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STOCK-BASED COMPENSATION | 12 Months Ended
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Mar. 31, 2025
Share-Based Payment Arrangement [Abstract] |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Stock Incentive Plan In September 2017, our stockholders approved our 2017 Stock Incentive Plan (as amended and restated, the "2017 Plan"). The aggregate number of shares issuable under the 2017 Plan is 25.7, subject to adjustment as set forth in the 2017 Plan, and, as of March 31, 2025, there were approximately 8.3 shares available for issuance. The 2017 Plan is administered by the Compensation Committee of the Board of Directors (the "Board") and allows for awards of restricted stock units and other stock-based awards of our common stock to employees and non-employees, including to ZMC in connection with their contract to provide executive management service to us. Subject to the provisions of the plans, the Board, or any Committee appointed by the Board, has the authority to determine the individuals to whom the equity awards are to be granted, the number of shares to be covered by each equity award, the vesting period, restrictions, if any, on the equity award and the terms and conditions of the equity award. Stock-Based Compensation Expense The following table summarizes stock-based compensation expense included in our Consolidated Statements of Operations:
|  | Fiscal Year Ended March 31,
|  | 2025 |  | 2024 |  | 2023
Cost of revenue |  | $ | 9.4 |  |  | $ | 24.4 |  |  | $ | (9.5) |
Selling and marketing |  | 92.4 |  |  | 95.3 |  |  | 95.2 |
General and administrative |  | 123.2 |  |  | 111.5 |  |  | 115.5 |
Research and development |  | 99.0 |  |  | 104.4 |  |  | 116.6 |
Stock-based compensation expense before income taxes |  | 324.0 |  |  | 335.6 |  |  | 317.8 |
Provision for (benefit from) income taxes |  | (6.5) |  |  | (12.2) |  |  | (45.8) |
Stock-based compensation expense, net of income tax benefit |  | 317.5 |  |  | 323.4 |  |  | 272.0 |
Capitalized stock-based compensation expense |  | $ | 81.4 |  |  | $ | 85.4 |  |  | $ | 74.4 |
During the fiscal year ended March 31, 2025, the forfeiture of awards resulted in the reversal of expense of $8.3 and amounts capitalized as software development costs of $8.3. During the fiscal year ended March 31, 2024, the forfeiture of awards resulted in the reversal of expense of $2.4 and amounts capitalized as software development costs of $7.4. During the fiscal year ended March 31, 2023, the forfeiture of awards resulted in the reversal of expense of $49.5 and amounts capitalized as software development costs of $11.9. As of March 31, 2025, the total future unrecognized compensation cost related to outstanding unvested restricted stock was $624.2 and will be either recognized as compensation expense over a weighted-average period of approximately 2.6 years or capitalized as software development costs. For the fiscal years ended March 31, 2025, 2024, and 2023, the total fair values of restricted stock units that vested were $526.6, $309.3, and $321.8, respectively. In connection with the Zynga acquisition (i) the outstanding and unexercised options to purchase Zynga common stock were assumed by the Company and automatically converted into options exercisable for shares of Take-Two common stock (the “Converted Options”), (ii) the issued and outstanding restricted stock unit awards with respect to Zynga common stock were assumed by the Company and automatically converted into a Take-Two restricted stock unit award with respect to shares of Take-Two common stock (the “Converted RSUs”), and (iii) the issued and outstanding performance stock unit awards with respect to Zynga common stock were assumed by the Company and automatically converted into a Take-Two restricted stock unit award with respect to shares of Take-Two common stock (the “Converted PSUs” and together with the Converted Options and the Converted RSUs, the “Converted Awards”). As a result, we issued replacement equity options and PSU/RSU awards of 1.5 and 4.2, respectively. The portion of the fair value related to pre-combination services of $151.7 was included in the purchase price, and $28.6 was recognized as day-one post-combination expense for acceleration of awards, while the remaining fair value will be recognized over the remaining service periods. As of March 31, 2025, the future expense for the Converted RSUs and Converted PSUs was approximately $34.6, which will be recognized over a weighted average service period of approximately 0.6 years. Restricted Stock Units Employee Awards Time-based restricted stock units granted to employees under our stock-based compensation plans generally vest either annually or quarterly over three years or four years from the date of grant. Certain restricted stock units granted to key officers, senior-level employees, or key employees vest based on market conditions, primarily related to the performance of the price of our common stock. Certain restricted stock units granted to key officers, senior-level employees, or key employees vest based on performance conditions, primarily related to performance metrics around certain of our titles. ZMC Non-Employee Awards In connection with the 2022 Management Agreement and the 2017 Management Agreement, we granted restricted stock units (in thousands) to ZMC (see Note 3 - Management Agreement) as follows:
