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    TTWO
    Earnings call· Jun 2026(Q1 FY27)

    TAKE TWO INTERACTIVE SOFTWARE Q1 FY27 earnings call TTWO

    Aug 7, 2026 Source

    Executive summary

    Take-Two Interactive Software Q1 FY27 — Strong Start Driven by NBA 2K and Grand Theft Auto Series, Reaffirming FY27 Outlook

    Take-Two delivered a strong Q1 FY27, exceeding net bookings guidance, driven by robust performance from NBA 2K and the Grand Theft Auto series, alongside solid mobile growth from key titles. The company reaffirmed its ambitious FY27 outlook, anticipating an inflection point with the upcoming Grand Theft Auto VI launch, which is expected to usher in a new era of growth and sustained scale, supported by a rich development pipeline and strategic international expansion.

    Highlights

    5

    • Q1 net bookings of $1.39 billion, slightly above the high end of guidance.

    • NBA 2K26 sold over 12 million units, reflecting 9% growth compared to NBA 2K25, with recurrent consumer spending growing 7%.

    • Grand Theft Auto V has sold over 230 million units worldwide, with recurrent consumer spending for the series growing 3%.

    • Mobile titles Toon Blast, Words With Friends, and Top Eleven exceeded expectations with net bookings growth of 8%, 8%, and 15% respectively.

    • Reiterating fiscal 2027 net bookings outlook of $8 billion to $8.2 billion, representing approximately 20% growth over fiscal 2026 at the midpoint.

    Concerns

    3

    • Cost of revenue rose 17% to $651 million, including a $43 million impairment charge related to an unannounced title.

    • Mobile net bookings are expected to be down in Q2 FY27, reflecting a tougher year-over-year comparison for Colorblock Jam and moderating trends for several mature titles.

    • User acquisition costs in the mobile market can be pressured by competitors overspending, potentially making it less economic for Take-Two to spend.

    Guidance & targets

    17
    CategoryTargetConfidence
    Fiscal 2027 Net Bookings
    $8 billion to $8.2 billion
    high materiality
    High
    Fiscal 2027 Recurrent Consumer Spending as % of Net Bookings
    64%
    medium materiality
    High
    Fiscal 2027 NBA 2K Net Bookings Growth
    high single digits
    medium materiality
    High
    Fiscal 2027 Grand Theft Auto Series Net Bookings Growth
    up
    medium materiality
    High
    Fiscal 2027 Mobile Net Bookings Growth
    down
    medium materiality
    High
    Fiscal 2027 Operating Cash Flow
    in excess of $1 billion
    high materiality
    High
    Net Cash Position
    net cash position
    high materiality
    High
    Fiscal 2027 Capital Expenditures
    approximately $290 million
    medium materiality
    High
    Fiscal 2027 GAAP Net Revenue
    $7.9 billion to $8.1 billion
    high materiality
    High
    Fiscal 2027 Cost of Revenue
    $3.54 billion to $3.66 billion
    medium materiality
    High
    Fiscal 2027 Total Operating Expenses
    $4.15 billion to $4.17 billion
    medium materiality
    High
    Fiscal 2027 Management Basis Operating Expense Growth
    approximately 7%
    medium materiality
    High
    Fiscal Q2 2027 Net Bookings
    $1.62 billion to $1.67 billion
    high materiality
    High
    Fiscal Q2 2027 Recurrent Consumer Spending Decline
    approximately 5%
    medium materiality
    High
    Fiscal Q2 2027 GAAP Net Revenue
    $1.42 billion to $1.47 billion
    high materiality
    High
    Fiscal Q2 2027 Operating Expenses
    $1.01 billion to $1.02 billion
    medium materiality
    High
    Fiscal Q2 2027 Management Basis Operating Expense Decline
    approximately 5%
    medium materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Rockstar Games
    Expected to contribute roughly 37% of fiscal 2027 net bookings. The Grand Theft Auto series exceeded expectations in Q1, with GTA V reaching 230 million units sold and RCS growing 3%. Global excitement for GTA VI is building with exceptional preorders.
    Grand Theft Auto V units sold: 230 million worldwideGrand Theft Auto series recurrent consumer spending growth: 3% YoYGTA+ status: thrivingGrand Theft Auto VI preorders: exceptional start
    		————
    Zynga
    Expected to contribute roughly 34% of fiscal 2027 net bookings. Zynga performed in line with expectations, with several titles showing strong growth and exceeding forecasts, including Toon Blast, Words With Friends, and Top Eleven.
    Toon Blast net bookings growth: 8% YoYWords With Friends net bookings growth: 8% YoYTop Eleven net bookings growth: 15% YoY
    		————
    2K
    Expected to contribute roughly 29% of fiscal 2027 net bookings. NBA 2K26 performance was outstanding, concluding a record year with over 12 million units sold and significant engagement growth. 2K's mobile offerings also performed well, including NBA 2K AllStar in China.
    NBA 2K26 units sold: over 12 millionNBA 2K26 unit growth vs NBA 2K25: 9%NBA 2K recurrent consumer spending growth: 7% YoYNBA 2K average daily active users increase: 15%NBA 2K MyCareer daily active users increase: 25%NBA 2K average games played per user increase: 35%NBA 2K AllStar (China) registered users: over 10 million
    		————

