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Take-Two (TTWO) Reports Loss in Q1 Earnings, Revenues Up Y/Y

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Take-Two Interactive Software (TTWO - Free Report) reported a first-quarter fiscal 2023 loss of 76 cents per share against the year-ago quarter’s earnings of $1.30 per share.

Net revenues jumped 35.5% year over year to $1.10 billion. Net Bookings surged 40.9% to $1 billion.

The Zacks Consensus Estimate for earnings and revenues was pegged at 53 cents per share and $1.04 billion, respectively.

Game revenues (92.5% of revenues) improved 28% year over year to $1.02 billion.  Advertising revenues (7.5% of revenues) jumped 389.4% year over year to $83.2 million.

 

Top-Line Details

Digital revenues (94.1% of revenues) improved 40.1% year over year to $1.04 billion. Physical retail revenues (5.9% of revenues) declined 10.9% year over year to $64.6 million.

Recurrent consumer spending (virtual currency, add-on content and in-game purchases, including the allocated value of virtual currency and add-on content incorporated in special editions of certain games) increased 44% year over year and accounted for 75% of total revenues.

Region-wise, revenues from the United States (61.9% of revenues) soared 38.5% year over year to $682.9 million. International revenues (38.1% of revenues) increased 31.1% year over year to $419.5 million.

Based on platforms, revenues from consoles (55.1% of revenues) increased 0.8% year over year to $607.2 million. Revenues from mobile (33.5% of revenues) surged 349.1% year over year to $369.6 million.

Revenues from PC and other (11.4% of revenues) decreased 2.3% year over year to $125.6 million.

Operating Details

Take-Two’s gross profit increased 37.9% year over year to $666.7 million. Reported gross margin of 60.5% expanded 100 basis points (bps) on a year-over-year basis.

Operating expenses surged 124.9% year over year to $704.1 million.

Operating loss was $37.4 million against the year-ago quarter’s operating income of $170.5 million.

Balance Sheet

As of Jun 30, 2022, Take-Two had $2.55 billion in cash, cash equivalents and short-term investments compared with $2.55 billion as of Mar 31, 2022.

The company had a debt of $3.3 billion as of Jun 30.

Net cash provided by operating activities was $100.8 million compared with $148.2 million reported in the year-ago quarter.

Guidance

For the second quarter of fiscal 2023, Take Two expects GAAP net revenues between $1.37 billion and $1.42 billion. The company expects loss between 96 and 86 cents per share.

Net bookings are projected between $1.5 billion and $1.55 billion.

For fiscal 2023, Take-Two expects GAAP net revenues between $5.73 billion and $5.83 billion. The company expects loss between $2.75 and $2.50 per share.

Net bookings are projected between $5.8 billion and $5.9 billion.

Zacks Rank & Other Stocks to Consider

Take-Two currently carries a Zacks Rank #2 (Buy).

Vitru Limited (VTRU - Free Report) is a better-ranked stocks that investors can consider in the broader Zacks Consumer Discretionary sector. Vitru currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Enthusiast Gaming (EGLX - Free Report) and On (ONON - Free Report) are couple of same-ranked stocks that investors can consider in the broader sector. Both Enthusiast Gaming and On have a Zacks Rank #2 (Buy).

Vitru is set to announce second-quarter fiscal 2022 results on Aug 25. VTRU shares have been up 15.4% year to date.

Enthusiast is set to announce second-quarter 2022 results on Aug 15. EGLX shares have been down 37.8% year to date.

On is set to announce second-quarter 2022 results on Aug 16. ONON shares have been down 40.5% year to date.