Take-Two Interactive Software, Inc. (NASDAQ:TTWO) today reported better-than-expected results for the second quarter of its fiscal year 2012, ended September 30, 2011. In addition, the Company reiterated its financial outlook for the fiscal year 2012, ending March 31, 2012, and provided its initial financial outlook for the third quarter ending December 31, 2011.

For the second quarter of fiscal 2012, net revenue was $107.0 million, as compared to $245.0 million for the second quarter of fiscal 2011, which had benefited from the releases of Mafia II and Sid Meier’s Civilization V, and the post-launch performance of Red Dead Redemption. GAAP loss from continuing operations was $47.3 million, or $0.57 per share, for the second quarter of fiscal 2012, as compared to GAAP income from continuing operations of $8.0 million, or $0.09 per diluted share, for the year-ago period. Non-GAAP net loss was $39.4 million, or $0.47 per share, as compared to Non-GAAP net income of $18.4 million, or $0.20 per diluted share, for the year-ago period.

The strongest contributors to net revenue in the second quarter this year were catalog titles and digitally delivered content. Catalog sales were led by the Grand Theft Auto franchise, Red Dead Redemption, Borderlands, Sid Meier’s Civilization V, Midnight Club Los Angeles, and NBA® 2K11. New title sales were led by L.A. Noire, MLB® 2K11, and Nicktoons MLB. Digitally delivered content accounted for 25% of net revenue, driven by offerings for the Grand Theft Auto franchise, Borderlands, Red Dead Redemption and the Sid Meier’s Civilization franchise.

For the six-month period ended September 30, 2011, net revenue was $441.4 million, as compared to $620.4 million for the year-ago period. GAAP loss from continuing operations was $55.9 million, or $0.68 per share, as compared to GAAP income from continuing operations of $35.4 million, or $0.41 per diluted share, for the year-ago period. Non-GAAP net loss was $37.4 million, or $0.45 per share, as compared to Non-GAAP net income $59.3 million, or $0.64 per diluted share, for the year-ago period.

Management Comments

“Our second quarter results exceeded expectations, driven by strong demand for the Company’s catalog offerings and digitally delivered add-on content that deepens the consumer experience,” said Strauss Zelnick, Chairman and CEO of Take-Two. “The second half of the year is off to a solid start with the launch of NBA 2K12, which received the highest ratings in the history of our industry-leading basketball series. We expect to build upon this momentum through the balance of this year with groundbreaking new releases from our portfolio of hit franchises, including Max Payne 3 from Rockstar Games and The Darkness II from 2K Games, and a broad array of other offerings that promise to delight audiences worldwide – whether at home or on the go.

“Looking ahead, Take-Two has the strongest development pipeline in the Company’s history. At the cornerstone of our stellar lineup is the recently announced next installment of Rockstar Games’ iconic franchise that has sold-in more than 114 million units – Grand Theft Auto V. The creative team at Rockstar Games continues to set benchmarks for excellence with every new release and we’re confident that consumers’ enthusiasm will be rewarded with a breathtaking entertainment experience that can only be provided by Grand Theft Auto.

“With our diverse lineup of industry-leading franchises and focus on operational excellence, we continue to expect fiscal 2012 to be another profitable year for Take-Two on a Non-GAAP basis and fiscal 2013 to be one of our best years ever, with Non-GAAP net income in excess of $2.00 per diluted share.”

Business and Product Highlights

Since July 1, 2011:

Take-Two Interactive amended its senior secured revolving credit facility on significantly improved terms. As amended, the credit facility provides for borrowings of up to $100 million, plus an additional $40 million accordion feature, for a period of five-years. The credit facility may be used to fund working capital, letters of credit and for other general corporate purposes.
2K Games launched the Company’s first social game, Sid Meier’s Civilization World, for Facebook. The title was developed by Firaxis Games.
2K Games announced that Borderlands 2, the next installment in the franchise that has sold-in over 5 million units worldwide, is currently in development with Gearbox Software and expected to launch in fiscal year 2013.
Rockstar Games announced that Max Payne 3 is planned for release in March 2012.
2K Games released the Sid Meier’s Civilization V: Game of the Year Edition for PC, featuring the standalone title and all previously released downloadable content. The strategy franchise has sold-in nearly 11 million units worldwide.
2K Sports released NBA 2K12 to critical acclaim and the highest review scores in the history of the franchise (91 – Metacritic). The game will be supported with the Legends Showcase downloadable content during the 2011 holiday season. The label also released NBA 2K12 for the iPhone, iPod touch and iPad.
Rockstar Games released the Red Dead Redemption: Game of the Year Edition, featuring the standalone title and all previously released add-on content. The Red Dead franchise has sold-in over 13 million units worldwide.
Rockstar Games announced that it plans to release a special edition of Grand Theft Auto III for mobile phones and tablets running iOS and Android during the fall in celebration of the game’s 10th anniversary.
Rockstar Games announced that Grand Theft Auto V, the next installment in the interactive entertainment industry’s most iconic and critically acclaimed franchise, is currently in full development.
2K Sports announced that Justin Verlander, the Detroit Tigers pitcher who was selected as the Players Choice Award winner for Player of the Year and American League Outstanding Pitcher, will be the cover athlete for Major League Baseball 2K12 when it launches in March 2012.
Rockstar Games released L.A. Noire: The Complete Edition for the PC, featuring all previously released downloadable content. This special edition is also planned for release on the Xbox 360 and PlayStation 3 on November 15, 2011 in North America and November 18, 2011 internationally. L.A. Noire has sold-in more than 4 million units worldwide since its launch.
2K Games now expects to release XCOM during fiscal 2013.