Key Highlights
- Take-Two (NASDAQ:TTWO) reported better-than-expected revenue in Q3 CY2025 with sales up 20.3% year on year to $1.77 billion.
- The company raised its full-year revenue guidance for the second consecutive quarter, now at $6.43 billion at the midpoint from $6.15 billion, a 4.6% increase.
- Grand Theft Auto VI release date is set for November 19, 2026, and the company remains confident about delivering an unrivalled blockbuster entertainment experience.
- The stock price dropped by 6.9% immediately following the results announcement due to lower-than-expected earnings and EBITDA figures.
Quarterly Performance Overview
In a surprising move, video game publisher Take-Two Interactive (NASDAQ:TTWO) reported better-than-expected revenue for its third quarter of fiscal year 2025. The company’s sales surged to $1.77 billion, marking a robust 20.3% increase compared to the same period in the previous year.
Despite this impressive growth, Take-Two faced some challenges with earnings. Its GAAP loss per share was reported at -$0.73, which was 17.1% below analysts’ consensus estimates of -$0.62.
The adjusted EBITDA margin stood at 6.6%, significantly lower than the analyst estimate of 59.5%. These results have led to a mixed reaction from investors, with the stock price dropping by 6.9% shortly after the earnings announcement.
Guidance and Future Outlook
In an effort to reassure its stakeholders, Take-Two raised its revenue guidance for the full year to $6.43 billion at the midpoint, up from a previous estimate of $6.15 billion. This 4.6% increase reflects the company’s confidence in its future prospects.
Looking ahead, the company has set an ambitious release date for Grand Theft Auto VI, which is scheduled to hit the market on November 19, 2026. Strauss Zelnick, Chairman and CEO of Take-Two Interactive, expressed his excitement about the upcoming game, stating, “With momentum across our business, particularly in mobile and NBA 2K, we are raising our Fiscal Year 2026 Net Bookings forecast for the second consecutive quarter.”
Zelnick further emphasized the company’s commitment to innovation and quality, asserting that Grand Theft Auto VI will deliver an unrivalled blockbuster entertainment experience. The company is optimistic about achieving record levels of net bookings in fiscal year 2027, which it believes will set a new baseline for its business and enhance profitability.
Industry Context and Expert Analysis
The gaming industry continues to grow at a rapid pace, driven by the increasing demand for digital entertainment. As one of the largest video game publishers, Take-Two’s performance is crucial not only for the company but also for investors interested in the sector.
According to experts, Take-Two’s robust revenue growth this quarter can be attributed to strong performances across its various franchises, including Grand Theft Auto and NBA 2K. However, the significant gap between the reported earnings and analysts’ expectations has raised concerns about the company’s long-term financial health.
Analysts suggest that while the positive revenue figures are encouraging, Take-Two needs to address the issues with profitability and EBITDA margins to ensure sustainable growth in the future.
The upcoming release of Grand Theft Auto VI could be a turning point for the company, potentially driving higher revenues and improving overall financial performance.
For now, investors will closely monitor Take-Two’s progress as it navigates through the challenges while preparing for the anticipated release of its flagship titles. The success or failure of these games could significantly impact the stock price and the broader gaming industry landscape in the coming months.
