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Take-Two (TTWO) Q1 Earnings Lag Estimates, Revenues Up Y/Y
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Take-Two Interactive Software (TTWO - Free Report) reported first-quarter fiscal 2024 adjusted earnings of 36 cents per share, which missed the Zacks Consensus Estimate by a penny. The company reported earnings of 61 cents per share in the year-ago quarter.
Net revenues jumped 16.5% year over year to $1.28 billion.
Game revenues (85.3% of revenues) improved 7.5% year over year to $1.1 billion. Advertising revenues (14.7% of revenues) surged 126.7% year over year to $188.6 million.
Take-Two shares have gained 31.7% year to date, outperforming the Zacks Consumer Discretionary sector’s growth of 14.9%.
Recurrent consumer spending (which is generated from ongoing consumer engagement and includes virtual currency, add-on content, in-game purchases and in-game advertising) surged 29% year over year and accounted for 83% of total net revenues.
Top-line growth benefited from strong adoption titles, including NBA 2K23, Grand Theft Auto Online and Grand Theft Auto V, hyper-casual mobile portfolio, Toon Blast, Empires & Puzzles, Merge Dragons!, Red Dead Redemption 2 and Red Dead Online, Words With Friends and Toy Blast.
Take-Two’s gross profit increased 1.9% year over year to $679.2 million. Reported gross margin was 52.9% compared with 60.5% reported in the year-ago quarter.
Operating expenses surged 25.5% year over year to $883.5 million.
Operating loss was $204.3 million against the year-ago quarter’s operating income of $128.9 million.
Balance Sheet
As of Jun 30, 2023, Take-Two had $1.27 billion in cash, cash equivalents and short-term investments compared with $1.01 billion as of Mar 31, 2023.
The company had a debt of $3.08 billion as of Jun 30, almost unchanged from Mar 31, 2023.
Guidance
For the second quarter of fiscal 2024, Take-Two expects GAAP net revenues between $1.26 billion and $1.31 billion. It expects a loss between $1 and 90 cents per share.
For fiscal 2024, the company expects GAAP net revenues between $5.37 billion and $5.47 billion. It expects a loss between $3.20 and $2.95 per share.
For fiscal 2024, net cash provided by operating activities is expected to be roughly $90 million. Capital expenditures are expected to be approximately $180 million.
Zacks Rank & Stocks to Consider
Take-Two currently carries a Zacks Rank #3 (Hold).
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Take-Two (TTWO) Q1 Earnings Lag Estimates, Revenues Up Y/Y
Take-Two Interactive Software (TTWO - Free Report) reported first-quarter fiscal 2024 adjusted earnings of 36 cents per share, which missed the Zacks Consensus Estimate by a penny. The company reported earnings of 61 cents per share in the year-ago quarter.
Net revenues jumped 16.5% year over year to $1.28 billion.
Game revenues (85.3% of revenues) improved 7.5% year over year to $1.1 billion. Advertising revenues (14.7% of revenues) surged 126.7% year over year to $188.6 million.
Take-Two shares have gained 31.7% year to date, outperforming the Zacks Consumer Discretionary sector’s growth of 14.9%.
Take-Two Interactive Software, Inc. Price
Take-Two Interactive Software, Inc. price | Take-Two Interactive Software, Inc. Quote
Quarter Details
Recurrent consumer spending (which is generated from ongoing consumer engagement and includes virtual currency, add-on content, in-game purchases and in-game advertising) surged 29% year over year and accounted for 83% of total net revenues.
Top-line growth benefited from strong adoption titles, including NBA 2K23, Grand Theft Auto Online and Grand Theft Auto V, hyper-casual mobile portfolio, Toon Blast, Empires & Puzzles, Merge Dragons!, Red Dead Redemption 2 and Red Dead Online, Words With Friends and Toy Blast.
Take-Two’s gross profit increased 1.9% year over year to $679.2 million. Reported gross margin was 52.9% compared with 60.5% reported in the year-ago quarter.
Operating expenses surged 25.5% year over year to $883.5 million.
Operating loss was $204.3 million against the year-ago quarter’s operating income of $128.9 million.
Balance Sheet
As of Jun 30, 2023, Take-Two had $1.27 billion in cash, cash equivalents and short-term investments compared with $1.01 billion as of Mar 31, 2023.
The company had a debt of $3.08 billion as of Jun 30, almost unchanged from Mar 31, 2023.
Guidance
For the second quarter of fiscal 2024, Take-Two expects GAAP net revenues between $1.26 billion and $1.31 billion. It expects a loss between $1 and 90 cents per share.
For fiscal 2024, the company expects GAAP net revenues between $5.37 billion and $5.47 billion. It expects a loss between $3.20 and $2.95 per share.
For fiscal 2024, net cash provided by operating activities is expected to be roughly $90 million. Capital expenditures are expected to be approximately $180 million.
Zacks Rank & Stocks to Consider
Take-Two currently carries a Zacks Rank #3 (Hold).
Afya Limited (AFYA - Free Report) , ON Holding (ONON - Free Report) and LiveOne (LVO - Free Report) are some better-ranked stocks that investors can consider in the broader sector. Afya and On Holding sport Zacks Rank #1 (Strong Buy) each, while LiveOne carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Afya is set to announce second-quarter 2023 results on Aug 28. AFYA shares have declined 1.7% year to date.
On Holding is set to announce second-quarter 2023 results on Aug 15. ONON shares have gained 107.9% year to date.
LiveOne is set to announce first-quarter fiscal 2024 results on Aug 10. LVO shares have gained 156.4% year to date.