Take-Two Interactive Prepares for Fiscal Q2 Earnings: What to Expect
Take-Two Interactive (TTWO) will announce its second-quarter fiscal 2025 financial results on November 6.
Projected Revenue and Loss
For the upcoming quarter, Take-Two anticipates GAAP net revenues to range between $1.29 billion and $1.34 billion. The company expects to report a loss per share between $2.15 and $2.30.
The Zacks Consensus Estimate predicts revenues at $1.45 billion, indicating a modest increase of 0.21% from the same quarter last year.
However, the consensus for earnings per share has remained stable at 42 cents over the last month, signaling a significant decline of 65.85% compared to the previous year’s earnings.
Stay informed about all quarterly releases: Check out the Zacks Earnings Calendar.
In the last four quarters, Take-Two’s earnings exceeded the Zacks Consensus Estimate three times and fell short once, delivering an impressive average surprise of 190.52%.
Take-Two’s Performance Overview
Take-Two Interactive Software, Inc. price-eps-surprise | Take-Two Interactive Software, Inc. Quote
Let’s explore some of the factors influencing this earnings report.
Key Influencing Factors
Take-Two is likely to see steady demand for its popular game series such as Grand Theft Auto, Red Dead Redemption 2, Red Dead Online, NBA 2K25, and WWE 2K. Revenue from Grand Theft Auto V is expected to positively impact the fiscal second-quarter results.
Innovations aimed at enhancing mobile gaming experiences are likely to drive customer engagement. The expected success of NBA 2K24 Arcade Edition could lead to higher download rates in this quarter.
The acquisition of Gearbox Entertainment has boosted development capabilities and contributed to improved mobile revenues.
Additionally, the rising popularity of mobile games like Toon Blast and in-app purchases from Zynga’s offerings may further bolster Take-Two’s revenue growth.
Take-Two’s publication arm, Zynga, has made Star Wars: Hunters available on Nintendo Switch, iOS, and Android, potentially expanding its user base.
While the blended monetization strategy in hyper-casual games shows promise, ongoing sluggish growth in consumer spending could hinder overall revenue performance. In the first quarter of fiscal 2025, consumer spending stagnated year-over-year, comprising 83% of net revenues.
Furthermore, challenges in the mobile portfolio, including Empires, Puzzles, Grand Theft Auto Online, and NBA 2K, could lead to disappointing results in revenue.
Increased operating expenses related to mobile and core launches, as well as costs from the Gearbox acquisition, are likely to pressure margins in this upcoming report.
Earnings Model Insight
According to the Zacks model, having a positive Earnings ESP combined with a Zacks Rank of #1 (Strong Buy), #2 (Buy), or #3 (Hold) improves the chances of an earnings beat.
Currently, TTWO holds an Earnings ESP of -9.16% and a Zacks Rank of #3. Investors looking for strong stock picks can utilize the Earnings ESP Filter to uncover potential opportunities.
Stocks to Watch
Several stocks appear promising for this earnings season based on positive earnings indicators.
Flutter Entertainment PLC (FLUT) has an Earnings ESP of +172.73% and a Zacks Rank of #1. The company’s shares have risen by 20.7% this year and it plans to announce results for its third quarter of 2024 on November 12.
DraftKings (DKNG) possesses an Earnings ESP of +13.83% and has a Zacks Rank of 3. Its shares are up by 1.6% year-to-date, with third-quarter 2024 results set for November 7.
Airbnb (ABNB) shares have gained 15.4% this year, and the company has an Earnings ESP of +0.12% with a Zacks Rank of 3. The earnings announcement is scheduled for November 7.
Investment Insights
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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
