Key Points
- Net bookings of $1.22 billion, in line with management's expectations.
- GAAP Net Revenue surpassed expectations at $1.34 billion.
- GAAP Net Loss increased to $262 million, with higher operating expenses.
Take-Two Interactive Software (TTWO 1.75%), the gaming giant behind popular franchises like Grand Theft Auto and NBA 2K, released its earnings for the fiscal first quarter of 2025 on Aug. 8, 2024. The most notable highlights include net bookings of $1.22 billion, aligning with management's guidance of $1.20 to $1.25 billion. GAAP net revenue reached $1.34 billion, slightly above the expected range of $1.30 to $1.35 billion. However, the company reported an increased GAAP net loss of $262 million, within the guidance range of $245 to $272 million but reflecting higher operating expenses. Overall, the quarter showed a strong performance in core franchises but indicated challenges in operational cost management.
| Financial Metric | Fiscal Q1 2025 | Management's Guidance | Fiscal Q1 2024 | % Change YoY |
|---|---|---|---|---|
| Total Net Revenue | $1.34 billion | $1.30 to $1.35 billion | $1.28 billion | 4.7% |
| Net Bookings | $1.22 billion | $1.20 to $1.25 billion | $1.20 billion | 1.7% |
| GAAP Net Loss | $262 million | $245 to $272 million | $206 million | 27.2% |
| Loss per Share | $1.52 | $1.43 to $1.58 | $1.22 | 24.6% |
| Operating Expenses | $956 million | $928 to $938 million | $883.5 million | 8.2% |
| Source: Expectations based on management's guidance, as provided in May 16, 2024, earnings report. |
Understanding Take-Two Interactive Software
Take-Two Interactive Software is a leading publisher known for popular franchises like Grand Theft Auto, Red Dead Redemption, and NBA 2K. The company focuses on developing high-quality games across various platforms, including consoles, PCs, and mobile devices, leveraging both internal studios and external partners.
In recent years, Take-Two has prioritized expanding its digital distribution channels. A significant portion of its revenue comes from digital sales, reflecting changing consumer preferences for instant, on-demand gaming experiences. Additionally, the company places substantial emphasis on recurrent consumer spending through in-game purchases and virtual currencies.
Quarterly Highlights
During the fiscal first quarter of 2025, Take-Two's performance was marked by several notable developments. Net bookings, a key indicator of future revenue, were $1.22 billion, reflecting just a 1% increase from the previous year. This growth was primarily driven by strong performances from titles like NBA 2K24, Grand Theft Auto Online, and Grand Theft Auto V. Recurrent consumer spending, however, remained flat, making up 83% of total net bookings.
GAAP net revenue grew by 4% to $1.34 billion, slightly exceeding management's expectations. The dominant source of revenue was digital sales.
Conversely, the GAAP net loss increased to $262 million from $206 million in the prior year, showing a widened gap driven by higher operating expenses. Operating expenses rose to $956 million from $883.5 million, indicating significant investments in expansion and development initiatives.
Looking Ahead
Looking ahead, Take-Two's management has reaffirmed its guidance for fiscal year 2025. Net bookings are projected to be in the range of $5.55 to $5.65 billion, with total net revenue anticipated between $5.57 and $5.67 billion. However, the projected net loss for the year is wider than earlier forecasts, expected to be between $690 and $757 million. Adjusted EBITDA is expected to be between $365 and $420 million, reflecting ongoing investments and cost management initiatives.
The company remains optimistic about its upcoming titles, including NBA 2K25, WWE 2K25, and the highly anticipated Grand Theft Auto VI, set for release in Fall 2025. These key releases are expected to drive significant engagement and revenue growth in the coming quarters.
Investors should keep an eye on Take-Two's ongoing efforts to manage operational expenses and achieve sustainable growth amidst a highly competitive market. Monitoring the performance of upcoming game releases and the company's ability to leverage new technologies and revenue streams will be crucial for assessing its long-term outlook.
