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Net bookings: $1.47 billion, at the high end of the guidance range.
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Net accounting guidelines for fiscal year 2025: $5.55 billion to $5.65 billion.
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GAAP net income: Up 4% to $1.35 billion.
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Cost of income: Dropped 29% to $625 million.
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Operating costs: Increased 7% to $1 billion.
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Recurring consumer spending: Increase of 6%, accounting for 81% of net bookings.
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Mobile Revenue: Elevated high single digits.
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NBA 2K Revenue: Grew low single digits.
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Net bookings breakdown: 51% Zynga, 32% 2K, 17% Rockstar games.
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Geographic net postings: 60% United States, 40% International.
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Non-GAAP adjusted unrestricted operating cash flow: Expected outflow of $150 million.
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Capital expenditures: About $140 million.
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Tax guidance for net bookings in the third quarter: $1.35 billion to $1.4 billion.
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Forecasting recurring consumer spending: An increase of approximately 9% is expected.
Release date: November 6, 2024
For the full earnings call transcript, please refer to the full earnings call transcript.
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Take-Two Interactive Software Inc (NASDAQ:TTWO) reported strong second-quarter results with net bookings of $1.47 billion, hitting the high end of their expectations.
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The Grand Theft Auto and Borderlands franchises continue to perform exceptionally well, with Grand Theft Auto V exceeding expectations and selling more than 205 million copies worldwide.
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NBA 2K25 achieved significant growth in average revenue per user and games per user, with 4.5 million units sold and a 40% increase in average games per user.
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Zynga’s mobile games, such as Match Factory and Toon Blast, showed strong growth, with Toon Blast’s net bookings increasing more than 50% year-over-year.
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Take-Two Interactive Software Inc (NASDAQ:TTWO) is optimistic about future growth and plans to release several blockbuster titles in fiscal 2026, including Grand Theft Auto VI, Borderlands 4 and Mafia: The Old Country.
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The company experienced declines in its hyper-casual mobile portfolio and Empires & Puzzles, which partially offset growth in other mobile segments.
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Despite higher review scores for NBA 2K25, unit sales remained flat year-over-year, indicating the difficulty in translating critical acclaim into higher sales.
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The decision to sell the Private Division label signals a strategic shift, but may also indicate challenges in achieving desired growth through partnerships with independent developers.
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There is continued pressure on operating costs, up 7% year-on-year, driven by marketing and personnel costs.
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The company is facing challenges in the mobile industry, with the need to balance user acquisition costs and monetization strategies across platforms.
Q: Are the remaining three core titles still in the software lineup for this year, and how does this impact your overall guidelines? A: Our labels will provide more details on upcoming titles when they are ready. We have not updated our fiscal year 2025 pipeline forecasts, and there is no financial incentive to do so at this time.
Q: How much of your mobile growth is attributed to specific titles, and how do you view the mobile industry in general? A: The growth is largely contributed by Match Factory and Toon Blast, but not exclusively. We are optimistic about the mobile industry and note that consumers are rewarding innovative and attractive new titles. We continue to invest in new intellectual property, which is crucial for the growth of the sector.
Q: Given the trend towards market consolidation, how do you see the future of game development and new IP? A: As the industry matures, quality standards rise and larger companies tend to grow. We focus on creativity, innovation and efficiency, supported by a strong portfolio of proprietary intellectual property. We believe in the potential for new intellectual property, despite the challenges, because it is essential for long-term success.
Q: Can you provide insight into the assumptions for record bookings in fiscal years 2026 and 2027? A: We are excited about our pipeline, which we believe will be robust and sustainable. However, we are not ready to announce specific details for fiscal year 2027 at this time.
Q: How does the higher review score for NBA 2K translate to revenue and recurring consumer spending? A: Higher review scores reflect higher player engagement, leading to better monetization. While unit sales comparisons are important, the transition from Gen 8 to Gen 9 consoles will impact sales dynamics. We expect Gen 9 to ultimately drive growth as it gains momentum.
For the full earnings call transcript, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
