games. If we fail to manage our game economies properly, our business may suffer.
Paying players make purchases in our games because of the perceived value of these virtual items, which is dependent on the relative ease of obtaining an equivalent good by playing our game. The perceived value of these virtual items can be impacted by various actions that we take in the games including offering discounts for virtual items, giving away virtual items in promotions or providing easier non-paid means to secure these goods. Managing game economies is difficult and relies on our assumptions and judgment. If we fail to manage our virtual economies properly or fail to promptly and successfully respond to any such disruption, our reputation may suffer and our players may be less likely to play our games and to purchase virtual items from us in the future, which would cause our business, financial condition and results of operations to suffer.
Some of our players may make sales or purchases of virtual items used in our games through unauthorized or fraudulent third-party websites, which may reduce our revenue.
Game accounts and virtual items in our games have no monetary value outside of our games. Nonetheless, some of our players may make sales and/or purchases of game accounts or virtual items, such as virtual currency, through unauthorized third-party sellers in exchange for real currency. These unauthorized or fraudulent transactions are usually arranged on third-party websites and the virtual items offered may have been obtained through unauthorized means such as exploiting gameplay vulnerabilities in our games, from scamming our players with fake offers for virtual items or other game benefits, or from credit card fraud. We do not in any way facilitate these transactions and do not generate any revenue from them. These unauthorized purchases and sales from third-party sellers have in the past and could in the future impede our revenue and profit growth by, among other things:
• decreasing revenue from authorized transactions;
• creating downward pressure on the prices we charge players for our virtual items;
• increasing chargebacks from unauthorized credit card transactions;
• causing us to lose revenue from dissatisfied players who stop playing a particular game;
• causing us to lose revenue from players who we take disciplinary action against, including banning certain players who may have previously made purchases within our games;
• increasing costs we incur to develop technological measures to detect, prevent, and curtail unauthorized transactions;
• increasing costs we incur in pursuing enforcement action against the individuals and websites responsible for facilitating such unauthorized transactions;
• increasing risk of certain monetization practices in our games being erroneously deemed a form of gambling in certain jurisdictions by virtue of the existence of such authorized marketplaces;
• resulting in negative publicity or harm our reputation with players and partners; and
• increasing customer support costs to respond to dissatisfied players.
To discourage unauthorized purchases and sales of game accounts and virtual items, we state in our terms of service that the buying or selling of game accounts and virtual items from unauthorized third-party sellers may result in bans from our games or legal action. We periodically encounter such issues and expect to continue to do so. We have banned players as a result of such activities. We have also issued DMCA notices and filed lawsuits against third parties attempting to “sell” game accounts and virtual items from our games outside of our games. We have also employed technological measures to help detect unauthorized transactions and continue to develop additional methods and processes by which we can identify unauthorized transactions and block such transactions. However, there can be no assurance that our efforts to detect, prevent or minimize these unauthorized or fraudulent transactions will be successful and that these actions will not increase over time.
Risks related to legal or regulatory compliance
Companies and governmental agencies may restrict access to platforms, our website, mobile applications or the Internet generally, which could have a negative impact on our business.
    We rely on our consumers' access to significant levels of Internet bandwidth for the sale and digital delivery of our content and the functionality of our games with online features. Changes in laws or regulations that adversely affect the growth, popularity, or use of the Internet, including laws affecting "net neutrality" or measures enacted in certain jurisdictions, could decrease the demand for our products and services or increase our cost of doing business. Although certain jurisdictions have implemented laws and regulations intended to prevent Internet service providers from discriminating against particular types of legal traffic on their networks, other jurisdictions may lack such laws and regulations or repeal existing laws or regulations. In 2024, the Federal Communications Commission's efforts to reinstate net neutrality regulations in the U.S. were blocked by the
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Sixth Circuit Court of Appeals. Notwithstanding that decision, several states have enacted net neutrality regulations. Given uncertainty around these rules, including changing interpretations, amendments, or repeal, coupled with the potentially significant political and economic power of local Internet service providers and the relatively significant level of Internet bandwidth access our products and services require, we could experience discriminatory or anti-competitive practices that could impede our growth, cause us to incur additional expenses, or otherwise negatively affect our business.
Additionally, our players generally need to access the Internet and in particular platforms such as the Apple App Store, the Google Play Store, Facebook, Snapchat or our website to play our mobile games. Companies and governmental agencies could block access to, impose restrictions on or require a license for any platform, our website or mobile applications for a number of reasons such as security or confidentiality concerns or regulatory reasons which may include, among other things, governmental restrictions on certain content in a particular country, requirements to establish a local presence in a particular jurisdiction, and a requirement that player information be stored on servers in a country within which we operate. Companies may also adopt policies that prohibit employees from accessing Apple, Google, Facebook and our website or any social platform. If companies or governmental entities block or limit such or otherwise adopt policies restricting players from playing our games, our business could be negatively impacted and could lead to the loss or slower growth of our player base.
Our business and products are subject to a variety of existing U.S. and foreign laws and regulations, many of which are unsettled and still developing, as well as potential new legislation, all of which could subject us to claims or otherwise harm our business.
As a global company, we are subject to a variety of regulations and laws in the U.S. and abroad, including regarding consumer protection (including the use of prepaid cards, online safety, and the protection of minors), subscriptions, advertising, electronic marketing, privacy (including verified parental consent and age assurance), biometrics, cybersecurity, data protection and data localization or data transfer requirements, AI, online services, online gaming or gambling, anti-competition, freedom of speech, labor, real estate, taxation, social media and content moderation, escheatment, intellectual property ownership and infringement, tax, export and national security, tariffs and other trade restrictions, anti-corruption and telecommunications, all of which are continuously evolving and developing. The scope and interpretation of the laws that are or may be applicable to us, which in some cases can be enforced by private parties in addition to government entities and regulatory bodies, are often uncertain and may be conflicting, particularly laws outside the U.S., and compliance with laws, regulations, codes of practice, and similar requirements may be burdensome and expensive. Laws and regulations may be inconsistent, or even contradictory, from jurisdiction to jurisdiction, which may increase the cost of compliance and doing business and expose us to possible litigation, penalties or fines, which in certain circumstances can be linked to a percentage of our global turnover. Any changes which we may introduce to our games in order to comply with these laws, regulations, codes of practice, and similar requirements, could make our games less attractive to our players, or cause us to change or limit our ability to sell our products in certain jurisdictions. We have policies and procedures designed to ensure compliance with applicable laws and regulations, but we cannot assure that we will not be deemed to have violated any such laws and regulations.
    Several proposals have been made for federal legislation to regulate our industry. Such proposals seek to prohibit the sale of products containing certain content and functionality included in some of our games. If any such proposals are enacted into law, it may limit the potential market for some of our games in the U.S., and adversely affect our business, financial condition and operating results. Other countries have adopted laws regulating content both in packaged games and those transmitted over the Internet that are stricter than current U.S. laws. In the U.S., proposals have also been made by numerous state legislators to regulate and prohibit the sale of interactive entertainment software products containing certain types of violent or sexual content to audiences under the ages of 17 or 18, such as the State of California's "ultraviolent video games law" that sought to ban the sale or rental of violent video games to minors. While such legislation to date has been enjoined by legal action of industry and retail groups or been found unconstitutional, the adoption into law of such legislation in federal and/or in state jurisdictions in which we do significant business could severely limit the retail market for some of our games.
    In addition, there are ongoing academic, political and regulatory discussions in the U.S., Europe, Middle East, Asia, Australia, Brazil and other jurisdictions regarding whether certain game genres, such as social casino, or certain game mechanics, such as "loot boxes," or in game "virtual currencies," should be subject to a higher level or different type of regulation than other game genres or mechanics to protect consumers, in particular minors and vulnerable adults, and, if so, what such regulations should include. In particular, Australia and Brazil have recently introduced more stringent regulations on games that contain simulated gambling and loot boxes. If new regulations are imposed, or other regulations are interpreted to apply to our games or certain game mechanics, such rules and regulations may expose us to civil and criminal penalties if we do not comply. For example, in January 2025, the U.S. Federal Trade Commission ("FTC") announced an enforcement action against a game developer for various consumer protection and privacy violations related to a game that was deemed by the FTC to have been directed at children under the federal children's privacy law. Central to the FTC's complaint was the game's implementation of a virtual currency and loot box system that was deemed too confusing for vulnerable consumers such as children and teens. The complaint was settled with the developer having to, among other things, agree to a ten-year compliance
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monitoring program and pay a fine of $20 million. Also, we may be subject to civil claims and regulatory actions alleging our games, including social casino games, violate certain state laws concerning unfair or deceptive acts or practices in conduct of any trade or commerce or certain state gambling laws.
Additionally, in the U.K., the government is expected to conclude its review of the implementation of the industry guidance on loot boxes which was published by the U.K. Interactive Entertainment Association. It is possible that the government's review may recommend further regulation to address the concerns raised during the 2020 call for evidence into loot boxes in video games. In addition, in Australia, the Phase 2 Industry Codes were recently approved by eSafety and have introduced new age assurance and other online safety requirements for distribution platforms and games containing certain content or interactive features.
Furthermore, the European Commission has confirmed that loot boxes, virtual currencies, and certain in-game mechanics, are being considered as part of its preparation of the Digital Fairness Act, a draft of which is expected to be published later this year. Similarly, the E.U.'s Consumer Protection Cooperation Network (which is comprised of consumer protection authorities from across the E.U.'s various member states) has recently published a set of "Key Principles on In-game Virtual Currencies" that introduces novel interpretations of existing E.U. consumer protection law and that present significant challenges for games that offer in-game virtual currencies to consumers in the E.U.
In March 2025, Spain's Council of Ministers introduced a new minor protection bill to the Spanish Parliament that proposes to limit the availability of certain loot boxes to consumers in Spain who are at least 18 years old. A similar bill was introduced in February 2026 by Portugal's Parliament. It is possible that other courts or regulatory agencies could adopt similar regulations or similarly broad interpretations of existing gambling laws to effectively regulate loot boxes in their jurisdiction as a form of gambling or otherwise as a prohibited commercial practice . In some of our games, such as CSR Racing 2 , Dragon City, Empires & Puzzles , FarmVille 3 , Golf Rival , Harry Potter: Puzzles & Spells , Merge Dragons! , Merge Magic! , Monster Legends, NBA 2K , Top Eleven, WWE 2K , and Zynga Poker , certain mechanics may be deemed as “loot boxes.” Meanwhile, the U.K. and various European member states are actively exploring proposals to follow Australia's lead and prohibit the availability of social media services for teenagers under the age of 15 or 16. These proposed prohibitions could, if drafted broadly, impact the ability of certain consumers to access our products and services, particularly those that include communications functionality or user generated content.
New regulation by the FTC, U.S. states or other international jurisdictions, which may vary significantly across jurisdictions and with which we may be required to comply, could require that these game mechanics be modified or removed from games, increase the costs of operating our games, impact player engagement and monetization or otherwise harm our business performance. It is difficult to predict how existing or new laws may be applied to these or similar game mechanics. If we become liable under these laws or regulations, we could be directly harmed, and we may be forced to implement new measures to reduce our exposure to this liability. This may require us to expend substantial resources or to modify our games, which would harm our business, financial condition and results of operations. In addition, the increased attention focused upon liability issues as a result of lawsuits and legislative proposals could harm our reputation or otherwise impact the growth of our business. Any costs incurred as a result of this potential liability could harm our business, financial condition or results of operations.
Within the mobile games industry there has been an increase in recent years in the use of a user acquisition channel called incentivized marketing. Incentivized marketing offers generally involve offering an incentive to the players, such as in-game app currency, for certain actions, such as downloading the game, completing consumer surveys or reaching certain milestones in a game. While we believe our use of incentivized marketing to be a legally permissible promotional activity, if the use of incentivized marketing were deemed to affect the legality of our games, we may be required to restructure our marketing activities in a manner that could impair our revenue or reduce the effectiveness of our marketing expenses. We may also be subject to enforcement actions by federal or state regulators, as well as private litigation, which would materially affect our business and results of operations.
Certain of our business models and features within our games and services are subject to new laws or regulations or evolving interpretations and application of existing laws and regulations, including those related to gambling. The growth and development of electronic commerce, virtual items and virtual currency has prompted calls for new laws and regulations and resulted in the application of existing laws or regulations that have limited or restricted the sale of our products and services in certain territories. In addition, certain foreign countries allow government censorship of interactive entertainment software products or require pre-approval processes of uncertain length before our games and services can be offered. Adoption of ratings systems, censorship, restrictions on distribution and changes to approval processes or the status of any approvals could harm our business by limiting the products we are able to offer to our consumers. In addition, compliance with new and possibly inconsistent regulations for different territories could be costly, delay, or prevent the release of our products in those territories.
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The laws and regulations concerning data privacy, consumer protection, and certain other aspects of our business are continually evolving. Failure to comply with these laws and regulations could harm our business.
    We are subject to certain privacy and data protection laws and industry terms and codes of conduct, the requirements of which are rapidly changing and likely will continue to do so for the foreseeable future. This may add complexity to our compliance efforts and could have a negative impact on or materially change our approach to the sale and marketing of our products. For example, because we target our services to and/or receive and process the personal information of individuals in the E.U. and the U.K., and we maintain certain local entities in the E.U. and the U.K. responsible for processing personal information, we are subject to the E.U. General Data Protection Regulation ("E.U. GDPR"), and the E.U. GDPR as assimilated into U.K. Law ("U.K. GDPR"). To the extent personal information is transferred from the E.U., U.K., or Switzerland across borders, we use legally valid transfer mechanisms such as standard contractual clauses and adequacy decisions; however, such mechanisms have been subject to legal scrutiny and may face additional challenges or regulatory guidance in the future, which could require us to implement different or additional measures and face increased compliance burdens and cost. The E.U. GDPR and U.K. GDPR contain significant penalties for non-compliance, which have been imposed by regulators. In addition, E.U. member states continue to enact national laws to implement the E.U. GDPR. Also, the E.U. Digital Services Act (“DSA”) became fully applicable on February 17, 2024. The DSA imposes new content moderation obligations, reporting and transparency obligations, and other requirements on digital services to protect consumers and their rights online. Noncompliance with the DSA could result in fines of up to 6% of annual global revenues, which are in addition to the ability of service recipients to lodge lawsuits against service providers in respect of any damage or loss suffered as result of such noncompliance. Similar online safety laws have been introduced in Australia, the U.K., and Brazil, all of which include significant fines for noncompliance.
In the U.S., approximately 20 states have enacted comprehensive privacy laws and several other states have enacted more narrow privacy laws. These apply to the processing of personal information of those states' residents and may impact how we can collect and use that information, especially for players under 18 years of age. Other U.S. states are considering similar privacy or data protection laws that may apply to us. Certain U.S. states are also considering a number of other additional laws related to the use of artificial intelligence or “automated decision making,” and advertising, such as requiring mandatory device settings for users to opt-out of advertising. Failure to comply with privacy and data protection laws may increase our costs, subject us to expensive and distracting government investigations, and result in substantial fines, or result in lawsuits and claims against us to the extent these laws include a private right of action.
Moreover, a number of jurisdictions impose specific and more onerous requirements regarding the collection and use of child and teen data. For instance, the U.S. Children's Online Privacy Protection Act ("COPPA") regulates the collection, use, and disclosure of personal information from children under 13 years of age, and age-based privacy laws can apply to how we collect and use personal information or provide certain game features to players up to 18 years of age, including how or whether we are permitted to use their information for targeted advertising. The FTC's most recent amendments to the COPPA Rule became effective in April 2026. These amendments expand the definition of covered personal information and impose new data retention and information security obligations. The U.K. implemented an Age Appropriate Design Code, which became effective in September 2021, that sets forth risk-based standards to be implemented by organizations that provide online services (e.g., online games) likely to be accessed by children in the U.K. under the age of 18, as part of such organization’s efforts to comply with applicable data protection laws. A number of U.S. states have enacted or are considering legislation similar to the U.K. Age Appropriate Design Code and several have also enacted or are considering legislation that prohibits targeted advertising to child and teen players under the age of 16 or 18 without express consent. For instance, the California Age-Appropriate Design Code Act took effect in July 2024. Since September 2023, the California Attorney General has been enjoined from enforcing elements of the act on First Amendment grounds. In March 2026, this injunction was narrowed but will undergo further review in the courts. Many states have focused recent regulatory efforts on children's and teens' privacy, with various state laws in place or taking effect in 2026 on issues including parental consent, age-verification obligations, and app store accountability. We cannot predict how these or other age-based obligations imposed on providers of online services may affect our compliance efforts going forward, and whether they will result in industry-wide changes to online services available to child and teen players; however, they may impact our financial position or operations to the extent that we are required to modify our practices, policies, products, or services as a result.
The U.S. government, including the FTC and the Department of Commerce, also continue to review the need for greater or different regulation over the collection of personal information and information about consumer behavior on the Internet and on mobile devices, and the U.S. Congress is considering a number of legislative proposals to regulate in this area, including a draft Federal comprehensive privacy law, updates to existing children's privacy laws that may expand the scope of coverage, and online safety laws that may require additional content moderation or changes to features in our games to minimize potential harm to children. Various government and consumer agencies worldwide have also called for new regulation and changes in industry practices. We cannot predict whether such proposals may be enacted into law, in what form
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or when. Any such new or amended privacy laws may add complexity to our compliance efforts and require us to expend additional financial or other resources as a result.
Privacy-based litigation and similar legal challenges likely will continue to affect our industry and the internet-enabled ecosystem. Existing laws that include private rights of action may continue to be leveraged by private litigants even if those legal challenges do not align with more recent privacy laws. These risks may also be increased when the law includes statutory damages instead of an evaluation of the actual harm presented by the activity in question. The ongoing, or subsequent resolution of, legal challenges affecting organizations using internet-enabled data collection and use may affect how we engage with our players and operate our business.
Further, and most notably in the mobile ecosystem, companies that provide the platforms on which our games are played are changing the terms on which publishers can collect and use personal data obtained from users on those platforms.
    Player use of our games is subject to our privacy policy and terms of service ("TOS"). If we fail to comply with our posted privacy policy, TOS, or other consents received in our game experience, or if we fail to comply with existing privacy or data protection laws and regulations, it could result in proceedings or litigation against us by governmental authorities or others, which could result in fines or judgments against us, damage our reputation, affect our financial condition, and harm our business. If regulators, the media, or consumers raise any concerns about our privacy and data protection or consumer protection practices, even if unfounded, this could also result in fines or judgments against us, damage our reputation, negatively affect our financial condition, and damage our business.
    It is possible that a number of laws and regulations may be adopted or construed to apply to us in the U.S. and elsewhere that could restrict the interactive entertainment industry, including player privacy, advertising, taxation, content suitability and moderation, online safety, copyright, distribution, and antitrust. Furthermore, the growth and development of electronic commerce and virtual goods may prompt calls for more stringent consumer protection laws that may impose additional burdens on companies such as ours conducting business through digital sales. Any such changes would require us to devote legal and other resources to address such regulation and may impair our business, financial condition, and operating results. For example, existing laws or new laws regarding the regulation of currency, banking institutions, and unclaimed property may be interpreted to cover virtual currency or virtual goods. If that were to occur, we may be required to seek licenses, authorizations, or approvals from relevant regulators, the granting of which may be dependent on us meeting certain capital and other requirements and we may be subject to additional regulation and oversight, all of which could significantly increase our operating costs. Similarly, changes in current laws or regulations or the imposition of new laws and regulations in the U.S. or elsewhere regarding in-game currencies, loot boxes and other in-game items, features or mechanics may lessen the growth of the interactive entertainment industry and impair our business, financial condition, and operating results. Similarly, new regulatory developments internationally aimed at better protecting consumers online from illegal or harmful content and interactions may introduce additional compliance and reporting obligations for our business which may increase operating costs. If we were to fail to comply with such new regulations, it could result in proceedings or litigation against us by governmental authorities or regulators, which could result in substantial fines or judgments against us, damage our reputation, affect our financial condition, and harm our business.
