Q1 2027 Take-Two Interactive Software Inc Earnings Call Transcript
Key Points
- First-quarter net bookings of $1.39 billion exceeded the high end of guidance, driven by strong performance from NBA 2K and the Grand Theft Auto series.
- NBA 2K26 delivered a record year with over 12 million units sold (up 9% year-over-year) and recurrent consumer spending grew 7%, with engagement metrics like daily active users up 15%.
- Grand Theft Auto V has sold over 230 million units, and recurrent consumer spending for the series grew 3%, with GTA+ continuing to thrive.
- Grand Theft Auto VI pre-orders are exceptional and unprecedented, with an extended look coming on August 27, building excitement for the November 19 release.
- Mobile portfolio shows strength with Toon Blast net bookings up 8%, Words With Friends up 8%, and Top Eleven up 15%, while direct-to-consumer channels enhance margins.
- Company reiterates fiscal 2027 net bookings outlook of $8-8.2 billion (20% growth) and expects to be in a net cash position by year-end, with operating cash flow over $1 billion.
- Recurrent consumer spending declined 1% in Q1, and mobile net bookings declined 7% year-over-year, partly due to tough comparison with Color Block Jam's launch last year.
- Cost of revenue rose 17% to $651 million, including a $43 million impairment charge for an unannounced title from a third-party developer.
- Second-quarter net bookings guidance of $1.62-1.67 billion is down from $1.96 billion last year, with recurrent consumer spending expected to decline 5%.
- Mobile user acquisition costs are under pressure due to competitors overspending, which can crowd out Take-Two's marketing efficiency.
- Management remains cautious about GTA VI pre-orders, noting they can be canceled and that demand could be pulled forward, so they are not changing guidance.
- Capital expenditures increased to $290 million due to a planned real estate purchase, and operating expenses are expected to grow 7% on a management basis.
Hello, everyone. Thank you for joining us, and welcome to the Take-Two Interactive Software first-quarter fiscal year 2027 results conference call. (Operator Instructions)
I will now hand the conference over to Nicole Shevins, SVP, Investor Relations and Corporate Communications. Nicole, please go ahead.
Good morning. Thank you for joining our conference call to discuss our results for the first quarter of fiscal year 2027 ended June 30, 2026. Today's call will be led by Strauss Zelnick, Take-Two's Chairman and Chief Executive Officer; Karl Slatoff, our President; and Lainie Goldstein, our Chief Financial Officer. We will be available to answer your questions during the Q&A session following our prepared remarks.
Before we begin, I'd like to remind everyone that statements made during this call that are not historical facts are considered forward-looking statements under federal securities laws. These forward
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