Take-Two beats quarterly results estimates on healthy gamer spending

7:06 pm Wednesday, November 06th, 2024

By Zaheer Kachwala

(Reuters) -Take-Two Interactive Software beat Wall Street expectations for second-quarter bookings and profit on Wednesday, boosted by the strong performance of the “Grand Theft Auto” and “Borderlands” franchises, sending its shares up more than 5% in extended trading.

Bookings for the second quarter came in at $1.47 billion, beating estimates of $1.43 billion, as per data compiled by LSEG.

The videogame publisher continues to see healthy in-game purchases for its mobile and console titles, as investors keenly await the launch of the hotly anticipated “Grand Theft Auto VI” next year.

“GTA VI” is expected to be an instant hit, with several analysts predicting the game to generate billions of dollars in sales yearly.

The company’s fiscal 2026 pipeline also includes titles like “Borderlands 4” and “Mafia: The Old Country,” which could give a further boost to bookings along with “GTA VI.”

“Borderlands and Mafia should grow over Civilization this year by around $400 million and GTA should add around $2 billion, so they will have no trouble growing next year,” said Wedbush Securities analyst Michael Pachter.

Take-Two also said it sold its Private Division label to an unnamed buyer as the company focuses on growing its core and mobile business in the long term.

The company’s mobile business saw strong spending, growing over 9% in the quarter.

“Zynga had been actively pushing into accretive revenue streams, like ads, to offset the growing costs of user acquisition,” said Joost Van Dreunen, a lecturer at NYU’s Stern School of Business.

Take-Two forecast bookings in the range of $1.35 billion to $1.40 billion, compared with estimates of $1.44 billion. 

It reiterated its annual bookings forecast, expressing confidence in achieving net bookings growth in its fiscal 2026 and 2027, with analysts seeing much of the growth to come from “GTA VI.”      

On an adjusted basis, the company earned 66 cents per share, compared with estimates of 41 cents per share.

(Reporting by Zaheer Kachwala in Bengaluru; editing by Alan Barona)