TTWO

Mattel, Inc. MAT posted a clear split in second-quarter 2026 performance. Net sales rose 10% year over year and topped expectations, while adjusted earnings fell sharply as margin pressure and higher operating expenses weighed on profitability.The quarter showed that revenue momentum is improving faster than earnings. That puts greater emphasis on whether second-half margin recovery can support the company’s reaffirmed full-year outlook. Mattel reported net sales of $1.13 billion, up 10% year over year and 4.2% above the Zacks Consensus Estimate of $1.08 billion. Growth was led by North America, Vehicles and the Action Figures, Building Sets, Games and Other category.Adjusted earnings were 1 cent per share, down from 21 cents a year earlier. The result missed the Zacks Consensus Estimate of 3 cents by 66.7%, as higher advertising, selling and administrative expenses and weaker margins offset the benefit of higher sales. Mattel, Inc. price-eps-surprise | Mattel, Inc. Quote Worldwide Vehicles gross billings increased 11% in constant currency to $463 million, mainly on Hot Wheels growth. Action Figures, Building Sets, Games and Other gross billings rose 33% in constant currency to $358 million, helped by games, Mattel163 and action figures tied to theatrical releases.The broader competitive landscape also shows why digital and intellectual-property monetization matter. Hasbro, Inc. HAS operates across physical and digital games, toys, licensed consumer products and entertainment, while Take-Two Interactive Software, Inc. TTWO develops and publishes interactive entertainment through Rockstar Games, 2K and Zynga. Mattel’s expansion into digital games and entertainment increases its exposure to some of the same consumer attention channels. Adjusted gross margin declined 260 basis points year over year to 48.6%. Tariffs reduced margin by 170 basis points, inflation by 120 basis points, higher royalties by 110 basis points and foreign exchange by 60 basis points.Mattel163 contributed 120 basis points of benefit, while tariff-mitigation actions and Optimizing for Profitable Growth savings added another 80 basis points. Management still expects adjusted gross margin of about 50% for 2026 and sequential improvement in the second half, making cost control and mix improvement central to the earnings recovery. Management reaffirmed its full-year 2026 guidance despite the second-quarter earnings shortfall. Mattel continues to expect constant-currency net sales growth of 3% to 6% and adjusted operating income of $580 million to $630 million.Adjusted earnings are still projected at $1.27 to $1.39 per share, with adjusted gross margin expected at about 50%. The guidance provides a counterweight to the weak quarterly profit result, but it also leaves execution pressure elevated because stronger second-half profitability is needed to support the full-year targets. Mattel’s second-quarter results support a balanced view. Sales growth accelerated and category diversification improved, but the earnings miss and margin contraction show that higher revenues are not yet converting into stronger profits. The stock currently carries a Zacks Rank #3 (Hold). Mattel also has a Value Score of A and VGM Score of B, while its Growth Score of C and Momentum Score of D are less favorable. The mix supports patience rather than a more aggressive stance until margin recovery and earnings performance become more convincing. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Mattel, Inc. (MAT) : Free Stock Analysis Report Hasbro, Inc. (HAS) : Free Stock Analysis Report Take-Two Interactive Software, Inc. (TTWO) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Find your next quality investment with Simply Wall St's easy and powerful screener, trusted by over 7 million individual investors worldwide. Take-Two Interactive Software (TTWO) is back in focus after reporting first quarter results on August 7, 2026, along with fresh guidance that outlines expected revenue and profitability for the rest of the fiscal year. See our latest analysis for Take-Two Interactive Software. Take-Two Interactive Software’s recent earnings release and updated guidance have come alongside softer short term momentum, with the 7 day share price return down 4.72%, while the 3 year total shareholder return of 73.12% points to a much stronger longer term record. If the latest gaming update has you thinking more broadly about opportunities in related themes, this could be a good moment to scan a curated list of 56 AI infrastructure stocks After a softer share price move and mixed guidance from Take-Two Interactive Software, the gap between today’s US$241.61 price and both analyst targets and intrinsic estimates now matters. How far away does fair value really look? According to the most followed narrative on Take-Two Interactive Software, the fair value of $276.97 sits above the last close at $241.61, which frames the recent pullback in a very specific way for long term holders. Read the complete narrative. Want to see how this narrative gets to that higher fair value for Take-Two Interactive Software? The core of the story is a specific blend of revenue growth, margin assumptions and future profitability that all lean on one defining release window. The interesting part is how those inputs are sequenced across the next few years rather than the headline numbers themselves. Result: Fair Value of $276.97 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, Take-Two Interactive Software still faces real pressure points, including the execution risk around Grand Theft Auto VI and the current loss of US$320.4 million on US$6.7b revenue. Find out about the key risks to this Take-Two Interactive Software narrative. The user narrative suggests Take-Two Interactive Software is 12.8% undervalued at $241.61. However, the current P/S ratio of 6.8x is well above the US Entertainment industry average of 1.3x, the peer average of 2.1x and an estimated fair ratio of 3.6x. That gap points to meaningful valuation risk if expectations slip. Which story do you think is closer to reality? See what the numbers say about this price — find out in our valuation breakdown. Sentiment on Take-Two Interactive Software is clearly split, which is exactly why this is a useful moment to move quickly and test the numbers yourself. To weigh the upside against the concerns in a structured way, start with the 1 key reward and 1 important warning sign. If you are weighing what comes next after Take-Two Interactive Software, this is a smart time to broaden your watchlist and compare other potential opportunities side by side. Pinpoint dependable income opportunities by scanning 10 dividend fortresses that combine higher yields with robust underlying businesses. Spot potential bargains before the crowd by checking the screener containing 19 high quality undiscovered gems and seeing which fundamentals back up the story. Build a sturdier portfolio foundation by reviewing the solid balance sheet and fundamentals stocks screener (50 results), so you are not relying on just one stock to carry your returns. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include TTWO. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Image source: The Motley Fool. Friday, Aug. 7, 2026 at 8:00 a.m. ET Chairman and Chief Executive Officer - Strauss Zelnick President - Karl Slatoff Chief Financial Officer - Lainie Goldstein SVP, Investor Relations and Corporate Communications - Nicole Shevins Operator: Hello, everyone. Thank you for joining us, and welcome to the Take-Two Interactive Software First Quarter Fiscal Year 2027 Results Conference Call. [Operator Instructions] I will now hand the conference over to Nicole Shevins, SVP, Investor Relations and Corporate Communications. Nicole, please go ahead. Nicole Shevins: Good morning. Thank you for joining our conference call to discuss our results for the first quarter of fiscal year 2027 ended June 30, 2026. Today's call will be led by Strauss Zelnick, Take-Two's Chairman and Chief Executive Officer; Karl Slatoff, our President; and Lainie Goldstein, our Chief Financial Officer. We will be available to answer your questions during the Q&A session following our prepared remarks. Before we begin, I'd like to remind everyone that statements made during this call that are not historical facts are considered forward-looking statements under federal securities laws. These forward-looking statements are based on the beliefs of our management as well as assumptions made by and information currently available to us. We have no obligation to update these forward-looking statements. Actual operating results may vary significantly from these forward-looking statements based on a variety of factors. These important factors are described in our filings with the SEC, including the company's most recent annual report on Form 10-K and quarterly report on Form 10-Q, including the risks summarized in the section entitled Risk Factors. I'd also like to note that unless otherwise stated, all numbers we will be discussing today are GAAP and all comparisons are year-over-year. Additional details regarding our actual results and outlook are contained in our press release, including the items that our management uses internally to adjust our GAAP financial results in order to evaluate our operating performance. Our press release also contains a reconciliation of any non-GAAP financial measure to the most comparable GAAP measure. In addition, we have posted to our website a slide deck that visually presents our results and financial outlook. Our press release and filings with the SEC may be obtained from our website at take2games.com. And now I'll turn the call over to Strauss. Strauss Zelnick: Thanks, Nicole. Good morning, and thank you for joining us today. Fiscal 2027 is off to an excellent start, led by the power of our diverse portfolio and the strong consistent execution of our strategy at all of our labels. We delivered first quarter net bookings of approximately $1.39 billion, which was slightly above the high end of our guidance range, primarily due to the outperformance of NBA 2K and the Grand Theft Auto series. We're reiterating our fiscal 2027 outlook for net bookings of $8 billion to $8.2 billion, which reflects both ongoing positive trends in our business and our high degree of confidence around the November 19 release of Grand Theft Auto VI. We expect to sustain this new level of scale and generate strong cash flows for the next several years as we release our robust development pipeline, capitalize on incremental opportunities within our highly established hit franchises and continue to apply our proven long-term approach to managing the company. Now turning to highlights for the period. NBA 2K26's performance was outstanding and concluded a record year for the franchise. To date, the title has sold in over 12 million units, reflecting 9% growth compared to NBA 2K25. Engagement was up meaningfully during the quarter with recurrent consumer spending growing 7%, driven by a 15% increase in average daily active users, a 25% increase in MyCAREER daily active users and a 35% increase in average games played per user. The achievements of this year's iteration of the series are a testament to Visual Concepts ability continually to deliver new innovative ways for fans to stay engaged, and our live service execution remains a cornerstone of NBA 2K's sustained success. During the quarter, 2K also supported Borderlands 4, Sid Meier's Civilization VII and WWE 2K26 with an array of new offerings, which enhanced player engagement and sentiment. The Grand Theft Auto series once again exceeded expectations. And to date, Grand Theft Auto V has sold in over 230 million units worldwide. Recurrent consumer spending for the series grew 3% and GTA+ continues to thrive, all led by a series of content offerings, including the addition of the Rockstar Mission Creator, an all-new suite of innovative and in-depth tools empowering the player community to bring missions to life. Global excitement for the launch of Grand Theft Auto VI continues to build with the title having an exceptional start to preorders. With Rockstar Games' recent announcement of Grand Theft Auto VI, an extended look coming on August 27, we believe that consumers' passion and anticipation for the next evolution of this iconic series will grow further, leading up to the title's November 19 release. Turning to our mobile business. Zynga performed in line with our expectations, and we're pleased that many of our forever franchises continue to resonate with players. Net bookings for Toon Blast grew 8% over last year. The title was supported by a new marketing campaign featuring Emmy nominated actor Giancarlo Esposito. Empires & Puzzles maintained steady momentum, anchored by a successful ninth anniversary campaign and the introduction of new heroes and character abilities. Words With Friends exceeded our forecast with net bookings growing 8% year-over-year, led by strong ad performance and higher player engagement with several features, including Dice Challenge, the title's latest permanent one-on-one game mode. Top Eleven surpassed our expectations with net bookings increasing 15% year-over-year as fans enjoyed a special in-game event featuring player versus environment matches in 10 international locations. 