The company saying Grand Theft Auto 6 remains on track to be released in May 2026. The stock rebounding today from Friday's losses, now up roughly 20% this year. Joining us now in an exclusive interview is Take 2 Interactive Chairman and CEO Strauss Zelnik.Welcome. Great to have you. Great to be here.So I mean things are looking good ahead of this release it seems given your report. Things are looking amazing. We had a great first quarter.It's great to be able to guide up for the year and what's really exci ...

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]

Core Viewpoint - Take-Two Interactive is poised for growth with the upcoming release of Grand Theft Auto VI, which is expected to significantly boost revenue and stock performance [1][2]. Financial Performance - Take-Two reported solid financial results for fiscal 2025 and anticipates record revenue for fiscal 2026 [1]. - The stock has increased approximately 21% year-to-date, outperforming the Nasdaq Composite's 10% return [2]. Upcoming Releases - The highly anticipated Grand Theft Auto VI is set to release on May 26, 2026, and is projected to drive substantial revenue growth in fiscal year 2027 [2]. - The last installment of the series sold 215 million copies over 12 years, indicating a strong established player base [4]. Business Strategy - Take-Two is diversifying its portfolio beyond reliance on GTA by increasing research and development spending and headcount for future releases [5]. - A significant portion of revenue comes from recurrent consumer spending, which accounted for 77% of bookings in the most recent quarter [6]. Profitability and Margins - Despite recent pressures on margins and free cash flow due to R&D and acquisitions, recurrent consumer spending has improved profitability over the last decade [7]. - The release of GTA VI and other titles is expected to enhance margins and free cash flow in the long term [7]. Market Position - Take-Two's stock is considered fairly valued, trading at a forward enterprise value-to-revenue multiple of 7.15x, which is competitive compared to peers [9]. - Analysts project earnings growth at an annualized rate of 39% through 2029, with free cash flow expected to reach $2.9 billion [12]. Future Outlook - The integration of artificial intelligence in game development is anticipated to improve efficiency and profitability for Take-Two over the next decade [11]. - The stock is positioned to potentially outperform the market due to its growth catalysts and reasonable pricing [8][12].

Core Insights - Sea Limited (SE) and Take-Two Interactive (TTWO) are benefiting from increased consumer spending on mobile games, with mobile game revenues reaching approximately $6.85 billion in May, reflecting a 5.4% month-over-month increase [2][3] - Video game revenues are projected to grow at a CAGR of 7.01% from 2025 to 2030, reaching $733.22 billion, with mobile game revenues expected to hit $163.98 billion by 2030, indicating significant growth opportunities for both companies [3] Sea Limited (SE) Analysis - SE's Garena Digital Entertainment revenues increased 8.2% year-over-year to $495.6 million in Q1 2025, with bookings soaring 51.4% year-over-year to $775.4 million, driven by the success of Free Fire [4] - Garena Free Fire was the second most downloaded mobile game globally in May 2025, with a growing user base in markets like India, Brazil, and Indonesia [4][5] - Quarterly active users rose 11.3% year-over-year to 661.8 million, while quarterly paying users increased 32.2% year-over-year to 64.6 million, resulting in a paying user ratio of 9.8% [5] - SE's gaming portfolio expansion includes the launch of Delta Force Mobile, which attracted over 10 million downloads, and the company aims for double-digit growth in user base and bookings for Garena in 2025 [6] Take-Two Interactive (TTWO) Analysis - In Q4 fiscal 2025, TTWO's NBA 2K25 exceeded forecasts with nearly 10 million units sold, a 7% increase compared to NBA 2K24 [7] - The Grand Theft Auto series continues to perform well, with GTA V selling over 215 million units, and Red Dead Redemption 2 showing a 23% year-over-year growth in net bookings [7] - However, TTWO's reliance on a few franchises poses challenges, as the anticipated Grand Theft Auto VI release has been delayed to May 26, 2026, impacting near-term revenue expectations [8] - TTWO's fiscal 2026 guidance for net bookings is $5.9-$6 billion, reflecting a modest 5% growth, with increasing cost pressures and flat recurrent consumer spending expected [9][10] Stock Performance and Valuation - Year-to-date, Sea Limited shares have surged 46.8%, outperforming Take-Two Interactive's 31.2% increase [11] - Both companies are currently considered overvalued, with Sea Limited trading at a forward Price/Sales ratio of 3.78X, lower than TTWO's 6.22X [14][17] - The Zacks Consensus Estimate for Sea Limited's 2025 earnings is $2.68 per share, indicating a 41.8% year-over-year increase, while TTWO's fiscal 2026 earnings estimate is $2.93 per share, reflecting a 42.93% year-over-year jump despite a 10.4% decline over the past 30 days [19][20] Business Model Comparison - Sea Limited benefits from a diversified business model, with growth in its e-commerce platform Shopee and fintech service Monee, while TTWO's performance is heavily reliant on its established franchises [21] - Sea Limited's strategic expansion into underserved markets like Brazil signals a pivot towards sustainable growth, contrasting with TTWO's challenges in maintaining consistent release schedules [21][22]

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]

Core Viewpoint - Take-Two Interactive Software reported mixed fiscal fourth-quarter results, leading to a decline in share price despite some positive analyst ratings and guidance for future performance [1][2]. Financial Performance - The company declared net bookings of $1.582 billion, exceeding consensus estimates of $1.550 billion and reaching the high end of its guidance [2]. - Recurrent consumer spending grew by 14% year-on-year, contributing 77% of total net bookings [7]. - NBA 2K25 sold nearly 10 million units, reflecting a 7% year-on-year increase [6]. Analyst Ratings and Guidance - Wedbush analyst Michael Pachter maintained an Outperform rating and raised the price target from $253 to $269, noting the solid performance across various segments [2]. - Raymond James analyst Andrew Marok reiterated an Outperform rating and increased the price target from $240 to $250, highlighting strong results and positive fan reception for major titles [4]. - Benchmark analyst Mike Hickey reaffirmed a Buy rating with a price target of $250, citing broad-based performance across core franchises and mobile [6]. Future Outlook - Management guided for net bookings of $5.9 billion to $6 billion and earnings of $2.45 to $2.70 per share for fiscal 2026, which was below expectations due to the delay of Grand Theft Auto VI's launch to May 26, 2026 [3]. - Fiscal 2026 is expected to have a solid release slate, with positive responses to major titles like Mafia and Borderlands 4, which should support bookings momentum [5].

Financial Data and Key Metrics Changes - The company reported fourth quarter net bookings of $1,580,000,000, which was at the top of the guidance range [8][27] - For fiscal year 2025, net bookings reached $5,650,000,000, also at the top of the guidance range [29] - GAAP net revenue increased by 13% to $1,580,000,000 in the fourth quarter and rose 5% to $5,630,000,000 for the fiscal year [29][30] - Operating expenses increased by 44% to $4,600,000,000 in the fourth quarter due to an impairment expense of $3,600,000,000 related to goodwill and acquired intangible assets [29][30] Business Line Data and Key Metrics Changes - NBA 2K25 sold nearly 10,000,000 units, a 7% increase compared to NBA 2K24, with engagement metrics showing significant growth [11][12] - WWE 2K25 received critical acclaim with a Metacritic score of 84 for Xbox Series X, and recurrent consumer spending grew by 20% during the quarter [13][14] - Zynga's performance was strong, with Match Factory exceeding expectations and Color Block Jam becoming a top 10 downloaded game in the US Apple App Store [18][19] Market Data and Key Metrics Changes - The mobile gaming segment remains challenging, but Zynga is noted for regularly creating new hits, with Match Factory and Color Block Jam being profitable [49][51] - The company expects recurrent consumer spending to be flat compared to fiscal 2025, representing 76% of net bookings for fiscal 2026 [31] Company Strategy and Development Direction - The company plans to release approximately 38 titles through fiscal 2028, with 13 titles expected in fiscal 2026 [22][25] - The release of Grand Theft Auto VI is anticipated to significantly enhance the company's financial profile and establish a new baseline for net bookings [21][56] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the upcoming pipeline and the potential for record levels of net bookings, particularly with the release of Grand Theft Auto VI [21][35] - The company is focused on delivering value to consumers and maintaining a player-first approach [21][38] Other Important Information - The company has implemented a cost reduction program and is working on improving operational efficiency [27][29] - The direct-to-consumer business has become a significant part of the company's strategy, particularly following the acquisition of Zynga [74] Q&A Session Summary Question: Pricing strategy for Mafia - Management explained that variable pricing is a long-standing strategy aimed at delivering more value to consumers [38][39] Question: Goodwill impairment related to Zynga - Management confirmed that the impairment was a partial impairment of one of the reporting units, resulting from updated long-term expectations [40] Question: Operating margins and structural changes - Management stated there is no reason to believe operating margins cannot return to previous levels, emphasizing ongoing cost reduction efforts [44] Question: Mobile segment performance - Management acknowledged the challenges in mobile gaming but highlighted Zynga's success in creating new hits [49][51] Question: Anticipated demand for Grand Theft Auto VI - Management noted the unprecedented anticipation for Grand Theft Auto VI, supported by record trailer views and ongoing engagement with existing titles [58][90]

