Takeaways From Take-Two’s Recent Q4 Earnings Meeting

Take-Two Interactive announced its fourth-quarter earnings Monday afternoon, beating estimates. The publisher reported net revenue of $930 million, beating analyst estimates of 873 million and company estimates of 883 million. Net revenue is a metric that shows a company’s total revenue minus any direct expenses incurred.

Net Bookings for the quarter rose to $846 Million, with total net bookings of $3.41 bln. The company also reported adjusted earnings per share of 1.09 vs analyst estimates of 1.04 a share. 

Take-Two Chairman & CEO Strauss Zelnick commented on the company’s strong earnings;

Our strong fourth quarter results concluded another highly successful year for our Company, during which we delivered Net Bookings of $3.4 billion, In addition to our outstanding financial results, I am pleased that we took pivotal steps to position our organization for the long term by investing in talent, broadening our portfolio further, and agreeing upon our transformational pending combination with Zynga, which has the potential to exponentially increase our Net Bookings from mobile, while also enabling us to deliver substantial cost synergies and revenue opportunities.” – Strauss Zelnick 

In the companies earnings call, Strauss Zelnick confirmed that GTA 5 has sold over 165 million units, also noting that the PS5/XSX/S are the third console generation which the title has launched on. We reported in February that 160 million units were sold at that time. 

The company also gave an insight into its future plans. 

Take Two expects to close its acquisition of Zynga on May 23rd, 2022. It was also noted that the company has a continued focus on mergers and acquisitions, so future acquisitions by the company are not out of the question.

The company also wants to further the adoption of subscriptions as well as free to play games. Take-Two’s Rockstar Games has already launched GTA +, a subscription service for Grand Theft Auto Online. 

Streaming also will be a strong focus into the future. As the console shortage continues, cloud streaming may give access to current generation titles to players with older generation consoles. GTA 6, which may very well outsell GTA 5, would have access to a larger total addressable market including the 117 million PS4s sold and 51 million Xbox Ones sold so far. 

In their investor presentation, TTWO reaffirmed its commitment to cloud streaming on Stadia, Playstation Plus and Xbox Game Pass Ultimate. However in their earnings call Strauss Zelnick mentioned that these distribution channels are still a small part of their business.  

TTWO also plans to release 65+ titles into FY 2025, not including games in development at Zynga.

This includes 24 immersive core titles, or AAA titles from its main studios. 

10 games from Independent studios, external studios who’s games will be published by TTWO. 

20 mobile games, with at least 12 free to play.

7 Mid core games, which are AA in size, and not as large as their immersive core titles.

8 New iterations of previously released titles, which includes remakes and remasters.

Take-Two made no comments on the development or release timeline of Grand Theft Auto 6, however insiders suggest that a release could come as soon as 2024. 

TTWO shares were up after earnings to $112.94 a share. Wall Street continue to have a positive outlook on the company, with an average 12 month price target of $199.53 from 25 analysts.