Executive Summary

Q1 FY26 delivered Net Bookings of $1.42B, exceeding the company’s guidance range, with GAAP net revenue of $1.50B (+12% YoY) and GAAP net loss narrowing to $11.9M ($0.07 per share) as mobile titles and NBA 2K25 outperformed expectations .
Management raised FY26 outlook: Net Bookings to $6.05–$6.15B (from $5.90–$6.00B), GAAP net revenue to $6.10–$6.20B, and improved expected GAAP net loss per share to $(2.40)–$(2.05), reflecting strong start and pipeline confidence .
S&P Global consensus for Q1: revenue $1.32B and Primary EPS $0.27; TTWO beat with actual revenue $1.50B and Primary EPS $0.65, signaling estimate revisions higher near term (values from S&P Global*) .
Near-term catalysts: Mafia: The Old Country (Aug 8), NBA 2K26 (Sep 5), Borderlands 4 (Sep 12); FY26 mix remains mobile-heavy with RCS at 84% of GAAP net revenue and 83% of Net Bookings; management expects mobile moderation and GTA Online decline later in FY26—watch opex ramp and guidance durability .

What Went Well and What Went Wrong

What Went Well

Net Bookings and GAAP net revenue exceeded internal guidance; CEO: “Net bookings…meaningfully above the high end of our expectations,” driven by mobile hits (Toon Blast, Match Factory!, Color Block Jam) and NBA 2K/GTA franchises .
RCS strength: Net Bookings from recurrent consumer spending grew 17% and accounted for 83% of Net Bookings; GAAP RCS +14% to 84% of revenue, underpinning durability of live services .
Pipeline visibility: Raised FY26 Net Bookings outlook to $6.05–$6.15B; management reiterated confidence in multi-year trajectory and record FY27 bookings (GTA VI in FY27) .

What Went Wrong

Operating cash flow remained negative in Q1 (net cash used in operations $(44.7)M) due to working capital movements; UA investment elevated at Zynga to support momentum, while personnel costs lifted opex modestly on a management basis .
Management flagged anticipated moderation in mature mobile titles and expects GTA Online to decline over FY26, tempering RCS growth vs Q1 strength (FY26 RCS +~4% revised from flat) .
Q2 opex to grow ~7% YoY on a management basis, driven by marketing for strong release slate; watch opex leverage against raised top-line .

Financial Results

Quarterly Performance vs Prior Periods

Metric	Q3 2025	Q4 2025	Q1 2026
Revenue ($USD Millions)	$1,359.8	$1,582.5	$1,503.8
Net Bookings ($USD Millions)	$1,373.4	$1,581.5	$1,423.1
GAAP Diluted EPS ($USD)	$(0.54)	$(17.02)	$(0.07)
GAAP Net Income ($USD Millions)	$(91.6)	$(3,726.2)	$(11.9)
EBITDA ($USD Millions)	$88.8	$161.0	$225.5
Gross Profit ($USD Millions)	$759.9	$803.3	$945.0

Segment/Channel Mix (YoY Q1 comparison)

Segment	Q1 2025	Q1 2026
Net revenue – Mobile ($USD Millions)	$722.5	$801.7
Net revenue – Console ($USD Millions)	$508.9	$550.6
Net revenue – PC & Other ($USD Millions)	$106.8	$151.5
Net revenue – Digital online (%)	97%	98%
Net revenue – Physical & other (%)	3%	2%
Net revenue – United States ($USD Millions, %)	$820.5 (61%)	$900.4 (60%)
Net revenue – International ($USD Millions, %)	$517.7 (39%)	$603.4 (40%)

KPIs

KPI	Q1 2026
Net Bookings ($USD Billions)	$1.42
Net Bookings – RCS (%)	83%
Net Bookings – RCS growth YoY (%)	17%
GAAP Net Revenue – RCS (%)	84%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Bookings ($USD Billions)	FY 2026	$5.90–$6.00	$6.05–$6.15	Raised
GAAP Net Revenue ($USD Billions)	FY 2026	$5.95–$6.05	$6.10–$6.20	Raised
Cost of Revenue ($USD Billions)	FY 2026	$2.519–$2.545	$2.548–$2.570	Raised
Total Operating Expenses ($USD Billions)	FY 2026	$3.78–$3.80	$3.84–$3.86	Raised
GAAP Net Loss per Share ($USD)	FY 2026	$(2.79) to $(2.45)	$(2.40) to $(2.05)	Improved
EBITDA ($USD Millions)	FY 2026	$508–$562	$554–$613	Raised
Net Cash from Operating Activities ($USD Millions)	FY 2026	~$130	~$130	Maintained
Capital Expenditures ($USD Millions)	FY 2026	~$140	~$140	Maintained
GAAP Net Revenue ($USD Billions)	Q2 FY26	—	$1.65–$1.70	New
Net Bookings ($USD Billions)	Q2 FY26	—	$1.70–$1.75	New
Total Operating Expenses ($USD Billions)	Q2 FY26	—	$1.02–$1.03	New
GAAP Net (Loss) per Share ($USD)	Q2 FY26	—	$(0.75) to $(0.60)	New
EBITDA ($USD Millions)	Q2 FY26	—	$117–$140	New