2K's mobile offerings continue to perform well with strong downloads and engagement across key titles. NBA 2K All-Star, our mobile title in China in partnership with Tencent, surpassed 10 million registered users since launching last year and is yielding strong profit margins. Our mobile direct-to-consumer channel remains a significant driver of revenue and margin enhancement with many of Zynga's titles offering this feature and further growth anticipated. Guided by our core pillars to be the most creative, innovative and efficient entertainment company in the world, our 13,000 colleagues share a singular vision for excellence and hit creation. Each day, we strive to bring joy to our player communities and value to our shareholders. I'd like to express my gratitude to our teams for their immense passion and unwavering commitment to our mission to make the most captivating and engaging experiences in the entertainment business. We believe that fiscal 2027 will be an inflection point for Take-Two, one that will write an exciting new chapter in our history and provide the foundation for new levels of success and the creation of groundbreaking entertainment experiences. I'll now turn the call over to Karl. Karl Slatoff: Thanks, Strauss. I'd like to thank our teams for delivering a great start to the year and setting the stage for the most exciting pipeline in our company's history. I'll now discuss our recent and upcoming releases. On July 8, 2K and HB Studios launched Season 7 for PGA TOUR 2K25, a free update, which added the 154th Open Championship at Royal Birkdale Golf Club. The team is planning to launch Season 8 in late September and is hard at work on this year's release of PGA TOUR 2K27. 2K will share more details in the coming months. On July 14, Rockstar Games launched the Kortz Center Heist for GTA Online, which introduced an all-new blockbuster Heist targeting Los Santos' premier cultural institution with an array of artwork for the taking. On July 30, 2K and Gearbox launched Bounty Pack 4: Mergers and Acquisitions for Borderlands 4, which includes a new story mission and cosmetic items. Fans can look forward to even more action in September when Gearbox releases additional content, including the title's Next Story Pack. On August 14, 2K and Hangar 13 will release the Man of Honor story expansion for Mafia: The Old Country. With Hangar 13 industry-leading capabilities and narrative-driven action titles, players will enjoy 2 new story chapters and all new content for the game's free ride mode. 2K and Visual Concepts will launch the WrestleMania 42 Pack for WWE 2K26 on August 19, followed by new seasons as part of the Ringside Pass during the fall. WWE 2K27 is currently in development, and 2K will provide updates later this year. On September 4, 2K and Visual Concepts will launch NBA 2K27, the next installment of our industry-leading basketball simulation that provides the most realistic and authentic NBA experience in interactive entertainment. This year, Victor Wembanyama of the San Antonio Spurs will be on the cover of the Standard Edition. Caitlin Clark of the Indiana Fever will be on the cover of the Deluxe Edition and Chicago Bulls legend, Derrick Rose, will be on the cover of the Ultra Edition with early access available as part of the Deluxe and Ultra Editions. Last week, a first-look trailer of NBA 2K27's gameplay was revealed and the response has been positive with fans and the media expressing excitement over the titles improved graphics and enhanced player movement and presentation. 2K will share more about the game soon, including the NBA 2K27 preseason breakdown full game review on August 18. Zynga will continue to focus on enhancing its existing mobile portfolio with bold beats and updates as well as releasing new titles, including Top Goal, which is currently in soft launch. The title recently introduced real-world soccer stars as well as enhanced 3D match simulation and player versus player gameplay. In closing, we are deeply excited about this year, highlighted by the November 19 launch of Grand Theft Auto VI, which will usher in a new era of growth for our company and returns for our shareholders. We remain steadfast in our mission and commitment to delivering the highest quality entertainment experiences that captivate and engage audiences throughout the world. I'll now turn the call over to Lainie. Lainie Goldstein: Thanks, Karl, and good morning, everyone. We achieved excellent first quarter results driven by our powerful franchises, industry-leading talent and unwavering commitment to our strategic vision. I'd like to thank our teams for their hard work, which has enabled us to reach this exciting point within our company's history. Turning to our results. We delivered first quarter net bookings of $1.39 billion, which was slightly above our guidance range of $1.32 billion to $1.37 billion. This primarily reflected better-than-expected performance from NBA 2K and The Grand Theft Auto series. Recurrent consumer spending declined 1% for the period, which was favorable to our guidance of a 3% decline and accounted for 84% of net bookings. NBA 2K grew 7%. The Grand Theft Auto series rose 3%. And as expected, mobile declined 7% over last year. GAAP net revenue increased 2% to $1.5 billion, while cost of revenue rose 17% to $651 million and included a $43 million impairment charge related to the decision not to proceed with an unannounced title from a third-party developer. Operating expenses were flat at $918 million. On a management basis, operating expenses declined 1% year-over-year, which was favorable to our forecast of 3% growth due to timing of marketing expenses across our labels. With the ongoing positive trends in our business and excitement around the November 19 release of Grand Theft Auto VI, we are reiterating our fiscal 2027 net bookings outlook range of $8 billion to $8.2 billion, which represents approximately 20% growth over fiscal 2026 at the midpoint. The largest contributors to net bookings are expected to be The Grand Theft Auto series, NBA 2K, Toon Blast, Match Factory!, Empires & Puzzles, Words With Friends, the Red Dead Redemption Series, WWE 2K, Color Block Jam and Zynga Poker. We continue to expect recurrent consumer spending to be in line with fiscal 2026 and to represent 64% of net bookings. The underlying drivers remain unchanged. NBA 2K projected to grow high single digits. The Grand Theft Auto series is expected to be up and Mobile expected to be down due to last year's success of Color Block Jam and our assumption that trends will moderate for several of Zynga's mature mobile titles. We now expect the net bookings breakdown from our labels to be roughly 37% Rockstar Games, 34% Zynga and 29% 2K. We continue to forecast operating cash flow in excess of $1 billion, and we remain on track to be in a net cash position by the end of the fiscal year. We now plan to deploy approximately $290 million of capital expenditures, which is up from our prior forecast due to a planned real estate purchase. We continue to expect GAAP net revenue to range from $7.9 billion to $8.1 billion, while we now expect cost of revenue to range from $3.54 billion to $3.66 billion. Our total operating expenses are now expected to range from $4.15 billion to $4.17 billion. On a management basis, we expect operating expense growth of approximately 7% year-over-year, which is down slightly from our prior forecast. Now moving on to our guidance for the fiscal second quarter. We project net bookings to range from $1.62 billion to $1.67 billion compared to $1.96 billion in the second quarter last year. Our release slate for the quarter includes NBA 2K27, as well as new content updates for various titles. The largest contributors to net bookings are expected to be NBA 2K, The Grand Theft Auto series, Toon Blast, Match Factory, Empires & Puzzles, Words with Friends, Color Block Jam, the Borderlands franchise, the Red Dead Redemption series and Zynga Poker. We project recurrent consumer spending to decline by approximately 5%, which assumes growth for NBA 2K and the Grand Theft Auto series, while mobile is expected to be down. We expect GAAP net revenue to range from $1.42 billion to $1.47 billion. Operating expenses are planned to range from $1.01 billion to $1.02 -- on a management basis, operating expenses are expected to decline by approximately 5% year-over-year as last year included significant marketing expenses for the launch of Borderlands 4. Looking ahead, fiscal 2027 is on track to be a milestone year for our company, led by the release of Grand Theft Auto VI. We have great ambitions as our teams have carefully curated new opportunities that we believe will sustain this new level of scale for the foreseeable future, including live service enhancements, franchise extensions, the launch of new IP and international expansion. In addition, we will continue to evaluate accretive M&A. As we bring these opportunities to fruition, we are confident in our ability to enhance our financial profile further and generate strong cash flows, setting us on a path to deliver continued growth and long-term shareholder returns. Thank you. I'll now turn the call back to Strauss. Strauss Zelnick: Thanks, Lainie and Karl. On behalf of our entire management team, I'd like to thank our colleagues for an excellent start to what is poised to be an outstanding year for Take-Two. And to our shareholders, I want to express our appreciation for your continued support. We'll now take your questions. Operator? Operator: [Operator Instructions] Your first question comes from the line of Doug Creutz with TD Cowen. Douglas Creutz: One of your peers that reported previously suggested that there have been some slowdown in the Mobile market in Q2, which they attributed to macro uncertainty. Just wondered if you saw the same thing, if you saw different things. Any commentary you could offer would be helpful. Strauss Zelnick: No, it's really not what we're seeing. Our results have been affected by how Color Block Jam is doing versus last year in terms of comping because it was a new title last year. But apart from that, we have delivered some really good news in Mobile. There's no doubt there's