    Although we have structured and operate our skill tournaments and game mechanics, including random digital item mechanics, with applicable laws in mind, including any applicable laws relating to gambling, and believe that playing these games does not constitute gambling, our skill tournaments or game mechanics could become subject to gambling-related rules and regulations, or be deemed violative of current rules and regulations, and expose us to civil and criminal penalties. We also sometimes offer consumers of our online and casual games various types of contests and promotional opportunities. We are subject to laws in a number of jurisdictions concerning the operation and offering of such activities and games, many of which are still evolving and could be interpreted in ways that could harm our business. Further, Brazil has recently introduced new regulations to prohibit the availability of paid random digital items to players under the age of 18 and other jurisdictions such as Spain and Portugal are actively considering introducing similar restrictions. Should additional jurisdictions introduce similar prohibitions on random digital item mechanics, we might be required to alter some of our games to address these additional requirements or seek licenses, authorizations, or approvals from relevant regulators, the granting of which may be dependent on us meeting certain capital and other requirements, and we may be subject to additional regulation and oversight, such as reporting to regulators, all of which could significantly increase our operating costs. Moreover, the inclusion of random digital item mechanics has attracted the attention of the interactive gaming community, and if the future implementation of these features creates a negative perception of gameplay fairness or other negative perceptions, our reputation and brand could be harmed and revenue could be negatively impacted. Changes in current laws or regulations or the imposition of new laws and regulations in the U.S., the E.U., or elsewhere regarding these activities may lessen the growth of online or casual game services and impair our business.
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If we infringe on or are alleged to infringe on the intellectual property rights of third parties, our business could be adversely affected.
    As our industry grows, we have been, and may be, subject to an increasing amount of litigation that is common in the software industry based on allegations of infringement or other alleged violations of patent, copyright, or trademarks. In addition, we believe that interactive entertainment software will increasingly become the subject of claims that such software infringes on the intellectual property rights of others with both the growth of online functionality and advances in technology, game content and software graphics as games become more realistic. From time to time, we receive notices from third parties or are named in lawsuits by third parties alleging infringement of their proprietary rights. Although we believe that our software and technologies and the software and technologies of third-party developers and publishers with whom we have contractual relations do not and will not infringe or violate proprietary rights of others, it is possible that infringement of proprietary rights of others may occur. Any claims of infringement, with or without merit, could be time consuming, costly and difficult to defend. Moreover, intellectual property litigation or claims could require us to discontinue the distribution of products, obtain a license or redesign our products, which could result in additional substantial costs and material delays.
In addition, many patents have been issued that may apply to potential new modes of delivering, playing or monetizing products and services such as those that we produce or would like to offer in the future. We may discover that future opportunities to provide new and innovative modes of game play and game delivery may be precluded by existing patents that we are unable to acquire or license on reasonable terms.
Risks related to financial and economic condition
We have a significant amount of outstanding indebtedness, and may incur other indebtedness in the future, all of which may adversely affect our financial condition and future financial results.
As of March 31, 2026, we had $2,500.0 aggregate principal amount of outstanding senior notes ("Senior Notes") and a $1,000.0 revolving credit facility under that certain Credit Agreement, dated as of May 23, 2022 (as amended, the "2022 Credit Agreement") with no outstanding borrowings. (Refer to Note 11 – Debt to our Consolidated Financial Statements, herein).
As our outstanding Senior Notes mature, we will have to expend significant resources to either repay or refinance such notes. If we decide to refinance our Senior Notes, we may be required to do so on different or less favorable terms or we may be unable to refinance such notes at all, either of which may adversely affect our financial condition.
Our current or future levels of indebtedness may adversely affect our financial condition and future financial results by, among other things:
• increasing our vulnerability to adverse changes in general economic, industry and competitive conditions;
• requiring the dedication of a greater than expected portion of our expected cash from operations to service our indebtedness, thereby reducing the amount of expected cash flow available for general corporate purposes, including capital expenditures and acquisitions; and
• limiting our flexibility in planning for, or reacting to, changes in our business and our industry.
We are required to comply with the covenants set forth in the indentures governing our outstanding indebtedness, including our Senior Notes, Convertible Notes, and 2022 Credit Agreement. Our ability to comply with these covenants may be affected by events beyond our control. If we breach any of the covenants and do not obtain a waiver from the holders of our indebtedness or the lenders under the 2022 Credit Agreement, then, subject to applicable cure periods, any outstanding indebtedness may be declared immediately due and payable. Further, these covenants may limit our ability to take various actions, including incurring additional debt, paying dividends, repurchasing shares, and acquiring or disposing of assets or businesses. Accordingly, we may be restricted from taking actions that we believe would be desirable and in the best interest of us and our stockholders. In addition, changes by any rating agency to our credit rating may negatively impact the value and liquidity of our securities. Downgrades in our credit ratings could also restrict our ability to obtain additional financing in the future and could affect the terms of any such financing.
Delaware law, our charter documents, and provisions of our debt agreements may impede or discourage a takeover, which could cause the market price of our shares to decline.
    We are a Delaware corporation, and the anti-takeover provisions of Delaware law impose various impediments to the ability of a third party to acquire control of us, even if a change in control would be beneficial to our existing stockholders. Our Board has the power, without stockholder approval, to adopt a stockholder rights plan and/or to designate the terms of one or more series of preferred stock and issue shares of preferred stock. The ability of our Board to create and issue a new series of preferred stock and certain provisions of Delaware law, our certificate of incorporation and bylaws could impede a merger, takeover or other business combination involving us or discourage a potential acquirer from making a tender offer for our
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common stock, which, under certain circumstances, could reduce the market price of our common stock and the value of any outstanding notes.
Changes in our tax rates or exposure to additional tax liabilities could adversely affect our earnings and financial condition.
    We are a multinational corporation with operations in the U.S. and various other jurisdictions around the world. Accordingly, we are subject to tax in the U.S. and in various other jurisdictions. Significant judgment is required in determining our worldwide provision for income taxes, and, in the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. We are required to estimate future taxes. Although we currently believe our tax estimates are reasonable, the estimation process is inherently uncertain, and such estimates are not binding on tax authorities. Further, our effective tax rate or tax payable could be adversely affected by a variety of factors, including changes in the business, the mix and level of earnings between countries with differing statutory tax rates, changes in the realizability of deferred tax assets, changes in the availability of local tax incentives and production tax credits, changes in legislation that could scale back or eliminate tax credits for software development (which have benefitted our results in the past and whose benefits could be lessened or eliminated through such legislation in the future), changes in tax elections, and changes in applicable tax laws. Additionally, tax determinations are regularly subject to audit by tax authorities, and developments in those audits could adversely affect our income tax provision. Should our ultimate tax liability exceed estimates, our income tax provision and net income or loss could be materially affected.
We have recorded a valuation allowance against the majority of our deferred tax assets due to uncertainty with respect to their realization. We expect to provide for a valuation allowance until other significant positive evidence arises that suggests that the benefits associated with the deferred tax assets are more likely than not to be realized.
On July 4, 2025, the One Big Beautiful Bill Act ("OBBB") was signed into law. OBBB includes significant provisions, including but not limited to (1) permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act of 2017 ("TCJA"), (2) modifications to the international provisions relating to Base Erosion Anti Abuse Act ("BEAT"), Global Intangible Low-Tax Income ("GILTI") and Foreign Derived Deduction Eligible Income ("FDDEI"), (3) permanent reinstatement deduction for domestic research expenditures and 100% bonus depreciation for certain qualified property, and (4) modifications to tax credits. The legislation has multiple effective dates, with certain provisions effective in the fiscal year ended March 31, 2026 and others implemented in future periods. We have estimated the accounting for income tax effects of the OBBB, which reduced our estimated U.S. cash tax liability. It did not, however, impact our U.S. deferred tax assets or liabilities since we continue to maintain a full valuation allowance against U.S. net deferred tax assets. We are continuing to evaluate the impact of OBBB on the Company. It is possible that these changes could have an adverse impact on our effective tax rate, tax payments, financial condition, or results of operations. The new tax law is complex and additional interpretive guidance may be issued that could affect the interpretations and assumptions we have made, as well as actions we may take as a result of OBBB.
The Inflation Reduction Act of 2022 (the “Inflation Reduction Act”) includes a corporate alternative minimum tax ("CAMT") of 15% on the adjusted financial statement income ("AFSI") of corporations with an average AFSI exceeding $1.0 billion over a consecutive three-year period. The CAMT became effective for the fiscal year ended March 31, 2024. It is possible that the CAMT could result in an additional tax liability over the regular federal corporate tax liability in a particular year based on differences between book and taxable income. We estimate no tax liability relating to the CAMT for the current fiscal year. We will continue to evaluate the potential impact the Inflation Reduction Act may have on our operations and Consolidated Financial Statements in future periods. It is possible that these changes could have an adverse impact on our effective tax rate, tax payments, and financial condition in future periods.
The American Rescue Plan Act of 2021 (“ARPA”) provides for numerous tax and other stimulus measures, one of which will expand the limitation of compensation deductions for certain covered employees of publicly held corporations to also include the next five highly compensated employees. This limitation will be effective for us beginning April 1, 2027 and could have a significant adverse impact on our effective tax rate, tax payments, and financial condition in future periods.
In addition, TCJA added BEAT to prevent the reduction of tax liability through certain payments made to foreign related parties. BEAT imposes a minimum tax on taxpayers to prevent profit shifting from such payments. It is possible that we could be subject to BEAT and that it could have a significant adverse impact on our effective tax rate, tax payments, and financial condition in future periods.
Additionally, a number of countries are actively pursuing fundamental changes to the tax laws applicable to multinational companies like us and agreed to implement a global minimum tax regime, referred to as Pillar Two, intended to conform to the new and evolving Organisation for Economic Cooperation and Development ("OECD") guidelines. Pillar Two could result in additional tax liability over the regular corporate tax liability in a particular jurisdiction to the extent tax expense is less than a 15% minimum rate. Although the model rules provide a framework for applying the minimum tax, countries may enact Pillar Two differently than the model rules and on different timelines. Although the U.S., and certain other countries, has
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not yet enacted Pillar Two legislation, it is possible that Pillar Two could have an adverse impact effective tax rate, tax payments, and financial condition in future periods.
On January 5, 2026, the OECD released new administrative guidance outlining a "side-by-side" arrangement following agreement on key elements by the OECD/G20 Inclusive Framework on Pillar Two. It provides new safe harbors for U.S. multinational companies which would exempt U.S.-parented groups from two of the three Pillar Two top up taxes, extend the current Transitional Country-by-Country Reporting Safe Harbor by one year through the end of our fiscal year ending March 31, 2028, and make the Simplified Effective Tax Rate Safe Harbor permanent. The tax law is complex and additional interpretive guidance may be issued that could affect the interpretations and assumptions we have made, as well as actions we may take as a result of additional Pillar Two guidance. We will continue to monitor legislative and regulatory developments to assess the potential impact of Pillar Two. In addition, an increasing number of countries have enacted, or are considering enacting, revenue-based taxes on digital services. These digital services taxes target various business activities, including online advertising and, in some cases, video game sales. While the scope and applicability of these taxes often remains unclear, digital services taxes that ultimately apply to us could have an adverse impact on our business.
Our ability to use net operating loss and tax credit carryforwards to reduce future years' taxes could be substantially limited under Internal Revenue Code Sections 382 and 383 if we experience an ownership change as defined in the Internal Revenue Code Section 382.
Section 382 of the Internal Revenue Code contains rules that limit the ability of a company to use its net operating loss and tax credit carryforwards in years after an ownership change, which is generally defined as any change in ownership of more than 50% of its stock over a three-year testing period. These rules generally operate by focusing on ownership changes among stockholders owning directly or indirectly 5% or more of the stock of a company and/or any change in ownership arising from a new issuance of stock by the company. If, as a result of future transactions involving our common stock, including purchases or sales of stock by 5% stockholders, we undergo cumulative ownership changes which exceed 50% over the testing period, our ability to use our net operating loss and tax credit carryforwards would be subject to additional limitations under Sections 382 and 383. Generally, if an ownership change occurs, the annual taxable income limitation on the use of net operating loss and tax credit carryforwards is equal to the product of the applicable long-term tax-exempt rate and the value of the company's stock immediately before the ownership change. Depending on the resulting limitation, a portion of our net operating loss and tax credit carryforwards could expire before we would be able to use them. Our inability to fully utilize any net operating losses or tax credit carryforwards to reduce the tax liability in the future could have a material and negative affect on our future financial position and results of operations.
We are subject to risks and uncertainties of international trade, including fluctuations in the values of local foreign currencies against the dollar.
    Sales in international markets, primarily in Europe, have accounted for a significant portion of our net revenue. For the fiscal year ended March 31, 2026, 40.8% of our net revenue was earned outside the U.S. We are continuing to execute on our growth initiatives in Asia, where our strategy is to broaden the distribution of our existing products and expand our online gaming presence, especially in China. We are subject to risks inherent in foreign trade, including increased credit risks, tariffs, trade restrictions, and duties, fluctuations in foreign currency exchange rates, especially in jurisdictions like Turkey; shipping delays, and international political, regulatory and economic developments, such as the Russia-Ukraine war and the war in the Middle East, all of which can have a significant influence on our operating results. Many of our international sales are made in local currencies, which could fluctuate against the dollar. While we may use forward exchange contracts to a limited extent to seek to mitigate foreign currency risk, our operating results could be adversely affected by unfavorable foreign currency fluctuations.
Our reported financial results could be adversely affected by the application of existing or future accounting standards to our business as it evolves.
    Our financial results are reported under the accounting policies promulgated by the SEC and national accounting standards bodies and the methods, estimates, and judgments that we use in applying our accounting policies. For example, standards regarding revenue recognition have and could further significantly affect the way we account for revenue related to our products and services. We expect that an increasing number of our games will be supported with material post-release activities, such as content updates and online-enabled features, and we could therefore be required to recognize more of the related revenues for those games over a period of time rather than at the time of sale. Further, as we increase our downloadable content and add new features to our online services, user playing patterns can affect our estimate of the service period, and we could be required to recognize revenues, and defer related costs, over a shorter or longer period of time than we initially allocated. As we enhance, expand and diversify our business and product offerings, the application of existing or future financial accounting standards, particularly those relating to the way we account for revenue, could have a significant adverse effect on our reported results although not necessarily on our cash flows.
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Declines in consumer spending and other adverse changes in the economy could have a material adverse effect on our business, financial condition and operating results.
    Most of our products involve discretionary spending on the part of consumers. We believe that consumer spending is influenced by general economic conditions and the availability of discretionary income. This makes our products particularly sensitive to general economic conditions and economic cycles as consumers are generally more willing to make discretionary purchases, including purchases of products like ours, during periods in which favorable economic conditions prevail. Adverse economic conditions, such as a prolonged U.S. or international general economic downturn, including periods of increased inflation, stagflation, unemployment levels, tax rates, interest rates, energy prices, or declining consumer confidence, or the adverse impacts of implemented or threatened tariffs or trade wars could reduce consumer spending. Natural disasters, acts of war, pandemics, terrorism, transportation disruptions, climate change, adverse weather conditions, and other reasons beyond our control could further reduce discretionary spending on entertainment activities and products. Reduced consumer spending has and may in the future continue to result in reduced demand for our products and may also require increased selling and promotional expenses, which has had and may continue to have an adverse effect on our business, financial condition and operating results. Moreover, we maintain cash balances at third-party financial institutions in excess of the Federal Deposit Insurance Corporation insurance limit. If the financial conditions affecting the banking industry and financial markets cause additional banks and financial institutions to enter receivership or become insolvent, our ability to access our existing cash, cash equivalents and investments, or to draw on our existing lines of credit, may be threatened and could have a material adverse effect on our business and financial condition.
In addition, during periods of relative economic weakness, our consolidated credit risk, reflecting our counterparty dealings with distributors, customers, capital providers and others may increase. As a result of geopolitical conditions, our counterparty credit risk may be particularly exacerbated, as certain of our counterparties may face financial difficulties in paying owed amounts on a timely basis or at all. Furthermore, uncertainty and adverse changes in the economy could also increase the risk of material losses on our investments, increase costs associated with developing and publishing our products, increase the cost and availability of sources of financing, and increase our exposure to material losses from bad debts, any of which could have a material adverse effect on our business, financial condition and operating results. If economic conditions worsen, our business, financial condition and operating results could be adversely affected.
We are particularly susceptible to market conditions and risks associated with the entertainment industry, which, in addition to general macroeconomic downturns, also include the popularity, price, and timing of our products; changes in consumer demographics; the availability and popularity of other forms of entertainment and leisure; and critical reviews and public tastes and preferences, which may change rapidly and cannot necessarily be predicted.
General Risk Factors
Additional issuances or sales of equity securities by us would dilute the ownership of our existing stockholders and could adversely affect the market price of our common stock.
We may issue equity or equity-based securities in the future to facilitate acquisitions or strategic transactions, as we did in connection with our acquisitions of Zynga and Gearbox, to adjust our ratio of debt to equity, to fund expansion of our operations or for other purposes, such as the approximately $1.2 billion underwritten public offering of our common stock that we completed in May 2025. To the extent we issue additional equity securities, the percentage ownership of our existing stockholders would be reduced. The sale of substantial amounts of our common stock could adversely affect its price. The sale or the availability for sale of a large number of shares of our common stock in the public market could cause the price of our common stock to decline.
We are subject to risks related to corporate and social responsibility and reputation.
Many factors influence our reputation including the perception held by our customers, business partners and other key stakeholders. Our business faces increasing scrutiny related to environmental, social and governance activities. We risk damage to our reputation if we fail to act responsibly in a number of areas, such as environmental stewardship, supply chain management, climate change, workplace conduct, human rights and philanthropy. Any harm to our reputation could impact employee engagement and retention and the willingness of customers and our partners to do business with us, which could have a material adverse effect on our business, results of operations and cash flows. Negative reactions to our products and services may not be foreseeable. We also may not effectively manage or respond to these negative perceptions for reasons within or outside of our control. We expect to continue to expend resources to address concerns with our products and services. Negative perceptions could arise despite our efforts, though, and may result in loss of engagement with our products and services, increased scrutiny from government bodies and consumer groups, and/or litigation, any of which could negatively impact our business.
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Catastrophic events and climate change may have a long-term impact on our business.
Natural disasters, cyber incidents, weather events, wildfires, power disruptions, telecommunications failures, pandemics, health crises and other public health events, failed upgrades of existing systems or migrations to new systems, acts of terrorism, geopolitical conflict (such as the Russia-Ukraine war and the war in the Middle East), or other events could cause outages, disruptions and/or degradations of our infrastructure (including our or our partners’ information technology and network systems), a failure in our ability to conduct normal business operations, or the closure of public spaces in which players engage with our games and services all of which could materially impact our reputation and brand, financial condition and operating result.
Furthermore, climate change could result in an increase in the frequency or severity of natural disasters, such as earthquakes, fires, floods, or significant power outages and other catastrophic events. Such events may adversely impact critical infrastructure, have the potential to disrupt our business, our third-party suppliers, or the business of our customers, and may cause us to experience higher attrition, losses and additional costs to maintain or resume operations. In addition, rapidly changing customer and regulatory requirements, along with stakeholder expectations, to reduce carbon emissions and otherwise to reduce our environmental footprint could increase our costs of operations to comply or present a risk of loss of business, if we are not able to meet those requirements.
We may be adversely affected by the effects of inflation.
Inflation has the potential to adversely affect our business, results of operations, financial position and liquidity by increasing our overall cost structure, particularly if we are unable to achieve commensurate increases in the prices we charge our customers. The existence of inflation in the economy has the potential to result in higher interest rates and capital costs, supply shortages, increased costs of labor and other similar effects. Further, events, such as the Russia-Ukraine war and the war in the Middle East, and the adverse impacts of implemented tariffs and trade wars, could affect inflationary trends. As a result of inflation, we have experienced and may continue to experience, increases in our costs associated with operating our business including labor, equipment and other inputs. Although we may take measures to mitigate the impact of this inflation through pricing actions and efficiency gains, if these measures are not effective our business, results of operations, financial position and liquidity could be materially adversely affected. Even if such measures are effective, there could be a difference between the timing of when these beneficial actions impact our results of operations and when the cost of inflation is incurred.
We are and may become involved in legal proceedings that may result in adverse outcomes.
We are currently, and from time to time in the future may become, subject to legal proceedings, claims, litigation and government investigations or inquiries, which could be expensive, lengthy, disruptive to normal business operations and occupy a significant amount of our employees’ time and attention. In addition, the outcome of any legal proceedings, claims, litigation, investigations or inquiries may be difficult to predict and could have a material adverse effect on our business, reputation, operating results, or financial condition.

