- Wednesday, October 16, 2024
Take-Two Interactive Software, a leading video game company, fell short of earnings expectations in its most recent quarter. Despite this, the company's shares continued to rise in late trading. While investors have been primarily focused on fiscal 2025 and beyond, Take-Two's performance for the first quarter of fiscal 2024 did not meet Wall Street's consensus estimate of 33 cents per share. Instead, the company reported non-GAAP earnings of 27 cents per share. However, net bookings, a key revenue indicator in the video game industry, met expectations at $1.2 billion.
Looking ahead to the fiscal second quarter, Take-Two's outlook suggests non-GAAP earnings in the range of 95 cents per share to $1.05 per share. This falls below Wall Street's consensus estimate of $1.16 per share. CEO Strauss Zelnick acknowledges that the video game business has been affected by a recession over the past year and a half, with changing consumer spending habits and challenging comparisons due to the pandemic. However, Zelnick remains optimistic about the future, noting that certain segments of the industry are showing signs of improvement.
While Take-Two's performance in the current fiscal year has been overshadowed by its forecast for fiscal 2025, the company's projection of $8 billion in net bookings for that year has garnered attention. This substantial increase from the $5.28 billion reported in fiscal 2023 has led some to speculate that the highly anticipated game Grand Theft Auto VI may be on the horizon. Zelnick acknowledges the excitement surrounding the company's outlook but emphasizes that specific title announcements are left to subsidiary publishing labels.
Since announcing its fiscal 2025 forecast in mid-May, Take-Two's stock has risen by 12%. Despite missing earnings expectations in the latest quarter, the company's positive outlook and strong release schedule have instilled confidence in investors. While the video game industry continues to navigate challenges, Take-Two Interactive Software remains well-positioned for future success.
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