The video game software company reported $1.38 billion in net bookings in its recent earnings report, which is $70 million under its expectation.
Take-Two Interactive Software shares slipped slightly after the video game company reported revenue below expectations.
The Grand Theft Auto developer reported $1.38 billion in net bookings versus an expected $1.45 billion in its third-quarter report for the fiscal year 2023. That’s about $70 million off its mark. Overall, Take-Two’s net revenue increased by 56% year-over-year to $1.41 billion.
“Our new game releases and post-launch content received significant critical acclaim; however, our Net Bookings of $1.38 billion were slightly below our prior guidance, as we believe that consumers shifted their holiday spending toward established blockbuster franchises and titles that were offered with pricing promotions in light of macroeconomic conditions,” Take-Two Chairman and CEO Strauss Zelnick said in the earnings report. “While our catalog benefited from this trend, it affected the performance of certain new releases and recurrent consumer spending for some of our console and PC games.”
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Take-Two’s recent earnings report also includes financial updates from Zynga, the mobile gaming company that it acquired for $12.7 billion last May.
“We have always managed our business for the long-term,” Zelnick said in a statement. “As we achieve the powerful synergies from our combination with Zynga, release new titles from our robust multi-year pipeline, and execute on our cost savings initiatives, we expect to deliver sequential growth and record performance over the next several years, which we anticipate will drive meaningful shareholder value.”
More high-level takeaways from the Take-Two Interactive earnings report:
- Despite missing its mark, Take-Two’s net bookings grew by 60%. The company estimates that its net bookings will fall between 1.31 billion and $1.36 billion.
- Game revenue generated $1.23 billion, an improvement of 39.4% year-over-year.
- The company is implementing a cost reduction program to yield over $50 million of annual savings.
- Advertising revenue surged by an impressive 782.5% year-over-year to $176.5 million.
- Take-Two reported $1.46 billion in cash, cash equivalents, and short-term investments as of Dec. 31.
- Physical retail generated $71.1 million in revenue, a decline of 33.9% year-over-year.
Take-Two’s net booking increase can largely be attributed to big gaming titles such as NBA 2K23, Grand Theft Auto Online, and Grand Theft Auto V.
The company said in its earnings report that it’s “revising its outlook for the fiscal year ending March 31, 2023.”
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