Item 1B.    Unresolved Staff Comments
None.

Item 1C.  Cybersecurity
Risk Management and Strategy
Our business operations depend on the availability, integrity and secure processing, storage, and transmission of confidential and sensitive information, including personal information, digitally and through interconnected systems, including those of our vendors, service providers and other third parties on which we rely. Consequently, we maintain a formal information security program, including physical, technical and administrative safeguards, to prevent and mitigate the risks posed by cybersecurity threats and incidents and to identify, analyze, address, mitigate and remediate those incidents that do occur. As part of our program:
a. we regularly review and update at least annually our standard policies and procedures related to information technology and analyze those policies against the standards and controls that we believe are most relevant to our Company set by organizations such as the National Institute of Standards and Technology cybersecurity framework and the International Organization for Standardization ("ISO");
b. we maintain a dedicated cybersecurity team under the direction of our Chief Technology Officer ("CTO") and supported by our Chief Information Security Officer ("CISO"), each of whom has expertise related to data and network security, data governance and risk management;
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c. we regularly test our internal IT controls;
d. we regularly conduct internal vulnerability assessments as well as third-party penetration tests;
e. we maintain, and we require our third-party service providers to maintain, security controls designed to ensure the confidentiality, integrity, and availability of our information systems and the confidential and sensitive information we maintain and process, or which is processed on our behalf;
f. we conduct pre-engagement and targeted recurring reviews of the security controls and security-compliance posture of applicable third-party service providers;
g. all employees are required to complete periodic trainings that cover security and privacy best practices and company policies;
h. we regularly review our business continuity and other back-up plans, including as they relate to cybersecurity incidents; and
i. we perform periodic simulations of attack scenarios by an internal “Red Team” to test the efficacy of both security controls and our tactical incident response procedures.
We also work with third-party cybersecurity and data privacy professionals as part of the design and implementation of our information security program, including our auditors, independent assessors (for example, for penetration testing) of our cybersecurity program, internal and external legal counsel, and other consultants.
We have a documented incident monitoring, escalation and reporting process and procedure that we believe to be effective in detecting and analyzing cyber incidents as they occur to determine appropriate response action and reporting, including the materiality of any such incidents to our financial condition and operations. This process includes:
a. continual monitoring of our systems and logs by both dedicated cybersecurity internal and outsourced staff;
b. immediate escalation to and review by our CISO of certain signals, including evidence of external threat actors, ransomware attacks, data exfiltration, identity compromise or unusual requests from management or certain departments;
c. if deemed appropriate, reporting by our CISO to the Company’s Management and its Disclosure Committee, comprised of multi-disciplinary senior leaders across the organization, including representatives of our accounting, human resources, finance, information technology and legal functions, and consultation with internal and external legal counsel, for further review and determination of the scope and materiality of the incident or incidents, including whether public disclosure is appropriate or required; and
d. informing the Audit Committee and the Technology Risk Committee (which was formed in October 2025) of our Board of significant or material cybersecurity incidents, as appropriate.
All incidents are documented and recorded and catalogued for further review by the CISO and their team. Incidents that are deemed to be significant and/or rise to the level of a “security breach” are documented in a security incident register as part of our established vulnerability monitoring and incident response procedures.
While we, our clients and our vendors are regularly exposed to malicious technology-related events and threats, none of these threats or incidents, either individually or in the aggregate of related occurrences, have materially affected the Company in the period covered by this report. We have faced—and in the future may face—sophisticated attacks, including attacks referred to as advanced persistent threats, which are cyberattacks aimed at compromising our intellectual property and other commercially sensitive information, such as the source code and game assets for our software or confidential customer or employee information, which may remain undetected for prolonged periods of time.
In determining materiality, cybersecurity incidents are reviewed not only for potential financial impacts, which could include potential legal and regulatory penalties, stolen assets or funds, system damage, forensic and remediation costs, lost client revenue or litigation costs, but also the breadth and sensitivity of data exposure, data exfiltration, impacts on the ability to operate our business or provide our services, client dissatisfaction, reputational harm, and loss of investor confidence. See Item 1A, Risk Factors, for more information on the cybersecurity threats facing our Company.
Governance
Our Board actively oversees our risk management activities both directly and through its committees and considers various risk topics throughout the year, including, through the Audit Committee and the Technology Risk Committee,
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cybersecurity and information security risk management and controls. As part of its oversight function, the Board, directly and through its Audit Committee and Technology Risk Committee, oversees the Company’s risk assessment and risk management policies, including related to cybersecurity. At least quarterly (with respect to the Technology Risk Committee) and annually (with respect to the Board), our CTO and CISO report to the Technology Risk Committee or the Board, respectively, addressing a broad range of topics, including significant cybersecurity incidents that have occurred, if any, since the last update, the status of projects and initiatives to update our cybersecurity policies and practices, and ongoing efforts to prevent, detect, and respond to internal and external critical threats.
Our senior management is responsible for assessing and managing the Company’s various exposures to risk, including those related to cybersecurity, on a day-to-day basis, including the identification of risks through an enterprise risk management framework and the creation of appropriate risk management programs and policies to address such risks. Our CTO and CISO have primary responsibility for managing our information security program and efforts, including with respect to cybersecurity. They work closely with key stakeholders, including internal committees such as our Cyber Steering Group, peer institutions, and industry groups, in order to manage cybersecurity and information security risk. Our internal audit team is responsible for testing and auditing our information-technology internal controls. In addition, leaders from our communications, finance, legal and risk teams participate in incident response training, including tabletop exercises, designed to enhance our ability to respond to cybersecurity incidents quickly, efficiently and with the appropriate degree of urgency.
We believe our information technology team to be well-qualified in this area. These qualifications include collective decades of professional experience in the field, in both private enterprise and government, and relevant training and certifications, such as Certified Information Systems Security Professional certification, ISO 27001 certification, and other technical cybersecurity certifications from ISC2, the SANs Institute, and OffSec, as well as recent participation in IT and cybersecurity programs organized by leading educational institutions with expertise in the field.

Item 2.    Properties
    Our principal executive offices are located at 110 West 44th Street (also known as 1133 Avenue of the Americas), New York, New York, in approximately 102,000 square feet of space under a lease expiring in December 2037. We also own office space in New York, New York, which was acquired in November 2025.
Take-Two Interactive Software Europe Ltd, our wholly-owned subsidiary, leases approximately 39,500 square feet of office space in London, U.K., which expires in December 2034 and owns two office buildings in Edinburgh, U.K.
Rockstar's corporate offices occupy approximately 97,000 square feet of leased office space in New York, New York, under leases expiring in March 2030.
    2K's corporate offices and two development studios occupy approximately 90,000 square feet of leased office space in Novato, California, under a lease expiring in October 2033.
Zynga's corporate office occupy approximately 62,000 square feet of leased office space in San Mateo, California. The lease expires in June 2032. In addition, Zynga leases approximately 185,000 square feet for its former corporate headquarters located in San Francisco, California, which is now closed. The lease expires in June 2031.
We also own an office building located in Los Angeles, California, which was acquired in October 2025.
    In addition, our other subsidiaries lease office space in Sydney and Pyrmont, Australia; Halifax, Oakville, Montreal, Parksville, Quebec, Toronto, and Vancouver, Canada; Chengdu, Hong Kong, and Shanghai, China; Prague, Czech Republic; Helsinki, Finland; Cesson-Sévigné and Paris, France; Munich and Berlin, Germany; Budapest, Hungary; Bangalore, India; Dublin, Ireland; Tel Aviv, Israel; Tokyo, Japan; Belgrade, Serbia; Singapore; Seoul, South Korea; Barcelona, Madrid, and Valencia, Spain; Lucerne, Switzerland; Taipei, Taiwan; Istanbul, Turkey; Brighton, Dundee, London, Lincoln, and Leeds, U.K.; and, in the U.S.: Agoura Hills, Carlsbad, Irvine, Los Angeles, Petaluma, Moorpark, San Francisco, San Mateo, and San Rafael, California; Chicago, Illinois; Sparks, Maryland; Andover and Westwood, Massachusetts; Las Vegas, Nevada; Bethpage and New York, New York; Eugene, Oregon; Austin and Frisco, Texas; and Kirkland and Seattle, Washington.
    For information regarding our lease commitments, see Note 13 - Leases to our Consolidated Financial Statements.

Item 3.    Legal Proceedings
    Refer to Note 14 - Commitments and Contingencies to our Consolidated Financial Statements for disclosures regarding our legal proceedings.
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Item 4.    Mine Safety Disclosures
Not applicable.
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PART II

Item 5.    Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information and Holders
    Our common stock trades on the NASDAQ Global Select Market under the symbol "TTWO." The number of record holders of our common stock was 269 as of May 11, 2026.
Dividend Policy
    We have never declared or paid cash dividends. We currently anticipate that all future earnings will be retained to finance the growth of our business and pay down our outstanding debt. We do not expect to declare or pay any cash dividends in the foreseeable future. The payment of dividends in the future is within the discretion of our Board and will depend upon future earnings, capital requirements and other relevant factors.
Securities Authorized for Issuance under Equity Compensation Plans
    The table setting forth this information is included in Part III—Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters .
Stock Performance Graph
The performance graph shall not be deemed "filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of the Company under the Exchange Act or the Securities Act of 1933, as amended.
The following line graph compares, from March 31, 2021 through March 31, 2026, the cumulative total shareholder return ("TSR") on our common stock with the cumulative TSR on (1) the stocks comprising the NASDAQ Composite Index, (2) the stocks comprising the S&P 500 Index, and (3) the RDG Technology Composite Index. The comparison assumes $100 was invested on March 31, 2021 in our common stock and in each of the following indices and assumes reinvestment of all cash dividends, if any, paid on such securities. We have not paid any cash dividends and, therefore, our cumulative TSR calculation is based solely upon stock price appreciation and not upon reinvestment of cash dividends. Historical stock price is not necessarily indicative of future stock price performance.

