Core Insights - Take-Two Interactive Software (TTWO) reported a narrower GAAP net loss of 50 cents per share for Q3 fiscal 2026, compared to a loss of 71 cents in the same quarter last year, while revenues increased by 24.9% year over year to $1.7 billion, surpassing the Zacks Consensus Estimate of $1.58 billion [1][10] Revenue Breakdown - Revenues from the United States rose by 22.6% year over year to $1.01 billion, making up 59.6% of total GAAP net revenues, while international revenues increased by 28.6% to $686.8 million [2] - Game revenues, which constitute 92.4% of total revenues, grew by 26.3% year over year to $1.57 billion, while advertising revenues increased by 10.3% to $128.7 million [2] Net Bookings - Net Bookings improved by 27.9% year over year to $1.76 billion, with U.S. bookings rising by 24.4% to $1.05 billion, accounting for 59.6% of total Net Bookings, and international bookings increasing by 33.6% to $710.1 million [3] Consumer Spending - Recurrent consumer spending rose by 23% during the period, representing 76% of Net Bookings [4] Distribution Channels - Digital online revenues grew by 26.2% year over year to $1.65 billion, accounting for 97.4% of GAAP net revenues, while physical retail revenues decreased by 9.4% to $44.5 million [5] - Digital online bookings increased by 29.3% year over year to $1.71 billion, also making up 97.4% of total bookings [5] Platform Performance - Revenues from mobile, console, and PC/other accounted for 51%, 38.4%, and 10.7% of GAAP net revenues, respectively, with mobile revenues increasing by 18.3% to $865.8 million, console revenues growing by 28.4% to $652.1 million, and PC/other revenues jumping by 50.5% to $181.1 million [6] Future Releases - Take-Two has a strong multi-year content pipeline, with confirmed titles including Sid Meier's Civilization VII and PGA TOUR 2K25, along with major franchises and new IPs such as WWE 2K26 and Grand Theft Auto VI [9] Financial Guidance - For Q4 fiscal 2026, Take-Two expects GAAP net revenues between $1.57 billion and $1.62 billion, with a projected loss per share between 70 cents and 54 cents [15] - For the full fiscal 2026, the company raised its revenue guidance to between $6.55 billion and $6.60 billion, and net bookings to between $6.65 billion and $6.70 billion [16]

Key Takeaways Take-Two is set to report fiscal Q3 results on Feb. 3, guiding GAAP net revenues of $1.57B-$1.62B.TTWO faces pressure after Borderlands 4's Nintendo Switch 2 launch was delayed indefinitely in September.NBA 2K26 and GTA Online were expected to drive holiday engagement in a seasonally strong quarter for gaming.Take-Two Interactive Software (TTWO) is scheduled to release third-quarter fiscal 2026 results on Feb. 3.For the third quarter of fiscal 2026, Take-Two expects GAAP net revenues between $ ...

Core Insights - Take-Two Interactive Software (TTWO) reported a narrower GAAP net loss of 73 cents per share for Q2 fiscal 2026, compared to a loss of $2.08 in the same quarter last year, while revenues increased by 31.1% year over year to $1.77 billion, meeting the Zacks Consensus Estimate [1][10] Revenue Breakdown - Revenues from the United States rose by 27.2% year over year to $1.04 billion, making up 58% of total GAAP net revenues, while international revenues increased by 37.0% to $737.7 million [2] - Game revenues, which constitute 92.5% of total revenues, grew by 33.0% year over year to $1.64 billion, and advertising revenues increased by 11.5% to $132.9 million [2] Net Bookings - Net Bookings improved by 32.9% year over year to $1.96 billion, with U.S. bookings increasing by 30.0% to $1.19 billion, accounting for 60.6% of total Net Bookings [3] - Recurrent consumer spending rose by 20% for the period, representing 73% of Net Bookings [4] Distribution Channels - Digital online revenues grew by 30.2% year over year to $1.69 billion, accounting for 95.4% of GAAP net revenues, while physical retail revenues increased by 52.0% to $80.7 million [5] - Digital online bookings improved by 32.0% year over year to $1.87 billion, also representing 95.4% of total bookings [5] Platform Performance - Revenues from mobile, console, and PC/other accounted for 46.3%, 40.6%, and 13.1% of GAAP net revenues, respectively, with mobile revenues increasing by 11.0% to $821.6 million, console revenues jumping by 46.6% to $720.0 million, and PC/other revenues rising by 90.6% to $232.2 million [6] Gaming Metrics - Major contributors to Net Bookings included NBA 2K26, Borderlands 4, and Grand Theft Auto titles, with NBA 2K26 performing strongly since its release on September 5, 2025 [8][9] Financial Performance - GAAP gross profit rose by 34.7% year over year to $980.5 million, with gross margin expanding to 55.3% from 53.8% in the previous year [12] - Operating loss improved to $98 million from $297.2 million in the year-ago quarter [13] Balance Sheet - As of September 30, 2025, Take-Two had $1.87 billion in cash and cash equivalents, down from $2.03 billion as of June 30, 2025, with total debt at $3.07 billion [14] Guidance - For Q3 fiscal 2026, TTWO expects GAAP net revenues between $1.57 billion and $1.62 billion, with a projected loss per share between 49 cents and 35 cents [16] - For fiscal 2026, the revenue outlook has been raised to between $6.38 billion and $6.48 billion, with net bookings expected in the range of $6.4 billion to $6.5 billion [17] Upcoming Releases - Grand Theft Auto VI is now scheduled for release on November 19, 2026, with expectations of record net bookings in fiscal 2027 [19]

Financial Data and Key Metrics Changes - The company reported net bookings of $1.96 billion for the second quarter, significantly exceeding expectations and marking the best second quarter in the company's history [7][18] - GAAP net revenue increased by 31% to $1.77 billion, while the cost of revenue rose by 27% to $793 million [19] - Operating expenses increased by 5% to $1.1 billion, with management basis operating expenses rising by 13% year over year [19][23] - Recurrent consumer spending rose by 20%, accounting for 73% of net bookings, with expectations for recurrent consumer spending growth now projected at approximately 11% for the fiscal year [19][21] Business Line Data and Key Metrics Changes - The mobile business outperformed expectations, with Toon Blast growing 26% year over year and Match Factory achieving a 20% increase [8][9] - NBA 2K26 sold over 5 million units, representing a double-digit increase over NBA 2K25, with average selling prices reaching an all-time high [11] - The Grand Theft Auto Online community remains highly engaged, with GTA Plus membership growing over 20% year over year [14] Market Data and Key Metrics Changes - The company expects net bookings for fiscal 2026 to range from $6.4 billion to $6.5 billion, reflecting a 14% growth over fiscal 2025 [20] - The breakdown of net bookings is projected to be approximately 46% from Zynga, 39% from 2K, and 15% from Rockstar Games [22] Company Strategy and Development Direction - The company aims to expand core franchises and release groundbreaking new titles, with a strong pipeline including Grand Theft Auto VI and other major titles [17][25] - The focus on mobile direct-to-consumer business is expected to enhance net bookings and margins through new payment mechanisms [10][21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing strong performance and a commitment to delivering high-quality entertainment experiences [15][25] - The company is confident in its ability to sustain momentum and achieve record levels of net bookings in fiscal 2027 [15][20] Other Important Information - The release date for Grand Theft Auto VI has been pushed to November 19, 2026, to ensure a high level of polish [8] - The company has seen a notable increase in ad revenue across its mobile business, particularly from Rollic [68] Q&A Session Summary Question: Insights on RCS performance and GTA content updates - Management noted that there are no expected changes in support for GTA Online despite the release date shift for GTA VI, emphasizing ongoing strong performance [30] Question: Impact of being a standalone publisher - Management acknowledged the competitive position but emphasized a focus on creativity and performance as key to future success [36] Question: Mobile margins and alternate payment mechanisms - Management confirmed that the rollout of direct-to-consumer initiatives has improved margins and net bookings, with expectations for continued growth [41] Question: NBA audience expansion - Management indicated that returning players and international engagement are key to driving recurrent consumer spending in NBA titles [49] Question: Importance of launch period for Borderlands - Management acknowledged a softer launch for Borderlands 4 but expressed confidence in long-term unit sales and economic results [51] Question: Confidence in sustaining mobile outperformance - Management attributed Zynga's success to strong leadership and execution, with a focus on strategic acquisitions and disciplined growth [54] Question: AI implementation in game development - Management discussed the positive role of AI in enhancing efficiency but emphasized that creativity remains the core of game development [60] Question: Update on BioShock franchise - Management expressed excitement about the new leadership for the BioShock franchise and confidence in delivering a product that exceeds consumer expectations [65]

