Yahoo Finance Take-Two (TTWO) Q4 Loss Widens Y/Y, Revenues Decline
Take-Two Interactive Software TTWO incurred fourth-quarter fiscal 2024 GAAP net loss of $17.02 per share, wider than a loss of $3.62 reported in the year-ago quarter.
The Zacks Consensus Estimate for earnings was pegged at 7 cents per share.
GAAP net revenues decreased 3% year over year to $1.45 billion. The figure beat the Zacks Consensus Estimate by 3.92%.
Revenues from the United States declined 9.1% year over year to $861.4 million and accounted for 61.6% of GAAP net revenues. The rest came from international, revenues of which increased 7.9% year over year to $538 million.
Game revenues (90.1% of total revenues) decreased 0.5% year over year to $1.26 billion. Advertising revenues (9.9% of total revenues) plunged 22.8% year over year to $138.8 million.
Bookings declined 3.2% year over year to $1.34 billion. Bookings from the United States decreased 4.9% year over year to $818.8 million and accounted for 60.7% of GAAP bookings. The rest came from international, bookings from which decreased 0.5% year over year to $530 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 advertising) decreased 2% year over year. It accounted for 79% of total GAAP net revenues. Recurrent consumer spending declined due to Grand Theft Auto Online, although it was up for virtual currency and GTA+.
The largest contributors to GAAP net revenues were NBA 2K24, NBA 2K23, Grand Theft Auto Online, Grand Theft Auto V, Toon Blast and Empires & Puzzles, as well as the company’s hyper-casual mobile portfolio, Red Dead Redemption 2, Red Dead Online, WWE 2K24, Match Factory! and Words With Friends.
In terms of distribution channels, Digital online revenues fell 4.1% year over year to $1.3 billion and accounted for 95.4% of GAAP net revenues. Physical retail and other revenues climbed 18.5% year over year to $64.2 million and accounted for 4.6% of GAAP net revenues.
Digital online bookings fell 4.2% year over year to $1.29 billion and accounted for 95.8% of bookings. Physical retail and other revenues jumped 26.8% from the year-ago quarter to $57.2 million and contributed 4.2% of bookings.
In terms of platform, revenues from mobile, console, and PC and other accounted for 51.1%, 40.6% and 8.3% of GAAP net revenues, respectively. Mobile revenues declined 0.4% year over year to $715.1 million. Console revenues declined 2.5% year over year to $568.7 million. PC and other revenues declined 20.4% year over year to $115.6 million.
Bookings from mobile, console, and PC and other accounted for 52.5%, 39.1% and 8.4% of bookings, respectively. Mobile bookings increased 0.3% year over year to $708.3 million. Console revenues fell 1.4% year over year to $527.4 million. PC and other revenues plunged 25.6% year over year to $113.1 million.
Gaming Metric Details
NBA 2K24 remained the #1 basketball simulation experience in the industry. The title has sold more than nine million units to date. Engagement remains high, with nearly two million consumers playing daily.
The Grand Theft Auto series delivered another fantastic quarter, partially driven by an array of free content updates for Grand Theft Auto Online, including new vehicles, drag races, holiday-themed items to celebrate Lunar New Year and Valentine’s Day, new community series jobs and more. Unit sales for Grand Theft Auto V exceeded forecast, and to date, the title has sold approximately 200 million units worldwide. More than a decade after their initial releases, Grand Theft Auto V and Grand Theft Auto Online grew their audience size by an incredible 35% and 23%, respectively, for the full year.
Rockstar’s premium subscription service, GTA+, also continues to grow, with membership for the quarter almost doubling over the same period in the prior year, as it continues to add valuable benefits to players.
Red Dead Redemption 2 also surpassed expectations and has sold nearly 64 million units worldwide.
WWE 2K24 has been a resounding success and is the highest-rated sports simulation of 2024. Engagement has been exceptional, with players logging over 11 million hours across more than 110 million played matches. In addition, the Forty Years of WrestleMania Pack has the highest attach rate for a Super Deluxe DLC in the series’ history, with more than 25% of WWE 2K24 players owning it.
Zynga delivered outstanding results for the period, led by robust in-app purchases. Twisted Tangle and Screw Jam both have become Top-100 grossing games on the U.S. Apple App Store.
Match Factory is accelerating and proving to be a hit, already establishing itself as a Top-20 grossing game on the U.S. Apple App Store and reaching millions of new users with its launch on the Google Play store.
Toon Blast maintained its positive momentum, achieving nearly 20% growth of in-app purchases compared with the fiscal third quarter, driven by a new Dragons' Treasure competition and many other features.
Top Troops launched several content updates, as well as a major cross-media collaboration with the popular influencer, MrBeast. The team plans to release additional enhancements to core gameplay and progression systems to drive further growth.
Momentum continues at Rollic, with the studio crossing 3.5 billion all-time downloads and announcing a new partnership with Mattel to introduce a mass-market Barbie mobile game later this year.
Operating Details
Take-Two’s GAAP gross profit surged 110.2% year over year to $469.1 million. Gross margin expanded 180 basis points on a year-over-year basis to 33.5%.
Operating expenses rallied 243.8% year over year to $3.18 billion, primarily due to a goodwill impairment charge of $2.2 billion and $93 million of business reorganization expenses related to the recently announced cost-reduction program. On a management basis, operating expenses rose 20% year over year due to higher personnel and IT expenses and professional fees.
Selling expenses rose 6% year over year to $448.8 million. General and administrative expenses plunged 20.1% year over year to $175 million. Research & development expenses declined 5.6% year over year to $245.5 million.
Operating loss was $2.71 billion compared with the year-ago quarter’s operating loss of $702.4 million.
Balance Sheet
As of Mar 31, 2024, Take-Two had $776 million in cash, cash equivalents and short-term investments compared with $1.11 billion as of Dec 31, 2023.
The company had a debt of $3.08 billion as of Mar 31, 2024, which remained almost unchanged from Dec 31, 2023.
Guidance
For the first quarter of fiscal 2025, Take-Two expects GAAP net revenues between $1.3 billion and $1.35 billion. The company expects net bookings in the range of $1.2-$1.25 billion.
Operating expenses are expected between $928 million and $938 million. It expects loss per share between $1.43 and $1.58. Per management, the reporting tax rate is anticipated to be 18%.
TTWO’s release slate for the guided quarter includes TopSpin 2K25, No Rest for the Wicked on early access for PC and NFL 2K Playmakers.
For fiscal 2025, the company expects GAAP net revenues between $5.57 billion and $5.67 billion. The company expects net bookings in the range of $5.55-$5.65 billion.
Operating expenses are expected in the band of $3.559-$3.579 billion. It expects loss per share between $3.5 and $3.9 per share.
For fiscal 2025, net cash provided by operating activities is expected to be roughly $(20) million. Capital expenditures are expected to be approximately $140 million.
Zacks Rank & Other Stocks to Consider
Currently, TTWO carries a Zacks Rank #2 (Buy).
Shares of Take-Two have lost 9.2% year to date compared with the Zacks Consumer Discretionary sector’s decline of 2.1%.
Some other top-ranked stocks in the broader Consumer Discretionary sector are Nexstar Media Group NXST, Netflix NFLX and JAKKS Pacific JAKK, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Nexstar Media Group have gained 11% in the year-to-date period. The long-term earnings growth rate for NXST is 10%.
Shares of Netflix have climbed 26% in the year-to-date period. The long-term earnings growth rate for NFLX is 22.58%.
Shares of JAKKS Pacific have plunged 46.5% in the year-to-date period. The long-term earnings growth rate for JAKK is 42.61%.
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