Take-Two Interactive Software (TTWO -4.03%), the gaming company behind series such as Grand Theft Auto, NBA 2K, and Red Dead Redemption, reported results for Q1 FY2026 on August 7, 2025, covering the period ended June 30, 2025. The release highlighted year-over-year growth in Net Bookings, surpassing the company's own guidance, as well as analysts' expectations. Net bookings came in at $1.42 billion, beating analyst expectations of $1.31 billion. Non-GAAP earnings per share clocked in at $0.61, handily beating estimates of $0.29. The company’s GAAP net loss narrowed substantially versus last year, and management raised its full-year Net Bookings guidance, reflecting increased optimism for upcoming launches. Robust digital and mobile performance, but ongoing profitability concerns and cost discipline remain in focus looking ahead.
| Metric | Q1 FY26 | Q1 FY26 Estimate† | Q1 FY25 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $0.61 | $0.29 | $0.05 | N/A |
| Net bookings | $1.42 billion | $1.31 billion | $1.22 billion | 17% |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q4 2025 earnings report.
Business Overview and Recent Strategic Focus
Take-Two Interactive Software develops, publishes, and distributes interactive entertainment across gaming consoles, PC, and mobile devices. It operates well-known publishing labels including Rockstar Games, 2K, and Zynga. The company’s catalog features global franchises such as Grand Theft Auto (an open-world action game series), NBA 2K (a basketball simulation series), and Red Dead Redemption (a Western-themed open-world game), along with a substantial mobile games portfolio led by titles like Toon Blast and Match Factory.
The company’s current strategy centers on expanding its multi-platform reach, deepening its portfolio, and scaling up player engagement. These efforts are fueled by investment in talent, live services, and technology. Key focuses include driving recurring spending within games, continuous cost control, and innovation on newer platforms such as virtual reality and Nintendo’s next-generation hardware. A robust pipeline of planned releases and titles in development aims to sustain revenue consistency while preparing for significant launches, most notably Grand Theft Auto VI slated for the next fiscal year.
Quarter in Review: Key Developments and Performance Drivers
Net Bookings, which measure products and services sold digitally and physically, rose 17% year over year to $1.42 billion. Recurring consumer spending, which includes in-game purchases and subscriptions, accounted for 83% of Net Bookings and grew 17%.
GAAP revenue increased 11.9% versus the same quarter last year. Growth was driven by established franchises, with NBA 2K25 (a basketball simulation game), Grand Theft Auto V and Online (open-world action games), and a slate of mobile puzzle and casual games such as Toon Blast, Match Factory, and Color Block Jam noted as top contributors. Notably, Color Block Jam’s rapid scaling and profitability highlighted the potential for successful new mobile launches in a competitive landscape. The digital business continued to dominate, making up 98% of GAAP net revenue and 99% of Net Bookings, while mobile accounted for 53% of GAAP net revenue and 56% of Net Bookings.
Operating expenses (GAAP) remained high at $923.4 million. Research and development spending (GAAP) rose to $261.4 million. Despite the progress on gross profit, the period ended with a GAAP net loss of $11.9 million, considerably narrower than the prior year’s $262.0 million GAAP net loss. Negative operating cash flow persisted, registering an outflow of $44.7 million.
Product and franchise milestones were a major story. With new hits and stability in older titles supporting growth. Grand Theft Auto V surpassed 215 million units sold-in as of the end of the fiscal year. International markets accounted for 41% of Net Bookings, up slightly from last year. There were no announced dividends for the quarter.
The Pipeline, Franchise Expansion, and Emerging Trends
Take-Two continues to roll out updates and new releases to maintain relevance and fuel growth. Notable launches in the period included Civilization VII (a turn-based strategy game), with new VR and Switch 2 editions building on the strategy franchise’s legacy, and ongoing updates to Grand Theft Auto Online. The company plans to launch Mafia: The Old Country (a narrative-driven adventure game), NBA 2K26, and Borderlands 4 (first-person shooter), followed by the highly anticipated Grand Theft Auto VI in the following fiscal year.
Mobile gaming remains key, with the Zynga division releasing profitable new titles and leveraging a direct-to-consumer platform for in-game sales. “Our outstanding first quarter results reflect ongoing demand for our core franchises and the increasingly diversified, successful nature of our business,” said CEO Strauss Zelnick in the earnings release. The shift toward digital sales has allowed the company to reduce reliance on physical distribution, align with industry trends, and maximize reach across consoles, PC, and mobile devices.
Cost control remains a critical theme, with management implementing a cost reduction program and aiming for improved operating leverage as revenue expands. The margin between revenue gains and net income improvement is not yet substantial, due to the heavy ongoing investment in development and future releases. The company still forecasts a full fiscal year net loss.
Finally, Take-Two is positioning itself at the forefront of new trends such as virtual reality, global expansion, and direct-to-consumer models. International partnerships, especially in Asia, and technology experiments with virtual reality are expected to expand addressable markets and support longer-term growth.
Looking Ahead: Guidance and Investor Watch Points
Management raised its full-year Net Bookings guidance to $6.05–$6.15 billion, up from the previous range of $5.9–$6.0 billion. Net Bookings for Q2 FY2026 are projected between $1.70 and $1.75 billion, while GAAP revenue is expected at $1.65–$1.70 billion. GAAP revenue for FY2026 is projected between $6.10 and $6.20 billion. The company also guides for full-year adjusted EBITDA of $554–$613 million, but it continues to anticipate a GAAP net loss of $442 to $377 million.
Key assumptions for the outlook include stable game release schedules, steady platform user growth for PlayStation and Xbox consoles, and stable currency trends. With Grand Theft Auto VI on the horizon and a slate of new games, attention will be on the execution of this ambitious release pipeline, cash flow performance, and progress on operating margins.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
