Take-Two Misses Q3 Earnings Estimates, Raises FY26 Sales View

Take-Two Interactive Software TTWO posted a third-quarter fiscal 2026 GAAP net loss of 50 cents per share, narrower than a loss of 71 cents reported in the year-ago quarter. The Zacks Consensus Estimate for earnings was pegged at 83 cents per share.GAAP net revenues increased 24.9% year over year to $1.7 billion. The Zacks Consensus Estimate for revenues was pegged at $1.58 billion.Revenues from the United States increased 22.6% year over year to $1.01 billion and accounted for 59.6% of GAAP net revenues. The rest came from international revenues, which increased 28.6% year over year to $686.8 million.Game revenues (92.4% of total revenues) rose 26.3% year over year to $1.57 billion. Advertising revenues (7.6% of total revenues) increased 10.3% year over year to $128.7 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. QuoteNet Bookings improved 27.9% year over year to $1.76 billion. Bookings from the United States increased 24.4% year over year to $1.05 billion and accounted for 59.6% of Net Bookings. The rest came from international bookings, which rose 33.6% year over year to $710.1 million.TTWO's Q3 DetailsRecurrent consumer spending rose 23% for the period and accounted for 76% of Net Bookings.In terms of distribution channels, Digital online revenues grew 26.2% year over year to $1.65 billion and accounted for 97.4% of GAAP net revenues. Physical retail and other revenues decreased 9.4% year over year to $44.5 million and accounted for 2.6% of GAAP net revenues. Digital online bookings increased 29.3% year over year to $1.71 billion and accounted for 97.4% of bookings. Physical retail and other bookings decreased 8.1% from the year-ago quarter to $45.4 million and contributed 2.6% of bookings.In terms of platform, revenues from mobile, console, and PC and other accounted for 51%, 38.4% and 10.7% of GAAP net revenues, respectively. Mobile revenues increased 18.3% year over year to $865.8 million. Console revenues grew 28.4% year over year to $652.1 million. PC and other revenues jumped 50.5% year over year to $181.1 million.Bookings from mobile, console, and PC and other accounted for 49%, 40% and 11% of bookings, respectively. Mobile bookings increased 21.3% year over year to $860.9 million. Console bookings grew 30.6% year over year to $702.6 million. PC and other bookings increased 53.8% year over year to $193.6 million.Gaming Metric DetailsThe largest contributors to Net Bookings were NBA2K26, Grand Theft Auto Online, Grand Theft Auto V, Toon Blast, Match Factory!, Empires & Puzzles, Color Block Jam, Red Dead Redemption 2, Red Dead Online, Red Dead Redemption and Undead Nightmare, Words With Friends, WWE 2K25 and Toy Blast.Take-Two’s announced future release pipeline highlights a strong multi-year content slate. Key confirmed titles include Sid Meier's Civilization VII for Apple Arcade, targeted for release on Feb. 5, 2026, and PGA TOUR 2K25, scheduled for launch on Feb. 6. The company also plans to release major franchises and new IPs such as WWE 2K26, Grand Theft Auto VI, CSR 3, Top Goal, Judas, Project ETHOS and the next iteration of BioShock, with specific release dates yet to be disclosed.Operating Details of TTWOTake-Two's GAAP gross profit rose 24.4% year over year to $945.5 million. Gross margin shrinks to 55.7% on a year-over-year basis from 55.9% in the year-ago quarter.Operating expenses rose 10.3% year over year to $984.2 million.Selling expenses increased 11.4% year over year to $433.2 million. General and administrative expenses rose 15.3% year over year to $218.6 million. Research & development expenses grew 17.4% year over year to $282.7 million. Business reorganization expenses decreased significantly to $0.6 million from $23.1 million in the year-ago quarter.Operating loss was $38.7 million compared with the year-ago quarter's operating loss of $132.1 million, representing a significant improvement.Balance SheetAs of Dec. 31, 2025, Take-Two had $2.16 billion in cash and cash equivalents compared with $1.87 billion as of Sept. 30, 2025. The company also had short-term investments of $199 million. It had total debt of $3.07 billion as of Dec. 31, 2025 (consisting of $582.2 million in short-term debt and $2.49 billion in long-term debt).For the nine months ended Dec. 31, 2025, net cash provided by operating activities was $388.9 million compared to net cash used in operating activities of $324.2 million in the prior-year period. Capital expenditures were $126.0 million for the nine-month period.TTWO's Q4 & FY26 GuidanceFor the fourth quarter of fiscal 2026, Take-Two expects GAAP net revenues between $1.57 billion and $1.62 billion. Operating expenses are expected to be between $973 million and $983 million. It expects a loss per share between 70 cents and 54 cents.Net Bookings are expected to be in the range of $1.51-$1.56 billion.For fiscal 2026, Take-Two has raised its expectations and now expects GAAP net revenues between $6.55 billion and $6.60 billion, up from $6.38-$6.48 billion previously expected. The company expects net bookings in the range of $6.65-$6.70 billion, up from the prior range of $6.40-$6.50 billion.Total operating expenses are expected in the range of $3.96-$3.97 billion. It expects a loss per share between $2.00 and $184.For fiscal 2026, net cash provided by operating activities is expected to be approximately $450 million. Capital expenditures are expected to be approximately $180 million.Take-Two’s Zacks Rank & Stocks to ConsiderCurrently, TTWO carries a Zacks Rank #3 (Hold).Under Armour, Inc. UAA, Airbnb, Inc. ABNB and Rush Street Interactive RSI are some better-ranked stocks that investors can consider in the broader Zacks Consumer Discretionary sector. While Under Armour currently sports a Zacks Rank #1 (Strong Buy), Airbnb and Rush Street Interactive carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.Under Armour shares have declined 24.3% over the past year. UAA is set to report its third-quarter fiscal 2026 results on Feb. 6.Airbnb shares have fallen 5.9% over the past year. ABNB is set to report its fourth-quarter 2025 results on Feb. 12, 2026.Rush Street Interactive shares have gained 16% over the past year. RSI is scheduled to report its fourth-quarter 2025 results on Feb. 17, 2026.Free Report: Profiting from the 2nd Wave of AI ExplosionThe next phase of the AI explosion is poised to create significant wealth for investors, especially those who get in early. It will add literally trillion of dollars to the economy and revolutionize nearly every part of our lives.Investors who bought shares like Nvidia at the right time have had a shot at huge gains.But the rocket ride in the "first wave" of AI stocks may soon come to an end. The sharp upward trajectory of these stocks will begin to level off, leaving exponential growth to a new wave of cutting-edge companies.Zacks' AI Boom 2.0: The Second Wave report reveals 4 under-the-radar companies that may soon be shining stars of AI’s next leap forward.Access AI Boom 2.0 now, absolutely free >>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 Under Armour, Inc. (UAA): Free Stock Analysis Report Airbnb, Inc. (ABNB): Free Stock Analysis Report Rush Street Interactive, Inc. (RSI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks