Take-Two Interactive Software, Inc.
TTWO · Nasdaq
Next quarter
Reports Nov 5, 2026.
Consensus is $0.40 EPS for Sep 2026 across 7 estimates, ranging -$0.08 to $0.68.
TTWO Jun 2026
- 112.50%
- $0.08
- -$0.01
- —
- $1.53B
Reported results
- $1.53B
- 57.53%
- -$35.50M
- -2.31%
- -$34.10M
- -$0.18
Highlights
- Bookings: Net Bookings declined 3% year over year to $1.39 billion, slightly above Take-Two's guidance range, with recurrent consumer spending down 1% and representing 84% of the total.
- Revenue: GAAP net revenue rose 2% to $1.53 billion from $1.50 billion, led by an $89.0 million increase from NBA 2K that offset weaker Color Block Jam and Grand Theft Auto performance.
- Earnings: The supplied consensus dataset shows EPS of -$0.01 versus an expected $0.08, a -112.5% surprise; the filed GAAP result was a $34.1 million net loss, or -$0.18 per share, versus a $11.9 million loss, or -$0.07, last year.
- Impairment: Cost of revenue included a $43.4 million impairment charge after Take-Two abandoned further development of an unannounced third-party title.
- Margins: Gross margin fell to 57.5% from 62.9%, while operating income shifted to a $35.5 million loss from $21.6 million of income; EBITDA was $167.0 million versus $225.5 million.
- GTA VI: Take-Two reiterated fiscal 2027 Net Bookings guidance of $8.0 billion to $8.2 billion ahead of the planned November 19, 2026 launch of Grand Theft Auto VI.
- Cash flow: Operating cash flow was negative $168.8 million versus negative $44.7 million a year ago, primarily reflecting $173.0 million invested in software development and licenses.
- Balance sheet: Cash, cash equivalents and restricted cash declined to $1.45 billion from $1.64 billion at March 31, while debt totaled $2.52 billion face value and $997.5 million remained available under the revolver.
Analysis
Take-Two's fiscal first quarter 2027 was a mixed pre-launch quarter: bookings were slightly ahead of company guidance, but the earnings result missed the supplied consensus expectation. The consensus dataset shows EPS of -$0.01 versus $0.08 expected, while the filed GAAP numbers show a $34.1 million net loss, or -$0.18 per share, compared with a $11.9 million loss, or -$0.07, in the year-ago quarter. Revenue increased 2% to $1.53 billion, although the latest prior quarter on file, Q3 fiscal 2026, was higher at $1.70 billion with a $92.9 million net loss.
The print was defined by a resilient recurring business and a major shift in mix toward console. Recurrent consumer spending revenue rose 3% to $1.29 billion, or 84% of revenue, while console revenue increased 16% to $640.5 million and mobile revenue declined 5% to $762.3 million. Profitability deteriorated as gross margin contracted to 57.5% from 62.9%, including a $43.4 million pipeline-title impairment, and EBITDA fell to $167.0 million from $225.5 million. Management nevertheless kept full-year Net Bookings guidance at $8.0 billion to $8.2 billion, with NBA 2K27 due September 4 and GTA VI scheduled for November 19.
Bookings and portfolio
The underlying portfolio was broadly stable but uneven. Net Bookings declined $37.2 million, or 2.6%, to $1.386 billion, primarily because of lower contribution from Grand Theft Auto and Color Block Jam, partly offset by higher NBA 2K bookings. Recurrent spending remained the anchor, although its bookings declined 1% to $1.169 billion.
- NBA 2K: Higher NBA 2K performance drove an $89.0 million increase in recognized revenue and helped console revenue rise to $640.5 million from $550.6 million.
- Mobile: Mobile revenue fell to $762.3 million from $801.7 million, reducing its mix to 49.7% from 53.3%, mainly because of weaker Color Block Jam.
- Digital mix: Digital online revenue increased 2% to $1.507 billion and represented 98.3% of total revenue; physical retail contributed only $26.6 million.
Profitability and impairment
Revenue growth did not translate into earnings growth. Cost of revenue increased 17% to $651.4 million, pushing gross margin down 540 basis points to 57.5%. Software development costs and royalties rose to $135.1 million from $30.1 million, while licenses increased to $99.5 million from $70.9 million. The company also recorded a $43.4 million impairment charge tied to an unannounced third-party title that it will no longer develop.
- Operating result: Operating expenses were broadly flat at $918.0 million, but operating income moved from a $21.6 million profit to a $35.5 million loss.
- Adjusted measure: EBITDA declined to $167.0 million from $225.5 million, despite lower selling and marketing expense of $369.7 million versus $409.2 million.
- Below the line: Interest and other expense improved to $13.8 million from $35.4 million, helped by lower debt and foreign-exchange losses, but this was not enough to offset weaker gross profit.
GTA VI outlook
Management kept its fiscal 2027 outlook intact, making the quarter primarily a bridge to a concentrated release slate rather than a reset of expectations. Grand Theft Auto VI remains scheduled for November 19, 2026, following the start of pre-orders in June. NBA 2K27 is scheduled for September 4, 2026, with PGA TOUR 2K27 and WWE 2K27 also planned during the fiscal year.
- Full year: Net Bookings guidance remains $8.0 billion to $8.2 billion, alongside revenue guidance of $7.9 billion to $8.1 billion and EBITDA guidance of $993 million to $1.053 billion.
- Cash generation: Management expects more than $1.0 billion of operating cash flow and approximately $290 million of capital expenditures in fiscal 2027.
- Near term: For the September quarter, Take-Two forecasts Net Bookings of $1.62 billion to $1.67 billion and a net loss of $140 million to $157 million, reflecting the timing of the release schedule.
Cash and capital
Liquidity weakened during the quarter as the business funded its development pipeline ahead of the major releases. Cash, cash equivalents and restricted cash fell $192.0 million to $1.446 billion, while operating cash flow was negative $168.8 million. The decline was driven largely by $173.0 million of investment in software development and licenses, alongside a $174.9 million reduction in deferred revenue.
- Debt: Senior notes totaled $2.50 billion, with $29.4 million of convertible notes due in December 2026; total debt at face value was $2.53 billion.
- Liquidity access: Take-Two had $461.7 million of short-term investments and approximately $997.5 million available under its undrawn $1.0 billion revolving credit facility.
- Share activity: The company issued $31.8 million of common stock through its employee stock purchase plan and made no open-market repurchases; 10.0 million shares remained available under the repurchase authorization.
