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Take Two Interactive (TTWO) Q4 Earnings and Revenues Up Y/Y
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Take Two Interactive Software Inc (TTWO - Free Report) reported fourth-quarter fiscal 2017 results. GAAP earnings were 89 cents per share compared with the prior-year quarter’s earnings of 48 cents. Adjusted earnings came in at 65 cents per share. The Zacks Consensus Estimate was pegged at 47 cents.
Net revenues (excluding deferred revenues) were $407.1 million, up 7.93% year over year. It also beat the Zacks Consensus Estimate of $359.1 million. Continued increase in digital revenues and strength in games like Grand Theft Auto V,Grand Theft Auto Online, NBA 2K17, WWE 2K17, Mafia III, and Sid Meier’s Civilization VI were the driving factors. Shares were up nearly 6% yesterday.
Revenues (including deferred revenues) came in at $571.6 million, higher than $377.2 million reported in the year-ago period.
Take Two’s (GAAP) digital revenues (49% of total revenue) increased 43.1% to $278.7 million while revenues from Physical retailer and other segments (51% of total revenue) were up 60.6% to $292.9 million.
Region wise, revenues from the United States (52% of total revenue) were up 51% to $296 million, while from the International markets, revenues surged 52.1% to $275.5 million.
Take-Two Interactive Software, Inc. Price, Consensus and EPS Surprise
Total bookings for the quarter were up 14% to $370.6 million, driven by NBA 2K17, WWE 2K17, Grand Theft Auto V, Grand Theft Auto Online and Sid Meier’s Civilization VI. Digitally-delivered bookings were up 28% to $267.4 million, of which, recurrent consumer spending bookings increased 64% and represented 70% of total digitally-delivered bookings.
Margins
Take Two’s gross margin was 44.9% compared with 44.5% reported in the prior-year quarter.
Operating profit was $111.5 million, increasing more than twice from the prior-year quarter.
Balance Sheet and Cash Flow
As of Mar 31, 2017, Take Two had $1.39 billion in cash and short-term investments compared with $1.27 billion as of Mar 31, 2016. During the fiscal year, net cash provided by operating activities for the fiscal year came in at $331.4 million.
Outlook
Take Two provided guidance for the first quarter and fiscal 2018. Strength in franchises like Grand Theft Auto, NBA 2K and WWE 2K will boost the top line in the fiscal year, despite a light slate of new releases. The company has pushed the release of its much-anticipated Red Dead Redemption 2 from fall of 2017 to spring of 2018.
For the first quarter, the company expects GAAP net revenues to be in the band of $390–$440 million. The company projects earnings per share to be in the range of 65–75 cents. Net sales (operational metric) are projected in the band of $240–$290 million.
For fiscal 2018, the company expects GAAP net revenues to be in the band of $1.95–$2.05 billion. The company projects earnings per share in the range of $4.35–$4.65. Net sales are projected in the band of $1.42–$1.52 billion. Operating cash flow is estimated to be around $150 million.
Our Take
The company continues to benefit from its popular offerings like Grand Theft Auto V and Grand Theft Auto Online (though sales are slowing down), along with its other releases like NBA 2K and WWE 2K. In fact, higher sales of the digital version of the games add to the company’s margins. Take Two continues to expect growth in digital revenues, driven by higher sales of full game downloads and increase in recurrent consumer spending.
The company recently forayed into the free-to-play games space with the acquisition of game developer, Social Point. The acquisition will help it to boost its performance, going ahead. Take Two also inked a partnership with NBA to launch NBA 2K eLeague, making it the “first eSports league operated by a U.S. professional sports league.” TheNBA 2K league will be functional in 2018.
Nonetheless, stiff competition from other game makers such as Activision Blizzard Inc. , Electronic Arts (EA - Free Report) and Glu Mobile Inc. remains a major concern.
In the last one year, Take Two has returned 90.01% compared with the Zacks Toys/Games/Hobby/ Product industry’s gain of 32.92%.
