Executive Summary
Take-Two reported a strong second quarter for fiscal 2025, with net bookings of $1.47 billion at the top end of the guidance range, driven by continued strength in Grand Theft Auto and Borderlands franchises. Management highlighted that the quarterly beat was aided by a shift in marketing spend timing within the year, and reiterated a full-year net bookings outlook of $5.55–$5.65 billion, signaling confidence in a durable growth trajectory into fiscal 2026 and 2027. While GAAP net revenue rose modestly to $1.35 billion, the quarter delivered an operating loss of $297 million and a net loss of $365.5 million as the company incurs ongoing investment in titles, platform expansion, and the integration of Gearbox, alongside strategic actions like the sale of Private Division. The quarter also featured accelerating momentum in mobile and live services (Match Factory!, Toon Blast, NBA 2K25), a broadened IP portfolio, and a strengthened development pipeline (Civilization VII, GTA VI, Borderlands 4, Mafia: The Old Country). Management stressed that the pipeline should support elevated net bookings in fiscal 2026 and 2027, though near-term profitability remains pressured by elevated marketing and hiring costs. Overall, TTWO remains well positioned to sustain durable growth through a diversified mix of owned IP, mobile growth, and an expanding cross-media ecosystem, while remaining vigilant on monetization efficiency, cost discipline, and balance sheet leverage.
Key Performance Indicators
QoQ: -60.74% | YoY:45.34%
QoQ: -39.50% | YoY:32.76%
QoQ: -36.84% | YoY:35.00%
Key Insights
Revenue: $1.3531 billion (GAAP) up 4.15% YoY and 1.11% QoQ. Gross margin: 53.8% (gross profit of $727.9 million). Operating loss: $(297.2) million; EBITDA: $(21.3) million. Net income: $(365.5) million; EPS: $(2.08). Net bookings: $1.47 billion (top of guidance range $1.42–$1.47B). Recurrent consumer spending: up 6% YoY, accounting for 81% of net bookings. Cash flow: net cash provided by operating activities $(128.4) million; free cash flow $(165.2) million. Cash and equivalents: $1.234 billio...
Financial Highlights
Revenue: $1.3531 billion (GAAP) up 4.15% YoY and 1.11% QoQ. Gross margin: 53.8% (gross profit of $727.9 million). Operating loss: $(297.2) million; EBITDA: $(21.3) million. Net income: $(365.5) million; EPS: $(2.08). Net bookings: $1.47 billion (top of guidance range $1.42–$1.47B). Recurrent consumer spending: up 6% YoY, accounting for 81% of net bookings. Cash flow: net cash provided by operating activities $(128.4) million; free cash flow $(165.2) million. Cash and equivalents: $1.234 billion; total debt: $4.112 billion; net debt: $2.8788 billion. Shares outstanding (weighted): 175.4 million. DSO: 62.4 days; current ratio: 0.845; quick ratio: 0.845; cash ratio: 0.385.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
1.35B |
4.15% |
1.11% |
| Gross Profit |
727.90M |
75.23% |
-5.60% |
| Operating Income |
-297.20M |
45.34% |
-60.74% |
| Net Income |
-365.50M |
32.76% |
-39.50% |
| EPS |
-2.08 |
35.00% |
-36.84% |
Key Financial Ratios
operatingProfitMargin
-22%
operatingCashFlowPerShare
$-0.73
freeCashFlowPerShare
$-0.94
priceEarningsRatio
-18.44
Management Commentary
Key management takeaways from the earnings call: (1) Pipeline confidence and net bookings guidance: "net bookings of $1.47 billion were at the top end of our guidance range" and a reaffirmation of the FY25 net bookings range of $5.55–$5.65 billion, implying durability into 2026–27. (2) Strategic IP and platform momentum: GTA V and GTA Online continued to drive results, with NBA 2K25 delivering strong engagement and a notable update cycle; Gearbox integration expands Borderlands and related IP, with ongoing opportunities. (3) Mobile and Zynga execution: Match Factory! and Toon Blast are contributing meaningfully to recurrent spend; hypercasual monetization is evolving toward in-app purchases alongside ads. (4) Portfolio and capital allocation: TTWO completed the strategic sale of Private Division; Gearbox acquisition closes a key inorganic growth lever; the company maintains a multi-year pipeline with several blockbuster titles planned for fiscal 2026/27, including GTA VI in fall 2025 and Borderlands 4; 2K and Visual Concepts continue to push technological updates in NBA 2K25. (5) Near-term profitability and leverage: management cited timing shifts in marketing spend as a primary driver of the operating result variance and emphasized ongoing investments in marketing, game technology, and headcount, contributing to higher operating expenses and negative cash flow in the quarter.
"Our net bookings of $1.47 billion were at the top end of our guidance range, driven by the continued success of the Grand Theft Auto and Borderlands franchises."
— Strauss Zelnick
"Looking ahead, we expect fiscal 2026 to be a milestone year as we plan to release several blockbuster titles, including Rockstar Games' Grand Theft Auto VI in the fall of 2025, Borderlands 4 and Mafia: The Old Country."
— Karl Slatoff
Forward Guidance
Performance outlook remains anchored by a robust development slate and multi-year pipeline. Full-year net bookings guidance is reaffirmed at $5.55–$5.65 billion, with a 60% US / 40% international geographic split and roughly 51% Zynga, 32% 2K, 17% Rockstar contributions by label mix. GAAP net revenue is guided to $5.57–$5.67 billion; cost of revenue is guided to $2.40–$2.42 billion; total operating expenses are expected to be $3.77–$3.79 billion, with management‑driven expense growth around the low single digits excluding incremental marketing and Gearbox. Q3 net bookings are projected at $1.35–$1.40 billion, aided by titles such as Red Dead Redemption and Undead Nightmare for PC, with recurrent consumer spending anticipated to rise about 9% as Match Factory! and Toon Blast contribute more strongly. Management reiterated that non-GAAP adjusted free cash flow will be an outflow of about $150 million, with capex around $140 million. The strategic transition, including the exit from Private Division, is expected to relieve long-term resource allocation toward core and mobile franchises. Near-term risks include higher marketing spend, execution risk around new IP, and platform/console cycle dynamics. Investors should monitor: progress toward GTA VI and other blockbuster launches, the cadence of QQ and year-end title releases, mobile monetization evolution, and the rate of deleveraging given current net debt levels.