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Comparison of 5 Year Cumulative Total Return*
Among Take-Two Interactive Software, Inc., the NASDAQ Composite Index,
the S&P 500 Index, and the RDG Technology Composite Index
March 2026

* The graph and chart assume that $100 was invested on March 31, 2021 in the applicable stock or index and that all dividends were reinvested.

March 31,
2021 2022 2023 2024 2025 2026
Take-Two Interactive Software, Inc. $ 100.00  $ 87.01  $ 67.52  $ 84.04  $ 117.29  $ 111.77 
NASDAQ Composite 100.00  108.06  93.71  126.58  134.65  169.11 
S&P 500 100.00  115.65  106.71  138.59  150.03  176.74 
RDG Technology Composite 100.00  107.40  97.22  120.79  129.47  137.38 

Issuer Purchases of Equity Securities
    Share Repurchase Program —Our Board has authorized the repurchase of up to 21.7 shares of our common stock. Under this program, we may purchase shares from time to time through a variety of methods, including in the open market or through privately negotiated transactions, in accordance with applicable securities laws. Repurchases are subject to the availability of stock, prevailing market conditions, the trading price of the stock, our financial performance and other conditions. The program does not require us to repurchase shares and may be suspended or discontinued at any time for any reason.
    During the fiscal years ended March 31, 2026, 2025, and 2024, we did not repurchase shares of our common stock. As of March 31, 2026, we had repurchased a total of 11.7 shares of our common stock under the program, and 10.0 shares of our
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common stock remained available for repurchase under the share repurchase program. All of the repurchased shares are classified as Treasury stock in our Consolidated Balance Sheets.
    Summary Table —The table below details the share repurchases that were made by us during the three months ended March 31, 2026:

Period Shares
purchased Average price
per share Total number of shares
purchased as part of publicly
announced plans or programs Maximum number of shares that
may yet be purchased under the
repurchase program
January 1 - 31, 2026 —  —  —  10.0 
February 1 - 28, 2026 —  —  —  10.0 
March 1 - 31, 2026 —  —  —  10.0 

Item 6.    [Reserved]

Item 7.    Management's Discussion and Analysis of Financial Condition and Results of Operations
Overview
Our Business
    We are a leading developer, publisher, and marketer of interactive entertainment for consumers around the globe. We develop, operate, and publish products principally through Rockstar Games, 2K, and Zynga. Our products are currently designed for console gaming systems, mobile, including smartphones and tablets, and personal computer ("PC"). We deliver our products through physical retail, digital download, online platforms, and cloud streaming services. We are continually innovating the design and development of our products, including by investing in artificial intelligence ("AI") tools and technologies, in order to enhance game play, anticipate changes in consumer behavior, and evolve our business as new dynamics develop. Refer to Item 1 - Business for additional discussion.
Trends and Factors Affecting our Business
    Product Release Schedule.     Our financial results are affected by the timing of our product releases and the commercial success of our titles. Generally, a significant portion of our revenue has been derived from a few popular franchises, particularly around new releases within those franchises, some of which have annual or biennial releases. Additionally, our Grand Theft Auto products in particular have historically accounted for a significant portion of our revenue. Sales of Grand Theft Auto products generated 12.4% of our net revenue for the fiscal year ended March 31, 2026. The timing of our Grand Theft Auto product releases may affect our financial performance on a quarterly and annual basis. Rockstar plans to release Grand Theft Auto VI on November 19, 2026.
    Economic Environment and Retailer Performance.     We continue to monitor various macroeconomic and geopolitical factors, such as global tariff policies, that may affect our business in several areas, including consumer demand, inflation, pricing pressure on our products and third party hardware platforms, credit quality of our receivables, and foreign currency exchange rates. Actions we have taken to date and other potential actions we may take in the future in response to these factors could result in negative impacts in future periods.
The economic environment has affected our customers in the past and may do so in the future. There has been increased consolidation in our industry, which is extremely competitive, and larger, better capitalized competitors will be in a stronger position to withstand prolonged periods of economic downturn and sustain their business through periods of financial volatility. Also, bankruptcies or consolidations of our large retail customers could hurt our business, due to uncollectible accounts receivable and the concentration of purchasing power among the remaining large retailers.
    Hardware Platforms.     We derive a substantial portion of our revenue from the sale of products made for video game consoles manufactured by third parties. Such console revenue comprised 39.0% of our net revenue for the fiscal year ended March 31, 2026. The success of our business is dependent upon consumer acceptance of these platforms and the continued growth in the installed base of these platforms, which has been and could be impacted by global economic factors, including global tariff policies. When new hardware platforms are introduced, demand for interactive entertainment developed for older platforms typically declines, which may negatively affect our business during the market transition to the new consoles. The latest Sony and Microsoft consoles provide "backwards compatibility" (i.e., the ability to play games for the previous generation of consoles). The inclusion of such features on new consoles could mitigate the risk of such a decline. However, we cannot be certain how backwards compatibility will affect demand for our products. Further, events beyond our control may impact the availability or pricing of consoles, which may also affect demand for our products. We manage our product delivery on each current and future platform in a manner we believe to be most effective to maximize our revenue opportunities and
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achieve the desired return on our investments in product development. Accordingly, our strategy for these platforms is to focus our development efforts on a select number of the highest quality titles.
    Online Content and Digital Distribution.     We provide a variety of online delivered products, including direct digital downloads of our titles, and access to additional offerings through virtual currency, add-on content, in-game purchases, and in-game advertising, which drive ongoing engagement and incremental revenue from recurrent consumer spending on our titles. Net revenue from digital online channels comprised 97.0% of our net revenue for the fiscal year ended March 31, 2026. We expect online delivery of games and game offerings to continue to be the primary part of our business over the long term.
A significant portion of our mobile titles are distributed, marketed, and promoted through third parties, primarily Apple’s App Store and the Google Play Store. Virtual items for our mobile games are purchased principally through the payment processing systems of these platform providers, as well as our direct-to-consumer commerce platform. We generate a significant portion of our net revenue through the Apple and Google platforms and expect to continue to do so for the foreseeable future. Apple and Google generally have the discretion to set the amounts of their platform fees and change their platforms’ terms of service and other policies with respect to us or other developers at their sole discretion, and those changes may be unfavorable to us. These platform fees are recorded as Cost of revenue as incurred. Further, as a result of the platform fees associated with online game sales, our mobile net revenue generally generates a lower gross margin percentage than our Console or PC revenue. Accordingly, the overall product mix between mobile and other game sales may affect our gross margin percentage. We are also continuing to expand our direct-to-consumer efforts more meaningfully across our mobile portfolio to enhance profitability.
Player acquisition costs.     Principally for our mobile titles, we use advertising and other forms of player acquisition and retention to grow and retain our player audience. These expenditures, which are recorded within Selling and marketing in our Consolidated Statements of Operations, generally relate to the promotion of new game launches and ongoing performance-based programs to drive new player acquisition and lapsed player reactivation. Over time, the effectiveness or cost of these acquisition and retention-related programs may change, affecting our operating results.
Content Release Highlights
During fiscal year 2026, 2K released Mafia: The Old Country , NBA 2K26, Borderlands 4 , and WWE 2K26 . Rockstar plans to release Grand Theft Auto VI on November 19, 2026.
Fiscal 2026 Financial Summary
Our net revenue for the fiscal year ended March 31, 2026 was led by a variety of our top franchises, primarily NBA 2K , Grand Theft Auto , Borderlands , Red Dead Redemption , and WWE 2K , as well as our top mobile contributors, primarily Toon Blast , Match Factory! , Empires & Puzzles , and Color Block Jam . Our net revenue for the fiscal year ended March 31, 2026 was $6,656.4, an increase of $1,022.8 or 18.2% compared to the fiscal year ended March 31, 2025.
    Our operating loss for the fiscal year ended March 31, 2026 was $104.2 compared to operating loss of $4,391.1 for fiscal year ended March 31, 2025, primarily driven by Goodwill impairment charges of $3,545.2 in the prior year, with no corresponding expense in the current year, as well as, higher sales of our products. For the fiscal year ended March 31, 2026, our net loss was $298.2, as compared to net loss of $4,478.9 in the prior year. Basic and diluted loss per share for the fiscal year ended March 31, 2026 was $1.62, as compared to Basic and diluted loss per share of $25.58 for the fiscal year ended March 31, 2025.
    At March 31, 2026, we had $1,638.1 of Cash, cash equivalents, and restricted cash and cash equivalents, compared to $1,559.2 at March 31, 2025. This increase was primarily driven by proceeds from our May 2025 underwritten public offering of common stock (refer to Note 12 - Loss Per Share ) and positive cash flow from product sales. These increases were partially offset by the repayment of our 2025 Notes and 2026 Notes (refer to Note 11 - Debt ), as well as continued investments in software, fixed assets, and short-term investments.
Critical Accounting Policies and Estimates
    Our most critical accounting policies, which are those that require significant judgment, include revenue recognition, capitalization and recognition of software development costs and licenses, fair value estimates including valuation of goodwill and intangible assets, valuation and recognition of stock-based compensation, and income taxes. See Note 1 - Basis of Presentation and Significant Accounting Policies in the Notes to our Consolidated Financial Statements in this Annual Report on Form 10-K.
Recently Adopted and Recently Issued Accounting Pronouncements
See Note 1 - Basis of Presentation and Significant Accounting Policies .
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Operating Metric
Net Bookings
We monitor Net Bookings as a key operating metric in evaluating the performance of our business. Net Bookings is defined as the net amount of products and services sold digitally or sold-in physically during the period and includes licensing fees, merchandise, in-game advertising, and publisher incentives. Net Bookings were as follows:

Fiscal Year Ended March 31,
2026 2025 Increase/(decrease) Increase/(decrease) %
Net Bookings $ 6,721.0   5,648.0  $ 1,073.0  19.0  %

    For the fiscal year ended March 31, 2026, Net Bookings increased by $1,073.0 as compared to the prior year period. The increase was primarily driven by higher Net Bookings from our NBA 2K franchise, our Borderlands franchise, the latest installment of which, Borderlands 4 , released in September 2025; Color Block Jam , which released in November 2024; and our Grand Theft Auto franchise.
Results of Operations
In this section, we discuss the results of our operations for the fiscal year ended March 31, 2026 compared to the fiscal year ended March 31, 2025. For the comparison of fiscal year 2025 to fiscal year 2024, refer to Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended March 31, 2025.

The following tables set forth, for the periods indicated, our Consolidated Statements of Operations, net revenue by platform, net revenue by distribution channel, and net revenue by content type:

  Fiscal Year Ended March 31,
  2026 2025 2024
Total net revenue $ 6,656.4   100.0   % $ 5,633.6  100.0  % $ 5,349.6  100.0  %
Cost of revenue 2,846.7   42.8   % 2,571.4  45.7  % 3,107.8  58.1  %
Gross profit 3,809.7   57.2   % 3,062.2  54.3  % 2,241.8  41.9  %
Selling and marketing 1,770.8   26.6   % 1,683.7  29.9  % 1,550.2  29.0  %
Research and development
1,074.6   16.1   % 1,005.2  17.8  % 948.2  17.7  %
General and administrative
874.4   13.1   % 883.3  15.7  % 716.1  13.4  %
Depreciation and amortization 198.5   3.0   % 229.4  4.1  % 171.2  3.2  %
Goodwill impairment —   —   % 3,545.2  62.9  % 2,342.1  43.8  %
Business reorganization (4.4) (0.1) % 106.5  1.9  % 104.6  1.9  %
Total operating expenses 3,913.9   58.7   % 7,453.3  132.3  % 5,832.4  109.0  %
Income (loss) from operations (104.2) (1.5) % (4,391.1) (78.0) % (3,590.6) (67.1) %
Interest and other, net (93.6) (1.4) % (100.2) (1.8) % (112.2) (2.1) %
Loss before income taxes (197.8) (2.9) % (4,491.3) (79.8) % (3,702.8) (69.2) %
Provision for (benefit from) income taxes 100.4   1.5   % (12.4) (0.2) % 41.4  0.8  %
Net loss (298.2) (4.4) % (4,478.9) (80.0) % (3,744.2) (70.0) %

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  Fiscal Year Ended March 31,
  2026 2025 2024
Net revenue by content:
Recurrent consumer spending $ 5,196.6   78.1   % $ 4,474.6  79.4  % $ 4,213.5  78.8  %
Full game and other 1,459.8   21.9   % 1,159.0  20.6  % 1,136.1  21.2  %
Net revenue by platform:            
Mobile $ 3,333.0   50.1   % $ 2,942.0  52.2  % $ 2,748.0  51.4  %
Console 2,597.3   39.0   % 2,099.1  37.3  % 2,167.3  40.5  %
PC and other 726.1   10.9   % 592.5  10.5  % 434.3  8.1  %
Net revenue by distribution channel:            
Digital online $ 6,459.7   97.0   % $ 5,431.8  96.4  % $ 5,112.2  95.6  %
Physical retail and other 196.7   3.0   % 201.8  3.6  % 237.4  4.4  %

Fiscal Years ended March 31, 2026 and 2025
2026 % of net revenue 2025 % of net revenue Increase/(decrease) % Increase/(decrease)
Total net revenue $ 6,656.4   100.0   % $ 5,633.6  100.0  % $ 1,022.8  18.2  %
Product costs 863.8   13.0   % 821.1  14.6  % 42.7  5.2  %
Game intangibles 662.2   9.9   % 811.0  14.4  % (148.8) (18.3) %
Licenses 463.5   7.0   % 365.8  6.5  % 97.7  26.7  %
Software development costs and royalties (1)
439.8   6.6   % 168.1  3.0  % 271.7  161.6  %
Internal royalties 417.4   6.3   % 405.4  7.2  % 12.0  3.0  %
Cost of revenue 2,846.7   42.8   % 2,571.4  45.7  % 275.3  10.7  %
Gross profit $ 3,809.7   57.2   % $ 3,062.2  54.3  % $ 747.5  24.4  %

(1) Includes $(27.9) and $9.4 of stock-based compensation expense in fiscal year 2026 and 2025, respectively.
    For the fiscal year ended March 31, 2026, net revenue increased by $1,022.8, as compared to the prior year period. The increase was primarily driven by higher net revenue of $416.9 from our NBA 2K franchise; $210.3 from our Borderlands franchise, the latest installment of which, Borderlands 4 , released in September 2025; $206.6 from Color Block Jam , which released in November 2024; $121.9 from Toon Blast ; and $115.1 from our Grand Theft Auto franchise.
Recurrent consumer spending ("RCS") is generated from ongoing consumer engagement and includes revenue from virtual currency, add-on content, in-game purchases, and in-game advertising. Net revenue from recurrent consumer spending increased by $722.0 and accounted for 78.1% of net revenue for the fiscal year ended March 31, 2026, as compared to 79.4% for the prior year period. The increase was primarily driven by higher net revenue from our NBA 2K franchise and Color Block Jam . Net revenue from full game and other increased by $300.8 and accounted for 21.9% of net revenue for the fiscal year ended March 31, 2026, as compared to 20.6% for the prior year period. The increase was primarily driven by higher net revenue from our Borderlands and Grand Theft Auto franchises, and our Mafia franchise, the latest installment of which, Mafia: The Old Country released in August 2025, partially offset by lower net revenue from our Sid Meier's Civilization franchise, the latest installment of which, Civilization VII , released in February 2025.    
Net revenue from mobile increased by $391.0 and accounted for 50.1% of our total net revenue in the fiscal year ended March 31, 2026, as compared to 52.2% in the prior year period. The increase was primarily driven by higher net revenue from Color Block Jam and Toon Blast . Net revenue from console games increased by $498.2 and accounted for 39.0% of our total net revenue in the fiscal year ended March 31, 2026, as compared to 37.3% in the prior year period. The increase was primarily driven by higher net revenue from our NBA 2K and Borderlands franchises. Net revenue from PC and other increased by $133.6 and accounted for 10.9% of our total net revenue in the fiscal year ended March 31, 2026, as compared to 10.5% in the prior year period. The increase was primarily driven by higher net revenue from our Borderlands , Grand Theft Auto , and NBA 2K franchises, partially offset by lower net revenue from our Sid Meier's Civilization franchise.
    Net revenue from digital online channels increased by $1,027.9 and accounted for 97.0% of our total net revenue for the fiscal year ended March 31, 2026, as compared to 96.4% in the prior year period. The increase was primarily driven by higher net revenue from our NBA 2K franchise, Color Block Jam , our Borderlands and Grand Theft Auto franchises, and Toon Blast . Net revenue from physical retail and other channels decreased by $5.1 and accounted for 3.0% of our total net revenue for the fiscal year ended March 31, 2026, as compared to 3.6% for the prior year period.
    Gross profit as a percentage of net revenue for the fiscal year ended March 31, 2026 was 57.2%, as compared to 54.3% in the prior year period. The increase in gross profit as a percentage of net revenue was primarily driven by (i) lower
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amortization of intangible assets primarily due to higher impairments in the prior year and (ii) lower product costs as a percentage of net revenue, partially offset by higher amortization of capitalized software and development costs primarily due to the timing of releases.
    Changes in foreign currency exchange rates increased net revenue by $9.9 and increased gross profit by $45.4, respectively, in the fiscal year ended March 31, 2026 as compared to the prior year period.
Operating Expenses