    Operational metrics

    15
    Net Bookings
    $1.39 billionslightly above the high end of our guidance range
    Q1 FY27

    Exceeded guidance primarily due to outperformance of NBA 2K and Grand Theft Auto series.

    Recurrent Consumer Spending as % of Net Bookings
    84%
    Q1 FY27

    Accounted for 84% of net bookings.

    Recurrent Consumer Spending Growth
    -1%favorable to our guidance of a 3% decline
    Q1 FY27

    Declined 1% for the period, which was favorable to guidance of a 3% decline.

    Cost of Revenue
    $651 millionincreased 17%
    Q1 FY27

    Included a $43 million impairment charge related to the decision not to proceed with an unannounced title from a third-party developer.

    Operating Expenses
    $98 millionflat
    Q1 FY27

    Operating expenses were flat year-over-year.

    Management Basis Operating Expenses Growth
    -1%favorable to our forecast of 3% growth
    Q1 FY27

    Declined 1% year-over-year, favorable to forecast due to timing of marketing expenses.

    International Revenue Footprint
    shift percentage of revenuefrom 80% US/Western Europe to other direction
    next 10 years

    Strategic priority to build up in underrepresented territories (India, Africa, Latin America, much of Middle East and Asia) to flip the percentage of revenue from US/Western Europe to international markets.

    Digital Distribution Percentage
    well over 90%
    current

    Company's business is already well over 90% digitally distributed.

    Mobile Direct-to-Consumer Business Growth
    growing
    ongoing

    Remains a growth business, seeing growth, and has a material positive effect on mobile margins.

    Employee Count
    13,000
    current

    Number of colleagues globally.

    PC Gaming Sales Share
    40% or 50%up from 1% to 2% 20 years ago
    current

    PC gaming now represents 40% to 50% of sales for a console release also available on PC, compared to 1% to 2% twenty years ago.

    Commercial Streaming Solution with Low Latency
    within 3 years
    future

    Expects a commercial streaming solution with low latency to be available within 3 years, potentially expanding the effective installed base tenfold.

    Mobile User Acquisition Costs
    —
    current

    Pressure on user acquisition costs due to competitors overspending, making it less economic for Take-Two to spend.

    Mobile Advertising Monetization
    growing
    ongoing

    Rolling out ad units in many mobile titles to monetize 100% of the audience, including those not making in-app payments.

    Console Advertising Monetization
    relatively small part
    ongoing

    Advertising is a relatively small part of the console business, primarily endemic advertising within games like NBA 2K.

    Industry KPIs

    4
    MetricValueDetails
    Paid members subscribersover 10 millionregistered users
    Member quality and retention7%%
    Addressable market penetrationunderrepresented
    Content spend title performanceover 12 millionunits sold

    Product announcements

    9
    ProductTypeDetails
    PGA Tour 2K25 Season 7update
    GTA Online Court Center Heistupdate
    Borderlands 4 Bounty Pack 4: Mergers and Acquisitionsupdate
    Mafia the Old Country: Man of Honor store expansionexpansion
    WWE 2K26 WrestleMania 42 packupdate
    NBA 2K27launch
    Top Goallaunch
    Grand Theft Auto VI Extended Lookmilestone
    Grand Theft Auto VIlaunch

    Deals & partnerships

    1
    NetflixExclusive initial distribution of Grand Theft Auto VI extended look trailer

    Groundbreaking partnership for the initial exclusive release of the Grand Theft Auto VI extended look trailer on August 27, before wider availability.

