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TT

TAKE TWO INTERACTIVE SOFTWARE INC (TTWO)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 FY2025 net revenue was $1.58B (+13% y/y) and Net Bookings were $1.58B (+17% y/y), both at the top end of guidance; recurrent consumer spend drove 76–77% of mix .
  • GAAP EPS was $(21.08) driven by a $3.55B goodwill impairment and $176.3M intangible impairments, overshadowing otherwise solid operating performance and a strong year for NBA 2K, GTA Online, Red Dead, and Zynga titles .
  • FY2025 finished at the high end of guidance: Net Bookings $5.65B and GAAP revenue $5.63B; management introduced FY2026 guidance with Net Bookings of $5.9–$6.0B, EBITDA $508–$562M, and GAAP net loss per share of $(2.79)–$(2.45) as the company invests ahead of FY2027 (GTA VI) .
  • GTA VI’s release was confirmed for May 26, 2026 (FY2027), with unprecedented engagement (Trailer 2: 475M views in 24 hours), reinforcing the multi‑year bookings growth narrative; stock catalysts include the impairment headline and GTA VI timing clarity .
  • The company raised ~$1.04B via an equity offering post‑quarter to enhance flexibility for debt repayment and acquisitions .

What Went Well and What Went Wrong

What Went Well

  • Net Bookings of $1.58B (+17% y/y) and GAAP net revenue of $1.58B (+13% y/y) both landed at the top of ranges; recurrent consumer spend accounted for ~77% of bookings and ~76% of revenue .
  • NBA 2K delivered near‑record performance: recurrent consumer spending growth of 42%, nearly 10M units sold‑in (+7% vs 2K24), and significant DAU/MyCAREER engagement gains; “We expect to achieve record levels of Net Bookings” heading into FY2026–27 .
  • Mobile momentum: Match Factory! and Toon Blast executed strong live‑ops and events, with Color Block Jam rapidly scaling to profitability and contributing meaningfully to mobile bookings .

What Went Wrong

  • GAAP net loss of $(3.73)B and GAAP EPS of $(21.08) were driven by a $3.55B goodwill impairment and $176.3M intangible asset impairments; operating expenses rose 44% to $4.58B on these charges .
  • Management expects FY2026 recurrent consumer spending to be flat y/y, with declines in mobile and GTA Online offset by NBA 2K, tempering near‑term momentum until FY2027’s GTA VI release .
  • Q4 FY2025 EBITDA was $161.0M, below S&P Global consensus; management flagged higher development costs for titles “not technologically feasible” and elevated marketing as drivers of near‑term expense pressure .

Financial Results

Headline P&L and Bookings (y/y and q/q context)

MetricQ4 2024Q3 2025Q4 2025
GAAP Revenue ($USD)$1,399.4M $1,359.8M $1,582.5M
Net Bookings ($USD)$1,348.8M $1,373.4M $1,581.5M
GAAP Diluted EPS ($)$(17.02) $(0.71) $(21.08)
Gross Profit ($USD)$469.1M $759.9M $803.3M
EBITDA ($USD)$(19.6) $88.8 $161.0

Mix and Platform (Q4 2025 vs Q4 2024)

Mix / PlatformQ4 2024Q4 2025
Net Revenue – United States$861.4M (62%) $946.1M (60%)
Net Revenue – International$538.0M (38%) $636.4M (40%)
Net Revenue – Digital Online$1,335.2M (95%) $1,525.6M (96%)
Net Revenue – Physical & Other$64.2M (5%) $56.9M (4%)
Net Revenue – Mobile$715.1M (51%) $747.7M (48%)
Net Revenue – Console$568.7M (41%) $591.2M (37%)
Net Revenue – PC & Other$115.6M (8%) $243.6M (15%)

Net Bookings Mix (Q4 2025 vs Q4 2024)

Mix / PlatformQ4 2024Q4 2025
Net Bookings – United States$818.8M (61%) $961.1M (61%)
Net Bookings – International$530.0M (39%) $620.4M (39%)
Net Bookings – Digital Online$1,291.6M (96%) $1,528.7M (97%)
Net Bookings – Physical & Other$57.2M (4%) $52.8M (3%)
Net Bookings – Mobile$708.3M (53%) $730.1M (46%)
Net Bookings – Console$527.4M (39%) $601.7M (38%)
Net Bookings – PC & Other$113.1M (8%) $249.7M (16%)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent/ActualChange
GAAP Revenue ($USD)Q4 FY2025$1.519B–$1.619B $1.5825B In-range (met)
Net Bookings ($USD)Q4 FY2025$1.484B–$1.584B $1.5815B Top end (met)
GAAP Revenue ($USD)FY2025$5.57B–$5.67B $5.6336B Met
Net Bookings ($USD)FY2025$5.55B–$5.65B $5.6480B Top end (met)
GAAP Revenue ($USD)FY2026N/A$5.95B–$6.05B Initial guide
Net Bookings ($USD)FY2026N/A$5.90B–$6.00B Initial guide
EBITDA ($USD)FY2026N/A$508M–$562M Initial guide
GAAP Net Loss per Share ($)FY2026N/A$(2.79)–$(2.45) Initial guide
GAAP Revenue ($USD)Q1 FY2026N/A$1.35B–$1.40B Initial guide
Net Bookings ($USD)Q1 FY2026N/A$1.25B–$1.30B Initial guide
EBITDA ($USD)Q1 FY2026N/A$114M–$136M Initial guide