2026 % of net revenue 2025 % of net revenue Increase/(decrease) % Increase/(decrease)
Selling and marketing $ 1,770.8   26.6   % $ 1,683.7  29.9  % $ 87.1  5.2  %
Research and development
1,074.6   16.1   % 1,005.2  17.8  % 69.4  6.9  %
General and administrative
874.4   13.1   % 883.3  15.7  % (8.9) (1.0) %
Depreciation and amortization 198.5   3.0   % 229.4  4.1  % (30.9) (13.5) %
Goodwill impairment —   —   % 3,545.2  62.9  % (3,545.2) (100.0) %
Business reorganization (4.4) (0.1) % $ 106.5  1.9  % (110.9) (104.1) %
Total operating expenses (1)
$ 3,913.9   58.7   % $ 7,453.3  132.3  % $ (3,539.4) (47.5) %

(1) Includes stock-based compensation expense, which was allocated as follows:
2026 2025
Selling and marketing $ 95.3   $ 92.4 
General and administrative 149.0   123.2 
Research and development 88.9   99.0 

    Foreign currency exchange rates increased total operating expenses by $31.2 for the fiscal year ended March 31, 2026 as compared to the prior year period.
Selling and marketing
    Selling and marketing expenses increased by $87.1 for the fiscal year ended March 31, 2026 as compared to the prior year period, primarily driven by higher personnel expense due to higher performance-based compensation, as well as, higher marketing expense for Color Block Jam and our Borderlands franchise. These increases were partially offset by lower marketing expenses for Match Factory! , Game of Thrones: Legends , our Sid Meier's Civilization franchise, and Star Wars: Hunters .
Research and development
    Research and development expenses increased by $69.4 for the fiscal year ended March 31, 2026, as compared to the prior year period, primarily driven by (i) higher personnel expense due to the acquisition of Gearbox in June 2024 and higher performance-based compensation, and (ii) the timing of additional R&D-related credits related to certain titles. These increases were partially offset by lower production and development expenses for titles that are not technologically feasible.
General and administrative
    General and administrative expenses decreased by $8.9 for the fiscal year ended March 31, 2026, as compared to the prior year period, primarily driven by lower legal fees and contingencies related to the IBM case against Zynga, partially offset by higher personnel expense due to higher performance-based compensation.
Depreciation and amortization
    Depreciation and amortization expenses decreased by $30.9 for the fiscal year ended March 31, 2026, as compared to the prior year period, primarily driven by lower amortization related to intangible assets due to prior year impairments, partially offset by higher IT infrastructure expense and higher leasehold improvement expense for office buildouts.
Goodwill impairment
Goodwill impairment expense decreased by $3,545.2 for the fiscal year ended March 31, 2026, as compared to the prior year period, primarily driven by partial impairments recognized in the prior year, with no corresponding expense in the current year.
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Business reorganization
Business reorganization expense decreased by $110.9 for the fiscal year ended March 31, 2026, as compared to the prior year period, primarily driven by our cost reduction program in fiscal year 2025 (the "2024 Plan").
Interest and other, net
2026 % of net revenue 2025 % of net revenue Increase/(decrease) % Increase/(decrease)
Interest income $ 85.1   1.3   % $ 98.6  1.8  % $ (13.5) (13.7) %
Interest expense (151.4) (2.3) % (167.3) (3.0) % 15.9  (9.5) %
Foreign currency exchange loss (17.4) (0.3) % (22.6) (0.4) % 5.2  (23.0) %
Other (9.9) (0.1) % (8.9) (0.2) % (1.0) 11.2  %
Interest and other, net $ (93.6) (1.4) % $ (100.2) (1.8) % $ 6.6  (6.6) %

    Interest and other, net was expense of $93.6 for the fiscal year ended March 31, 2026, as compared to expense of $100.2 for the fiscal year ended March 31, 2025. The net decrease in expense was primarily driven by lower outstanding debt balances and lower interest expense due to the repayment of our 2025 Notes in April 2025 and our 2026 Notes in March 2026 (refer to Note 11 - Debt ), decrease in foreign currency losses, and changes in fair value based on the observable price changes of our long-term investments. This was partially offset by lower interest income primarily due to lower interest rates.
Provision for income taxes
    Our provision for income taxes for the fiscal year ended March 31, 2026 was $100.4 as compared to a benefit from income taxes of $12.4 for the fiscal year ended March 31, 2025.
    When compared to the statutory rate of 21%, the effective tax rate of (50.8)% for the fiscal year ended March 31, 2026 was primarily driven by an expense of $113.4 from an increase in the U.S. valuation allowance expense, $18.2 from an increase in the foreign valuation allowance expense, and $79.0 from our geographic mix and foreign earnings, partially offset by a $45.7 benefit from tax credits and $39.7 of excess benefits from employee stock compensation.
When compared to the statutory rate of 21%, the effective tax rate of 0.3% for the fiscal year ended March 31, 2025 was primarily driven by an expense of $718.0 from nondeductible goodwill impairments, $222.7 from an increase in the U.S. valuation allowance expense, $25.5 from an increase in the foreign valuation allowance expense, and $41.4 from our geographic mix and foreign earnings, partially offset by a $54.5 benefit from tax credits anticipated to be utilized.
The change in the effective tax rate, when compared to the prior year period's effective tax rate, is primarily driven by the increased proportionate impact of the changes in valuation allowances and geographic mix of earnings. These were partially offset by increased tax benefits from employee stock compensation and the absence of expenses related to a prior year nondeductible goodwill impairment.
The accounting for share-based compensation will increase or decrease our effective tax rate based upon the difference between our share-based compensation expense and the deductions taken on our tax return, which depends on the stock price at the time of the employee award vesting.
The accounting for tax incentives and credits may increase or decrease our effective tax rate due to changes in tax legislation and elections we may make.
We anticipate that additional excess tax benefits or shortfalls from employee stock compensation, tax incentives or credits, and changes in our geographic mix of earnings could have a significant impact on our effective tax rate in the future. In addition, we are regularly examined by domestic and foreign taxing authorities. Examinations may result in tax assessments in excess of amounts claimed and the payment of additional taxes. We believe our tax positions comply with applicable tax law, and that we have adequately provided for reasonably foreseeable tax assessments. It is possible that settlement of audits or the expiration of the statute of limitations could have an impact on our effective tax rate in future periods.
On July 4, 2025, the One Big Beautiful Bill Act ("OBBB") was signed into law. OBBB includes significant provisions, including but not limited to (1) permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act of 2017 ("TCJA"), (2) modifications to the international provisions relating to Base Erosion Anti Abuse Act ("BEAT"), Global Intangible Low-Tax Income ("GILTI") and Foreign Derived Deduction Eligible Income ("FDDEI"), (3) permanent reinstatement deduction for domestic research expenditures and 100% bonus depreciation for certain qualified property, and (4) modifications to tax credits. The legislation has multiple effective dates, with certain provisions effective in the fiscal year ended March 31, 2026 and others implemented in future periods. We have estimated the accounting for income tax effects of
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the OBBB, which reduced our estimated U.S. cash tax liability. It did not, however, impact our U.S. deferred tax assets or liabilities since we continue to maintain a full valuation allowance against U.S. net deferred tax assets. We are continuing to evaluate the impact of OBBB on the Company. It is possible that these changes could have an adverse impact on our effective tax rate, tax payments, financial condition, or results of operations. The new tax law is complex and additional interpretive guidance may be issued that could affect the interpretations and assumptions we have made, as well as actions we may take as a result of OBBB.
The American Rescue Plan Act of 2021 (the “ARPA”), among other things, includes provisions to expand the IRC Section 162(m) disallowance for deduction of certain compensation paid by publicly held corporations. Effective for tax years starting after December 31, 2026 (April 1, 2027 for the Company), the ARPA expands the limitation to cover the next five most highly compensated employees. The ARPA did not have a material impact on our Consolidated Financial Statements for the fiscal year ended March 31, 2026. We continue to evaluate the potential impact the ARPA may have on our operations and Consolidated Financial Statements in future periods.
The Inflation Reduction Act of 2022 (the “Inflation Reduction Act”) includes a corporate alternative minimum tax ("CAMT") of 15% on the adjusted financial statement income ("AFSI") of corporations with an average AFSI exceeding $1.0 billion over a consecutive three-year period. It is possible that the CAMT could result in an additional tax liability over the regular federal corporate tax liability in a particular year based on differences between book and taxable income. We do not estimate any tax liability relating to CAMT for the current fiscal year. We will continue to evaluate the potential impact the Inflation Reduction Act may have on our operations and Consolidated Financial Statements in future periods.
The Organization for Economic Co-operation and Development ("OECD") has proposed a global minimum tax of 15% of reported profits, referred to as Pillar Two. Many countries have already implemented or are taking steps to implement Pillar Two. Although the model rules provide a framework for applying the minimum tax, countries may enact Pillar Two slightly differently than the model rules and on different timelines. Pillar Two could result in additional tax liability over the regular corporate tax liability in a particular jurisdiction to the extent tax expense is less than a 15% minimum rate. The impact of Pillar Two was not material to the tax provision for the fiscal year ended March 31, 2026. On January 5, 2026, the OECD released new administrative guidance outlining a “side-by-side” arrangement following agreement on key elements by the OECD/G20 Inclusive Framework on Pillar Two. It provides new safe harbors for U.S. multinational companies which would exempt U.S.-parented groups from two of the three Pillar Two top up taxes, extend the current Transitional Country-by-Country Reporting Safe Harbor by one year through the end of fiscal year ending March 31, 2028, and make the Simplified Effective Tax Rate Safe Harbor permanent. We will continue to evaluate the impact Pillar Two and any additional guidance may have on our results and operations.
Net loss and Loss per share
    For the fiscal year ended March 31, 2026, net loss was $298.2, as compared to a net loss of $4,478.9 in the prior year. Basic and diluted loss per share for the fiscal year ended March 31, 2026 was $1.62, as compared to basic and diluted loss per share of $25.58 for the fiscal year ended March 31, 2025. Basic weighted average shares of 183.9 were 8.8 higher as compared to the prior year period basic weighted average shares, primarily due to our May 2025 underwritten public offering of common stock, as well as normal stock compensation activity, including vests, grants, and forfeitures in the prior year being fully outstanding in the current year. See Note 12 - Loss Per Share to our Consolidated Financial Statements for additional information.
Liquidity and Capital Resources
Our primary cash requirements are to fund (i) the development, manufacturing and marketing of our published products, (ii) working capital, (iii) capital expenditures, (iv) debt and interest payments, (v) tax payments, and (vi) acquisitions. We expect to rely on cash and cash equivalents as well as on short-term investments, funds provided by our operating activities, and our 2022 Credit Agreement to satisfy our working capital needs. Refer to Note 11 - Debt for additional discussion of our outstanding debt obligations.
Short-term Investments
As of March 31, 2026, we had $443.8 of short-term investments, which primarily consisted of bank time deposits with maturities greater than 90 days. From time to time, we may make additional short-term investments depending on future market conditions and liquidity needs.
Senior Notes
As of March 31, 2026, we had $2,500.0 of Senior Notes outstanding.
On March 28, 2026, we repaid our 2026 Notes with a principal amount of $550.0.
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On April 14, 2025, we repaid our 2025 Notes with a principal amount of $600.0.
Credit Agreement
As of March 31, 2026, there were no borrowings under the 2022 Credit Agreement, and we had approximately $997.7 available for additional borrowings.
Convertible Notes
The 2026 Convertible Notes mature on December 15, 2026, unless earlier converted, redeemed, or repurchased in accordance with their terms, prior to the maturity date. The 2026 Convertible Notes do not bear regular interest, and the principal amount does not accrete. An aggregate principal amount of $29.4 of the 2026 Convertible Notes remained outstanding at March 31, 2026.
Financial Condition
    We are subject to credit risks, particularly if any of our receivables represent a limited number of customers or are concentrated in foreign markets. If we are unable to collect our accounts receivable as they become due, it could adversely affect our liquidity and working capital position.
Generally, we have been able to collect our accounts receivable in the ordinary course of business. We do not hold any collateral to secure payment from customers. We have trade credit insurance on the majority of our customers to mitigate accounts receivable risk.
    A majority of our trade receivables are derived from sales to major retailers, including digital storefronts and platform partners, and distributors. Our five largest customers accounted for 80.6%, 81.0% and 79.8% of net revenue during the fiscal year ended March 31, 2026, 2025 and 2024, respectively. As of March 31, 2026, and 2025, five customers comprised 69.6% and 72.1% of our gross accounts receivable, respectively, with our significant customers (those that individually comprised more than 10% of our gross accounts receivable balance) accounting for 57.7% and 61.0% of such balance at March 31, 2026, and 2025, respectively. We had three customers who accounted for 22.7%, 21.0%, and 14.0% of our gross accounts receivable as of March 31, 2026, and three customers who accounted for 24.0%, 21.3%, and 15.7% of our gross accounts receivable as of March 31, 2025. We did not have any additional customers that exceeded 10% of our gross accounts receivable as of March 31, 2026, and 2025. Based upon performing ongoing credit evaluations, maintaining trade credit insurance on a majority of our customers who sell our physical products, and our past collection experience, we believe that the receivable balances from these largest customers do not represent a significant credit risk, although we actively monitor each customer's creditworthiness and economic conditions that may affect our customers' business and access to capital. We are monitoring the current global economic conditions, including credit markets and other factors as it relates to our customers in order to manage the risk of uncollectible accounts receivable.
We believe that our current cash and cash equivalents, short-term investments, and projected cash flow from operations, along with availability under our 2022 Credit Agreement will provide us with sufficient liquidity to satisfy our cash requirements for working capital, capital expenditures, and commitments on both a short-term and long-term basis.
As of March 31, 2026, the amount of cash and cash equivalents held outside of the U.S. by our foreign subsidiaries was $1,359.7. These balances are dispersed across various locations around the world. We believe that such dispersion meets the business and liquidity needs of our foreign affiliates. In addition, we expect to have the ability to generate sufficient cash domestically to support ongoing operations for the foreseeable future.
Our Board of Directors has authorized the repurchase of up to 21.7 shares of our common stock. Under this program, we may purchase shares from time to time through a variety of methods, including in the open market or through privately negotiated transactions, in accordance with applicable securities laws. Repurchases are subject to the availability of stock, prevailing market conditions, the trading price of the stock, our financial performance and other conditions. The program does not require us to repurchase shares and may be suspended or discontinued at any time for any reason.
During the fiscal years ended March 31, 2026, 2025, and 2024, we did not repurchase shares of our common stock under the program, but in the past have repurchased a total of 11.7 shares of our common stock under the program, and as of March 31, 2026, 10.0 shares of our common stock remained available for repurchase under the share repurchase program.
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Our changes in cash flows were as follows:

  Fiscal Year Ended March 31,
2026 2025 2024
Net cash provided by (used in) operating activities $ 624.3   $ (45.2) $ (16.1)
Net cash used in investing activities (649.2) (151.5) (28.2)
Net cash provided by (used in) financing activities 94.6   650.5  (91.4)
Effects of foreign currency exchange rates on cash, cash equivalents, and restricted cash and cash equivalents 9.2   3.4  3.1 
Net change in cash, cash equivalents, and restricted cash and cash equivalents $ 78.9   $ 457.2  $ (132.6)

    At March 31, 2026, we had $1,638.1 of Cash, cash equivalents, and restricted cash and cash equivalents, compared to $1,559.2 at March 31, 2025. The increase was due to Net cash provided by operating activities, which was primarily due to sales of our products, partially offset by investments in software development and licenses. The increase was also primarily due to Net cash provided by financing activities, primarily related to proceeds from May 2025 underwritten public offering of common stock (refer to Note 1 2 - Loss Per Share ), partially offset by the repayment of our 2025 Notes and 2026 Notes (refer to Note 11 - Debt ). This net increase was partially offset by the decrease in Net cash used in investing activities, which was primarily due to the purchase of short-term investments and fixed assets.
Commitments
    Refer to Note 14 - Commitments and Contingencies to our Consolidated Financial Statements for disclosures regarding our commitments.
Capital Expenditures
    In fiscal year 2027, we anticipate capital expenditures to be $200.0.
Off-Balance Sheet Arrangements
    As of March 31, 2026 and 2025, we did not have any material relationships with unconsolidated entities or financial parties, such as entities often referred to as structured finance or variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. As such, we are not exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in such relationships.
International Operations
    Net revenue earned outside of the United States is principally generated by our operations in Europe, Asia, Australia, Canada, and Latin America. For the fiscal years ended March 31, 2026, 2025, and 2024, 40.8%, 39.5%, and 38.7%, respectively, of our net revenue was earned outside the U.S. We are subject to risks inherent in foreign trade, including increased credit risks, tariffs and duties, fluctuations in foreign currency exchange rates, shipping delays and international political, regulatory and economic developments, all of which can have a significant effect on our operating results.
Fluctuations in Quarterly Operating Results and Seasonality
    We have experienced fluctuations in quarterly and annual operating results as a result of the timing of the introduction of new titles, variations in sales of titles developed for particular platforms, market acceptance of our titles, development and promotional expenses relating to the introduction of new titles, sequels or enhancements of existing titles, projected and actual changes in platforms, the timing and success of title introductions by our competitors, product returns, changes in pricing policies by us and our competitors, the accuracy of retailers' forecasts of consumer demand, the size and timing of acquisitions, the timing of orders from major customers, and order cancellations and delays in product shipment. Sales of our full game products are also seasonal, with peak demand typically occurring in the fourth calendar quarter during the holiday season. For certain of our software products with multiple performance obligations, we defer the recognition of our net revenue over an estimated service period which generally ranges from five to fifteen months. As a result, the quarter in which we generate the highest Net Bookings may be different from the quarter in which we recognize the highest amount of Net revenue. Quarterly comparisons of operating results are not necessarily indicative of future operating results.