a bit of pressure on user acquisition at the moment. And I think that, that comes and goes in the marketplace. But no, we don't feel like the consumer is pulling back at all. Operator: Your next question comes from the line of Andrew Marok with Raymond James. Andrew Marok: Maybe one on the GTA VI extended look. I guess if you could give us a little bit more color on the thinking that went into the decision to go with Netflix for the time exclusivity rather than just the traditional route of releasing it on a free platform like YouTube or through Rockstar Socials. Strauss Zelnick: This is a first-of-its-kind partnership with Netflix. They're a great marketing partner for us and distribution partner, as you know. We also work with virtually every social media outlet on Earth. This is part of Rockstar Games marketing strategy. We're excited for everyone to see an extended look of Grand Theft Auto VI. I'm not prepared to tell you how it's going to go, but I feel really good about it. And of course, 6 hours after the initial launch on Netflix, it will be available on Rockstar Games Channel on YouTube and I think ultimately, many other outlets. Andrew Marok: Great. Maybe one more, if I could. Not that you needed any other tailwinds into GTA VI launch excitement, but can you talk a little bit about the Kortz Center update for GTA Online and maybe how that's been in terms of bringing in some lapsed players ahead of the GTA VI launch? Karl Slatoff: We're actually very pleased how things are going right now. We typically don't give specific details about how releases are doing. But I can tell you that right now, we're very pleased with how things are going. And like all the Rockstar releases, they're exciting. They're well received by players, and they always bring in -- they always reactivate folks. So, so far, so good. Operator: Your next question comes from the line of Brian Pitz with BMO Capital Markets. Brian Pitz: You recently announced the $80 base game for GTA VI, but ultimately decided to leave NBA 2K27 base pricing at $70. As you think about go-forward base pricing, help us understand how you're thinking about being able to price games at a more premium price with more traditional AAA game prices around the $70 price point. Strauss Zelnick: Look, we've said this many, many, many times. Our goal is to deliver way more value to consumers than what we charge them. And the truth is that the real cost of a AAA video game is a whole lot lower today than it was 20 years ago. Pricing has not kept pace with inflation. And our goal is to continue to overdeliver for our consumers because how you feel about any experience is the intersection of the experience itself and what you pay for it. So -- to say that we expect that Grand Theft Auto VI will be an incredible bargain as experiences go is a gross understatement because Rockstar Games is known for overdelivering. And when people engage with our titles, and Karl just answered a question about GTA Online, remember, we're 13 years after GTA Online was launched and people are still highly engaged and we have record-setting engagement at times. So that's our goal. Our goal is not to maximize price. So in this case, I think what we've decided to do makes a whole lot of sense in the context of what we're delivering, and that's the lens through which we'll look going forward as well. Operator: Your next question comes from the line of Eric Handler with ROTH Capital. Eric Handler: Strauss, I wonder if you could give a little bit of background on the decision to go with Netflix for the extended trailer launch. Did they approach you? Did you approach them? I assume for exclusivity, they probably paid a little bit of a premium to get that. Strauss Zelnick: Netflix is a close partner of the company, and we have tight relationships up and down the line. So we're always in conversation about things that we can do together. And this is a groundbreaking partnership that Rockstar arranged with our friends at Netflix, and we're really excited about how it's going to come about. I wouldn't normally give detail on sort of the nature of the back and forth or the terms of the arrangement. Eric Handler: Okay. And then as a follow-up, with chip costs rising so much and the input cost for hardware rising significantly, there's talks about the next-gen consoles maybe getting delayed. I know you're a software company and you produce for whatever is out there. But I'm curious about your big picture thoughts on the industry, just given the rising cost of hardware. Strauss Zelnick: Look, the rising cost of hardware is not a good thing, and we wouldn't argue that it is. I don't think it will slow us down any because we're delivering -- we're delivering experiences that people want. However, a lower price point for hardware would be a good thing because there'll be more hardware in people's hands. So I cannot argue this is a positive, but equally, we don't see it as a headwind either. And going forward, look, 2 things that I think are relevant. Probably the most relevant thing is the world continues to move to open systems, and that will continue. So 20 years ago, when we showed up here at Take-Two for a console release that was available on PC at launch, PC would represent 1% to 2% of the overall sales. Today, that can be 40% or 50% in a similar situation. And I believe that's going to go because people have PCs, they have outboard controllers. They work great as game machines, and I think that will continue. Number two, with the advent of streaming, which we really do believe is around the corner in terms of having something that's low latency and really works well for consumers, machines that weren't game machines before will become game machines. So without regard to what happens in the console business, which is a consequence to us, of course, we see the overall installed base as a practical matter growing materially. And if you believe in streaming, and to be clear, we really do, and I'm happy to put a time line on it, I think we'll be in commercial streaming mode within 3 years. And by commercial, I mean low latency. I mean that can 10x the effective installed base. Now it doesn't mean we're at 10x our revenue, and we wouldn't project that we would. But because obviously, your avid consumers already had access to video game machines. But I do think it creates great opportunity for titles that are broadly desirable even outside of core markets and we do have titles like that, obviously. The third thing is that interactive entertainment and the most important thing remains America's pasttime and the world's pasttime, it is the fastest-growing part of the entertainment business. That's going to continue as the cohort ages and grows. All we need to do is the hardest thing you can do, which is continue to make hits. Operator: Your next question comes from the line of Colin Sebastian with Baird. Colin Sebastian: I guess on NBA, the next game coming up here shortly, I mean, following another strong year for the franchise, what do you think is going to be part of this game that might differentiate or provide another opportunity to grow the franchise another year? And then secondly, on an unrelated topic, just curious on any update to how your studios are deploying AI tools internally. I know we've talked about this quite a bit, but the technology seems to be developing fairly quickly. So are those tools capturing any additional value and perhaps maybe more measurable efficiency? So any commentary on that would be helpful. Karl Slatoff: So in terms of NBA, obviously, NBA 2K26 performance was outstanding. It's a record for us, both on units and engagement. And I think that's the key. And we get the question -- the same question almost every quarter, certainly every year about how high can high be and how the growth is. And every time we get the question, we answer it the same way. And it's really is -- I don't want to say it's unlimited, but there's still a huge amount of growth potential in the NBA franchise. And that would be coming both from increased units, geographic expansion, et cetera, and bringing more customers back year-over-year. There's still a lot of wood to chop there and also more and more engagement. So we continue to refine that. And what really drives that is the folks at Visual Concep., and 2K and their efforts to year upon year to innovate. And it's really hard to do that on an annual release. And yet somehow through the brilliant and hard work of the team, they're able to do it. So I would just answer it the same way we had before, which is the growth is going to be coming from the same place it always does, and that's through the innovation, the creativity of the teams. We did announce some fun things in terms of cover athletes for NBA 2K27. I'm going to leave all the exciting news about what's next for that title with 2K, which is August 18, I think, is when there's going to be more of a reveal. Strauss Zelnick: And with regard to your question about AI, look, we are, first and foremost, an entertainment company and always have been. However, we're an entertainment company that creates its entertainment in computers and always has. So this company, its products and its approach was built on AI and machine learning well before it became buzzword du jour. So we're dyed-in-the-wool adopters of new technology to the extent it enhances our ability to do what we do. And we have a 3-part strategy, 2 parts of which are innovation and efficiency. So we have projects that sort of fall into both the basic research and the applied research buckets here to see on the basic research side, the art of the possible on the applied research side, how we can innovate more and how we can create additional efficiencies. And that threads through our entire company. All that said, the first of our core pillars is creativity. And we have 13,000 colleagues around the world, the vast majority of whom are people who are creative every day. And we believe that technology can enhance their creativity, but we do not believe it can or should replace their creativity. And ultimately, we make bespoke entertainment products and we aim to make the best ones in the world. And technology should make it easier for our incredibly creative people to innovate. But for better for worse, and I happen to think it's very much for the better, those tools are not going to replace anyone. So unlike some of our competitors who are announcing opportunities to save hundreds of millions of dollars with AI, I've said since the beginning that the history of new technology in the interactive entertainment business is efficiencies are created, are indeed created, but then we find ways to do bigger and bigger things. And we actually don't reduce the cost of doing those things, but we can meaningfully increase the quality. And what does meaningfully increase the quality mean for us? It means making bigger and bigger hits that appeal to more and more consumers. And that's our job. Our job is not to lead in technology. Our job is to lead in entertainment. And as it happens, we use technology to try to do that. Operator: Your next question comes from the line of Chris Schoell with UBS. Christopher Schoell: In the slides and prepared remarks, you mentioned international expansion and evaluating accretive M&A. Can you just walk us through the opportunities you see overseas for your franchises that are maybe untapped today? And for M&A, remind us of the criteria you use when evaluating deals, the types of assets you would be most interested in? And any particular regions where you feel like you would like to scale your operations? Strauss Zelnick: Yes. We've been very focused here on increasing our international footprint. As you know, companies like Take-Two and