Shares of Take-Two Interactive Software (NASDAQ:TTWO) jumped on Wednesday after the company reported strong net bookings growth in its fiscal second quarter and raised its net bookings guidance for the full year. The stock was up about 12% at 11:50 a.m. EDT.
Take-Two reported second-quarter revenue of $443.6 million, up 5.6% year over year. Net bookings totaled $577 million, up 20.4% year over year and about $61 million higher than the average analyst estimate. The company's net bookings figure was previously referred to as net sales.
Digitally delivered revenue surged 31% year over year to $302.9 million, accounting for 68% of total revenue. Recurrent consumer spending, which includes virtual currency, add-on content, and micro-transactions, grew by 66% year over year and accounted for 48% of revenue. Net bookings from recurrent consumer spending soared 84%, accounting for 42% of total net bookings.
Take-Two reported a net loss of $0.03 per share, down from a net income of $0.39 per share in the prior-year period. The company expects to produce net bookings between $610 million and $660 million during the third quarter, and between $1.93 billion and $2.03 billion for the full year. The full-year guidance represents an increase from the company's previous outlook.
Due to higher internal royalty payments related to Grand Theft Auto V, Take-Two cut its full-year earnings forecast. The company now expects GAAP net income between $63 million and $91 million. Free cash flow is expected to be much higher, around $240 million.
Take-Two's second-quarter report was a bit of a mixed bag. Strong bookings growth and a guidance bump were positives, while a steep earnings decline and a reduction in earnings guidance were negatives. Overall, investors liked what they saw, pushing the stock up on Wednesday.
Grand Theft Auto V is now the best-selling game of all-time, with more than 85 million units sold. The online portion of the game, Grand Theft Auto Online, is one of the main drivers of the company's recurrent revenue stream. Take-Two's success growing that portion of the business may be overshadowing any concerns about the bottom line.