Take-Two Interactive Software, Inc. — Fiscal First Quarter 2027 Earnings Summary

Financial Performance

• Total Net Bookings decreased 3% to $1.39 billion compared to $1.42 billion in the prior year period.
• GAAP net revenue increased 2% to $1.53 billion from $1.50 billion in the prior year period.
• GAAP net loss was $34.1 million ($0.18 per share), compared to a net loss of $11.9 million ($0.07 per share) in the prior year period.
• Cost of revenue included a $43.4 million impairment charge related to the decision not to proceed with an unannounced title.
• Recurrent consumer spending accounted for 84% of both total Net Bookings and GAAP net revenue.
• Net cash used in operating activities was $168.8 million for the quarter.
• Cash and cash equivalents were $1.36 billion as of June 30, 2026.
• Total debt (short-term and long-term) was $2.52 billion as of June 30, 2026.
• Deferred revenue decreased to $1.01 billion ($988.4 million current, $26.1 million non-current) from $1.19 billion ($1.16 billion current, $29.7 million non-current) at the start of the fiscal year.

Guidance and Future Outlook

• Reiterated full-year Fiscal 2027 Net Bookings guidance of $8.0 to $8.2 billion.
• Updated full-year Fiscal 2027 GAAP Total Net Revenue guidance to $7.90 to $8.10 billion.
• Updated full-year Fiscal 2027 GAAP Net Income guidance to $104 to $143 million ($0.55 to $0.75 per share).
• Updated full-year Fiscal 2027 Non-GAAP EBITDA guidance to $993 to $1,053 million.
• Provided initial guidance for Fiscal Q2 2027 (ending September 30, 2026):
  • GAAP Total Net Revenue: $1.42 to $1.47 billion.
  • GAAP Net Loss: $(157) to $(140) million ($(0.84) to $(0.75) per share).
  • Non-GAAP EBITDA: $(20) to $4 million.
  • Net Bookings: $1.62 to $1.67 billion.
• Full-year Fiscal 2027 Net Cash Provided by Operating Activities guidance is over $1.0 billion.
• Full-year Fiscal 2027 Capital Expenditures guidance is approximately $290 million.

Business Segments and Product Lines

• Key contributors to Net Bookings included NBA 2K, the Grand Theft Auto series, Toon Blast, Match Factory!, Empires & Puzzles, the Red Dead Redemption series, Words With Friends, Color Block Jam, WWE 2K, Zynga Poker, and Toy Blast.
• Key contributors to GAAP net revenue included NBA 2K, the Grand Theft Auto series, Toon Blast, Empires & Puzzles, Match Factory!, the Red Dead Redemption series, Words With Friends, Color Block Jam, WWE 2K, Zynga Poker, and Merge Dragons.
• Released "Grand Theft Auto Online Kortz Center Heist Summer Update" on July 14, 2026.
• Upcoming product releases include:
  • NBA 2K27 (September 4, 2026) on PS5, Xbox Series X|S, Switch 2, and PC.
  • Grand Theft Auto VI (November 19, 2026) on PS5 and Xbox Series X|S.
  • PGA TOUR 2K27, WWE 2K27, Top Goal, CSR 3, Judas, Project ETHOS, and the next BioShock iteration (release dates TBA).

Market and Competitive Landscape

• Mobile platform revenue accounted for 50% of total Net Revenue and 53% of Net Bookings.
• Console platform revenue accounted for 42% of total Net Revenue and 38% of Net Bookings.
• PC and other platforms accounted for 8% of total Net Revenue and 9% of Net Bookings.
• United States accounted for 60% of total Net Revenue and 58% of Net Bookings.
• International markets accounted for 40% of total Net Revenue and 42% of Net Bookings.
• 98% of Net Revenue and 99% of Net Bookings were generated through digital online channels.

Risks and Challenges

• Risks include the timely release and market acceptance of games, geopolitical events, interest rate changes, inflation, and foreign currency exchange volatility.
• Dependence on key management and product development personnel.
• Dependence on NBA 2K and Grand Theft Auto products and the ability to develop other hit titles.
• Factors affecting mobile business performance, such as player acquisition costs.
• The company incurred a $43.4 million impairment charge due to the cancellation of an unannounced title.

Management Commentary and Tone

• Strauss Zelnick, Chairman and CEO, stated that excellent first-quarter results reflect the power of the portfolio and disciplined execution across all labels.
• Management expressed excitement around the November 19th launch of Grand Theft Auto VI.
• Management expects to sustain the new level of scale and generate strong cash flows, setting a path for continued growth and long-term shareholder returns.

Other Key Points

• The financial results are preliminary; final data will be included in the Form 10-Q for the period ended June 30, 2026.
• Management uses a tax rate of 18% for internal reporting and outlook calculations.
• Share count used for management reporting diluted net income per share is expected to be 189.4 million for the full year and 188.5 million for Q2.
• The company hosts a conference call to review results and discuss other topics.
• Key assumptions for outlook include the continuation of the current economic backdrop, timely delivery of titles, and growth in the installed base of PlayStation 5 and Xbox Series X|S.