TTWO Q1 2023 Earnings

Call Details

• Call Title: Take-Two Interactive Q1 2023 Earnings Call
• Date: August 9, 2022 at 11:30 PM UTC
• Management Team:
  • Strauss Zelnick (Chairman and Chief Executive Officer)
  • Karl Slatoff (President)
  • Lainie Goldstein (Chief Financial Officer)
  • Nicole Shevins (Senior Vice President of Investor Relations and Corporate Communications)

Call Summary

Financial Performance

• The company reported first quarter fiscal 2023 net bookings of $1 billion for the combined entity.
• On a pre-combination basis, net bookings were $731 million, which grew 3% year over year and were within the prior guidance range.
• GAAP net revenue increased 36% to $1.1 billion for the quarter.
• GAAP cost of revenue increased 32% to $436 million for the quarter, which included a $20 million impairment charge related to an unannounced title.
• Operating expenses increased 125% to $704 million, primarily driven by the inclusion of Zynga and acquisition-related costs and higher personnel and marketing spend.
• GAAP net loss was $104 million, or $0.76 per share, which included $117 million of amortization of acquired intangibles and $165 million of business acquisition costs.
• The company ended the quarter with over $1.3 billion of cash and short-term investments and $3.3 billion of debt.

Guidance

• The company initiated full fiscal year net bookings guidance of $5.8 to $5.9 billion, which includes approximately 10 months of Zynga.
• The company expects label net bookings mix of approximately 45% Zynga, 37% 2K, 17% Rockstar Games, and 1% Private Division for the year.
• The company forecasted a geographic net bookings split of about 60% United States and 40% international.
• The company expects current consumer spending to grow approximately 110% and represent 77% of total net bookings for fiscal 2023.
• The company expects digitally delivered net bookings to grow approximately 80% and represent 96% of net bookings for the year.
• The company targets GAAP net revenue of $5.73 to $5.83 billion and GAAP net loss between $398 and $438 million, or $2.50 to $2.75 per share, assuming a basic share count of 159.2 million shares.
• The company projected second quarter net bookings of $1.5 to $1.55 billion and expects recurring consumer spending to grow ~85% and digitally delivered net bookings to increase ~70% in Q2.