Core Insights - Take-Two Interactive Software (TTWO) reported a first-quarter fiscal 2026 GAAP net loss of $0.07 per share, an improvement from a loss of $1.52 in the same quarter last year, while the Zacks Consensus Estimate was $0.27 per share [1] - GAAP net revenues increased by 12.4% year over year to $1.5 billion, surpassing the Zacks Consensus Estimate of $1.3 billion [1] Revenue Breakdown - Revenues from the United States rose by 9.7% year over year to $900.4 million, accounting for 59.9% of total GAAP net revenues, while international revenues increased by 16.6% to $603.4 million [2] - Game revenues, which represent 91.9% of total revenues, grew by 13.6% year over year to $1.38 billion, whereas advertising revenues fell by 0.16% to $121.3 million [2] Bookings Performance - Total bookings improved by 16.8% year over year to $1.42 billion, with U.S. bookings increasing by 14.8% to $836.6 million, representing 58.8% of total bookings [3] - International bookings rose by 19.8% year over year to $586.5 million [3] Consumer Spending and Distribution - Recurrent consumer spending increased by 14% for the period, making up 83% of net bookings [4] - Digital online revenues grew by 14% year over year to $1.48 billion, constituting 98.2% of GAAP net revenues, while physical retail revenues declined by 36.3% to $27.2 million [5] Platform Revenue Insights - Revenues from mobile, console, and PC accounted for 53.3%, 36.6%, and 10.1% of GAAP net revenues, respectively [6] - Mobile revenues increased by 11% to $801.7 million, console revenues rose by 8.2% to $550.6 million, and PC revenues surged by 41.9% to $151.5 million [6] Gaming Highlights - NBA 2K25 exceeded expectations, selling over 11.5 million units worldwide, with daily active users increasing by 30% and recurrent consumer spending rising by 48% [8] - The Grand Theft Auto series maintained strong momentum, with Grand Theft Auto V selling over 215 million units globally [11] Financial Performance - GAAP gross profit surged by 22.6% year over year to $945 million, with gross margin expanding to 62.8% [15] - Operating income was reported at $21.6 million, a significant improvement from an operating loss of $184.9 million in the previous year [16] Balance Sheet and Guidance - As of June 30, 2025, the company had $2.03 billion in cash and cash equivalents, up from $1.46 billion in March 2025, with total debt at $3.07 billion [17] - For Q2 fiscal 2026, TTWO expects GAAP net revenues between $1.65 billion and $1.70 billion, with net bookings projected in the range of $1.70 billion to $1.75 billion [18]

Financial Data and Key Metrics Changes - The company reported net bookings of $1,420,000,000 for Q1 2026, significantly exceeding guidance of $1,250,000,000 to $1,300,000,000 [21] - GAAP net revenue increased by 12% to $1,500,000,000, while cost of revenue declined by 1% to $559,000,000 [21] - Recurrent consumer spending grew by 17%, accounting for 83% of net bookings, surpassing the guidance of 7% growth [21] Business Line Data and Key Metrics Changes - The mobile business outperformed expectations, with titles like TuneBlast growing by 22% year over year and Match Factory achieving a 33% increase [7][8] - NBA 2K25 sold over 11,500,000 units, with engagement metrics such as daily active users increasing by 30% [11] - Grand Theft Auto V sold over 215 million units, with new player accounts for GTA Online growing over 50% year over year [11] Market Data and Key Metrics Changes - The company expects net bookings for fiscal 2026 to range from $6,050,000,000 to $6,150,000, reflecting an 8% growth at midpoint [22] - The breakdown of net bookings is projected to be approximately 45% from Zynga, 39% from 2K, and 16% from Rockstar Games [23] Company Strategy and Development Direction - The company is focused on delivering high-quality entertainment experiences and has a robust pipeline of upcoming releases, including The Old Country, NBA 2K26, and Borderlands 4 [13][19] - The strategy emphasizes organic growth while selectively pursuing inorganic opportunities that are strategically sound [42] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the year ahead, raising the net bookings outlook due to strong first-quarter performance [6] - The company anticipates a modest economic growth environment, with a focus on quality to attract consumers even in challenging macroeconomic conditions [56] Other Important Information - The company announced a multi-year global partnership expansion with the NBA, NBA PA, and WNBA PA, enhancing its sports titles' engagement [12] - The company is committed to supporting Nintendo with additional titles launching throughout the year [12] Q&A Session Summary Question: Insights on NBA 2K's performance - Management highlighted that NBA 2K has sold over 11,500,000 units, with significant engagement growth driven by improved in-game telemetry and consumer preferences [29][30] Question: Advertising revenue trends - Management noted a shift in advertising strategy from hyper-casual to hybrid casual, leading to flat year-over-year advertising revenue [35][36] Question: Mobile growth expectations - Management acknowledged strong Q1 mobile performance but anticipated moderation due to the maturity of some titles [38] Question: Capital allocation strategy - Management outlined three capital allocation priorities: supporting organic growth, selectively pursuing inorganic opportunities, and returning capital to shareholders [41][42] Question: Pricing strategy for Borderlands 4 - Management explained their pricing strategy focuses on delivering value that exceeds consumer expectations, with variable pricing being a long-standing industry practice [46][48] Question: Economic outlook and its impact - Management expressed a cautious but optimistic view on economic growth, emphasizing that quality will drive consumer spending even in tougher times [50][56] Question: Addressable player base versus quality - Management stated that they aim to be present on all platforms where consumers are, without sacrificing quality for a broader player base [60][61]