TakeTwo Interactive (0LCX.L) Q3 2025 Earnings Report

Revenue: $1,359.8m; YoY change: -0.5%; QoQ change: +0.5%
Gross Profit: $759.9m; Gross Margin: 55.9%; YoY Gross Profit change: +21.25%; QoQ: +4.40%
Operating Income: -$132.1m; Operating Margin: -9.71%; YoY: -2.01%; QoQ: +55.55%
Net Income: -$125.2m; Net Margin: -9.21%; YoY: -36.68%; QoQ: +65.75%
EPS: -$0.71; Diluted EPS: -$0.71; YoY: -31.48%; QoQ: +65.87%
EBITDA: $142.8m; EBITDA Margin: 10.5%
Free Cash Flow (FCF): -$48.2m; Operating Cash Flow (OCF): -$4.8m; Capital Expenditures (Capex): -$43.4m; Net Cash from Financing Activities: +$31.2m; Net Change in Cash: -$10.7m
Cash and Cash Equivalents: $1.2067b; Total Debt: $4.1037b; Net Debt: -$2.8969b
Current Ratio: 0.83; Debt/Equity: 0.72; LT Debt: $3.445b; Net Debt / EBITDA (approximate): negative to modestly negative given EBITDA level in the quarter
P/S (Price-to-Sales): ~23.92; P/E (negative); Cash Richness still supports near-term liquidity despite negative FCF

Note: No earnings call transcript data was provided in the input. As a result, key management quotes or thematic notes from a QQ3 2025 call are not included here. Once transcript access is available, a themes-based synthesis (strategy, operations, market conditions) with contextual quotes will be added.

Take-Two presents a nuanced risk/reward profile. The company sits on a robust IP backbone and substantial cash reserves, with EBITDA generating capacity that could translate into stronger FCF once the cost base normalizes and live-service monetization scales. However, the current quarter highlights ongoing profitability headwinds from heavy development and selling costs, and the firm carries meaningful leverage that could constrain flexibility in a volatile market. The stock may appeal to long-term investors who can tolerate near-term negative net income in exchange for exposure to high-margin, IP-driven growth through live services and platform expansions. Close monitoring should focus on (1) quarterly FCF trajectory and working capital normalization, (2) progression of live-service monetization and digital mix, (3) stability of upcoming release cadences, and (4) any impairment-related updates to goodwill/intangible assets. If these dynamics turn favorable, the valuation multiple could compress meaningfully, supporting an improving investment thesis.