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Take-Two's Q1 Loss Narrows Year Over Year, Revenue Growth Continues
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Key Takeaways
TTWO's Q1 loss narrowed to $0.07 per share on 12.4% revenue growth to $1.5B.
Net bookings rose 16.8% YoY to $1.42B, with digital accounting for 98.7% of the total.
NBA 2K25, GTA Online and Zynga mobile titles fueled strong engagement and spending gains.
TakeTwo Interactive Software (TTWO - Free Report) incurred a first-quarter fiscal 2026 GAAP net loss of 7 cents per share, narrower than a loss of $1.52 reported in the year-ago quarter. The Zacks Consensus Estimate for earnings was pegged at 27 cents per share.
GAAP net revenues increased 12.4% year over year to $1.5 billion. The Zacks Consensus Estimate for revenues was pegged at $1.3 billion.
Revenues from the United States increased 9.7% year over year to $900.4 million and accounted for 59.9% of GAAP net revenues. The rest came from international revenues, revenues from which increased 16.6% year over year to $603.4 million.
Game revenues (91.9% of total revenues) rose 13.6% year over year to $1.38 billion. Advertising revenues (8.1% of total revenues) plunged 0.16% year over year to $121.3 million.
Bookings improved 16.8% year over year to $1.42 billion. Bookings from the United States increased 14.8% year over year to $836.6 million and accounted for 58.8% of GAAP bookings. The rest came from international bookings, revenues from which increased 19.8% year over year to $586.5 million.
Take-Two Interactive Software, Inc. Price, Consensus and EPS Surprise
Recurrent consumer spending rose 14% for the period and accounted for 83% of Net Bookings.
In terms of distribution channels, Digital online revenues grew 14% year over year to $1.48 billion and accounted for 98.2% of GAAP net revenues. Physical retail and other revenues slumped 36.3% year over year to $27.2 million and accounted for 1.8% of GAAP net revenues. Digital online bookings improved 18.3% year over year to $1.41 billion and accounted for 98.7% of bookings. Physical retail and other bookings declined 41.6% from the year-ago quarter to $18 million and contributed 1.3% of bookings.
In terms of platform, revenues from mobile, console, and PC and other accounted for 53.3%, 36.6% and 10.1% of GAAP net revenues, respectively. Mobile revenues increased 11% year over year to $801.7 million. Console revenues inched up 8.2% year over year to $550.6 million. PC and other revenues increased 41.9% year over year to $151.5million.
Bookings from mobile, console and PC and other accounted for 55.7%, 33.3% and 11% of bookings, respectively. Mobile bookings increased 11.8% year over year to $792.8 million. PC and other bookings increased 50.8% year over year to $155.9 million. Console revenues increased 17% year over year to $474.4 million.
Gaming Metric Details
During the quarter, NBA 2K25 posted outstanding results, significantly exceeding the company's expectations. To date, the title has sold over 11.5 million units worldwide, with engagement increasing substantially year-over-year. Daily Active Users and MYCAREER Daily Active Users each rose 30%, driving a remarkable recurrent consumer spending expansion of 48%. The franchise demonstrates strong community engagement with over 3 billion games of basketball already played in 2K25.
2K announced a significant multi-year global partnership expansion with the NBA, NBPA and WNBPA, extending its longstanding relationships with the NBA G League and USA Basketball. The company's sports portfolio performed well during the quarter, with WWE 2K25 showing healthy engagement following its March 2025 launch.
The Grand Theft Auto series surpassed expectations, maintaining exceptional momentum. To date, Grand Theft Auto V has sold over 215 million units worldwide. During the quarter, engagement for Grand Theft Auto Online benefited from the record-setting launch of Grand Theft Auto VI Trailer 2 and the successful release of the Money Fronts Summer content pack, resulting in higher-than-expected recurrent consumer spending performance. New player accounts for GTA Online expanded over 50% year over year, demonstrating the franchise's continued ability to attract fresh audiences.
Zynga achieved outstanding mobile performance that vastly exceeded expectations across multiple titles. Toon Blast posted a remarkable expansion of 22% year over year and nearly 75% on a two-year basis, driven by the innovative seasonal collection feature that provided new engagement opportunities for millions of active players. Match Factory reached record Net Bookings with 33% gains year over year, enhanced by new features, including the Treasure Cave event and additional levels. Color Block Jam maintained strong momentum and has become the highest-grossing title in Rollic's history, remaining at the top of App Store charts while demonstrating broad mass appeal. The title received support through its first bold beat called Pilot's Drop, where players receive progressively larger rewards with consecutive wins.
2K's mobile offerings also generated strong results, including WWE SuperCard, which remains the label's most successful mobile game with over 37 million lifetime downloads. NBA 2K Mobile continues expanding its audience through new content and challenges, while NBA 2K25 Arcade Edition continues topping Apple Arcade charts. NBA 2K All-Star in China has posted strong and profitable results since its March launch. The company maintains focus on mobile direct-to-consumer business, achieving improved conversion rates through new offers, events and enhanced personalization.
Firaxis Games successfully released Sid Meier's Civilization VII for Nintendo Switch 2, expanding Take-Two's presence on the platform and featuring innovative mouse controls for an enhanced gameplay experience. The studio continues introducing monthly updates for the title while broadening platform availability.
Operating Details of TTWO
TakeTwo’s GAAP gross profit surged 22.6% year over year to $945 million. Gross margin expanded to 62.8% on a year-over-year basis from 57.6% in the year-ago quarter.
Operating expenses declined 3.4% year over year to $923.4 million.
Selling expenses decreased 5.2% year over year to $408.8 million. General and administrative expenses declined 1.7% year over year to $207 million. Research & development expenses rose 18.9% year over year to $261.4 million.
Operating income was $21.6 million compared with the year-ago quarter’s operating loss of $184.9 million.
Balance Sheet
As of June 30, 2025, Take-Two had $2.03 billion in cash and cash equivalents compared with $1.46 billion as of March 31, 2025. The company had total debt of $3.07 billion as of June 30, 2025.
Guidance
For the second quarter of fiscal 2026, Take-Two expects GAAP net revenues between $1.65 billion and $1.70 billion. Operating expenses are expected to be between $1.02 billion and $1.03 billion. It expects a loss per share between 75 cents and 60 cents.
Net Bookings are expected to be in the range of $1.70-$1.75 billion. The company's release slate for the guided quarter includes Mafia: The Old Country, NBA 2K26, and Borderlands 4.
The largest contributors to net bookings are expected to be NBA 2K, Borderlands 4, the Grand Theft Auto series, Toon Blast, Match Factory, Empires & Puzzles, Color Block Jam, the Red Dead Redemption series, Words With Friends and Mafia: The Old Country.
The company projects recurrent consumer spending to increase approximately 1%, which assumes low single-digit growth for NBA 2K, slight growth for mobile and a decline for Grand Theft Auto Online.
For fiscal 2026, the company has raised its expectations and now expects GAAP net revenues between $6.10 billion and $6.20 billion, up from $5.95-$6.05 billion previously expected. The company expects net bookings in the range of $6.05-$6.15 billion, raised from the prior range of $5.90-$6.00 billion.
Total operating expenses are expected in the range of $3.84-$3.86 billion. It expects a loss per share between $2.40 and $2.05.
For fiscal 2026, net cash provided by operating activities is expected to be approximately $130 million. Capital expenditures are expected to be approximately $140 million.
Image: Bigstock
Take-Two's Q1 Loss Narrows Year Over Year, Revenue Growth Continues
Key Takeaways
TakeTwo Interactive Software (TTWO - Free Report) incurred a first-quarter fiscal 2026 GAAP net loss of 7 cents per share, narrower than a loss of $1.52 reported in the year-ago quarter. The Zacks Consensus Estimate for earnings was pegged at 27 cents per share.