|  | Fiscal Year Ended March 31,
|  | 2025 |  | 2024
Time-based |  | 102 |  |  | 97 |
Market-based(1) |  | 311 |  |  | 295 |
Performance-based(1) |  | 104 |  |  | 98 |
Total Restricted Stock Units |  | 517 |  |  | 490 |
(1) Represents the maximum number of shares eligible to vest. Time-based restricted stock units granted pursuant to the 2022 Management Agreement in fiscal year 2025 will vest on June 1, 2025, June 1, 2026, and June 1, 2027, and those granted in fiscal year 2024 partially vested on June 1, 2024 and will also vest in part on June 1, 2025, and June 1, 2026. Time-based restricted stock units granted in fiscal year 2023, partially vested on June 1, 2023, and June 1, 2024, and will also vest on June 1, 2025. Market-based restricted stock units granted pursuant to the 2022 Management Agreement in fiscal year 2025 are eligible to vest on June 1, 2027, those granted in fiscal year 2024 are eligible to vest on June 1, 2026, and those granted in fiscal year 2023 are eligible to vest on June 1, 2025. Market-based restricted stock units are eligible to vest based on the Company's Total Shareholder Return (as defined in the relevant grant agreement) relative to the Total Shareholder Return (as defined in the relevant grant agreement) of the companies that constitute the NASDAQ 100 index under the 2022 Management Agreement (as defined in the relevant grant agreement) as of the grant date measured over a three-year period, as applicable. To earn the target number of market-based restricted stock units (which represents 50% of the number of the market-based restricted stock units set forth in the table above), the Company must perform at the 50th percentile, with the maximum number of market-based restricted stock units earned if the Company performs at the 75th percentile. Performance-based restricted stock units granted pursuant to the 2022 Management Agreement in fiscal year 2025 are eligible to vest on June 1, 2027, those granted in fiscal year 2024 are eligible to vest on June 1, 2026, and those granted in fiscal year 2023 are eligible to vest on June 1, 2025. The performance-based restricted stock units are tied to RCS (as defined in the relevant grant agreement) and are eligible to vest based on the Company's achievement of certain performance metrics (as defined in the relevant grant agreement) of RCS measured over a three-year period. The target number of performance-based restricted stock units that may be earned pursuant to these grants is equal to 50% of the grant amounts set forth in the above table (the numbers in the table represent the maximum number of performance-based restricted stock units that may be earned). At the end of each reporting period, we assess the probability of each performance metric and upon determination that certain thresholds are probable, we record expense for the unvested portion of the shares of performance-based restricted stock units. The unvested portion of time-based, market-based and performance-based restricted stock units held by ZMC as of March 31, 2025 and 2024 were 1.4 and 1.3, respectively. During the fiscal year ended March 31, 2025, 0.5 restricted stock units previously granted to ZMC vested, and 0.1 restricted stock units were forfeited by ZMC. Fair Value of Stock-Based Awards Time-Based Awards The estimated value, based on the closing price of our stock on the grant date, of time-based restricted stock units granted to employees during the fiscal years ended March 31, 2025, 2024, and 2023 was $162.17, $138.25, and $118.17 per share, respectively. For the fiscal years ended March 31, 2025, 2024, and 2023, the estimated value, based on the closing price of our stock on the grant date, of time-based restricted stock awards granted to ZMC was $163.64, $137.59, and $128.90 per share, respectively. The following table summarizes the activity in non-vested restricted stock units to employees and ZMC under our stock-based compensation plans with time-based restricted stock awards presented at 100% of target number of shares that may potentially vest:
|  | Shares (in millions) |  | Weighted Average Fair Value on Grant Date
Non-vested restricted stock units at March 31, 2024 |  | 4.4 |  |  | $ | 129.33 |
Granted |  | 1.8 |  |  | 162.26 |
Vested |  | (2.0) |  |  | 132.92 |
Forfeited |  | (0.5) |  |  | 126.61 |
Non-vested restricted stock units at March 31, 2025 |  | 3.7 |  |  | $ | 144.18 |
Market-Based Awards The following table summarizes the weighted-average assumptions used in the Monte Carlo Simulation to estimate the fair value of market-based awards:
|  | Fiscal Year Ended March 31,
|  | 2025 |  | 2024 |  | 2023
|  | Employee Market-Based |  | Non-Employee Market-Based |  | Employee Market-Based |  | Non-Employee Market-Based |  | Employee Market-Based |  | Non-Employee Market-Based
Risk-free interest rate |  | 4.7% |  | 4.6% |  | 4.0 | % |  | 4.0 | % |  | 2.6% - 2.8% |  | 2.4% - 2.8%
Expected stock price volatility |  | 34.1% |  | 34.1% |  | 36.6 | % |  | 36.6 | % |  | 35.9% - 37.6% |  | 34.2% - 37.6%
Expected service period (years) |  | 2.8 |  | 2.8 |  | 2.8 |  | 2.8 |  | 1.8 - 2.8 |  | 1.8 - 2.8
Dividends |  | None |  | None |  | None |  | None |  | None |  | None