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Take Two Interactive (TTWO) Q4 Earnings and Revenues Up Y/Y
Take Two Interactive Software Inc (TTWO - Free Report) reported fourth-quarter fiscal 2017 results. GAAP earnings were 89 cents per share compared with the prior-year quarter’s earnings of 48 cents. Adjusted earnings came in at 65 cents per share. The Zacks Consensus Estimate was pegged at 47 cents.
Net revenues (excluding deferred revenues) were $407.1 million, up 7.93% year over year. It also beat the Zacks Consensus Estimate of $359.1 million. Continued increase in digital revenues and strength in games like Grand Theft Auto V,Grand Theft Auto Online, NBA 2K17, WWE 2K17, Mafia III, and Sid Meier’s Civilization VI were the driving factors. Shares were up nearly 6% yesterday.
Revenues (including deferred revenues) came in at $571.6 million, higher than $377.2 million reported in the year-ago period.
Take Two’s (GAAP) digital revenues (49% of total revenue) increased 43.1% to $278.7 million while revenues from Physical retailer and other segments (51% of total revenue) were up 60.6% to $292.9 million.
Region wise, revenues from the United States (52% of total revenue) were up 51% to $296 million, while from the International markets, revenues surged 52.1% to $275.5 million.
Take-Two Interactive Software, Inc. Price, Consensus and EPS Surprise
Take-Two Interactive Software, Inc. Price, Consensus and EPS Surprise | Take-Two Interactive Software, Inc. Quote
Total bookings for the quarter were up 14% to $370.6 million, driven by NBA 2K17, WWE 2K17, Grand Theft Auto V, Grand Theft Auto Online and Sid Meier’s Civilization VI. Digitally-delivered bookings were up 28% to $267.4 million, of which, recurrent consumer spending bookings increased 64% and represented 70% of total digitally-delivered bookings.
Margins
Take Two’s gross margin was 44.9% compared with 44.5% reported in the prior-year quarter.
Operating profit was $111.5 million, increasing more than twice from the prior-year quarter.
Balance Sheet and Cash Flow
As of Mar 31, 2017, Take Two had $1.39 billion in cash and short-term investments compared with $1.27 billion as of Mar 31, 2016. During the fiscal year, net cash provided by operating activities for the fiscal year came in at $331.4 million.
Outlook
Take Two provided guidance for the first quarter and fiscal 2018. Strength in franchises like Grand Theft Auto, NBA 2K and WWE 2K will boost the top line in the fiscal year, despite a light slate of new releases. The company has pushed the release of its much-anticipated Red Dead Redemption 2 from fall of 2017 to spring of 2018.
For the first quarter, the company expects GAAP net revenues to be in the band of $390–$440 million. The company projects earnings per share to be in the range of 65–75 cents. Net sales (operational metric) are projected in the band of $240–$290 million.
For fiscal 2018, the company expects GAAP net revenues to be in the band of $1.95–$2.05 billion. The company projects earnings per share in the range of $4.35–$4.65. Net sales are projected in the band of $1.42–$1.52 billion. Operating cash flow is estimated to be around $150 million.
Our Take
The company continues to benefit from its popular offerings like Grand Theft Auto V and Grand Theft Auto Online (though sales are slowing down), along with its other releases like NBA 2K and WWE 2K. In fact, higher sales of the digital version of the games add to the company’s margins. Take Two continues to expect growth in digital revenues, driven by higher sales of full game downloads and increase in recurrent consumer spending.
The company recently forayed into the free-to-play games space with the acquisition of game developer, Social Point. The acquisition will help it to boost its performance, going ahead. Take Two also inked a partnership with NBA to launch NBA 2K eLeague, making it the “first eSports league operated by a U.S. professional sports league.” TheNBA 2K league will be functional in 2018.
Nonetheless, stiff competition from other game makers such as Activision Blizzard Inc. , Electronic Arts (EA - Free Report) and Glu Mobile Inc. remains a major concern.
Currently, Take Two carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the last one year, Take Two has returned 90.01% compared with the Zacks Toys/Games/Hobby/ Product industry’s gain of 32.92%.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana. Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look. See the pot trades we're targeting>>