Item 7A.    Quantitative and Qualitative Disclosures About Market Risk
    Market risk is the potential loss arising from fluctuations in market rates and prices. Our market risk exposures primarily include fluctuations in interest rates and foreign currency exchange rates.
49

Interest Rate Risk
    Our exposure to fluctuations in interest rates relates primarily to our short-term investment portfolio and variable rate debt under the 2022 Credit Agreement.
    We seek to manage our interest rate risk by maintaining a short-term investment portfolio that includes corporate bonds with high credit quality and maturities of less than two years. Since short-term investments mature relatively quickly and can be reinvested at the then-current market rates, interest income on a portfolio consisting of short-term securities is more subject to market fluctuations than a portfolio of longer-term maturities. However, the fair value of a short-term portfolio is less sensitive to market fluctuations than a portfolio of longer-term securities. We do not currently use derivative financial instruments in our short-term investment portfolio. Our investments are held for purposes other than trading.
As of March 31, 2026, we had $443.8 of short-term investments. We also had $1,545.5 of cash and cash equivalents that are comprised primarily of money market funds and bank-time deposits. We determined that, based on the composition of our investment portfolio, there was no material interest rate risk exposure to our Consolidated Financial Statements or liquidity as of March 31, 2026.
Historically, fluctuations in interest rates have not had a significant effect on our operating results.
Under our 2022 Credit Agreement, loans will bear interest at a rate of (a) 0.000% to 0.625% above an alternate base rate (6.75% at March 31, 2026) or (b) 1.000% to 1.625% above SOFR, approximately 3.66% at March 31, 2026, which rates are determined by the Company's credit rating. At March 31, 2026, there were no borrowings under our 2022 Credit Agreement.
Foreign Currency Exchange Rate Risk
We transact business in foreign currencies and are exposed to risks resulting from fluctuations in foreign currency exchange rates. In particular, during the six months ended September 30, 2023, there was a significant devaluation of the Turkish Lira against the U.S. Dollar, which negatively affected our results. It is possible that further devaluations could occur, which would have a negative impact on our results. Accounts relating to foreign operations are translated into U.S. dollars using prevailing exchange rates at the relevant period end. Translation adjustments are included as a separate component of Stockholders' equity on our Consolidated Balance Sheets.
For the fiscal years ended March 31, 2026 and 2025, our foreign currency translation adjustment was a gain of $29.6 and a gain of $8.2, respectively. The change in foreign currency translation adjustment was primarily driven by the weakening of the U.S. Dollar against the British Pound. We recognized foreign currency exchange transaction losses of $17.4, $22.6, and $28.6 for the fiscal years ended March 31, 2026, 2025, and 2024, respectively, in Interest and other, net in our Consolidated Statements of Operations.
Balance Sheet Hedging Activities
    We use foreign currency forward contracts to mitigate foreign currency exchange rate risk associated with non-functional currency denominated cash balances and intercompany funding loans, non-functional currency denominated accounts receivable and non-functional currency denominated accounts payable. These transactions are not designated as hedging instruments and are accounted for as derivatives whereby the fair value of the contracts is reported as either assets or liabilities on our Consolidated Balance Sheets, and gains and losses resulting from changes in the fair value are reported in Interest and other, net, in our Consolidated Statements of Operations. We do not enter into derivative financial contracts for speculative or trading purposes.
At March 31, 2026, we had $349.2 of forward contracts outstanding to sell foreign currencies in exchange for U.S. dollars and $140.3 of forward contracts outstanding to buy foreign currencies in exchange for U.S. dollars, all of which have maturities of less than one year. At March 31, 2025, we had $299.8 of forward contracts outstanding to sell foreign currencies in exchange for U.S. dollars and $97.0 of forward contracts outstanding to buy foreign currencies in exchange for U.S. dollars, all of which had maturities of less than one year. For the fiscal years ended March 31, 2026, 2025 and 2024, we recorded a loss of $5.5, a gain of $5.3, and a gain of $5.3, respectively, related to foreign currency forward contracts in Interest and other, net on our Consolidated Statements of Operations. As of March 31, 2026 and March 31, 2025, the fair value of these outstanding forward contracts were immaterial, and were included in Accrued expenses and other current liabilities when in a loss position, or in Prepaid expenses and other when in a gain position. The fair value of these outstanding forward contracts is estimated based on the prevailing exchange rates of the various hedged currencies as of the end of the period.
    Our hedging programs are designed to reduce, but do not entirely eliminate, the effect of currency exchange rate movements. We believe that the counterparties to these foreign currency forward contracts are creditworthy multinational commercial banks and that the risk of counterparty nonperformance is not material. Notwithstanding our efforts to mitigate
50

some foreign currency exchange rate risks, there can be no assurance that our hedging activities will adequately protect us against the risks associated with foreign currency fluctuations. For the fiscal year ended March 31, 2026, 40.8% of our revenue was generated outside the U.S. Using sensitivity analysis, a hypothetical 10.0% increase in the value of the U.S. dollar against all currencies would decrease revenues by 4.0%, while a hypothetical 10.0% decrease in the value of the U.S. dollar against all currencies would increase revenues by 4.0%. In our opinion, a substantial portion of this fluctuation would be offset by cost of revenue and operating expenses incurred in local currency.

Item 8.    Financial Statements and Supplementary Data
    The financial statements and supplementary data appear in a separate section of this Form 10-K following Part IV. We provide details of our valuation and qualifying accounts in Note 19 - Supplementary Financial Information to our Consolidated Financial Statements. All schedules have been omitted since the information required to be submitted has been included on our Consolidated Financial Statements or notes thereto or has been omitted as not applicable or not required.

Item 9.    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.

Item 9A.    Controls and Procedures
Definition and Limitations of Disclosure Controls and Procedures
    Our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are designed to reasonably ensure that information required to be disclosed in our reports filed under the Exchange Act is (i) recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and (ii) accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures.
    There are inherent limitations to the effectiveness of any system of disclosure controls and procedures. These limitations include the possibility of human error, the circumvention or overriding of the controls and procedures and reasonable resource constraints. In addition, because we have designed our system of controls based on certain assumptions, which we believe are reasonable, about the likelihood of future events, our system of controls may not achieve its desired purpose under all possible future conditions. Accordingly, our disclosure controls and procedures provide reasonable assurance, but not absolute assurance, of achieving their objectives.
Evaluation of Disclosure Controls and Procedures
    Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures at March 31, 2026, the end of the period covered by this report. Based on this evaluation, the principal executive officer and principal financial officer concluded that, at March 31, 2026, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized, and reported on a timely basis, and (ii) accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosures.
Management's Report on Internal Control Over Financial Reporting
    Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria set forth in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission 2013 framework ("COSO"). Based on this evaluation, management has concluded that our internal control over financial reporting was effective as of March 31, 2026.
Our independent registered public accounting firm, Ernst & Young LLP, has issued an audit report on our internal control over financial reporting, which is included in this Form 10-K.
Changes in Internal Control Over Financial Reporting
    There were no changes in our internal control over financial reporting during the fiscal quarter ended March 31, 2026, which were identified in connection with management's evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
51

Item 9B.    Other Information
The share numbers in this Item 9B represent the actual number of shares (i.e., not presented in millions).
Securities Trading Plans of Directors and Executive Officers
Our Section 16 officers and directors, as defined in Rule 16a-1(f) of the Exchange Act, may from time to time enter into plans for the purchase or sale of our common stock that are intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act. During the quarter ended March 31, 2026, the following Section 16 officers and directors, as defined in Rule 16a-1(f), adopted, modified, or terminated a "Rule 10b5-1 trading arrangement" (as defined in Item 408 of Regulation S-K of the Exchange Act):
• On February 19, 2026 , Ellen Siminoff , a member of our Board of Directors , adopted a new written trading plan. The plan's maximum duration is until July 31, 2027 , and the first trade will not occur until July 1, 2026, at the earliest. The trading plan is intended to permit Ms. Siminoff to sell up to an aggregate of 4,000 shares of our common stock.
• On March 3, 2026 , Daniel Emerson , our Executive Vice President and Chief Legal Officer , adopted a new written trading plan. The plan's maximum duration is until December 31, 2026 and the first trade will not occur until June 8, 2026, at the earliest. The trading plan is intended to permit Mr. Emerson to sell up to an aggregate of 42,105 shares of our common stock.
No other Section 16 officers or directors, as defined in Rule 16a-1(f), adopted , modified, or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as defined in Item 408 of Regulation S-K, during the three months ended March 31, 2026.

Item 9C.    Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
52

PART III

Item 10.    Directors, Executive Officers and Corporate Governance
    The information required by this Item is incorporated herein by reference to the sections entitled "Proposal 1—Election of Directors" and "Executive Compensation—Section 16(a) Beneficial Ownership Reporting Compliance" in our definitive Proxy Statement (the "Proxy Statement") for the Annual Meeting of Stockholders to be held in 2026. We intend to file the Proxy Statement within 120 days after the end of the fiscal year (i.e. on or before July 29, 2026). Our Code of Business Conduct and Ethics applicable to our directors and all employees, including senior financial officers, is available on our website at www.take2games.com . If we make any amendment to our Code of Business Conduct and Ethics that is required to be disclosed pursuant to the Exchange Act, we will make such disclosures on our website.

Item 11.    Executive Compensation
    The information required by this Item is incorporated herein by reference to the section entitled "Executive Compensation" in our Proxy Statement.

Item 12.    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    The information required by this Item is incorporated herein by reference to the sections entitled "Voting Security Ownership of Certain Beneficial Owners and Management" and "Equity Compensation Plan Information" in our Proxy Statement.

Item 13.    Certain Relationships and Related Transactions, and Director Independence
    The information required by this Item is incorporated herein by reference to the section entitled "Certain Relationships and Related Transactions" in our Proxy Statement.

Item 14.    Principal Accounting Fees and Services
    The information required by this Item is incorporated herein by reference to the section entitled "Independent Auditor Fee Information" in our Proxy Statement.
53

PART IV

Item 15.    Exhibits, Financial Statement Schedules
(a) The following documents are filed as part of this Report:

(i) Financial Statements. See Index to Financial Statements on page  59 of this Report.
(ii) Financial Statement Schedule. See Note 19 - Supplementary Financial Information to our Consolidated Financial Statements.
Index to Exhibits:
    Incorporated by Reference
Exhibit Number Exhibit Description Form Filing Date Exhibit Filed
Herewith
3.1 Restated Certificate of Incorporation
10-K 2/12/2004 3.1  
3.1.1 Certificate of Amendment of Restated Certificate of Incorporation, dated April 30, 1998
10-K 2/12/2004 3.1.2  
3.1.2 Certificate of Amendment of Restated Certificate of Incorporation, dated November 17, 2003
10-K 2/12/2004 3.1.3  
3.1.3 Certificate of Amendment of Restated Certificate of Incorporation, dated April 23, 2009
8-K 4/23/2009 3.1  
3.1.4 Certificate of Amendment of Restated Certificate of Incorporation, dated September 21, 2012
8-K 9/24/2012 3.1  
3.1.5 Certificate of Amendment of Restated Certificate of Incorporation, dated May 20, 2022
8-K 5/26/2022 3.1
3.2 Certificate of Designation of Series A Preferred Stock, dated March 11, 1998
10-K 2/12/2004 3.1.1  
3.3 Certificate of Designation of Series B Preferred Stock, dated March 26, 2008
8-A12B 3/26/2008 4.2  
3.4 Take-Two Interactive Software, Inc.'s Fourth Amended and Restated By-Laws, as adopted and effective on January 4, 2023
8-K 1/6/2023 3.1  
4.1 Description of Registrant's Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934
10-K 5/22/2024 4.1
4.2 Base Indenture, dated as of April 14, 2022, between Take-Two Interactive Software, Inc. and The Bank of New York Mellon, as Trustee.
8-K 4/14/2022 4.1
4.3 Third Supplemental Indenture, dated as of April 14, 2022, between Take-Two Interactive Software, Inc. and The Bank of New York Mellon, as Trustee.
8-K 4/14/2022 4.4
4.4 Fourth Supplemental Indenture, dated as of April 14, 2022, between Take-Two Interactive Software, Inc. and The Bank of New York Mellon, as Trustee.
8-K 4/14/2022 4.5
4.5 Fifth Supplemental Indenture, dated as of April 14, 2023, between Take-Two Interactive Software, Inc. and The Bank of New York Mellon, as Trustee.
8-K 4/14/2023 4.1
4.6 Sixth Supplemental Indenture, dated as of April 14, 2023, between Take-Two Interactive Software, Inc. and The Bank of New York Mellon, as Trustee.
8-K 4/14/2023 4.2
4.7 Seventh Supplemental Indenture, dated as of June 12, 2024, between Take-Two Interactive Software, Inc. and The Bank of New York Mellon, as Trustee.
8-K 6/12/2024 4.1
4.8 Eighth Supplemental Indenture, dated as of June 12, 2024, between Take-Two Interactive Software, Inc. and The Bank of New York Mellon, as Trustee.
8-K 6/12/2024 4.2
4.9 Form of Global Note representing 3.700% Senior Notes due 2027 (included as part of Exhibit 4.5)
8-K 4/14/2022 4.8
4.10 Form of Global Note representing 4.000% Senior Notes due 2032 (included as part of Exhibit 4.6)
8-K 4/14/2022 4.9

