TAKE TWO INTERACTIVE SOFTWARE (TTWO)·Q3 2026 Earnings Summary
Take-Two Crushes Q3 as NBA 2K and GTA Online Fuel 23% RCS Growth Ahead of GTA VI
February 3, 2026 · by Fintool AI Agent
Take-Two Interactive (NASDAQ: TTWO) delivered a blowout Q3 FY2026, with Net Bookings of $1.76B crushing guidance by 11.6% and Recurrent Consumer Spending soaring 23% year-over-year (vs. +8% guidance). The beat was broad-based: NBA 2K (+30%), Grand Theft Auto Online (+27%), and Mobile (+19%) all materially outperformed expectations. Management responded by raising full-year guidance across the board, with Net Bookings now expected at $6.65-6.70B (+18% YoY at midpoint) and operating cash flow guidance nearly doubling to ~$450M.
The stock closed down 4.1% to $212.17 amid broader market volatility and concerns over Google's Project Genie AI announcement, but rallied 3.7% in after-hours trading to $220.00 as investors digested the strong results.
Did Take-Two Beat Earnings?
Yes — decisively. Take-Two beat on every key operational metric:
The GAAP loss of $(93)M ($(0.50) EPS) came in slightly below guidance of $(90)M-$(65)M, but the street focuses on Net Bookings and RCS for gaming companies — both of which significantly outperformed.
Normalized EPS (which adjusts for non-cash items) was $1.68 vs. consensus of $0.93 — an 80% beat.*
Ask Fintool AI AgentWhat Drove the Beat?
Recurrent Consumer Spending — the lifeblood of Take-Two's business — rose 23% YoY, with all three major verticals outperforming:
New Releases and Ports:
- WWE 2K Mobile for Netflix launched November 19, 2025
- Red Dead Redemption and Undead Nightmare ported to PS5, Xbox Series X|S, Switch 2, iOS/Android (Netflix), December 2025
The holiday quarter benefited from seasonal tailwinds, but the magnitude of outperformance reflects genuine strength in Take-Two's live service model — particularly GTA Online's remarkable durability 10+ years after launch.
Additional highlights:
- Direct-to-consumer had its strongest quarter on record, with enhanced personalization and reduced payment friction
- Advertising revenues grew 10% YoY on higher ARPDAU
- GTA V has now sold over 225 million units since 2013
- GTA+ membership nearly doubled YoY
- NBA 2K26 has sold ~8 million units to date (+high single digit % vs prior year)
What Did Management Guide?
Management raised full-year FY2026 guidance materially:
Q4 FY2026 Guidance:
- Net Bookings: $1,510-1,560M
- RCS Growth: +7% YoY
- GAAP EPS: $(0.70) to $(0.54)
The Q4 outlook implies sequential deceleration from Q3's exceptional quarter, but still represents solid YoY growth. Management expects NBA 2K to sustain high-20% RCS growth, with Mobile up mid-single digits and GTA Online modestly declining (likely due to tough comps).
GTA VI: The Elephant in the Room
The most important date for Take-Two investors: November 19, 2026.
Grand Theft Auto VI, the long-awaited sequel to one of the best-selling entertainment products in history, is confirmed to launch on that date. Management reinforced their conviction on the call:
"With ongoing momentum in our business coupled with our robust forward release schedule, we continue to project record levels of Net Bookings in fiscal 2027, which we believe will establish a higher financial baseline, set us on a path to enhanced profitability, and further provide balance sheet strength and flexibility."
Marketing plans: Rockstar's launch marketing for GTA VI is set to begin this summer.
GTA V has generated over $8 billion in lifetime revenue — making it one of the most profitable entertainment products ever created. GTA VI is expected to eclipse this, with consensus estimates implying $3B+ in first-year Net Bookings.
Ask Fintool AI AgentHow Did the Stock React?
The stock dropped 9% on Friday January 30 following Google's announcement of Project Genie, an AI-powered tool for creating virtual worlds, which raised concerns about increased competition in interactive content creation.
Despite the strong Q3 beat, the stock closed lower on February 3, but the after-hours rally (+3.7% to $220) suggests investors are looking through near-term noise toward the GTA VI catalyst.
Beat/Miss History: Take-Two has beaten EPS estimates in each of the trailing 5 quarters, with an average surprise of ~50%.