there aren't many of us, but there are some, basically drive about 80% of their revenue from the U.S., Western Europe and 1 or 2 countries in Asia. The rest of the world is really underrepresented, even though they love video games, of course. And even though they have devices typically low -- low capable mobile devices, but devices nonetheless. So for example, despite the number of people in India, our revenue out of India is really, really tiny and people in India love like mobile video games. Same is true for Africa, a massive market, but our revenue footprint is very low. And we're also underrepresented in places like Latin America, obviously, Russia, much of the Middle East and much of Asia, although we do have a significant amount of business in China and selective other countries, South Korea, Taiwan, for example, growing business in Indonesia, a little business in Vietnam. So it's been an enormous strategic priority for us to begin to build up in these underrepresented territories in a way that appeals to local consumers. We have a geo pricing tool for that purpose because the different markets have a different ability to pay. That's a tool that we created in-house that allows us to experiment in a way that doesn't impact other parts of our business and other parts of the world. And in certain instances, we're working on properties that may only appeal to some of those markets very selectively. So my goal is that in the next 10 years, we flip the percentage of our revenue that comes from the U.S. and international markets in the other direction because we've grown the overall business. And if we don't invest here now, we run the risk of being behind in 10 years. So it's an area of enormous focus. Turning to your second question about M&A. We always look to inorganic growth through the same sort of 3 categories. First, are we buying owned intellectual property? Secondly, are we buying tools and teams that are valuable? And third, is the transaction immediately accretive to EBITDA and to GAAP earnings. And generally speaking, our acquisitions have ticked all those boxes. Then we have the broad rubric, is there a cultural fit? We've done many small tuck-in acquisitions, and then we've obviously done one very, very large acquisition. And I'm proud to say that unlike history for most corporations, public corporations, our track record is excellent. I think virtually all of our deals have worked out if you define worked out as being accretive and long-lasting. And certainly, the Zynga deal has been terrifically successful as has the Gearbox deal, our most recent larger transactions. So we'll continue to look at the world that way. And in terms of areas in which we're not represented, thankfully, we don't really have that anymore. We're a big mobile company. We're a big console and PC company. So we don't have any must-haves, but there are some -- certainly some nice to haves, and we think some opportunities will come our way. We also, to finish the thought, have this allergy to being overleveraged. And we have very, very light net leverage now. We expect to be in a net cash position in about 30 seconds -- sorry, not exactly 30 seconds, but you get what I mean. And once we're back in a net cash position, I think that would be the time when we'd be more likely to think about an inorganic opportunity. Operator: Your next question comes from the line of Mike Hickey with StoneX. Michael Hickey: Great quarter, guys. First one, Strauss, you mentioned in your prepared remarks that you think '27 will be an inflection point in your company's history. Obviously, that's a strong statement. I'm sure there's an obvious answer as well. But I am curious sort of what that means to you exactly when you say that and maybe details on why you believe that. And we've got a quick follow-up. Strauss Zelnick: Well, it's a great -- it's obviously a great question. And I think the point is that if you look historically at big, really, really big releases for this company, I'm thinking, obviously, of Grand Theft Auto and Red Dead, they didn't just affect us positively for a quarter. They had ongoing effects on our company. And we also have this massive pipeline that's we think quite extraordinary, and we have live services and we have a catalog. So if you believe, as I said, I do before that there are opportunities in terms of organic growth because the market is growing and because we're trying to extend into other markets and we have a pipeline and we have a huge -- what we believe is a huge release coming up, there's a lot of fuel for the fire. Michael Hickey: Nice. As a follow-up to the streaming comment, I think you said that you think we could have a commercial streaming solution within 3 years that would solve the latency problem. Strauss, it feels like we've been down this road at least twice. But I'm curious to hear that. Obviously, the TAM is exciting at 10 times. You've heard that before, but it's never really materialized. So is there something that you're seeing different today in terms of a tech solution or some change that's sort of giving you better visibility that we could actually have a real streaming solution in the future because obviously, that would be a sea change to the industry. Strauss Zelnick: It is a very fair and accurate comment. And even when we supported Stadia some years ago, we were -- we talked in -- at the same time we were supporting Stadia about concerns about latency. And you're right, certain things remain perpetually in the future like nuclear fusion, which is perpetually 30 years away, although people think it's not now. I hope it's not. I don't think that's the case here because of enormous advances in hyperscaler networks and advances in edge network technology. And I think, for example, there's one player in the market that's looking at rolling out a significant edge network that would address latency, at least in the U.S. So -- and I picked 3 years kind of because we know it's not tomorrow, but I don't think it's 5 years. But of course, I could be wrong, and we're not betting any of our company on this. We just see it as another one of the many embedded call options in our security. Operator: Your next question comes from the line of Alec Brondolo with Wells Fargo. Alec Brondolo: Maybe 2 for me. Could you help us, maybe walk us through the thinking behind the GTA VI premium SKU mix? I think Red Dead Redemption 2 launched with 3 SKUs. GTA VI only had 2, and you didn't offer early access in the premium SKU, which I think has been a big part of the hook or the upsell driver on some of the other titles over the last several years. And then maybe secondly, encouraging to hear preorder data for GTA VI is strong. I guess I'd love to get your perspective as someone that's been in the industry a long time. How do you think about the incrementality of preorder units as they flow in? Is it possible that kind of hype around the game is pulling forward sales that you otherwise would have earned post release into pre-release and the strong data won't prove to be that incremental? Strauss Zelnick: Yes. We don't tend to give a lot of color around pricing or additions. We leave that to our labels. But I think Rockstar feels that offering a phenomenal value at $80 makes sense for some consumers and then offering incremental value at a modestly increased price makes sense for consumers. And given the hype around this title, I mean, I think we could have made any number of other pricing choices. But as I said earlier, our focus is on delivering way, way, way more value than what we charge for something. And with regard to preorders, we -- our preorders are exceptional. No one's ever seen anything like this before at Take-Two or in the industry. That said, you could absolutely be right. We just don't know. So could demand be pulled forward? Sure. And one of the reasons that we're not changing our guidance is, to be clear, we haven't sold one unit yet. You can cancel a preorder. So we -- around here, like we're sort of allergic to victory laps. But one thing we certainly don't do is take a victory lap before we run the event. So the news is great so far. We're incredibly excited. We couldn't be more excited than we are, and yet we are realistic and at best, cautiously optimistic, and we're going to leave it at that until the thing occurs. Operator: Your next question comes from the line of Matthew Cost with Morgan Stanley. Matthew Cost: I was wondering if you could comment on Sony's decision to get rid of physical disk sales for new games beginning -- in the beginning of 2028. Will that have a material impact on your gross margins? Or will you continue to sell boxed download codes at a similar gross margin, presumably at a similar scale going forward? And then secondly, if you could just comment on your progress shifting towards direct payments inside of the Zynga business and if that's still something that is currently increasing and has a significant runway ahead. Strauss Zelnick: Thanks for your questions. I'm not going to comment on Sony's own decision. But in terms of our decision, look, our business is well over 90% digitally distributed as is. It's already a digital business. So in certain instances, especially if it's a big game, disks just -- and note I said disks don't really make sense for the consumer. Also, in most instances, you have to register online to play anyhow. So if you're already connected, like who cares if you download digitally, it's all the same, and it's much more convenient. So that's where the world is going in our opinion, and I think Sony understands that. We certainly understand that. It doesn't mean that we won't have physical additions now and then I'm sure we will in the same way that they're still vinyl in the recorded music business. But in other instances, it just won't make sense. On direct-to-consumer, yes, that remains a growth business for us. We are not direct-to-consumer across our entire mobile portfolio yet, but we're getting closer, and we are seeing growth there. We have not -- we don't talk about the actual percentage, and we don't talk about our goals in terms of the percentage of our business, what we want to do if we were the consumers. So we will support and continue to support all third-party distributors who treat us appropriately and with which we can make sound economic arrangements. And at the same time, we'll offer direct-to-consumer opportunities for consumers who want to avail themselves with those. There is no doubt that our direct-to-consumer business has had a material effect positive on our margins in the Mobile business. Operator: Your next question comes from the line of Jason Bazinet with Citi. Jason Bazinet: As you can imagine, the buy side is doing everything they can to sort of monitor these preorders to gauge sort of demand for GTA. I don't know if there's anything you can share from a historical perspective as experts on sort of ranges or how people should sort of think about preorders in terms of what bookings ultimately are for a title. I think it would be helpful just because there's some risk that the -- I mean I've just gotten some crazy e-mails from buy-siders on how big they think GTA should be. So any sort of ring-fencing or dimensionalization that you could offer, I think, would be super helpful. Strauss Zelnick: I like that, ring-fencing or dimensionalization, which is another way of saying how many units are you going to sell? The answer is I don't know, and I'm not going to tell you. But I can say that the level of preorders is unprecedented and astonishing, and we're very grateful for that. But they are so unprecedented that we just don't know how it will translate into sales and which was a question I answered earlier, we genuinely don't