Take-Two: Revenues exceed, losses grow

Key points

• Net bookings of $1.22 billion, in line with management expectations.
• GAAP net income exceeded expectations and amounted to $1.34 billion.
• GAAP net loss widened to $262 million on higher operating expenses.

Take-Two Interactive Software (TWO 3.25%)the gaming giant behind popular franchises such as Grand Theft Auto AND NBA2Kreported its fiscal first-quarter 2025 earnings on August 8, 2024. Highlights included net bookings of $1.22 billion, in line with management’s guidance of $1.20 billion to $1.25 billion. GAAP net revenue came in at $1.34 billion, slightly above the expected range of $1.30 billion to $1.35 billion. However, the company reported an increased GAAP net loss of $262 million, in line with guidance of $245 million to $272 million but reflecting higher operating expenses. Overall, the quarter showed strong performance across its core franchises but highlighted challenges in managing operating expenses.

Understanding Take-Two Interactive Software

Take-Two Interactive Software is a leading video game publisher, known for popular series such as Grand Theft Auto, Red Dead RedemptionAND NBA2KThe company focuses on creating high-quality games across platforms, including consoles, PC 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 revenue comes from digital sales, reflecting changing consumer preferences for instant, on-demand gaming experiences. The company also places a strong emphasis on recurring consumer spending through in-game purchases and virtual currencies.

Quarterly highlights

Take-Two’s fiscal first quarter of 2025 saw several notable highlights. Net bookings, a key indicator of future revenue, came in at $1.22 billion, up just 1% from the prior year. The increase was primarily driven by strong performances from titles like NBA 2K24, Grand Theft Auto OnlineAND Grand Theft Auto VHowever, consumer spending on current purchases remained unchanged at 83% of total net bookings.

GAAP net revenue increased 4% to $1.34 billion, slightly exceeding management’s expectations. Digital sales were the dominant source of revenue.

On the other hand, GAAP net loss increased to $262 million from $206 million in the previous year, showing a widening gap caused by higher operating expenses. Operating expenses increased to $956 million from $883.5 million, indicating significant investments in expansion and development initiatives.

Looking to the future

Looking ahead, Take-Two management reaffirmed its guidance for fiscal 2025. Net bookings are expected to be in the range of $5.55 billion to $5.65 billion, with total net revenue expected to be in the range of $5.57 billion to $5.67 billion. However, the projected net loss for the year is wider than previous guidance, at $690 million to $757 million. Adjusted EBITDA is expected to be in the range of $365 million to $420 million, reflecting ongoing investments and cost management initiatives.

The company remains optimistic about its upcoming titles, including NBA 2K25, WWE 2K25and awaited Grand Theft Auto VIscheduled to launch 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 operating expenses and achieve sustainable growth in 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 key to assessing its long-term prospects.