GAAP net revenues increased 12.4% year over year to $1.5 billion. The Zacks Consensus Estimate for revenues was pegged at $1.3 billion.
Revenues from the United States increased 9.7% year over year to $900.4 million and accounted for 59.9% of GAAP net revenues. The rest came from international revenues, revenues from which increased 16.6% year over year to $603.4 million.
Game revenues (91.9% of total revenues) rose 13.6% year over year to $1.38 billion. Advertising revenues (8.1% of total revenues) plunged 0.16% year over year to $121.3 million.
Bookings improved 16.8% year over year to $1.42 billion. Bookings from the United States increased 14.8% year over year to $836.6 million and accounted for 58.8% of GAAP bookings. The rest came from international bookings, revenues from which increased 19.8% year over year to $586.5 million.
Take-Two Interactive Software, Inc. Price, Consensus and EPS Surprise
Take-Two Interactive Software, Inc. price-consensus-eps-surprise-chart | Take-Two Interactive Software, Inc. Quote
TTWO’s Fiscal First Quarter Details
Recurrent consumer spending rose 14% for the period and accounted for 83% of Net Bookings.
In terms of distribution channels, Digital online revenues grew 14% year over year to $1.48 billion and accounted for 98.2% of GAAP net revenues. Physical retail and other revenues slumped 36.3% year over year to $27.2 million and accounted for 1.8% of GAAP net revenues. Digital online bookings improved 18.3% year over year to $1.41 billion and accounted for 98.7% of bookings. Physical retail and other bookings declined 41.6% from the year-ago quarter to $18 million and contributed 1.3% of bookings.
In terms of platform, revenues from mobile, console, and PC and other accounted for 53.3%, 36.6% and 10.1% of GAAP net revenues, respectively. Mobile revenues increased 11% year over year to $801.7 million. Console revenues inched up 8.2% year over year to $550.6 million. PC and other revenues increased 41.9% year over year to $151.5million.
Bookings from mobile, console and PC and other accounted for 55.7%, 33.3% and 11% of bookings, respectively. Mobile bookings increased 11.8% year over year to $792.8 million. PC and other bookings increased 50.8% year over year to $155.9 million. Console revenues increased 17% year over year to $474.4 million.
Gaming Metric Details
During the quarter, NBA 2K25 posted outstanding results, significantly exceeding the company's expectations. To date, the title has sold over 11.5 million units worldwide, with engagement increasing substantially year-over-year. Daily Active Users and MYCAREER Daily Active Users each rose 30%, driving a remarkable recurrent consumer spending expansion of 48%. The franchise demonstrates strong community engagement with over 3 billion games of basketball already played in 2K25.
2K announced a significant multi-year global partnership expansion with the NBA, NBPA and WNBPA, extending its longstanding relationships with the NBA G League and USA Basketball. The company's sports portfolio performed well during the quarter, with WWE 2K25 showing healthy engagement following its March 2025 launch.
The Grand Theft Auto series surpassed expectations, maintaining exceptional momentum. To date, Grand Theft Auto V has sold over 215 million units worldwide. During the quarter, engagement for Grand Theft Auto Online benefited from the record-setting launch of Grand Theft Auto VI Trailer 2 and the successful release of the Money Fronts Summer content pack, resulting in higher-than-expected recurrent consumer spending performance. New player accounts for GTA Online expanded over 50% year over year, demonstrating the franchise's continued ability to attract fresh audiences.
Zynga achieved outstanding mobile performance that vastly exceeded expectations across multiple titles. Toon Blast posted a remarkable expansion of 22% year over year and nearly 75% on a two-year basis, driven by the innovative seasonal collection feature that provided new engagement opportunities for millions of active players. Match Factory reached record Net Bookings with 33% gains year over year, enhanced by new features, including the Treasure Cave event and additional levels. Color Block Jam maintained strong momentum and has become the highest-grossing title in Rollic's history, remaining at the top of App Store charts while demonstrating broad mass appeal. The title received support through its first bold beat called Pilot's Drop, where players receive progressively larger rewards with consecutive wins.
