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Take-Two (TTWO) Reports Loss in Q4, Revenues Increase Y/Y

Take-Two Interactive Software TTWO reported a fourth-quarter fiscal 2023 loss of $3.62 per share against the year-ago quarter’s earnings of 95 cents per share.

Net revenues jumped 55.5% year over year to $1.45 billion.

Adjusted earnings were 85 cents per share in the reported quarter compared with $1.16 per share in the year-ago quarter. The figure beat the Zacks Consensus Estimate by 25%.

Game revenues (87.6% of revenues) improved 39% year over year to $1.27 billion.  Advertising revenues (12.4% of revenues) surged 841.9% year over year to $179.9 million.

 

Take-Two Interactive Software, Inc. Price, Consensus and EPS Surprise

 

Take-Two Interactive Software, Inc. price-consensus-eps-surprise-chart | Take-Two Interactive Software, Inc. Quote

 

Quarter Details

Recurrent consumer spending (which is generated from ongoing consumer engagement and includes virtual currency, add-on content, in-game purchases and in-game advertising) surged 94% year over year and accounted for 79% of total net revenues.

Digitally-delivered net revenues increased 67% to $1.39 billion and accounted for 96% of total net revenues

Top-line growth benefited from strong adoption titles, including NBA 2K22 and NBA 2K23, Grand Theft Auto Online and Grand Theft Auto V, Empires & Puzzles, Rollic's hyper-casual portfolio, Toon Blast, Red Dead Redemption 2 and Red Dead Online, Words With Friends, Merge Dragons! and Toy Blast.

Take-Two’s gross profit decreased 58% year over year to $223.2 million. Reported gross margin was 15.4% compared with the 57.1% reported in the year-ago quarter.

Operating expenses surged 130% year over year to $925.6 million.

Operating loss was $702.4 million against the year-ago quarter’s operating income of $128.9 million.

Balance Sheet

As of Mar 31, 2023, Take-Two had $1.01 billion in cash, cash equivalents and short-term investments compared with $1.46 billion as of Dec 31, 2022.

The company had a debt of $3.08 billion as of Mar 31, slightly down from $3.09 billion as of Dec 31, 2022.

Guidance

For the first quarter of fiscal 2024, Take-Two expects GAAP net revenues between $1.21 billion and $1.26 billion. It expects a loss between $1.05 and 95 cents per share.

For fiscal 2024, the company expects GAAP net revenues between $5.37 billion and $5.47 billion. It expects a loss between $3.05 and $2.80 per share.

For fiscal 2024, net cash provided by operating activities is expected to be roughly $90 million. Capital expenditures are expected to be approximately $180 million.

Zacks Rank & Stocks to Consider

Take-Two currently carries a Zacks Rank #3 (Hold).

Take-Two shares have gained 34.4% year to date, outperforming the Zacks Consumer Discretionary sector’s gain of 7.7%.

Marriott International MAR, Playtika PLTK and Stride LRN are some better-ranked stocks that investors can consider in the broader sector. All three stocks currently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long term earnings growth rate for Marriott, Playtika and Stride is pegged at 15.54%, 12.78% and 20%, respectively. MAR, PLTK and LRN shares have returned 21.2%, 23.3% and 34.4% on a year-to-date basis, respectively.

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