TTWO · 10-Q · 2026Q3 · Full report

Income Tax Rate Changes

TAKE TWO INTERACTIVE SOFTWARE INC · 2026-11-09 · Importance 42 · Surprise 64 · In source text

For the six months ended September 30, 2026, Take-Two recorded an income tax benefit of $73.1 million, compared with a $16.5 million tax provision in the prior-year period. The effective tax rate was 45.3%, versus negative 12.8% a year earlier; current-period tax benefits included $74.0 million from geographic earnings mix and reserve changes, partly offset by $27.6 million of tax expense related to credits. The prior-year rate reflected $39.3 million of tax expense from increased U.S. and international valuation allowances and $18.9 million from geographic mix and reserve changes, partly offset by $12.9 million of tax credits. A November 2026 reorganization of certain intangible assets will affect jurisdictional earnings mix, and the company is evaluating its effects on the annual effective tax rate, deferred tax assets, and valuation allowance.

Key facts

• Take-Two completed a reorganization involving certain intangible assets in November 2026; its jurisdictional earnings mix will be affected beginning that month, and the company is evaluating effects on its annual effective tax rate, deferred tax assets, and valuation allowance. source
• Take-Two recorded an income tax benefit of $57.9 million for the three months ended September 30, 2026, compared with an income tax provision of $18.4 million in the prior-year period. source
• Take-Two recorded an income tax benefit of $73.1 million for the six months ended September 30, 2026, compared with an income tax provision of $16.5 million in the prior-year period. source
• The six-month effective tax rate was 45.3%; tax benefits of $74.0 million related to geographic earnings mix and changes in reserves were offset by $27.6 million of tax expense related to tax credits. source
• The quarterly effective tax rate was 51.7%; tax benefits of $57.1 million related to geographic earnings mix and changes in reserves were offset by $20.0 million of tax expense related to tax credits. source

Impact estimates