54

    Incorporated by Reference
Exhibit Number Exhibit Description Form Filing Date Exhibit Filed
Herewith
4.11 Form of Global Note representing 5.000% Senior Notes due 2026 (included as part of Exhibit 4.7)
8-K 4/14/2023 4.3
4.12 Form of Global Note representing 4.950% Senior Notes due 2028 (included as part of Exhibit 4.8)
8-K 4/14/2023 4.4
4.13 Form of Global Note representing 5.400% Senior Notes due 2029 (included as part of Exhibit 4.9)
8-K 6/12/2024 4.3
4.14 Form of Global Note representing 5.600% Senior Notes due 2034 (included as part of Exhibit 4.10)
8-K 6/12/2024 4.4
4.15 First Supplemental Indenture, dated May 23, 2022, by and among Zynga Inc., Zebra MS II, Inc. and Computershare Trust Company, N.A. (as successor to Wells Fargo Bank, National Association), as trustee.
8-K 5/26/2022 4.2
4.16 Form of Indenture to be entered into between the Company and The Bank of New York Mellon
S-3 ASR 2/7/2025 4.1(B)
10.1 Take-Two Interactive Software, Inc. Change in Control Employee Severance Plan +
8-K 3/7/2008 10.1  
10.2 Amended and Restated Take-Two Interactive Software, Inc. 2017 Stock Incentive Plan +
14A 7/28/2025 Annex B  
10.3 Amendment No. 1 to the Amended and Restated Take-Two Interactive Software, Inc. 2017 Stock Incentive Plan +
S-8 9/4/2020 99.2
10.4 Amendment to the Amended and Restated Take-Two Interactive Software, Inc. 2017 Stock Incentive Plan +
S-8 6/3/2022 99.2
10.5 Take-Two Interactive Software, Inc. 2017 Stock Incentive Plan Qualified RSU Sub-Plan for France, effective as of September 15, 2017 +
14A 7/27/2017 Annex C  
10.6 Take-Two Interactive Software, Inc. 2017 Second Amended and Restated Global Employee Stock Purchase Plan, effective as of March 28, 2019 +
10-K 5/14/2019 10.13
10.7 Form of Global Restricted Stock Unit Agreement Pursuant to the Take-Two Interactive Software, Inc. 2017 Stock Incentive Plan + **
X
10.8 Form of Global Restricted Stock Performance Unit Agreement Pursuant to the Take-Two Interactive Software, Inc. 2017 Stock Incentive Plan (TSR) + * *
X
10.9 F orm of Global Restricted Stock Performance Unit Agreement Pursuant to the Take-Two Interactive Software , Inc. 2017 Stock Incentive Plan (RCS) +**
X
10.10 Form of Non-Employee Director Restricted Stock Agreement Pursuant to the Take-Two Interactive Software Inc. 2017 Stock Incentive Plan +
10-Q 11/8/2017 10.6  
10.11 Form of Non-Employee Director Stock Grant Agreement Pursuant to the Take-Two Interactive Software Inc. 2017 Stock Incentive Plan +
10-Q 11/8/2017 10.7  
10.12 T ake-Two Interactive So ftware, Inc. Deferred Compensation Plan +
8-K 9/5/2025 10.1
10.13 T ake-Two Interactive So ftware, Inc. Deferred Compensation Plan Adoption Agreement +
8-K 9/5/2025 10.2
10.14 Employment Agreement, dated May 12, 2010, between the Company and Lainie Goldstein +
8-K 5/14/2010 10.1  
10.15 First Amendment to Employment Agreement, dated October 25, 2010, between the Company and Lainie Goldstein +
8-K 10/25/2010 10.1  
10.16 Second Amendment to Employment Agreement, dated August 27, 2012, between the Company and Lainie Goldstein +
10-Q 10/31/2012 10.6  

55

    Incorporated by Reference
Exhibit Number Exhibit Description Form Filing Date Exhibit Filed
Herewith
10.17 Third Amendment to Employment Agreement dated May 7, 2018, between the Company and Lainie Goldstein +
10-Q 8/3/2018 10.2
10.18 Employment Agreement, dated February 14, 2008, by and between the Company and Karl Slatoff +
8-K 2/15/2008 10.3  
10.19 Employment Agreement dated January 28, 2015 between the Company and Daniel Emerson +
10-Q 2/6/2015 10.1
10.20 Management Agreement, dated as of November 17, 2017, by and between the Company and ZelnickMedia Corporation +
8-K 11/22/2017 10.1
10.21 Restricted Unit Agreement, dated as of April 13, 2018, by and between Take-Two Interactive Software, Inc. and ZelnickMedia Corporation +
S-3 ASR 4/13/2018 10.2
10.22 Restricted Unit Agreement, dated as of April 15, 2019, by and between Take-Two Interactive Software, Inc. and ZelnickMedia Corporation +
S-3 ASR 4/15/2019 10.2  
10.23 Restricted Unit Agreement dated as of April 13, 2020, by and between Take-Two Interactive Software, Inc. and ZelnickMedia Corporation +
S-3 ASR 4/13/2020 10.2
10.24 Restricted Unit Agreement dated as of April 13, 2021, by and between Take-Two Interactive Software, Inc. and ZelnickMedia Corporation +
S-3 ASR 4/13/2021 10.2
10.25 Restricted Unit Agreement dated as of April 13, 2022, by and between Take-Two Interactive Software, Inc. and ZelnickMedia Corporation +
S-3 ASR 4/13/2022 10.2
10.26 Management Agreement, dated as of May 3, 2022, by and between Take-Two Interactive Software, Inc. and ZelnickMedia Corporation
8-K 5/5/2022 10.1
10.27 Restricted Unit Agreement dated as of June 1, 2022, by and between Take-Two Interactive Software, Inc. and ZMC Advisors, L.P. +
10-Q 8/9/2023 10.3
10.28 Restricted Unit Agreement dated as of June 1, 2022, by and between Take-Two Interactive Software, Inc. and ZMC Advisors, L.P. +
10-Q 8/9/2023 10.4
10.29 Restricted Unit Agreement dated as of June 1, 2022, by and between Take-Two Interactive Software, Inc. and ZMC Advisors, L.P. +
10-Q 8/9/2023 10.5
10.30 Restricted Unit Agreement dated as of June 1, 2023, by and between Take-Two Interactive Software, Inc. and ZMC Advisors, L.P. +
S-3 ASR 6/1/2023 10.2
10.31 Restricted Unit Agreement dated as of June 3, 2024, by and between Take-Two Interactive Software, Inc. and ZMC Advisors, L.P.+
S-3 ASR 6/3/2024 10.2
10.32 Restricted Unit Agreement dated as of June 2, 2025, by and between Take-Two Interactive Software, Inc. and ZMC Advisors, L.P.+
S-3 ASR 6/2/2025 10.2
10.33 Credit Agreement, dated as of May 23, 2022, by and among Take-Two Interactive Software, Inc., JPMorgan Chase Bank, N.A., Wells Fargo Securities, LLC, BOFA Securities, Inc. and BNP Paribas
8-K 5/26/2022 10.1
10.34 Amendment No. 1 to Credit Agreement, dated as of May 14, 2024, by and among Take-Two Interactive Software, Inc., and JPMorgan Chase Bank, N.A.
10-K 5/22/2024 10.38
10.35 Amendment No. 2 to Credit Agreement, dated as of June 6, 2024, by and among Take-Two Interactive Software, Inc., and JPMorgan Chase Bank, N.A.
10-Q 8/9/2024 10.3

56

    Incorporated by Reference
Exhibit Number Exhibit Description Form Filing Date Exhibit Filed
Herewith
10.36 Amendment No. 3 to Credit Agreement, dated as of May 19, 2025, by and among Take-Two Interactive Software, Inc. and JPMorgan Chase Bank, N.A.
10-K 5/20/2025 10.41
10.37 Receivables Purchase Agreement, dated as of May 19, 2025, by and among Take-Two Interactive Software, Inc., Zynga Inc., and Wells Fargo Bank, N.A.**
10-K 5/20/2025 10.42
10.38 Xbox 360 Publisher License Agreement dated November 17, 2005, between Microsoft Licensing, GP and the Company *
10-Q 11/8/2011 10.3  
10.39 Amendment to Xbox 360 Publisher License Agreement, dated December 4, 2008, between Microsoft Licensing, GP and the Company *
10-Q 6/5/2009 10.1  
10.40 Amendment to the Xbox 360 Publisher License Agreement, dated November 22, 2011, between the Company and Microsoft Licensing, GP *
10-Q 2/3/2012 10.1  
10.41 Amendment to the Xbox 360 Publisher License Agreement, dated December 11, 2012, between the Company and Microsoft Licensing, GP *
10-Q 2/6/2013 10.2  
10.42 Amendment to the Xbox 360 Publisher License Agreement, dated November 13, 2013, between the Company and Microsoft Licensing, GP *
10-Q 2/4/2014 10.2  
10.43 Amendment to the Xbox 360 Publisher License Agreement, dated September 30, 2014, between Microsoft Corporation and the Company *
10-Q 10/30/2014 10.1  
10.44 Amendment to the Xbox 360 Publisher License Agreement, signed on December 5, 2017, between Microsoft Corporation and the Company *
10-Q 2/8/2018 10.2
10.45 Xbox Console Publisher License Agreement, dated as of July 1, 2020, by and between Take-Two Interactive Software, Inc. and Microsoft Corporation **
10-Q 11/6/2020 10.1  
10.46 PlayStation Global Developer and Publisher Agreement, dated as of March 23, 2017, between the Company and certain of its affiliates and Sony Interactive Entertainment, Inc., Sony Interactive Entertainment America LLC, and Sony Interactive Entertainment Europe Ltd. *
10-K 5/24/2017 10.48
10.47 PlayStation 5 Amendment to PlayStation Global Developer and Publisher Agreement, effective as of May 1, 2020 and signed on September 30, 2020, between Take-Two Interactive Software, Inc. and certain of its affiliates and Sony Interactive Entertainment, Inc., Sony Interactive Entertainment America LLC, and Sony Interactive Entertainment Europe Ltd. **
10-Q 11/6/2020 10.4
10.48 Lease Agreement, dated as of December 12, 2016, by and between Take-Two Interactive Software, Inc. and DOLP 1133 Properties II LLC for a premises with entrances at 1133 Avenue of the Americas and 110 West 44th Street, New York, New York 10036
10-Q 2/8/2017 10.1
10.49 First Amendment to Lease, dated as of July 25, 2018 by and between Take-Two Interactive Software, Inc. and DOLP 1133 Properties II LLC
10-Q 11/8/2018 10.1
10.50 Second Amendment to Lease, dated as of August 31, 2021 by and between Take-Two Interactive Software, Inc. and DOLP 1133 Properties III LLC
10-Q 11/4/2021 10.1
10.51 Third Amendment to Lease, dated as of December 22, 2025, by and between Take-Two Interactive Software, Inc. and DOLP 1133 Properties III LLC
10-Q 2/4/2026 10.1
19.1 Take-Two Interactive Software, Inc. Securities Trading Policy
10-K 5/22/2024 19.1

57

    Incorporated by Reference
Exhibit Number Exhibit Description Form Filing Date Exhibit Filed
Herewith
21.1 Subsidiaries of the Company
X
23.1 Consent of Ernst & Young LLP
X
31.1 Chief Executive Officer Certification Pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
31.2 Chief Financial Officer Certification Pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
32.1 Chief Executive Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
X
32.2 Chief Financial Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
X
97.1 Take-Two Interactive Software, Inc. Policy for the Recovery of Erroneously Awarded Compensation
10-K 5/22/2024 97.1
101.INS The Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. X
101.SCH XBRL Taxonomy Extension Schema Document X
101.CAL XBRL Taxonomy Calculation Linkbase Document X
101.LAB XBRL Taxonomy Label Linkbase Document X
101.PRE XBRL Taxonomy Presentation Linkbase Document X
101.DEF XBRL Taxonomy Extension Definition Document X
104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) X

_______________________________________________________________________________
+    Represents a management contract or compensatory plan or arrangement.
* Portions thereof were omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment that was granted in accordance with Exchange Act Rule 24b-2.
**    Portions of this exhibit have been redacted in compliance with Regulation S-K Item 601(b)(10).
    Attached as Exhibit 101 to this report are the following formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets at March 31, 2026 and 2025, (ii) Consolidated Statements of Operations for the fiscal years ended March 31, 2026, 2025, and 2024, (iii) Consolidated Statements of Comprehensive Loss for the fiscal years ended March 31, 2026, 2025, and 2024, (iv) Consolidated Statements of Cash Flows for the fiscal years ended March 31, 2026, 2025, and 2024, (v) Consolidated Statements of Stockholders' Equity for the fiscal years ended March 31, 2026, 2025, and 2024, and (vi) Notes to the Consolidated Financial Statements.

Item 16.    Form 10-K Summary
Not applicable.
58

TAKE-TWO INTERACTIVE SOFTWARE, INC.
FISCAL YEAR ENDED MARCH 31, 2026
INDEX TO FINANCIAL STATEMENTS

  Page
Reports of Independent Registered Public Accounting Firm ( Ernst & Young LLP , New York, New York , PCAOB ID 42 )
60

Consolidated Balance Sheets —At March 31, 2026 and 2025
63

Consolidated Statements of Operations —For the fiscal years ended March 31, 2026, 2025, and 2024
64

Consolidated Statements of Comprehensive Loss —For the fiscal years ended March 31, 2026, 2025, and 2024
65

Consolidated Statements of Cash Flows —For the fiscal years ended March 31, 2026, 2025, and 2024
66

Consolidated Statements of Stockholders' Equity —For the fiscal years ended March 31, 2026, 2025, and 2024
67

Notes to the Consolidated Financial Statements
68

(All other items in this report are inapplicable)

59

Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Take-Two Interactive Software, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Take-Two Interactive Software, Inc. (the Company) as of March 31, 2026 and 2025, the related consolidated statements of operations, comprehensive loss, cash flows and stockholders’ equity for each of the three years in the period ended March 31, 2026, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at March 31, 2026 and 2025, and the results of its operations and its cash flows for each of the three years in the period ended March 31, 2026, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of March 31, 2026, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated May 21, 2026 expressed an unqualified opinion thereon.

Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
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Goodwill Impairment Assessment
Description of the Matter At March 31, 2026, the Company's goodwill balance was $1,061.9 million on its consolidated balance sheet. As disclosed in Note 1 to the consolidated financial statements, goodwill is tested for impairment annually, or more frequently if events and circumstances indicate the fair value of a reporting unit may be below its carrying amount. If the carrying value exceeds the fair value, an impairment charge is recognized equal to the difference between the carrying value of the reporting unit and its fair value.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company's goodwill impairment evaluation process.
Our audit procedures to test management's impairment evaluation of a certain reporting unit included, among others, assessing the valuation methodologies, and evaluating the impact of changes in selected assumptions. We involved our internal valuation specialists to assist in evaluating the valuation methodologies used to calculate the estimated fair value of a certain reporting unit.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2006.

New York, New York
May 21, 2026
61

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors of Take-Two Interactive Software, Inc.
Opinion on Internal Control Over Financial Reporting
We have audited Take-Two Interactive Software, Inc.’s internal control over financial reporting as of March 31, 2026, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Take-Two Interactive Software, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of March 31, 2026, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of March 31, 2026 and 2025, the related consolidated statements of operations, comprehensive loss, cash flows and stockholders’ equity for each of the three years in the period ended March 31, 2026, and the related notes and our report dated May 21, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
New York, New York
May 21, 2026
62

TAKE-TWO INTERACTIVE SOFTWARE, INC.
CONSOLIDATED BALANCE SHEETS
(in millions, except per share amounts)

  March 31,
  2026 2025
ASSETS    
Current assets:    
Cash and cash equivalents $ 1,545.5   $ 1,456.1  
Short-term investments 443.8   9.4  
Restricted cash and cash equivalents 13.2   14.9  
Accounts receivable, net of allowances of $ 0.9 and $ 1.6 at March 31, 2026 and 2025, respectively
737.0   771.1  
Software development costs and licenses 68.8   80.8  
Contract assets 89.7   80.8  
Prepaid expenses and other 301.5   402.8  
Total current assets 3,199.5   2,815.9  
Fixed assets, net 445.4   443.8  
Right-of-use assets 334.6   326.1  
Software development costs and licenses, net of current portion 2,277.5   1,892.6  
Goodwill 1,061.9   1,057.3  
Other intangibles, net 1,653.2   2,336.0  

Long-term restricted cash and cash equivalents 79.4   88.2  
Other assets 331.7   220.8  
Total assets $ 9,383.2   $ 9,180.7  
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 211.0   $ 194.7  
Accrued expenses and other current liabilities 1,117.8   1,127.6  
Deferred revenue 1,159.9   1,083.5  
Lease liabilities 70.1   61.5  
Short-term debt, net 30.0   1,148.5  
Total current liabilities 2,588.8   3,615.8  
Long-term debt, net 2,488.0   2,512.6  
Non-current deferred revenue 29.7   25.4  
Non-current lease liabilities 370.2   383.3  
Non-current software development royalties 84.5   93.6  
Deferred tax liabilities, net 182.3   259.6  
Other long-term liabilities 128.8   152.7  
Total liabilities $ 5,872.3   $ 7,043.0  
Commitments and contingencies (See Note 14 )

Stockholders' equity:    
Preferred stock, $ 0.01 par value, 5.0 shares authorized: no shares issued and outstanding at March 31, 2026 and 2025
—   —  
Common stock, $ 0.01 par value, 300.0 and 300.0 shares authorized; 209.1 and 200.8 shares issued and 185.4 and 177.1 outstanding at March 31, 2026 and 2025, respectively
2.1   2.0  
Additional paid-in capital 11,953.7   10,312.0  
Treasury stock, at cost; 23.7 and 23.7 common shares at March 31, 2026 and 2025, respectively
( 1,020.6 ) ( 1,020.6 )
Accumulated deficit ( 7,357.0 ) ( 7,058.8 )
Accumulated other comprehensive loss ( 67.3 ) ( 96.9 )
Total stockholders' equity $ 3,510.9   $ 2,137.7  
Total liabilities and stockholders' equity $ 9,383.2   $ 9,180.7  