know. And we just don't believe in claiming victory before it occurs. Operator: Your next question comes from the line of Eric Sheridan with Goldman Sachs. Eric Sheridan: Strauss, I wanted to know if you could opine about any evolution in your thinking about mobile gaming and being more tied into AAA quality of content when you think about the advances in mobile silicon and processing? And a second part of the question would be, with Grand Theft Auto and the community you have there, how should we be thinking about either engagement or maybe even gameplay components of Grand Theft Auto that could be the extension of the launch later this year? Strauss Zelnick: Yes. You're 100% right that if you believe in Moore's Law, what we'll be able to do with mobile games will grow materially, if not exponentially. And what I said earlier about streaming basically means that all games will become mobile games, if you wish. But I think -- and I haven't used the word mobile all the time as a result. When we talk about mobile versus console, we're really not talking about where you consume the title or on what device. We're talking about 2 different types of interactive entertainment. What we call a console or PC title is big and you spend hours on it and often you consume it on a big screen. What we call mobile is light -- a light experience. Typically, an avid consumer of a mobile game will play that game 5 to 7 times a day for around 9 minutes per session. It's a very different consumption experience. A console experience is akin to sitting down and watching a movie or binge watching a series for an evening. A mobile experience is something you do when you have a few moments free and you want to relax and enjoy and be entertained. And so the change in technology that will allow a console experience effectively to become a mobile experience probably broadens the market. But I don't think means that casual or hyper-casual or semi-casual or AA games necessarily go away. I think there's going to be a need and a desire for all different kinds of interactive entertainment. And as technology enhances the art of the possible, there'll be new formats that are delivered. An example of that, not -- it's not interactive, but an example of a new format that digital technology has enabled is micro dramas. And that's a huge business in China and a growing business in the U.S. It didn't exist 5 years ago. So there's some moral equivalent thereof in interactive entertainment. And one of the things that we think about here is the unknown, unknown, like what's the next thing that's coming in interactive entertainment at which we can excel, which our customers would love that new technology enables. We spend a lot of time thinking about that. In terms of Grand Theft Auto and where it's going on in the future, that's something that we're not talking about today. And in the fullness of time, I'm sure Rockstar will talk about. Operator: Your next question comes from the line of Ron Song with Wolfe Research. Taebin Song: Can you guys share any updates on your thoughts about advertising's place in Take-Two, especially with the continued shift to open platforms and streaming? You've been clear that it makes less sense for the consumers who are paying $70 plus for AAA game. But how can you strategically employ advertising beyond mobile games in a way that's not overly intrusive? Strauss Zelnick: Yes. Advertising is a growing part of our mobile business. We've rolled out ad units in many of our titles that previously did not have them. And our view really is, look, if you're going to engage with one of our mobile titles, we ought to be able to monetize that engagement in some way. So if you only engage with in-app payments, you're monetized -- pardon me, less than 20% of the audience typically, often quite a bit less than 20%. But if you have advertising as an option, you could monetize 100% of the audience in one form or another. So that has been a big part of our strategy in mobile, and we have rolled out advertising units in most, but not all of our titles so far. On the console side, look, you're correct in quoting me saying, if you're paying a premium price, you probably shouldn't be subject to advertising unless the advertising is sort of endemic to the title. So when you go to a basketball game or watch a basketball game on television, you're accustomed to seeing advertising in and around that game, advertising in the arena, for example. And in our video game, you'll see that, too, and that's appropriate, and we are able to monetize that. It is a relatively small part of the console business though, and I expect that, that will continue to be the case. Operator: Your next question comes from the line of Martin Yang with Oppenheimer. Martin Yang: Two questions. One, on the Netflix partnership. Do you think this is a one-off deal or this more creative use of Rockstar IP signals a broader framework for licensing Rockstar content in the longer term, especially when you consider there will be numerous ways to share derivative content off gameplay after the game launches? Strauss Zelnick: While this particular partnership is groundbreaking and unique. Rockstar has licensed content to Netflix before as has the rest of Take-Two. We have a close partnership with Netflix, and they are in the video game business, and we're very happy to be their partner. And I'm sure there will be plenty of things that we can do with Netflix and many other outlets in the future. So we want to be ubiquitous. We want to be where our customers are. We have, we believe, the best and biggest collection of owned intellectual property in the interactive entertainment business. And wherever you are, when you wake up, if you want to engage with our content, we want you to be able to do so. Martin Yang: A question on GTA Online. More recently, we see a higher frequency of content updates. Does that require you putting additional resources into GTA Online development team? Or you really just spreading out cutting historically a larger, less frequent updates into smaller chunks? Strauss Zelnick: Generally speaking, our update cadence for GTA Online has been pretty stable. And some of the updates have been amazing. Some have been less successful. But generally speaking, consumers really love them. But the cadence hasn't really changed, and we do apply significant resources to that, and we expect to continue to support GTA Online going forward. Operator: Your next question comes from the line of [ Jim Callahan ] with Piper Sandler. Unknown Analyst: I guess one on kind of GTA VI preorders. It sounds like the demand for the Deluxe Edition has been extremely strong. Any comment we can kind of provide on what that could look like, what maybe the mix kind of looks like as we get closer to release of the game would be helpful. Strauss Zelnick: Look, I think that Rockstar got it right in terms of the pricing of this Standard Edition and the pricing of the Deluxe Edition. And I think there's no doubt that consumers are really excited about both. And I think depending on your own ability to pay and how avid a consumer you are, you can choose between them. But we're -- the preorders have been exceptional, and we're happy with the mix as well. Unknown Analyst: Okay. That's great. And then maybe just a follow-up on the user acquisition cost comment on mobile. I guess kind of how do we parse that out from what overall engagement looks like broadly on mobile? That would be -- any comment there would be helpful. Strauss Zelnick: Engagement is fine. And as I said, we're very happy with what we see in the marketplace. And we have some titles that are just doing incredibly well. We have a tougher year-over-year comp on Color Block Jam. So that has affected our numbers, but that's really a comping issue, not a performance issue. So we give people what they want, they show up for it, and we have some titles that just continue to do great like Toon Blast and Match Factory! and Words with Friends and Empires & Puzzles and many other big titles. So the consumer is there. That said, user acquisition costs are a reflection of any number of things at any given time, including what else is going on in the market and what our competitors are doing. And in certain instances, we'll have competitors who, from our point of view, are vastly overspending in UA, and that will make it less economic for us to spend. So we really pay attention to how much we spend on UA and how that fits with the lifetime value of the property. And we want to make sure that every nickel that we spend in marketing comes back at a significant multiple. And some of our competitors don't seem to look at the world that way. And if there are a bunch of them in a given period of time, that can crowd us out of the market. Sometimes it happens. Operator: There are no further questions at this time. I will now turn the call back to Strauss Zelnick for closing remarks. Strauss Zelnick: The first thing and the most important thing is that we all want to reiterate our enormous gratitude to our 13,000 colleagues around the world who work hard every day to deliver the best entertainment properties to consumers wherever they are, whatever devices they have and whatever interest they have. And more often than not, our teams brilliantly succeed at that task. And that's everything. That's the whole shooting match. And we are aware of that, and as I said, highly grateful for that. We're also really excited about what we believe the future will bring for our company and for our colleagues. And all of that should translate into enormous benefits for our shareholders. We have a wonderful year that we're in process of and things are going really well. And we have great expectations for the upcoming launch of GTA VI, NBA 2K, WWE and lots of other titles coming from both the console and the mobile side. And as I said, we expect that this will usher in a new period of success at a different and enhanced level for Take-Two. So we couldn't feel more optimistic than we do. With big smiles on our faces and yet we know we have to wake up every day and do the hard work to deliver. That's our goal. Thank you so much for joining us today. Operator: This concludes today's call. Thank you for attending. You may now disconnect. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends Take-Two Interactive Software. The Motley Fool has a disclosure policy. Take-Two (TTWO) Q1 2027 Earnings Call Transcript was originally published by The Motley Fool