Financial Data and Key Metrics Changes - The company reported fourth quarter net bookings of $1,580,000,000, which was at the top of the guidance range [6][26] - GAAP net revenue increased by 13% to $1,580,000,000, while GAAP net revenue for the fiscal year rose by 5% to $5,630,000,000 [28][29] - Operating expenses increased by 44% to $4,600,000,000 due to an impairment expense of $3,600,000,000 related to goodwill and acquired intangible assets [28][29] - Recurrent consumer spending grew by 14% year over year, accounting for 77% of net bookings [27] Business Line Data and Key Metrics Changes - NBA 2K25 posted near record performance with nearly 10,000,000 units sold, a 7% increase compared to NBA 2K24 [10] - WWE 2K25 achieved a Metacritic score of 84 on Xbox Series X, with recurrent consumer spending up 20% during the quarter [12] - Zynga's Match Factory and Color Block Jam both showed strong performance, with Match Factory exceeding expectations and Color Block Jam becoming profitable within four months [16][17] Market Data and Key Metrics Changes - The mobile gaming segment remains challenging, but Zynga is noted for regularly creating new hits, with Match Factory and Color Block Jam being profitable [46][47] - The company expects recurrent consumer spending to be flat compared to fiscal 2025, representing 76% of net bookings for fiscal 2026 [30] Company Strategy and Development Direction - The company plans to release 13 titles in fiscal 2026, including major franchises like Mafia and Borderlands [21][23] - The release of Grand Theft Auto VI is anticipated to significantly enhance the company's financial profile, with expectations for record levels of net bookings [20][33] - The company is focusing on delivering value to consumers through variable pricing strategies [36][91] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the upcoming pipeline and the potential for long-term growth, particularly with the release of Grand Theft Auto VI [33][34] - The company is addressing challenges in the gaming industry and is confident in its ability to deliver results [108] Other Important Information - The company has a robust release schedule with approximately 38 titles planned through fiscal 2028 [21] - The anticipated release of Grand Theft Auto VI is expected to set a new baseline for the business [20] Q&A Session Summary Question: Discussion on Mafia's pricing strategy - Management explained that variable pricing is part of their strategy to deliver more value to consumers [36][37] Question: Goodwill impairment related to Zynga - Management confirmed that the impairment was a partial impairment of one of their units, resulting from updated long-term expectations [38] Question: Future operating margins - Management indicated that there is no reason to believe they cannot reach previous operating margin levels, despite increased development costs [42] Question: Mobile segment performance - Management acknowledged the challenges in mobile gaming but highlighted Zynga's success in creating new hits [46][48] Question: Anticipation for Grand Theft Auto VI - Management noted the record excitement for GTA VI, driven by ongoing engagement with GTA V and the success of the recent trailer [86][90] Question: Impact of console price increases - Management stated that their guidance would not be meaningfully affected by potential price increases in the gaming ecosystem [96] Question: Internal royalty line increase - Management explained that the increase in internal royalties is driven by product mix changes [103]

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]