The estimated value of market-based restricted stock awards granted to employees during the fiscal years ended March 31, 2025, 2024, and 2023 was $241.52, $195.85, and $179.93 per share, respectively. For the fiscal years ended March 31, 2025, 2024, and 2023, the estimated value of the market-based restricted stock awards granted to ZMC was $232.00, $193.41, and $175.12 per share, respectively. The following table summarizes the activity in non-vested restricted stock units to employees and ZMC under our stock-based compensation plans with market-based restricted stock awards presented at 100% of target number of shares that may potentially vest:
|  | Shares (in millions) |  | Weighted Average Fair Value on Grant Date
Non-vested restricted stock units at March 31, 2024 |  | 0.9 |  |  | $ | 172.66 |
Granted |  | 0.5 |  |  | 237.79 |
Vested |  | (0.2) |  |  | 197.59 |
Forfeited |  | — |  |  | 197.29 |
Non-vested restricted stock units at March 31, 2025 |  | 1.2 |  |  | $ | 194.30 |
Performance-Based Awards The estimated value of performance-based restricted stock awards granted to employees during the fiscal year ended March 31, 2025, 2024, and 2023 was $201.82, $139.21, and $125.03, respectively. For the fiscal years ended March 31, 2025, 2024, and 2023, the estimated value of the performance-based restricted stock awards granted to ZMC was $150.40, $148.42, and $125.90 per share, respectively. The following table summarizes the activity in non-vested restricted stock units to employees and ZMC under our stock-based compensation plans with performance restricted stock awards presented at 100% of target number of shares that may potentially vest:
|  | Shares (in millions) |  | Weighted Average Fair Value on Grant Date
Non-vested restricted stock units at March 31, 2024 |  | 3.9 |  |  | $ | 113.58 |
Granted |  | 0.2 |  |  | 178.52 |
Vested |  | (0.1) |  |  | 131.99 |
Forfeited |  | (0.1) |  |  | 136.95 |
Non-vested restricted stock units at March 31, 2025 |  | 3.9 |  |  | $ | 115.40 |
Fair Value of Stock Options All Converted Options generally vest over four to five years, with 20% to 25% vesting after one year and the remainder vesting monthly thereafter over 26 to 48 months, respectively. The stock options have a contract term of 10 years and the related expense is determined using the Black-Scholes option pricing model on the date of grant. The following table shows stock option activity for the fiscal year ended March 31, 2025:
|  | Shares (in millions) |  | Weighted Average Fair Value on Grant Date | Aggregate Intrinsic Value of Stock Options Outstanding |  | Weighted Average Contractual Term (In Years)
Balance as of March 31, 2024 |  | 0.6 |  |  | $ | 50.50 |  | $ | 61.85 |  |  | 3.45
Granted |  | — |  |  | — |  |  |  |
Vested |  | (0.6) |  |  | 50.03 |  |  |  |
Forfeited |  | — |  |  | 44.33 |  |  |  |
Balance as of March 31, 2025 |  | — |  |  | $ | 33.62 |  | $ | 0.04 |  |  | 4.69
As of March 31, 2025 |  |  |  |  |  |  |
Exercisable options |  | — |  |  | $ | 33.62 |  | $ | 0.04 |  |  | 4.69
Vested and expected to vest |  | — |  |  | $ | — |  | $ | — |  |  | 0
The aggregate intrinsic value of stock options exercised during the fiscal year ended March 31, 2025 was $93.3. For the fiscal year ended March 31, 2025, the amount of cash received from exercise of stock options was $31.3. The total fair value of options that vested during the fiscal year ended March 31, 2025 was $31.3. The total fair value of options that were exercised during the fiscal year ended March 31, 2025 was $124.6. Employee Stock Purchase Plans In September 2017, our stockholders approved our 2017 Global Employee Stock Purchase Plan as amended and restated ("ESPP"). The maximum aggregate number of shares of common stock that may be issued under the plan is 9.0, and as of March 31, 2025, there were approximately 7.5 shares available for issuance. The ESPP is administered by the Compensation Committee of the Board and allows for eligible employees an option to purchase shares of our common stock, which the employee may or may not exercise during an offering period. Eligible employees may authorize payroll deductions of between 1% and 15% of their compensation to purchase shares of common stock at 85% of the lower of the market price of our common stock on the date of commencement of the applicable offering period or on the last day of each six-month purchase period. The fair value is determined using the Black-Scholes valuation model. Key assumptions of the Black-Scholes valuation model are the risk-free interest rate, expected volatility, expected term, and expected dividends. The risk-free interest rate is based on U.S. Treasury yields in effect at the time of grant for the expected term of the option. Expected volatility is based on historical stock price volatility. Expected term is determined based on historical exercise behavior, post-vesting termination patterns, options outstanding and future expected exercise behavior. The following table summarizes the assumptions used in the Black-Scholes valuation model to value our purchase rights:
|  | Fiscal Year Ended March 31,
|  | 2025 |  | 2024
Risk-free interest rate |  | 4.42-5.43% |  | 5.14-5.51%
Expected stock price volatility |  | 23.6-25.1% |  | 26.3%-39.1%
Expected service period (years) |  | 0.5 |  | 0.5
Dividends |  | None |  | None
For the fiscal year ended March 31, 2025, our employees purchased 0.4 shares for $46.8 with a weighted-average fair value of $117.53. For the fiscal year ended March 31, 2024, our employees purchased 0.4 shares for $37.9 with a weighted-average fair value of $102.19.

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