Earnings Call Themes & Trends

Topic	Q3 2025 (prior two)	Q4 2025 (prior one)	Q1 2026 (current)	Trend
Mobile momentum & D2C	Mobile grew mid-single digits; D2C growing; Match Factory on track to profitability; breadth of portfolio; UA burden acknowledged	Mobile outperformed (Match Factory, Toon Blast, Color Block Jam); D2C record performance; optimism into FY26	“Mobile vastly exceeded expectations”; titles cited; continued D2C focus and better conversion; notes court rulings may expand D2C runway	Improving near term; cautious moderation later FY26
NBA 2K engagement/RCS	Significant upside; DAU up ~20%; RCS +30%; innovations in modes	Near-record performance; RCS +42%; multiple brand extensions strength	Units sold-in >11.5M; DAU & MyCareer DAU each +30%; RCS +48%	Strengthening
GTA Online & GTA VI	GTA V sold-in >210M; GTA Online holiday update strong; GTA+ growth	GTA V >215M; GTA Online RCS +5%; GTA VI May 26, 2026 (FY27)	GTA Online benefited from Trailer 2 and Money Front update; new accounts +50% YoY	Engagement up; FY26 decline expected later
Pricing strategy	Variable pricing/value rubric reiterated	Variable pricing; Mafia priced to maximize reach	Borderlands 4 at $70; focus on exceeding value; variable pricing persists	Consistent
Switch 2 support	Civilizations planned; case-by-case platform support	4 titles planned; optimism for platform	First NBA 2K launch on Switch 2; multiple titles slated	Expanding
App store rulings/open distribution	D2C opportunity noted	Court rulings seen as favorable; cost of distribution to decline	“Momentum of court rulings…open & fair”; D2C currency purchases already live	Positive
Macro/tariffs	Not discussed explicitly	Tariff/console pricing impacts considered in guidance; margins achievable long term	CEO sees soft-landing backdrop; consumer selectivity → flight to quality	Neutral-to-cautious

Management Commentary

CEO: “We are raising our Fiscal Year 2026 Net Bookings outlook to $6.05 to $6.15 billion as a result of our strong start to the fiscal year… exceptional confidence in our multi-year outlook” .
CFO: “First quarter net bookings of $1.42 billion… significantly above our guidance… RCS grew 17% and accounted for 83% of net bookings… raising net bookings outlook to $6.05–$6.15 billion” .
President: “This is one of the strongest lineups in 2K’s history… positioning us to deliver best-in-class gameplay and outstanding financial results” .

Q&A Highlights

Pricing environment: Borderlands 4 at $70; TTWO emphasizes delivering more value than price charged and maintaining variable pricing across life cycles .
Mobile trajectory: Q1 strong across marquee titles but management forecasts moderation in mature titles and hyper/hybrid casual lifecycle curves; expects slight growth for mobile in Q2 .
Capital allocation: ~$2B cash, net leverage ~1.2x; priorities remain organic growth, selective/accretive M&A (e.g., Gearbox), and opportunistic buybacks at deep value .
D2C/open ecosystems: Court rulings supportive; TTWO already enabling web store currency purchases for most mobile games; focus on fair distribution costs across channels .
Macro tone: CEO expects modest GDP growth and selectivity in consumer spend; TTWO’s focus on quality positioned to win share even in cautious environments .

Estimates Context

Metric	Q1 2026 Consensus*	Q1 2026 Actual
Revenue ($USD Millions)	1,315.12*	1,503.8
Primary EPS (Normalized) ($USD)	0.266*	0.647*

Values retrieved from S&P Global*.

Implication: Both revenue and Primary EPS materially beat consensus, driven by mobile outperformance and outsized engagement/monetization in NBA 2K and GTA Online, supporting FY26 guidance raise .

Key Takeaways for Investors

Q1 beat on revenue/Net Bookings and improved profitability metrics reflect stronger-than-expected mobile and NBA 2K engagement; expect positive estimate revisions near term (S&P Global*) .
FY26 guidance raised across bookings, revenue, EBITDA, and per-share loss—narrative shifts toward execution of a loaded H2 slate and FY27 scale with GTA VI .
Watch Q2: heavy release slate and elevated marketing imply opex growth; gauge opex leverage as bookings scale and RCS mix persists .
RCS dominance (84% of GAAP revenue, 83% of bookings) underscores durability but increases sensitivity to live-ops cadence and player engagement quality .
Mobile moderation expected later in FY26; monitor performance of Match Factory!, Color Block Jam, and D2C conversion to offset legacy title aging .
Platform expansion (Switch 2) and pricing discipline (value-first) should broaden reach without undermining monetization; subscription and D2C channels add optionality .
Risk-reward: execution on major launches (Mafia, NBA 2K26, Borderlands 4) is critical for sustaining raised outlook; any delays or engagement shortfalls could challenge FY26 trajectory .

TAKE TWO INTERACTIVE SOFTWARE INC (TTWO)·Q1 2026 Earnings Summary