Take-Two CEO "highly optimistic" about the company's future, reiterates FY25 bookings guidance "Game On" is The Fly's weekly recap of the stories powering up or beating down video game stocks.
NEW RELEASES: This week's major new release is Electronic Arts' (EA) popular football sim "Madden NFL 25," which launches for PC, PlayStation 4 (SONY), PS5, Xbox One (MSFT), and Xbox Series X/S on August 16.
TAKE-TWO RESULTS: Late last week, Take-Two (TTWO) reported quarterly results, with net bookings for the first quarter growing 1% but falling below consensus estimates. GAAP earnings per share, meanwhile, were ($1.52), down from ($1.22) in the same period last year. That said, the company noted that recurrent consumer spending increased 3% and accounted for 82% of total GAAP net revenue, with the largest contributors being "NBA 2K24," "Grand Theft Auto Online," "Toon Blast," and "Empires & Puzzles."
Looking ahead, Take-Two CEO Strauss Zelnick provided conservative earnings and net bookings guidance for Q2 but reiterated the company's bookings outlook for the full year. "We are highly optimistic about our future — our core franchises remain vibrant, our teams are hard at work on the most ambitious development pipeline in our history, and we are evaluating continually new growth opportunities that have the ability to enhance our business model and financial profile," Zelnick said. "As we pursue our strategic priorities, we expect to achieve sequential increases in Net Bookings in Fiscal 2026 and 2027, which we believe will drive long-term shareholder value."
Following the report, HSBC upgraded Take-Two Interactive Software to Buy from Hold with a price target of $179, up from $154. The analyst sees an improved outlook for mobile gaming and has greater confidence in the company's sales guidance as the "Grand Theft Auto VI" release date draws closer. Take-Two's improvement in mobile performance is helping to mitigate some of the softness of console revenues "in what is a relatively a quiet year for flagship releases," the analyst told investors in a research note.
SONY RESULTS: Also last week, Sony reported year-over-year increases in Q1 earnings per share and sales, and provided revenue and net income guidance for FY24. Of note, however, the company said that PlayStation 5 unit sales had fallen to 2.4M units in the quarter from 3.3M units sold in the same quarter of the previous year. Sony also noted that lifetime sales of the console, which first launched in late 2020, had reached 61.7M units.
Meanwhile, Sony noted that it had 116M monthly active users in Q1, which is down from the previous quarter but higher than the 108M it reported in the same period of the previous year.
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