Earnings Call Themes & Trends

TopicQ2 FY2025 (Q-2)Q3 FY2025 (Q-1)Q4 FY2025 (Current)Trend
GTA VI timing & engagementReiterated FY2026–27 bookings growth; GTA VI in fall ’25 (later moved) Confirmed strong pipeline; bookings acceleration in Q4 from new releases GTA VI set for May 26, 2026; Trailer 2 hit 475M views in 24h Clearer timing; engagement building
NBA 2K franchise strengthARPU and engagement up; strong launch of 2K25 2K outperformed; y/y engagement and RCS growth 42% RCS growth; ~10M units sold‑in; MyCAREER/DAU gains Sustained outperformance
Mobile portfolio momentumMatch Factory!, Toon Blast, D2C scaling Mixed: some moderation; stronger D2C conversion Color Block Jam profitable; Match Factory! strong; D2C “record performance” Positive, with selective moderation
Direct-to-consumer (D2C) economicsBuilding D2C inside Zynga; margin accretive Double‑digit D2C conversion in major titles D2C “record performance”; court rulings supportive Improving
Cost discipline & margin outlookShifted marketing; expense timing helped Q2 Expense timing shifted to Q4; guidance reiterated Expect to reach mid‑20% operating margins over time; 3% opex growth FY2026 Long‑term margin confidence
Pricing strategy——Variable pricing (e.g., Mafia at $50–$60) to maximize value Flexible pricing approach
Platform strategy (Switch 2, PC)Anticipated PC growth; platform‑agnostic —Supporting Switch 2 (4 titles); selective platform choices Broader platform support

Management Commentary

  • CEO: “We expect to achieve record levels of Net Bookings that will establish a new baseline for our business and set us on a path of enhanced profitability” .
  • CEO on GTA VI: “Consumer anticipation is unprecedented… Trailer 2… 475 million views in 24 hours” .
  • CFO: “Operating expenses increased by 44% to $4.6 billion due to an impairment expense of $3.6 billion related to goodwill and acquired intangible assets” .
  • CFO FY2026 mix: “We expect recurrent consumer spending to be flat… label breakdown roughly 45% Zynga, 39% 2K, 16% Rockstar Games” .
  • CEO on mobile: “Zynga is the only company… regularly creating new native mobile hits… Match Factory!, and Color Block Jam” .

Q&A Highlights

  • Goodwill impairment: partial impairment of one reporting unit; reflects updated long‑term expectations (no unit disclosed) .
  • Operating margin trajectory: management sees no structural barriers to returning to low/mid‑20% operating margins over time; cost reduction and efficiency initiatives underway .
  • Pricing approach: variable pricing to deliver “way more value than we charge,” with Mafia priced to maximize reach .
  • RCS guidance: FY2026 RCS flat y/y with declines in mobile and GTA Online, offset by NBA 2K growth .
  • Switch 2 and platforms: broader support planned (four titles), case‑by‑case platform selection to meet audience, growing importance of PC .

Estimates Context

Consensus (S&P Global) vs actuals for Q4 FY2025:

MetricConsensusActualResult
Revenue ($USD)$1,554.2M*$1,582.5M Beat (by ~$28.3M)
Primary EPS ($)$1.0945*$1.3011*Beat
EBITDA ($USD)$319.7M*$161.0M Miss

*Values retrieved from S&P Global.

Notes:

  • GAAP EPS of $(21.08) was driven by impairment charges and is not the S&P “Primary EPS” (normalized) used for consensus comparison .
  • EBITDA reported by the company ($161.0M) was below S&P consensus, reflecting higher development and marketing expenses and impairment effects in the period .

Key Takeaways for Investors

  • Q4 delivered top‑end revenue and bookings despite a headline GAAP loss from impairments; core franchises and mobile execution remained strong .
  • FY2025 finished at high end of bookings guidance; FY2026 guide implies mid‑single‑digit bookings growth ahead of FY2027’s GTA VI catalyst .
  • Near‑term mix: RCS expected flat y/y in FY2026, with NBA 2K strength offsetting mobile/GTA Online moderation; label mix skews toward Zynga (45%) .
  • GTA VI timing now explicit (May 26, 2026) with unprecedented trailer engagement; expect multi‑year bookings uplift beginning FY2027 .
  • Margin trajectory intact long‑term (targeting low/mid‑20% operating margins) as cost programs and scale benefits materialize post‑FY2026 .
  • Capital flexibility improved via ~$1.04B equity raise to support debt repayment and acquisitions; watch capital allocation updates .
  • Trading setup: impairment headline can weigh on near‑term sentiment, but bookings beat, FY2026 guide, and GTA VI timing clarity are constructive catalysts into FY2026–27 .