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]

Core Insights - Take-Two Interactive (TTWO) is experiencing growth due to a strong product portfolio and innovative pipeline, with net bookings increasing 17% year-over-year to $1.58 billion in Q4 fiscal 2025, driven by a 14% rise in recurrent consumer spending, which constituted 77% of total net bookings [1][9] Group 1: Financial Performance - In fiscal 2026, net bookings are projected to be between $5.9 billion and $6 billion, reflecting confidence in the company's growth trajectory [2][9] - The Zacks Consensus Estimate for TTWO's 2026 revenues is $5.99 billion, indicating a 6.10% year-over-year growth, with earnings estimated at $3.27 per share, representing a 59.51% increase from the previous year [14] Group 2: Product Pipeline - Upcoming releases include major titles such as Mafia: The Old Country, Borderlands 4, NBA 2K26, WWE 2K26, CSR 3, Civilization VII for Switch, and the highly anticipated Grand Theft Auto VI, set for May 2026 [3] Group 3: Competitive Landscape - Take-Two faces significant competition from Electronic Arts (EA) and Microsoft, with EA reporting a net bookings increase of 8% year-over-year to $1.8 billion in its fiscal Q4 2025, and Microsoft leveraging its broader portfolio to maintain a competitive edge [4][5][6] Group 4: Stock Performance and Valuation - TTWO shares have appreciated 25.5% year-to-date, outperforming the Zacks Gaming industry's return of 1.8% [7] - The company appears overvalued with a forward price-to-sales ratio of 6.09, higher than the industry average of 3.22, and carries a Value Score of F [11]

Core Insights - TakeTwo Interactive Software (TTWO) reported a GAAP net loss of $21.08 per share for the fourth quarter of fiscal 2025, which is wider than the loss of $17.02 in the same quarter last year. The Zacks Consensus Estimate for earnings was $1.08 per share [1] - GAAP net revenues increased by 13.1% year over year to $1.58 billion, surpassing the Zacks Consensus Estimate of $1.55 billion [1] Revenue Breakdown - Revenues from the United States rose by 9.8% year over year to $946.1 million, accounting for 59.8% of total GAAP net revenues. International revenues increased by 18.3% year over year to $636.4 million [2] - Game revenues, which represent 93.1% of total revenues, grew by 16.9% year over year to $1.47 billion, while advertising revenues, making up 6.9% of total revenues, fell by 21.7% year over year to $108.7 million [2] Bookings Performance - Total bookings improved by 17.3% year over year to $1.58 billion, with U.S. bookings increasing by 17.4% to $961.1 million, representing 60.8% of total bookings. International bookings rose by 17.1% to $620.4 million [3] - Recurrent consumer spending increased by 14% for the period, accounting for 77% of net bookings [4] Distribution Channels - Digital online revenues grew by 14.3% year over year to $1.53 billion, making up 96.4% of GAAP net revenues. Conversely, physical retail and other revenues declined by 11.4% to $56.9 million, representing 3.6% of total revenues [4] Platform Revenue Insights - Revenues from mobile, console, and PC/other accounted for 47.2%, 37.4%, and 15.4% of GAAP net revenues, respectively. Mobile revenues increased by 4.6% to $747.4 million, console revenues rose by 4% to $591.2 million, and PC/other revenues surged by 110.7% to $243.6 million [6] Gaming Performance Highlights - NBA 2K25 achieved near-record performance, selling nearly 10 million units, a 7% increase compared to NBA 2K24 [8] - The Grand Theft Auto series exceeded expectations, with GTA V selling over 215 million units, and Red Dead Redemption 2 showing a 23% year-over-year growth in net bookings [10] Operating Details - GAAP gross profit surged by 71.2% year over year to $803.3 million, with gross margin expanding to 50.8% from 33.5% in the previous year [13] - Operating expenses rose by 43.9% year over year to $4.58 billion, with a notable operating loss of $3.78 billion compared to a loss of $2.71 billion in the prior year [14] Financial Position - As of March 31, 2025, TakeTwo had $1.47 billion in cash and short-term investments, up from $1.21 billion as of December 31, 2024. The company had a total debt of $2.51 billion [15] Future Guidance - For the first quarter of fiscal 2026, TakeTwo expects GAAP net revenues between $1.35 billion and $1.40 billion, with anticipated operating expenses between $908 million and $918 million. The expected loss per share is projected to be between 78 cents and 65 cents [16] - For fiscal 2026, the company forecasts GAAP net revenues between $5.95 billion and $6.05 billion, with net bookings expected in the range of $5.9 billion to $6 billion [18]