Take-Two Interactive Software TTWO reported first-quarter fiscal 2027 adjusted earnings of 36 cents per share, beating the Zacks Consensus Estimate by 16.13%. GAAP loss widened to 18 cents per share from 7 cents a year ago.Revenues of $1.39 billion declined 2.6% year over year but topped the consensus estimate of $1.36 billion by 2.3%. Better-than-expected NBA 2K and Grand Theft Auto performance helped Net Bookings exceed management's guidance. Recurrent consumer spending accounted for 84% of Net Bookings.GAAP net revenues increased 2.0% year over year to $1.53 billion. Game revenues rose 2.9% to $1.42 billion, while advertising revenues fell 8.4% to $111.1 million.By platform, mobile revenues decreased 4.9% to $762.3 million and PC and other revenues dropped 13.5% to $131.1 million. Console revenues climbed 16.3% to $640.5 million, partly offsetting weakness elsewhere. U.S. revenues rose 2.2% to $920.0 million, while international revenues increased 1.7% to $613.9 million. NBA 2K26 sold in more than 12 million units, up 9% from NBA 2K25. Recurrent consumer spending for NBA 2K grew 7%, supported by a 15% increase in average daily active users, a 25% rise in MyCAREER daily active users and a 35% increase in average games played per user. Take-Two Interactive Software, Inc. price-consensus-eps-surprise-chart | Take-Two Interactive Software, Inc. Quote The Grand Theft Auto series also exceeded the company's expectations. Grand Theft Auto V has sold in more than 230 million units worldwide, while recurrent consumer spending for the series grew 3%. Management said Grand Theft Auto VI had an exceptional start to preorders ahead of its Nov. 19 release. Zynga performed in line with management's expectations, though mobile Net Bookings declined 7% year over year. Toon Blast Net Bookings rose 8%, Words With Friends grew 8% and Top Eleven increased 15%.NBA 2K All-Star in China surpassed 10 million registered users since launch and is generating strong profit margins. Management also noted some pressure on user acquisition but said it was not seeing a broader consumer pullback in mobile. GAAP gross profit declined 6.6% year over year to $882.5 million, while gross margin contracted to 57.5% from 62.8%. Cost of revenues rose to $651.4 million and included a $43.4 million impairment charge tied to an unannounced third-party title that the company decided not to pursue.Operating expenses edged down 0.6% to $918.0 million. Selling and marketing expenses fell 9.6% to $369.7 million, while research and development expenses increased 6.8% to $273.8 million and general and administrative expenses rose 9.1% to $226.3 million. Cash and cash equivalents were $1.36 billion as of June 30, 2026, down from $1.55 billion at March 31. Short-term investments increased to $461.7 million from $443.8 million.Operating cash outflow was $168.8 million compared with $44.7 million a year earlier. For the fiscal second quarter, management expects Net Bookings of $1.62-$1.67 billion and GAAP net revenues of $1.42-$1.47 billion. GAAP loss is forecast at 84-75 cents per share, with recurrent consumer spending expected to decline about 5%.Take-Two reiterated fiscal 2027 Net Bookings guidance of $8.0-$8.2 billion, representing roughly 20% growth at the midpoint. GAAP net revenues are still expected at $7.9-$8.1 billion, while GAAP earnings are projected at 55-75 cents per share. Recurrent consumer spending is expected to be flat year over year and represent 64% of Net Bookings.For fiscal 2027, TTWO continues to expect operating cash flow above $1 billion. Capital expenditures are now projected at approximately $290 million, up from the prior forecast because of a planned real estate purchase, while management expects to reach a net cash position by fiscal year-end. Currently, TTWO carries a Zacks Rank #2 (Buy).Kontoor Brands KTB, Newsmax Inc. NMAX and Viking Holdings VIK are some similar-ranked stocks that investors can consider in the broader Consumer Discretionary sector.Kontoor Brands, Newsmax and Viking Holdings carry a Zacks Rank #2 each at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Kontoor Brands is slated to announce second-quarter 2026 results on Aug. 12. Meanwhile, Newsmax will report on Aug. 13, and Viking Holdings is scheduled to release results on Aug. 19. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Take-Two Interactive Software, Inc. (TTWO) : Free Stock Analysis Report Kontoor Brands, Inc. (KTB) : Free Stock Analysis Report Viking Holdings Ltd. (VIK) : Free Stock Analysis Report Newsmax Inc. (NMAX) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Take-Two Interactive Software, Inc. TTWO entered fiscal 2027 with first-quarter Net Bookings slightly above guidance, while management kept its full-year outlook unchanged ahead of the Nov. 19 launch of Grand Theft Auto VI. Chief executive officer Strauss Zelnick framed the year as an inflection point, but the call also showed restraint around translating record GTA VI preorders into higher guidance before launch. Goldstein reiterated fiscal 2027 Net Bookings guidance of $8 billion to $8.2 billion, representing about 20% growth at the midpoint. The company still expects recurrent consumer spending to be in line with fiscal 2026 and accounts for 64% of Net Bookings. Take-Two reported fiscal first-quarter earnings of 36 cents per share, which beat the Zacks Consensus Estimate of 31 cents. Revenues of $1.39 billion beat the estimate of $1.35 billion. Take-Two Interactive Software, Inc. price-consensus-eps-surprise-chart | Take-Two Interactive Software, Inc. Quote CEO Strauss Zelnick said confidence in the Nov. 19 release of Grand Theft Auto VI remains high, supported by what management described as an exceptional start to preorders. Zelnick said the preorder level is unprecedented for Take-Two and the industry, but he declined to translate that demand into unit expectations. He stressed that preorders can be canceled and that no units have yet been sold. President Karl Slatoff also pointed to continued GTA Online engagement, saying recent content has reactivated players while the company maintains a stable update cadence and significant support for the service. CEO Strauss Zelnick said NBA 2K26 sold more than 12 million units, up 9% from NBA 2K25. Recurrent consumer spending for the franchise grew 7%, while average daily active users increased 15%. CFO Lainie Goldstein said companywide recurrent consumer spending declined 1%, better than guidance for a 3% decline, and represented 84% of first-quarter Net Bookings. For the fiscal second quarter, Goldstein guided Net Bookings to $1.62 billion to $1.67 billion and expects recurrent consumer spending to decline about 5%, with mobile down and NBA 2K and Grand Theft Auto growing. A TD Cowen analyst asked about signs of weaker mobile demand. CEO Strauss Zelnick said Take-Two is not seeing consumer pullback, though user acquisition costs face some pressure and Color Block Jam has a tougher year-over-year comparison. A BMO Capital Markets analyst questioned the decision to price GTA VI at $80 while keeping NBA 2K27 at $70. Zelnick said the company’s objective is to deliver more consumer value rather than maximize price. Zelnick also said direct-to-consumer distribution remains a growth area in mobile and has had a material positive effect on margins. A Wells Fargo analyst asked whether strong GTA VI preorders could pull demand forward. CEO Strauss Zelnick acknowledged that outcome while reiterating that management is not raising guidance before the title launches. A Citi analyst also pressed for a framework linking preorders to eventual sales. Zelnick again declined to provide unit expectations, emphasizing that the unprecedented preorder levels make historical comparisons less useful. The repeated caution contrasted with management’s strong confidence in the title and reinforced the decision to keep the fiscal 2027 Net Bookings range unchanged. CEO Strauss Zelnick said major releases have historically influenced Take-Two beyond a single quarter, while the company’s pipeline, live services and catalog provide additional growth avenues. Management also highlighted international expansion, selective accretive M&A and live-service enhancements as priorities for sustaining a higher scale after fiscal 2027. TTWO carries a Zacks Rank #2 (Buy). Its Value Score is F, while Growth and Momentum Scores are C and the VGM Score is D. Under the Zacks framework, the #2 rank is favorable, while A and B are the stronger Style Score grades. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. The combination therefore provides a positive earnings-estimate-revision signal but weaker support from the Style Scores. The Zacks Rank can change as analysts revise estimates following the just-reported results. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Take-Two Interactive Software, Inc. (TTWO) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Snail, Inc. SNAL is scheduled to release second-quarter 2026 results on Aug 11. The Zacks Consensus Estimate for SNAL’s second-quarter 2026 earnings per share (EPS) is pegged at 31 cents, indicating a 94.5% decline from $5.65 reported in the prior-year quarter. The consensus mark for earnings has witnessed downward revisions in the past 60 days. SNAL’s earnings have surpassed the Zacks Consensus Estimate in three out of the trailing four quarters and missed on one occasion, with an average beat being 2,808.4%. The consensus mark for second-quarter 2026 revenues is pegged at $29 million, indicating a 30.7% increase from the year-ago quarter’s reported figure. Our proven model does not predict an earnings beat for Snail this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here. SNAL’s Earnings ESP: SNAL has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. Snail Zacks Rank: The company carries a Zacks Rank #4 (Sell) at present. You can see the complete list of today’s Zacks #1 Rank stocks here. Snail is likely to have benefited from a strong slate of ARK-related content in the second quarter, with player engagement and monetization potentially receiving a lift from new releases. The company had planned the Fantastic Tames Season 1 Expansion Pack for May and ARK Tides of Fortune for June, providing fresh content for ARK: Survival Ascended during the quarter. The franchise entered the period with solid momentum, as ASA sold 1.4 million units in first-quarter, helped by promotional activity and the success of the Lost Colony DLC. A major potential catalyst for second-quarter 2026 revenue is the planned release of the ASA remake of ARK Genesis Part 1. Snail expects this launch to trigger recognition of roughly $11 million of revenues that had previously been deferred. The revenue recognition could therefore create a meaningful year-over-year increase in quarterly sales, particularly alongside contributions from other ARK content. Bellwright could provide another source of revenue growth, supported by the positive response to its late-2025 content update. The title helped drive first-quarter 2026 performance, while the company’s broader portfolio of indie games and licensed properties provides additional revenue opportunities. Snail also has a number of ARK-related releases and other projects scheduled across 2026, which should help broaden its revenue base beyond the core franchise. On the downside, declining revenues from ARK Mobile and ARK: Survival Evolved could temper the overall improvement in sales. Profitability might have faced pressure from continued investment in Snail’s expanding game pipeline. The company is advancing three AAA titles while simultaneously funding ARK DLCs and other projects.  Although management said it remains disciplined on spending, elevated development activity could continue to weigh on the bottom line in second-quarter 2026. Shares of Snail have surged 105.2% in the past three months against the industry’s decline of 16.3%. The stock has also outperformed other industry players like Take-Two Interactive Software, Inc. TTWO and Playtika Holding Corp. PLTK, as shown in the chart. Image Source: Zacks Investment Research From a valuation standpoint, SNAL trades at a forward price-to-sales (P/S) multiple of 0.36, above the industry’s average of 1.85. Conversely, industry players, such as Take-Two Interactive Software and Playtika Holding, have P/E multiples of 5.21 and 0.4, respectively. Image Source: Zacks Investment Research Given the sharp recent rally, the lack of a favorable earnings signal and the company’s continued investment requirements, investors may want to remain cautious on SNAL ahead of its second-quarter results. Although ARK content and the expected recognition of deferred revenues could support sales, the company remains heavily reliant on the ARK franchise while older titles face pressure. At the same time, advancing multiple AAA projects and developing additional content could keep costs elevated and limit bottom-line improvement. The absence of a positive earnings surprise signal further reduces the near-term catalyst for the stock. With the shares already having rallied strongly, expectations appear elevated, leaving greater scope for disappointment if quarterly execution or the outlook falls short. Overall, the combination of potential earnings pressure, continued development spending, dependence on ARK and limited near-term visibility makes it prudent for investors to avoid SNAL ahead of the second-quarter results. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Snail, Inc. (SNAL) : Free Stock Analysis Report Take-Two Interactive Software, Inc. (TTWO) : Free Stock Analysis Report Playtika Holding Corp. (PLTK) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

