TTWO Q3 Earnings Miss Estimates, Shares Rise on U.S. Revenue Growth

Core Viewpoint - Take-Two Interactive Software (TTWO) reported a wider net loss in Q3 fiscal 2025 compared to the previous year, with revenues falling short of expectations, indicating challenges in both game and advertising segments [1][2][4]. Financial Performance - The net loss for Q3 fiscal 2025 was 72 cents per share, compared to a loss of 71 cents per share in the same quarter last year, while the consensus estimate was 57 cents per share [1] - GAAP net revenues decreased by 0.5% year over year to $1.36 billion, below the consensus estimate of$1.39 billion [1] - Game revenues, which constitute 91.4% of total revenues, rose by 2.9% year over year to $1.24 billion, while advertising revenues fell by 26.2$116.7 million [2] Geographic Performance - Revenues from the United States increased by 0.9% year over year to $825.7 million, making up 60.7$534.1 million [2] Bookings and Consumer Spending - Total bookings improved by 2.7% year over year to $1.37 billion, with U.S. bookings rising by 7$841.8 million [3] - Recurrent consumer spending rose by 9% for the period, accounting for 79% of net bookings [5] Distribution Channels - Digital online revenues grew by 1% year over year to $1.31 billion, representing 96.4$49.1 million [6] Platform Performance - Revenues from mobile, console, and PC accounted for 53.8%, 37.4%, and 8.8% of GAAP net revenues, respectively, with mobile revenues increasing by 3.5% to $731.6 million [7] Operating Metrics - GAAP gross profit surged by 12.1$759.9 million, with gross margin expanding to 55.9% from 49.6% in the previous year [12] - Operating expenses increased by 10.5% year over year to $892 million, leading to an operating loss of$132.1 million [13] Balance Sheet - As of December 31, 2024, Take-Two had $1.21 billion in cash and short-term investments, up from$879.6 million as of September 30, 2024, with total debt at $3.66 billion [14] Future Guidance - For Q4 fiscal 2025, the company expects GAAP net revenues between$1.52 billion and $1.62 billion, with a projected loss per share between 13 cents and 20 cents [15][16] - For fiscal 2025, GAAP net revenues are expected to be between$5.57 billion and $5.67 billion, with net bookings projected to grow by 5% compared to fiscal 2024 [18]