TAKE-TWO INTERACTIVE SOFTWARE, INC. (NASDAQ: TTWO) SECOND QUARTER FISCAL 2026 RESULTS & GUIDANCE SUMMARY CAUTIONARY NOTE: FORWARD LOOKING STATEMENTS The statements contained herein, which are not historical facts, including statements relating to Take-Two Interactive Software, Inc.'s ("Take-Two," the "Company," "we," "us," or similar pronouns) outlook, are considered forward-looking statements under federal securities laws and may be identified by words such as "anticipates," "believes," "estimates," "expec ...

Core Insights - Take-Two Interactive Software (TTWO) is set to release its first-quarter fiscal 2026 results on August 7, with expected GAAP net revenues between $1.35 billion and $1.40 billion, and a GAAP net loss per share anticipated between 78 cents and 65 cents [1][9] - The Zacks Consensus Estimate for TTWO's fiscal first-quarter revenues is $1.28 billion, reflecting a year-over-year growth of 5.42% [1][2] Revenue and Earnings Expectations - The consensus estimate for earnings is 26 cents per share, unchanged over the past 30 days, showing an improvement from the previous year's earnings of 5 cents [2] - TTWO has consistently beaten the Zacks Consensus Estimate for earnings in the last four quarters, with an average surprise of 121.1% [2] Key Factors Influencing Performance - Take-Two's gaming portfolio and recurrent consumer spending model are expected to benefit from sustained franchise engagement, particularly in core console franchises and live service titles [3] - NBA 2K is projected to maintain engagement due to strong fiscal 2025 performance, with monetization from virtual currency and MyTEAM contributing significantly [4] - Zynga's mobile portfolio is expected to show mixed performance, with newer titles like Match Factory and Color Block Jam contributing to bookings, while mature games like Words With Friends may see a decline [4] Challenges and Constraints - Grand Theft Auto Online bookings are expected to decline modestly year over year due to platform maturity and late-cycle usage trends, although engagement is likely supported through GTA+ and content updates [5] - Seasonal softness in the spring quarter and high mobile acquisition costs are anticipated to limit margin improvement, with operating expenses projected to rise by 3% year over year [6][9] Earnings Model Insights - According to the Zacks model, TTWO currently has an Earnings ESP of 0.00% and a Zacks Rank of 3 (Hold), indicating a neutral outlook for an earnings beat [7]

Core Viewpoint - Take-Two Interactive Software (TTWO) has seen a 32% increase year to date, but this rally is viewed with caution due to fundamental weaknesses and concerning financial metrics indicating the stock may be overvalued and due for a correction [1][10]. Financial Performance - Take-Two reported a GAAP net loss of $4.48 billion for fiscal 2025, worsening from a $3.74 billion loss the previous year, primarily due to goodwill impairment charges of $3.55 billion [2]. - The company's operational cash flow turned negative at $45.2 million for fiscal 2025, highlighting fundamental weaknesses despite the stock's recent surge [3]. - Adjusted EBITDA for the full year was only $199.1 million, indicating a disconnect between financial performance and stock price appreciation [4]. Revenue and Growth Expectations - The Zacks Consensus Estimate for fiscal 2026 revenues is $5.99 billion, reflecting a 6.1% year-over-year growth, with earnings expected to rise 42.93% to $2.93 per share [5]. - The company's fiscal 2026 guidance for net bookings is $5.9-$6 billion, representing only 5% growth, which does not justify the recent stock surge [7]. Dependence on Key Releases - Take-Two's business model is heavily reliant on a few blockbuster releases, with the anticipated Grand Theft Auto VI release delayed to May 26, 2026, impacting near-term revenue expectations [6][7]. - The concentration risk is evident as a small number of franchises, such as NBA 2K and Grand Theft Auto, generate the majority of income, limiting diversification [8]. Growth Trajectory and Margin Pressures - The company faces a declining growth trajectory, with guidance indicating flat recurrent consumer spending in fiscal 2026, raising concerns for its business model [9]. - Operating expenses are projected to increase by 3% year-over-year, primarily due to higher marketing costs, which, combined with modest revenue growth, suggests margin compression [12]. - Capital expenditures are planned at approximately $140 million for fiscal 2026, which may not yield immediate returns, adding pressure to near-term financial performance [13]. Competitive Landscape - Take-Two trades at a premium P/E ratio of around 55.11, significantly above the industry average of 34.38, indicating a stretched valuation [14]. - The gaming industry is increasingly competitive, with major players like Microsoft and Sony capturing market share, while Take-Two struggles to match operational metrics of competitors like Electronic Arts and Activision Blizzard [22].

