Take-Two Bookings Slip as Mobile Revenue Retreats
The videogame publisher recorded a $43.4 million impairment charge after halting an unannounced title.
Take-Two Interactive Software (TTWO), the videogame publisher, reported a 3% decline in fiscal first-quarter Net Bookings as weaker mobile business outweighed growth on consoles.
The quarter marked a reversal from flat year-over-year bookings in the preceding period and growth of 28% and 33% in the two quarters before that. Bookings also fell about 12% sequentially to $1.386 billion.
GAAP net revenue rose 2% to $1.534 billion, slowing from roughly 6% growth in the fiscal fourth quarter. Take-Two posted a net loss of $34.1 million, or $0.18 a share, compared with a loss of $11.9 million, or $0.07 a share, a year earlier.
Recurrent-consumer-spending bookings declined 1%, following growth of 7% in the prior quarter, though the category's share of bookings increased sequentially to 84% from 82%. Related GAAP revenue rose 3%, down from 12% growth in the fourth quarter, and accounted for 84% of total revenue.
The platform mix shifted toward consoles. Console revenue rose to $640.5 million from $550.6 million a year earlier, while mobile revenue fell to $762.3 million from $801.7 million. Console bookings increased as mobile bookings declined.
Gross margin improved sequentially to about 57.5% but contracted from 62.8% a year earlier as cost of revenue grew faster than sales. Take-Two recorded a $35.5 million operating loss after generating operating income in both the previous and year-earlier quarters, while non-GAAP EBITDA fell 26% from a year earlier to $167.0 million. The company also recognized an impairment charge after deciding to stop development of a third-party title.
Take-Two reiterated fiscal 2027 Net Bookings guidance of $8.0 billion to $8.2 billion and continues to project more than $1.0 billion of operating cash flow. For the fiscal second quarter, the company expects bookings of $1.62 billion to $1.67 billion, implying sequential growth of roughly 17% to 21%, while EBITDA is forecast between a $20 million loss and $4 million of profit.
The annual outlook held even as first-quarter operating cash outflow widened to $168.8 million from $44.7 million a year earlier, partly reflecting a larger reduction in deferred revenue.