    Risks & headwinds

    3
    Pressure on mobile user acquisition costscurrent

    less economic for us to spend

    Mitigation: Pay attention to how much we spend on UA and how that fits with the lifetime value of the property; avoid overspending compared to competitors.

    Rising cost of hardware (consoles)ongoing

    not a good thing

    Mitigation: Not seen as a headwind for Take-Two due to focus on delivering desired experiences; shift to open systems (PC) and future streaming will expand effective installed base.

    Mobile net bookings declineQ2 FY27

    approximately 5% decline (for RCS, mobile is a driver of this)

    Mitigation: Attributed to tough year-over-year comps for Colorblock Jam and moderating trends for mature mobile titles, not a general market slowdown.

    What to watch in Q2 FY27

    4

    Grand Theft Auto VI Extended Look Reception

    August 27 (trailer release), leading up to November 19 (game release)
    CurrentExceptional start to preorders
    TargetPositive consumer and media response, further building anticipation

    Why it matters

    The reception of the extended look will be a key indicator of consumer sentiment and potential demand leading into the highly anticipated launch of Grand Theft Auto VI, which is expected to be an inflection point for the company.

    Global excitement for the launch of Grand Theft Auto VI continues to build with the title having an exceptional start to preorders. With Rockstar Games recent announcement of Grand Theft Auto V, an extended look coming on August 27, we believe that consumers' passion and anticipation for the next evolution of this iconic series will grow further, leading up to the title's November 19 release.

    Q&A highlights

    6

    Asked if Take-Two observed a slowdown in the mobile market in Q2, similar to what a peer reported, attributing it to macro uncertainty.

    Strauss Zelnick stated that Take-Two is not seeing a general slowdown in the mobile market. While user acquisition costs can be pressured by competitors, their titles are performing well, and the consumer engagement is fine.

    “No, it's really not what we're seeing. Our results have been affected by how Color Block JM is doing versus last year in terms of coping because it was a new title last year. But apart from that, we've delivered some really good news in mobile. There's no doubt there's a bit of pressure on user acquisition at the moment.”

    asked by Doug Creutz · answered by Strauss Zelnick

    2 min read6 chapters

    Detailed Narrative

    01

    Q1 FY27 Performance Highlights

    Take-Two reported Q1 FY27 net bookings of $1.39 billion, exceeding its guidance range, primarily driven by strong performances from NBA 2K and the Grand Theft Auto series. Recurrent consumer spending for the period declined 1%, which was better than the guided 3% decline, and accounted for 84% of net bookings. GAAP net revenue increased 2% to $1.5 billion.

    02

    Grand Theft Auto VI Anticipation

    Global excitement for Grand Theft Auto VI continues to build, with the title experiencing an exceptional start to preorders. Rockstar Games announced an extended look for the title on August 27, further fueling anticipation for its November 19 release, which management believes will be an inflection point for the company.

    03

    Mobile Business Momentum

    Zynga's mobile portfolio performed in line with expectations, with several "forever franchises" showing strong growth. Toon Blast, Words With Friends, and Top Eleven saw net bookings increase by 8%, 8%, and 15% year-over-year, respectively. NBA 2K AllStar, a mobile title in China, surpassed 10 million registered users and is yielding strong profit margins.

    04

    Strategic Focus on International Expansion

    Take-Two is prioritizing increasing its international footprint, particularly in underrepresented territories like India, Africa, and Latin America. The company aims to shift the percentage of revenue derived from international markets over the next decade by leveraging geo-pricing tools and developing properties appealing to local consumers.

    05

    AI Integration and Creative Enhancement

    Take-Two views AI and machine learning as integral to its entertainment creation process, enhancing creativity and efficiency rather than replacing human ingenuity. The company focuses on using AI to improve the quality of its games and create bigger hits, rather than solely for cost reduction, believing that efficiencies often lead to more ambitious creative endeavors.

    06

    Future of Gaming and Streaming

    Management anticipates that the world will continue to move towards open systems, with PC gaming's share of sales growing significantly. They also believe that low-latency commercial streaming solutions will emerge within three years, potentially expanding the effective installed base of game machines tenfold by enabling non-gaming devices to become gaming platforms.

    AI-generated summary of the company’s earnings call. Not investment advice.