For the quarter ended June 2026, Take-Two Interactive (TTWO) reported revenue of $1.39 billion, down 2.6% over the same period last year. EPS came in at $0.36, compared to $0.61 in the year-ago quarter. The reported revenue compares to the Zacks Consensus Estimate of $1.35 billion, representing a surprise of +2.3%. The company delivered an EPS surprise of +16.13%, with the consensus EPS estimate being $0.31. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health. Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance. Here is how Take-Two performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Total net bookings: $1.39 billion versus the 16-analyst average estimate of $1.36 billion. Net bookings by platform - Mobile: $739.5 million versus the 14-analyst average estimate of $761.78 million. Net bookings by distribution channel - Physical retail and other: $17.3 million versus the nine-analyst average estimate of $41.01 million. Net bookings by distribution channel - Digital online: $1.37 billion versus the nine-analyst average estimate of $1.31 billion. Net bookings by platform - PC and other: $121.2 million versus $108.1 million estimated by four analysts on average. Net bookings by platform - Console: $525.2 million compared to the $485.2 million average estimate based on four analysts. Net bookings by geographic region - United States: $805.4 million versus the two-analyst average estimate of $798.83 million. Net Revenue- Advertising: $111.1 million compared to the $102.6 million average estimate based on four analysts. The reported number represents a change of -8.4% year over year. Net Revenue- Game: $1.42 billion versus the three-analyst average estimate of $1.37 billion. The reported number represents a year-over-year change of +2.9%. Net Revenueby platform- PC and other: $131.1 million compared to the $106.17 million average estimate based on two analysts. The reported number represents a change of -13.5% year over year. Net Revenueby platform- Console: $640.5 million compared to the $574.85 million average estimate based on two analysts. The reported number represents a change of +16.3% year over year. Net Revenue by platform- Mobile: $762.3 million versus the two-analyst average estimate of $794.94 million. The reported number represents a year-over-year change of -4.9%. View all Key Company Metrics for Take-Two here>>> Shares of Take-Two have returned -5.5% over the past month versus the Zacks S&P 500 composite's +2.3% change. The stock currently has a Zacks Rank #1 (Strong Buy), indicating that it could outperform the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Take-Two Interactive Software, Inc. (TTWO) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in Take-Two Interactive Software, Inc.? Here are five stocks we like better. Take-Two exceeded Q1 expectations: Net bookings reached approximately $1.39 billion, above guidance, while revenue rose 2% year over year to $1.5 billion. The company maintained its fiscal 2027 net bookings outlook of $8 billion to $8.2 billion. Grand Theft Auto VI remains the key growth catalyst: Take-Two reiterated the planned November 19 release and described preorder activity as “exceptional,” while cautioning that it is not increasing guidance before launch. NBA 2K showed strong momentum, but mobile was mixed: NBA 2K26 unit sales rose 9% and daily active users increased 15%, while mobile spending declined 7% overall despite growth at several Zynga titles. Take-Two’s Q1 Results Leave GTA 6 Bulls Stuck in the Fog of War Take-Two Interactive Software (NASDAQ:TTWO) reported first-quarter fiscal 2027 net bookings of approximately $1.39 billion, slightly above its guidance range of $1.32 billion to $1.37 billion, as NBA 2K and the Grand Theft Auto series outperformed expectations. Chairman and Chief Executive Officer Strauss Zelnick said the company’s fiscal year had begun “an excellent start,” supported by its portfolio of console, PC and mobile franchises. Take-Two reiterated its fiscal 2027 net bookings outlook of $8 billion to $8.2 billion, which would represent roughly 20% growth at the midpoint compared with fiscal 2026. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth How the Memory Shortage Is Crushing the Gaming Industry The outlook reflects the company’s confidence in the planned November 19 release of Grand Theft Auto VI, which Zelnick described as a major driver of what Take-Two expects to be an inflection-point year. GAAP net revenue increased 2% year over year to $1.5 billion in the quarter ended June 30, 2026. Recurrent consumer spending declined 1%, a better result than the company’s forecast for a 3% decline, and represented 84% of net bookings. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High Unity’s 25% Drop: Gaming Crisis or Buying Opportunity? Chief Financial Officer Lainie Goldstein said NBA 2K recurrent consumer spending rose 7% and Grand Theft Auto spending grew 3%, while mobile spending declined 7% as expected. Cost of revenue rose 17% to $651 million and included a $43 million impairment charge related to Take-Two’s decision not to proceed with an unannounced game from a third-party developer. Operating expenses were flat at $918 million. For the full fiscal year, Take-Two expects recurrent consumer spending to be in line with fiscal 2026 and to account for 64% of net bookings. The company expects operating cash flow to exceed $1 billion and said it remains on track to reach a net cash position by year-end. Capital expenditures are now projected at about $290 million, increased from prior guidance because of a planned real estate purchase. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling For the fiscal second quarter, Take-Two forecast net bookings of $1.62 billion to $1.67 billion, compared with $1.96 billion in the prior-year quarter. The forecast includes the September 4 release of NBA 2K27 and content updates across its portfolio. Take-Two said consumer anticipation for Grand Theft Auto VI continues to build. Zelnick called preorder activity “exceptional” and said the company had not seen anything comparable “before at Take-Two or in the industry.” However, he cautioned that preorders can be canceled and that the company is not raising guidance before the game launches. The base version of Grand Theft Auto VI is priced at $80, while Take-Two is also offering a higher-priced deluxe edition. Zelnick said the company’s goal is not to maximize pricing but to provide consumers with more value than they pay for. NBA 2K27’s base price remains $70. Rockstar Games plans to provide an extended look at Grand Theft Auto VI on August 27 through a timed Netflix arrangement. Zelnick described the initiative as a first-of-its-kind partnership and said the footage will become available six hours later through Rockstar Games’ YouTube channel and potentially other outlets. The existing Grand Theft Auto franchise continued to exceed the company’s expectations. Grand Theft Auto V has now sold more than 230 million units worldwide, according to Take-Two. Rockstar also released The Kortz Center Heist for GTA Online on July 14. President Karl Slatoff said the update had been well received and that such releases typically reactivate players, though the company did not disclose specific performance data. NBA 2K26 concluded what management called a record year for the franchise. The game has sold more than 12 million units to date, up 9% from NBA 2K25. During the quarter, average daily active users rose 15%, MyCAREER daily active users increased 25%, and average games played per user climbed 35%. NBA 2K27 will feature San Antonio Spurs player Victor Wembanyama on the standard-edition cover, Indiana Fever player Caitlin Clark on the deluxe edition and former Chicago Bulls player Derrick Rose on the ultra edition. Take-Two plans a further game reveal on August 18. In mobile, Zynga performed in line with Take-Two’s expectations. Toon Blast net bookings increased 8%, Words with Friends bookings rose 8%, and Top Eleven bookings grew 15%. The company said its China-based NBA 2K All-Star title, developed with Tencent, surpassed 10 million registered users since its launch last year and is generating strong profit margins. Zelnick said Take-Two has not seen signs of a consumer pullback in mobile gaming. He attributed the company’s year-over-year mobile comparison largely to Color Block Jam, which was a new title in the previous year. He acknowledged pressure in user-acquisition spending but said engagement remained solid across titles including Toon Blast, Match Factory!, Words with Friends and Empires & Puzzles. Management identified international expansion as a strategic priority, particularly in underrepresented markets such as India, Africa, Latin America, the Middle East and parts of Asia. Zelnick said Take-Two has developed an in-house geographic pricing tool to experiment with pricing tailored to local purchasing power. He said the company’s long-term aim is to shift the balance of revenue more toward international markets through overall business growth. Take-Two currently derives about 80% of its revenue from the U.S., Western Europe and one or two Asian countries, according to Zelnick. On artificial intelligence, Zelnick said Take-Two is pursuing both research and applied projects intended to support innovation and efficiency. However, he said the company views technology as a tool to enhance creative work rather than replace its workforce. Take-Two also continues to expand direct-to-consumer payments across its mobile portfolio. Zelnick said the channel is growing and has had a material positive effect on mobile margins. Advertising is also becoming a larger part of the mobile business, with ad units now deployed across most, but not all, of the company’s mobile titles. Take-Two Interactive Software is an American video game publisher headquartered in New York City. Founded in 1993 by Ryan Brant, the company is publicly traded on the NASDAQ under the ticker TTWO and is led by Chairman and CEO Strauss Zelnick. Take-Two operates through distinct publishing labels that manage development, marketing and distribution of interactive entertainment for a global audience. Take-Two's publishing portfolio includes Rockstar Games and 2K, as well as the Private Division label, which supports independent and mid-size developers. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Take-Two Interactive Software Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