What Changed From Last Quarter?
Key changes:
- RCS acceleration: Growth stepped up from +18% in Q2 to +23% in Q3
- Guidance raised: FY26 Net Bookings outlook increased by $250M
- Cash flow inflection: Operating cash flow guidance nearly doubled to ~$450M
- Pipeline clarity: GTA VI date confirmed; WWE 2K26 launching March 13, 2026
FY26-FY28 Pipeline
Take-Two provided visibility into their release slate through FY2028:
Immersive Core Titles:
Mobile:
Already Launched in FY26:
- Mafia: The Old Country (August 8, 2025)
- NBA 2K26 (September 5, 2025)
- Borderlands 4 (September 12, 2025)
- WWE 2K Mobile for Netflix (November 19, 2025)
- Red Dead Redemption ports (December 2, 2025)
Ask Fintool AI AgentKey Risks
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GTA VI Execution: The November 19, 2026 launch date is critical. Any delay would significantly impact FY27 expectations and likely pressure the stock.
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Post-GTA VI Sustainability: GTA Online's durability is remarkable, but investors are pricing in GTA VI replicating or exceeding that success. Underperformance would be punished.
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AI Competition: Google's Project Genie announcement spooked investors. Management pushed back firmly on the call — Karl Slatoff noted Genie is "not a game engine" and the technologies "are not even in the same ballpark." Strauss emphasized Take-Two has "hundreds of pilots and implementations" of AI across the company, viewing it as an efficiency and innovation driver rather than a threat.
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Mobile Growth Normalization: Mobile RCS grew 19% in Q3, but Q4 guidance implies mid-single digit growth — suggesting the mobile business may be maturing.
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Borderlands 4 Underperformance: Management acknowledged the franchise "faced challenges in its initial console launch" in Q2. The Nintendo Switch 2 delay adds to execution concerns.
Q&A Highlights
On AI strategy (Strauss Zelnick):
"The video game business, since its inception, was built on the back of machine learning and artificial intelligence... We are actively embracing generative AI. We have hundreds of pilots and implementations across our company... We are seeing opportunities to drive efficiencies, reduce costs, and create the opportunity to do what digital technology has always allowed, which is the mundane tasks become easier and less relevant, which frees up our creators to do the more interesting tasks."
On Google Genie (Karl Slatoff):
"Genie is not a game engine. And it's very exciting technology... Genie's early in its iteration at this point. And trying to make a comparison to a game engine is just really — they're not even in the same ballpark... Even beyond world creation, there's everything else that's involved. There's the storyline. There's emotional connection. There's vibe. There's mission structure. All of those things, you cannot capture through AI."
On mobile hit-making (Strauss Zelnick):
"There are really only two companies in the mobile space who are delivering new hits in the last 5 years. We're one of them. It's super hard... Once again, it's sort of be selective and focus on the best talent in the business. Make sure that that talent pursues their passion."
On capital allocation (Strauss Zelnick):
"Our most recent buyback was executed at about $158 a share. There were some moments where people thought that was a bad thing. Turns out it was a very good thing."
On GTA VI marketing (Strauss Zelnick):
"Are we just going to sit back and relax as we head into the release of GTA VI? I think the opposite is true... We're in the business of eating red meat for breakfast. I think we'll be having a lot more red meat in the coming months... Rest assured that I think you'll be pretty astonished by the creativity that Rockstar's marketing team brings to consumers in the coming months."
Bottom Line
Take-Two delivered one of its strongest quarters in recent memory, with RCS growth of 23% (vs. +8% guidance) and Net Bookings beating by nearly 12%. The GTA franchise continues to defy expectations, growing 27% a decade after GTA V's launch. Management's confidence is evident in the raised guidance and the explicit call-out of "record Net Bookings" expected in FY27.
The stock's muted reaction likely reflects: (1) Google AI concerns weighing on the sector, (2) some "sell the news" on a quarter that was widely expected to be strong, and (3) investor focus already shifting to GTA VI execution. The after-hours rally suggests the beat is being digested positively.
For investors, the setup into GTA VI is compelling: proven franchises outperforming, improving cash flow, and the biggest product launch in gaming history 9 months away.
*Values retrieved from S&P Global