2K's mobile offerings also generated strong results, including WWE SuperCard, which remains the label's most successful mobile game with over 37 million lifetime downloads. NBA 2K Mobile continues expanding its audience through new content and challenges, while NBA 2K25 Arcade Edition continues topping Apple Arcade charts. NBA 2K All-Star in China has posted strong and profitable results since its March launch. The company maintains focus on mobile direct-to-consumer business, achieving improved conversion rates through new offers, events and enhanced personalization.
Firaxis Games successfully released Sid Meier's Civilization VII for Nintendo Switch 2, expanding Take-Two's presence on the platform and featuring innovative mouse controls for an enhanced gameplay experience. The studio continues introducing monthly updates for the title while broadening platform availability.
Operating Details of TTWO
TakeTwo’s GAAP gross profit surged 22.6% year over year to $945 million. Gross margin expanded to 62.8% on a year-over-year basis from 57.6% in the year-ago quarter.
Operating expenses declined 3.4% year over year to $923.4 million.
Selling expenses decreased 5.2% year over year to $408.8 million. General and administrative expenses declined 1.7% year over year to $207 million. Research & development expenses rose 18.9% year over year to $261.4 million.
Operating income was $21.6 million compared with the year-ago quarter’s operating loss of $184.9 million.
Balance Sheet
As of June 30, 2025, Take-Two had $2.03 billion in cash and cash equivalents compared with $1.46 billion as of March 31, 2025. The company had total debt of $3.07 billion as of June 30, 2025.
Guidance
For the second quarter of fiscal 2026, Take-Two expects GAAP net revenues between $1.65 billion and $1.70 billion. Operating expenses are expected to be between $1.02 billion and $1.03 billion. It expects a loss per share between 75 cents and 60 cents.
Net Bookings are expected to be in the range of $1.70-$1.75 billion. The company's release slate for the guided quarter includes Mafia: The Old Country, NBA 2K26, and Borderlands 4.
The largest contributors to net bookings are expected to be NBA 2K, Borderlands 4, the Grand Theft Auto series, Toon Blast, Match Factory, Empires & Puzzles, Color Block Jam, the Red Dead Redemption series, Words With Friends and Mafia: The Old Country.
The company projects recurrent consumer spending to increase approximately 1%, which assumes low single-digit growth for NBA 2K, slight growth for mobile and a decline for Grand Theft Auto Online.
For fiscal 2026, the company has raised its expectations and now expects GAAP net revenues between $6.10 billion and $6.20 billion, up from $5.95-$6.05 billion previously expected. The company expects net bookings in the range of $6.05-$6.15 billion, raised from the prior range of $5.90-$6.00 billion.
Total operating expenses are expected in the range of $3.84-$3.86 billion. It expects a loss per share between $2.40 and $2.05.
For fiscal 2026, net cash provided by operating activities is expected to be approximately $130 million. Capital expenditures are expected to be approximately $140 million.
TTWO’s Zacks Rank and Stocks to Consider
Currently, TTWO carries a Zacks Rank #3 (Hold).
Some better-ranked stocks that investors can consider in the broader Zacks Consumer Discretionary sector are Afya (AFYA - Free Report) , AMC Entertainment (AMC - Free Report) and Amer Sports (AS - Free Report)
Afya currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Afya is set to report second-quarter 2025 results on Aug. 21.
Amer Sports currently carries a Zacks Rank #2. Amer Sports is set to report its second-quarter 2025 results on Aug. 19.
AMC Entertainment currently carries a Zacks Rank #3. AMC Entertainment is set to report second-quarter 2025 results on Aug. 11.