This article first appeared on GuruFocus. Net Bookings: $1.39 billion for Q1 fiscal 2027, slightly above the high end of the guidance range of $1.32 billion to $1.37 billion. GAAP Net Revenue: Increased 2% year-over-year to $1.5 billion. Recurrent Consumer Spending: Declined 1% for the period, accounting for 84% of net bookings. Cost of Revenue: Rose 17% to $651 million, including a $43 million impairment charge related to an unannounced title. Operating Expenses: Flat at $98 million on a GAAP basis; declined 1% year-over-year on a management basis. Fiscal 2027 Net Bookings Outlook: Reiterated at $8 billion to $8.2 billion, representing approximately 20% growth over fiscal 2026 at the midpoint. Fiscal 2027 GAAP Net Revenue Outlook: Expected to range from $7.9 billion to $8.1 billion. Fiscal 2027 Cost of Revenue Outlook: Expected to range from $3.54 billion to $3.66 billion. Fiscal 2027 Operating Expenses Outlook: Expected to range from $4.15 billion to $4.17 billion. Operating Cash Flow: Forecasted to exceed $1 billion for fiscal 2027. Capital Expenditures: Planned at approximately $290 million, up from prior forecast due to a planned real estate purchase. Q2 Fiscal 2027 Net Bookings Guidance: Projected to range from $1.62 billion to $1.67 billion. Q2 Fiscal 2027 GAAP Net Revenue Guidance: Expected to range from $1.42 billion to $1.47 billion. Q2 Fiscal 2027 Operating Expenses Guidance: Planned to range from $1.01 billion to $1.02 billion. NBA 2K26 Unit Sales: Sold in over 12 million units to date, reflecting 9% growth compared to NBA 2K25. NBA 2K Recurrent Consumer Spending: Grew 7% during the quarter. Grand Theft Auto V Unit Sales: Sold in over 230 million units worldwide to date. Grand Theft Auto Series Recurrent Consumer Spending: Grew 3% during the quarter. Toon Blast Net Bookings: Grew 8% year-over-year. Words With Friends Net Bookings: Grew 8% year-over-year. Top Eleven Net Bookings: Increased 15% year-over-year. NBA 2K All Star Registered Users: Surpassed 10 million registered users since launching last year in China. Warning! GuruFocus has detected 2 Warning Sign with TTWO. Is TTWO fairly valued? Test your thesis with our free DCF calculator. Release Date: August 07, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. First-quarter net bookings of $1.39 billion exceeded the high end of guidance, driven by strong performance from NBA 2K and the Grand Theft Auto series. NBA 2K26 delivered a record year with over 12 million units sold (up 9% year-over-year) and recurrent consumer spending grew 7%, with engagement metrics like daily active users up 15%. Grand Theft Auto V has sold over 230 million units, and recurrent consumer spending for the series grew 3%, with GTA+ continuing to thrive. Grand Theft Auto VI pre-orders are exceptional and unprecedented, with an extended look coming on August 27, building excitement for the November 19 release. Mobile portfolio shows strength with Toon Blast net bookings up 8%, Words With Friends up 8%, and Top Eleven up 15%, while direct-to-consumer channels enhance margins. Company reiterates fiscal 2027 net bookings outlook of $8-8.2 billion (20% growth) and expects to be in a net cash position by year-end, with operating cash flow over $1 billion. Recurrent consumer spending declined 1% in Q1, and mobile net bookings declined 7% year-over-year, partly due to tough comparison with Color Block Jam's launch last year. Cost of revenue rose 17% to $651 million, including a $43 million impairment charge for an unannounced title from a third-party developer. Second-quarter net bookings guidance of $1.62-1.67 billion is down from $1.96 billion last year, with recurrent consumer spending expected to decline 5%. Mobile user acquisition costs are under pressure due to competitors overspending, which can crowd out Take-Two's marketing efficiency. Management remains cautious about GTA VI pre-orders, noting they can be canceled and that demand could be pulled forward, so they are not changing guidance. Capital expenditures increased to $290 million due to a planned real estate purchase, and operating expenses are expected to grow 7% on a management basis. Q: Can you provide more color on the thinking behind the decision to go with Netflix for the time exclusivity of the GTA VI Extended Look rather than releasing it on a free platform like YouTube?A: Strauss Zelnick (CEO): This is a groundbreaking, first-of-its-kind partnership with Netflix, who is a close partner and great marketing/distribution partner. It's part of Rockstar's marketing strategy. The extended look will be available on the Rockstar Games Channel and YouTube six hours after its initial launch on Netflix. Q: Given the strong pre-order data for GTA VI, how should we think about the incrementality of pre-order units? Could the hype be pulling forward sales that would otherwise occur post-release?A: Strauss Zelnick (CEO): Pre-orders are exceptional and unprecedented, but we genuinely don't know how they will translate into sales. We are not changing our guidance because we haven't sold a single unit yet and pre-orders can be canceled. We are cautiously optimistic and avoid taking a victory lap before the launch occurs. Q: You recently announced an $80 base price for GTA VI but left NBA 2K27 at $70. How are you thinking about premium pricing for AAA games going forward?A: Strauss Zelnick (CEO): Our goal is to deliver way more value than what we charge. The real cost of a AAA game is lower today than 20 years ago, and pricing hasn't kept pace with inflation. We aim to over-deliver for consumers, and the pricing decision for GTA VI makes sense in the context of what we're delivering. Q: Can you comment on Sony's decision to eliminate physical disc sales for new games beginning in 2028? Will this impact your gross margins?A: Strauss Zelnick (CEO): Our business is already well over 90% digitally distributed. Physical discs don't make sense for consumers in most instances since you have to register online to play anyway. We will still have physical editions now and then, similar to vinyl in the recorded music business, but the industry is moving toward digital distribution. Q: Can you share any updates on your thoughts about advertising in Take-Two, especially with the shift to open platforms and streaming?A: Strauss Zelnick (CEO): Advertising is a growing part of our mobile business, allowing us to monetize 100% of the audience rather than just the less than 20% who engage with in-app payments. On the console side, if you're paying a premium price, you shouldn't be subject to advertising unless it's endemic to the title, like arena ads in a basketball game. Q: What are the opportunities you see for international expansion, and what are your criteria for evaluating M&A deals?A: Strauss Zelnick (CEO): We're underrepresented in markets like India, Africa, Latin America, and parts of Asia. We have a geo-pricing tool to appeal to local consumers and are working on properties that may appeal to specific markets. For M&A, we look for owned intellectual property, valuable tools and teams, and transactions that are immediately accretive to EBITDA and GAAP earnings. We expect to be in a net cash position soon, which would be the time to consider inorganic opportunities. Q: You mentioned that fiscal 2027 will be an inflection point in the company's history. What does that mean to you exactly?A: Strauss Zelnick (CEO): Historically, big releases like Grand Theft Auto and Red Dead have had ongoing positive effects on the company, not just for a quarter. With our massive pipeline, live services, catalog, and the upcoming GTA VI release, there's a lot of fuel for the fire. We believe this will usher in a new period of success at a different and enhanced level. Q: You mentioned that you think we could have a commercial streaming solution within three years that would solve the latency problem. What are you seeing differently today that gives you better visibility?A: Strauss Zelnick (CEO): There have been enormous advances in hyperscaler networks and edge network technology. One player in the market is looking to roll out a significant edge network that would address latency, at least in the US. We're not betting the company on this, but we see it as another embedded call option in our security. Q: Can you comment on the performance of the Kortz Center Update for GTA Online and whether it's bringing in lapsed players ahead of the GTA VI launch?A: Karl Slatoff (President): We're very pleased with how things are going. We typically don't give specific details about releases, but Rockstar releases are exciting, well-received by players, and always reactivate folks. So far, so good. Q: Can you walk us through the thinking behind the GTA VI Premium SKU mix, which only has two SKUs and doesn't offer Early Access?A: Strauss Zelnick (CEO): We don't tend to give a lot of color around pricing or editions. Rockstar feels that offering a phenomenal value at $80 makes sense for some consumers, and offering incremental value at a modestly increased price makes sense for others. Given the hype, we could have made other pricing choices, but our focus is on delivering way more value than what we charge. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Take-Two Interactive Software (NASDAQ:TTWO) reported better-than-expected first-quarter results, but shares moved lower after the video game publisher issued guidance that fell short of Wall Street forecasts despite reaffirming its full-year outlook ahead of the highly anticipated launch of Grand Theft Auto VI. The stock slipped around 2% as investors focused on the company’s cautious projections for the coming quarters. Take-Two generated first-quarter net bookings of $1.39 billion, down 3% from a year earlier but ahead of both the company’s own guidance and analysts’ expectations of $1.37 billion. Net revenue increased 2% year over year to $1.53 billion, comfortably exceeding the consensus estimate of $1.49 billion. Chairman and Chief Executive Officer Strauss Zelnick said, “Our excellent first quarter results reflect the power of our portfolio and disciplined execution across all of our labels.” He added, “With these positive trends and excitement around the November 19th launch of Grand Theft Auto VI, we are reiterating our Fiscal 2027 Net Bookings outlook of $8.0 to $8.2 billion.” Despite the earnings beat, management’s outlook weighed on market sentiment. Take-Two expects second-quarter net bookings of between $1.62 billion and $1.67 billion, below analysts’ consensus forecast of approximately $1.79 billion. The company also reaffirmed its fiscal 2027 net bookings guidance of $8.0 billion to $8.2 billion, which remains below Wall Street’s expectation of roughly $8.62 billion. The decision to leave guidance unchanged disappointed investors who had anticipated a more optimistic forecast ahead of the launch of Grand Theft Auto VI. Recurring consumer spending, including microtransactions, downloadable content and in-game purchases, declined 1% year over year but still accounted for 84% of total net bookings. The strongest contributors included NBA 2K, Grand Theft Auto, Toon Blast, Match Factory! and Empires & Puzzles. Console net bookings increased 11% to $525.2 million, comfortably exceeding expectations. However, mobile bookings declined 7% to $739.5 million, missing analyst estimates as the mobile business continued to face headwinds. Take-Two reported a GAAP net loss of $34.1 million, or $0.18 per share, compared with a loss of $11.9 million, or $0.07 per share, in the same period last year. The results included a $43.4 million impairment charge related to the cancellation of an unannounced game project. Adjusted EBITDA declined 26% year over year to $167 million. The market’s primary focus remains the launch of Grand Theft Auto VI, scheduled for 19 November. Given the extraordinary commercial success of Grand Theft Auto V, investors have built high expectations for the next instalment, contributing to forecasts above the company’s own guidance. Management has historically adopted a conservative approach to forecasting ahead of major game launches, preferring to raise expectations only after early sales performance becomes clearer. While console gaming continues to perform strongly, ongoing softness in the mobile segment and cautious full-year guidance remain the key factors limiting investor enthusiasm despite an otherwise solid quarter. Take-Two Interactive Software stock price