See accompanying Notes.
63

TAKE-TWO INTERACTIVE SOFTWARE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share amounts)

  Fiscal Year Ended March 31,
  2026 2025 2024
Net revenue:
Game $ 6,162.1   $ 5,167.5   $ 4,693.5  
Advertising 494.3   466.1   656.1  
Total net revenue 6,656.4   5,633.6   5,349.6  
Cost of revenue 2,846.7   2,571.4   3,107.8  
Gross profit 3,809.7   3,062.2   2,241.8  
Selling and marketing 1,770.8   1,683.7   1,550.2  
Research and development
1,074.6   1,005.2   948.2  
General and administrative
874.4   883.3   716.1  
Depreciation and amortization 198.5   229.4   171.2  
Goodwill impairment —   3,545.2   2,342.1  
Business reorganization ( 4.4 ) 106.5   104.6  
Total operating expenses 3,913.9   7,453.3   5,832.4  
Income (loss) from operations ( 104.2 ) ( 4,391.1 ) ( 3,590.6 )
Interest and other, net ( 93.6 ) ( 100.2 ) ( 112.2 )

Loss before income taxes ( 197.8 ) ( 4,491.3 ) ( 3,702.8 )
Provision for (benefit from) income taxes 100.4   ( 12.4 ) 41.4  
Net loss $ ( 298.2 ) $ ( 4,478.9 ) $ ( 3,744.2 )
Loss per share:
Basic and diluted loss per share $ ( 1.62 ) $ ( 25.58 ) $ ( 22.01 )

See accompanying Notes.
64

TAKE-TWO INTERACTIVE SOFTWARE, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in millions)

  March 31,
  2026 2025 2024
Net loss $ ( 298.2 ) $ ( 4,478.9 ) $ ( 3,744.2 )
Other comprehensive income
Foreign currency translation adjustment 29.6   8.2   6.7  

Change in fair value of available for sale securities —   —   1.5  
Other comprehensive income 29.6   8.2   8.2  
Comprehensive loss $ ( 268.6 ) $ ( 4,470.7 ) $ ( 3,736.0 )

See accompanying Notes.
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TAKE-TWO INTERACTIVE SOFTWARE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)

  Fiscal Year Ended March 31,
  2026 2025 2024
Operating activities:      
Net loss $ ( 298.2 ) $ ( 4,478.9 ) $ ( 3,744.2 )
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Amortization and impairment of software development costs and licenses 412.8   333.8   292.7  
Stock-based compensation 305.3   324.0   335.6  
Noncash lease expense 56.2   59.5   61.1  
Amortization and impairment of intangibles 725.7   922.6   1,418.9  
Depreciation 166.4   153.9   135.5  
Goodwill impairment —   3,545.2   2,342.1  
Interest expense 151.4   167.3   140.6  
Deferred income taxes 78.0   139.5   ( 150.4 )
Fair value adjustments 12.5   6.9   8.6  

Other, net 21.4   24.8   30.5  
Changes in assets and liabilities, net of effect from purchases of businesses:
Accounts receivable 35.0   ( 105.0 ) 83.7  
Software development costs and licenses ( 688.9 ) ( 691.6 ) ( 603.4 )
Prepaid expenses, other current and other non-current assets ( 66.5 ) 11.9   ( 154.7 )
Deferred revenue 78.5   6.8   ( 11.8 )
Accounts payable, accrued expenses and other liabilities ( 365.3 ) ( 465.9 ) ( 200.9 )
Net cash provided by (used in) operating activities 624.3   ( 45.2 ) ( 16.1 )
Investing activities:
Change in bank time deposits ( 434.4 ) 12.6   19.8  
Sale and maturities of available-for-sale securities —   —   146.9  

Purchases of fixed assets ( 162.8 ) ( 169.4 ) ( 141.7 )
Divestitures —   32.7   —  
Purchases of long-term investments ( 22.0 ) ( 21.1 ) ( 18.5 )
Business acquisitions ( 2.6 ) 6.5   ( 7.3 )
Asset acquisitions ( 27.4 ) ( 20.3 ) ( 27.4 )
Other —   7.5   —  
Net cash used in investing activities ( 649.2 ) ( 151.5 ) ( 28.2 )
Financing activities:
Tax payment related to net share settlements on restricted stock awards ( 2.9 ) —   ( 94.1 )
Issuance of common stock 1,247.5   77.3   39.4  
Payment for settlement of convertible notes —   ( 8.3 ) —  
Proceeds from issuance of debt —   598.9   1,348.9  
Cost of debt —   ( 5.4 ) ( 10.3 )

Repayment of debt ( 1,150.0 ) —   ( 1,339.6 )

Payment of contingent earn-out consideration —   ( 12.0 ) ( 35.7 )
Net cash provided by (used in) financing activities 94.6   650.5   ( 91.4 )
Effects of foreign currency exchange rates on cash, cash equivalents, and restricted cash and cash equivalents 9.2   3.4   3.1  
Net change in cash, cash equivalents, and restricted cash and cash equivalents 78.9   457.2   ( 132.6 )
Cash, cash equivalents, and restricted cash and cash equivalents, beginning of year (1)
1,559.2   1,102.0   1,234.6  
Cash, cash equivalents, and restricted cash and cash equivalents, end of period (1)
$ 1,638.1   $ 1,559.2   $ 1,102.0  
Supplemental data:      
Interest paid $ 153.0   $ 147.1   $ 137.0  
Income taxes paid $ 149.4   $ 144.3   $ 150.2  

(1) Cash, cash equivalents and restricted cash and cash equivalents shown on our Consolidated Statements of Cash Flow includes amounts in the Cash and cash equivalents, Restricted cash and cash equivalents, and Long-term restricted cash and cash equivalents on our Consolidated Balance Sheet.
See accompanying Notes.
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TAKE-TWO INTERACTIVE SOFTWARE, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(in millions)

  Common Stock Additional
Paid-in
Capital Treasury Stock Retained
Earnings/(Accumulated
Deficit) Accumulated
Other
Comprehensive
Income (Loss) Total
Stockholders'
Equity
Shares Amount Shares Amount

Balance, March 31, 2023 192.6   1.9   $ 9,010.2   ( 23.7 ) $ ( 1,020.6 ) $ 1,164.3   $ ( 113.3 ) $ 9,042.5  
Net loss —  —  —  —  —  ( 3,744.2 ) —  ( 3,744.2 )
Change in cumulative foreign currency translation adjustment —  —  —  —  —  —  6.7   6.7  
Stock-based compensation —  —  416.1   —  —  —  —  416.1  
Issuance of restricted stock, net of forfeitures and cancellations 2.1   —  —  —  —  —  —  — 
Net unrealized gain on available-for-sale securities, net of taxes —  —  —  —  —  —  1.5   1.5  
Net share settlement of restricted stock awards ( 0.6 ) —  ( 94.1 ) —  —  —  —  ( 94.1 )
Employee share purchase plan settlement 0.4   —  37.9   —  —  —  —  37.9  

Exercise of stock options —  —  1.5   —  —  —  —  1.5  

Balance, March 31, 2024 194.5   1.9   9,371.6   ( 23.7 ) ( 1,020.6 ) ( 2,579.9 ) ( 105.1 ) 5,667.9  
Net loss —  —  —  —  —  ( 4,478.9 ) —  ( 4,478.9 )
Change in cumulative foreign currency translation adjustment —  —  —  —  —  —  8.2   8.2  
Stock-based compensation —  —  398.5   —  —  —  —  398.5  
Issuance of restricted stock, net of forfeitures and cancellations 2.4   —  —  —  —  —  —  — 

Employee share purchase plan settlement 0.4   —  45.9   —  —  —  —  45.9  

Exercise of stock options 0.6   —  31.4   —  —  —  —  31.4  
Issuance of shares related to Zynga convertible notes 0.1   —  16.0   —  —  —  —  16.0  
Issuance of shares related to Gearbox acquisition 2.8   —  448.6   —  —  —  —  448.6  

Other changes, net —  0.1   —  —  —  —  —  0.1  
Balance, March 31, 2025 200.8   2.0   10,312.0   ( 23.7 ) ( 1,020.6 ) ( 7,058.8 ) ( 96.9 ) 2,137.7  
Net loss —  —  —  —  —  ( 298.2 ) —  ( 298.2 )
Change in cumulative foreign currency translation adjustment —  —  —  —  —  —  29.6   29.6  
Stock-based compensation —  —  397.1   —  —  —  —  397.1  
Issuance of restricted stock, net of forfeitures and cancellations 2.5   —  —  —  —  —  —  — 

Net share settlement of restricted stock awards —  —  ( 2.9 ) —  —  —  —  ( 2.9 )
Employee share purchase plan settlement 0.3   —  54.7   —  —  —  —  54.7  
Issuance of common stock 5.5   0.1   1,192.7   —  —  —  —  1,192.8  

Other changes, net —  —  0.1   —   —   —   —   0.1  
Balance, March 31, 2026 209.1   2.1   $ 11,953.7   ( 23.7 ) $ ( 1,020.6 ) $ ( 7,357.0 ) $ ( 67.3 ) $ 3,510.9  

See accompanying Notes.
67

TAKE-TWO INTERACTIVE SOFTWARE, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(In millions, except per share amounts)

1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
Take-Two Interactive Software, Inc. (the "Company," "we," "us," or similar pronouns) was incorporated in the state of Delaware in 1993. We are a leading developer, publisher, and marketer of interactive entertainment for consumers around the globe. We develop, operate, and publish products principally through Rockstar Games, 2K, and Zynga. Our products are designed for console gaming systems, mobile, including smartphones and tablets, and PC. We deliver our products through physical retail, digital download, online platforms, and cloud streaming services.
Principles of Consolidation
    The Consolidated Financial Statements include the financial statements of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
Reclassifications
    Certain immaterial amounts in the financial statements of the prior years have been reclassified to conform to the current year presentation for comparative purposes.
Use of Estimates
    The preparation of financial statements in conformity with U.S. generally accepted accounting principles ("U.S. GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, net revenue, and expense, as well as the disclosure of contingent assets and liabilities at the dates of the financial statements during the reporting periods. Our most significant estimates relate to revenue recognition (see Note 2 - Revenue from Contracts with Customers ); the recoverability and amortization of software development costs, licenses, and intangible assets; assets acquired and liabilities assumed in business combinations; the realization of deferred income taxes; the valuation of stock-based compensation; and assumptions used in our goodwill and intangible impairment tests. These estimates generally involve complex issues and require us to make judgments, involve analysis of historical and the prediction of future trends, and are subject to change from period to period. Actual amounts could differ significantly from these estimates, which may affect economic conditions in a number of different ways and result in uncertainty and risk. We consider transactions or events that occur after the balance sheet date, but before the financial statements are issued, to provide additional evidence relative to certain estimates or to identify matters that require additional disclosures.
Concentration of Credit Risk and Accounts Receivable
    We maintain cash balances at several major financial institutions. While we attempt to limit credit exposure with any single institution, balances often exceed insurable amounts.
    Accounts receivable are recorded at the original invoiced amount less an allowance for credit losses. In evaluating our ability to collect outstanding receivable balances and related allowance for credit losses, we consider many factors, including the age of the balance, the customer’s payment history and current creditworthiness, as well as current and forecasted economic conditions that may affect our customers’ ability to pay. Bad debts are written off after all collection efforts have been exhausted. We do not require collateral from our customers.
    If the financial condition and operations of our customers deteriorate, our risk of collection could increase substantially. A majority of our trade receivables are derived from sales to major retailers, including digital storefronts and platform partners, and distributors. Our five largest customers accounted for 80.6 %, 81.0 % and 79.8 % of net revenue during the fiscal years ended March 31, 2026, 2025 and 2024, respectively. One customer accounted for 22.5 %, 24.4 % and 21.1 % of net revenue during the fiscal years ended March 31, 2026, 2025, and 2024, respectively. A second customer accounted for 24.9 %, 22.8 %, and 23.2 % of net revenue during the fiscal years ended March 31, 2026, 2025, and 2024, respectively. A third customer accounted for 15.0 %, 17.4 %, and 18.6 % of net revenue during the fiscal years ended March 31, 2026, 2025, and 2024, respectively. A fourth customer accounted for 12.1 %, 10.1 %, and 12.3 % of net revenue during the fiscal years ended March 31, 2026, 2025, and 2024, respectively. As of March 31, 2026 and 2025, five customers accounted for 69.6 % and 72.1 % of our gross accounts receivable, respectively. Customers that individually accounted for more than 10% of our gross accounts receivable balance comprised 57.7 % and 61.0 % of such balances at March 31, 2026 and 2025, respectively. We had three customers who accounted for 22.7 %, 21.0 %, and 14.0 % of our gross accounts receivable as of March 31, 2026 and three customers who accounted for 24.0 %, 21.3 %, and 15.7 % of our gross accounts receivable as of March 31, 2025. We did not have any additional customers that exceeded 10% of our gross accounts receivable as of March 31, 2026 and 2025. Based upon
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performing ongoing credit evaluations, maintaining trade credit insurance on a majority of our customers who sell our physical products, and our past collection experience, we believe that the receivable balances from these largest customers do not represent a significant credit risk.
Cash and Cash Equivalents
    We consider all highly liquid instruments purchased with original maturities of three months or less to be cash equivalents. Our restricted cash and cash equivalents balances are primarily related to dedicated accounts limited to the payment of certain internal royalty obligations. Balances that are restricted from use for more than one year are classified as non-current.
Short-term Investments
    Investments with original maturities greater than 90 days and remaining maturities of less than one year are normally classified within Short-term investments on our Consolidated Balance Sheets. In addition, investments with maturities beyond one year at the time of purchase that are highly liquid in nature and represent the investment of cash that is available for current operations are classified as short-term investments.
    Short-term investments are evaluated for impairment quarterly. We consider various factors in determining whether we should recognize an impairment charge, including the credit quality of the issuer, the duration that the fair value has been less than the adjusted cost basis, the severity of the impairment, the reason for the decline in value, and our intent to sell and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value. If we conclude that an investment is impaired or a portion of the unrealized loss is a result of a credit loss, we recognize the charge at that time in our Consolidated Statements of Operations. Determining whether the decline in fair value is due to a credit loss requires management judgment based on the specific facts and circumstances of each security. The ultimate value realized on these securities is subject to market price volatility until they are sold.
Software Development Costs and Licenses
    Capitalized software development costs include direct costs incurred for internally developed titles and payments made to third-party software developers under development agreements.
    We capitalize internal software development costs (including specifically identifiable payroll expense, employee stock-based compensation, and incentive compensation costs related to the completion and release of titles) as well as third-party costs (including development, production and other content) subsequent to establishing technological feasibility of a software title. Technological feasibility, which is evaluated on a product-by-product basis, requires the completion of both technical design documentation and game design documentation. Significant management judgments are made in the assessment of when technological feasibility is established. For products where proven technology exists, this may occur early in the development cycle. Prior to establishing technological feasibility of a product, we record any software development costs as research and development expenses. If we subsequently determine that a product that was technologically feasible ceases to meet the requirements for that determination, costs capitalized to date are expensed to Research and development in the period where the product is deemed no longer technologically feasible.
    Licenses consist of payments and guarantees made to holders of intellectual property rights for use of their trademarks, copyrights or other intellectual property rights in the development of our products. Agreements with license holders generally provide for guaranteed minimum payments for use of their intellectual property. Certain licenses, especially those related to our sports products, extend over multi-year periods and encompass multiple game titles.
    Amortization of capitalized software development costs and licenses commences when a product is available for general release and is recorded on a title-by-title basis in cost of revenue. For capitalized software development costs, annual amortization is calculated using (1) the proportion of current year revenue to the total revenue expected to be recorded over the life of the title or (2) the straight-line method over the remaining estimated life of the title, whichever is greater. For capitalized licenses, amortization is calculated as a ratio of (1) current year revenue to the total revenue expected to be recorded over the remaining estimated life of the title or (2) the contractual royalty rate based on actual net product sales as defined in the licensing agreement, whichever is greater. Amortization periods for our software products generally range from 9 to 36 months.
    Certain government grants earned on qualified production spend generally either reduce the cost basis of our capitalized software development costs, which therefore results in reduced expense over the amortization period, or reduce period development expense recognized for titles that do not meet the capitalization criteria. In the absence of authoritative U.S. GAAP applicable to the period presented, we account for these incentives by analogy under ASC 105‑10‑05‑2 to the principles in IAS 20, Accounting for Government Grants and Disclosure of Government Assistance.
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