Key Metrics - Take-Two Interactive reported Q4 2024 revenue of $1.40 billion, which is a 13% increase compared to Q4 2025 revenue of $1.58 billion, beating expectations [1] - Earnings per share for Q4 2024 were ($17.02), which missed expectations as it is projected to be ($21.08) for Q4 2025 [1] - Net bookings increased by 17%, from $1.35 billion in Q4 2024 to $1.58 billion in Q4 2025 [1] - EBITDA improved from a loss of $19.6 million in Q4 2024 to a profit of $161 million in Q4 2025 [1] Fiscal Performance - Take-Two finished fiscal 2025 with strong double-digit revenue and net bookings growth, with approximately 75% of net bookings coming from recurrent consumer spending [2] - Major contributors to net bookings included Grand Theft Auto V and Grand Theft Auto Online [2] Earnings Impact - The company faced significant earnings losses due to impairment charges from previous acquisitions, writing off $3.55 billion related to goodwill and $176 million in acquisition-related intangible assets [3] - This led to earnings per share being deeply negative [3] Future Outlook - The delay of Grand Theft Auto VI to May 2026 has pushed expectations for fiscal 2026 revenue to between $5.95 billion and $6.05 billion, with net bookings projected between $5.9 billion and $6.0 billion [4] - For comparison, net bookings in fiscal 2025 were $5.65 billion [4] - The company anticipates a net loss between $439 million and $499 million for fiscal 2026 [4] Market Reaction - Following the fourth-quarter report, Take-Two's shares fell approximately 2.5% in after-hours trading, reflecting a weak outlook for fiscal 2026 [5] - The earnings miss was attributed to charges that do not necessarily reflect the company's operating performance [5] Upcoming Releases - Fiscal 2027 is expected to be Take-Two's biggest year, driven by the new Grand Theft Auto franchise installment [6] - Significant releases planned for fiscal 2026 include Borderlands 4 and multiple new sports games, although none are expected to match the sales of GTA VI [6] - The company is expected to maintain a steady performance in fiscal 2026 as it prepares for the release of the first new GTA game in over a decade [6]

Core Insights - Take-Two Interactive reported fourth-quarter net bookings of $1.58 billion, a 17% increase year-over-year, surpassing the consensus estimate of $1.55 billion [1] - Adjusted earnings per share for the quarter were $1.08, slightly below the consensus estimate of $1.10 [1] Financial Performance - Net bookings from recurrent consumer spending rose 14% year-over-year, accounting for 77% of total net bookings in the quarter [2] - Total net bookings for the fiscal year reached $5.65 billion, a 6% increase year-over-year, with recurrent consumer spending up 7% for the full fiscal year, making up 70% of total net bookings [2] Management Commentary - CEO Strauss Zelnick highlighted the outstanding results for the 2025 Fiscal Year, noting meaningful contributions from each label [3] Future Guidance - Take-Two projects first-quarter net bookings to be between $1.25 billion and $1.30 billion [4] - Full fiscal-year net bookings are expected to range from $5.90 billion to $6.00 billion [4] - The company anticipates record levels of net bookings with the upcoming release of "Grand Theft Auto VI" in Fiscal 2027, which is expected to enhance profitability [5] Upcoming Releases - The game lineup for 2025 includes "Mafia: The Old Country," "Borderlands 4," and "WWE 2K Mobile," with future titles such as "NBA 2K26," "WWE 2K26," and "Grand Theft Auto VI," which has a new release date of May 26, 2026 [5] Stock Performance - Take-Two's stock decreased by 1.7% to $228.33 in after-hours trading, within a 52-week trading range of $135.24 to $238.00 [6]