TTWO Q1 2024 Earnings

Call Details

• Call Title: Take-Two Interactive Q1 2024 Earnings Call
• Date: 2023-08-08 20:30:00 UTC
• Management Team:
  • Strauss Zelnick (Chief Executive Officer)
  • Karl Slatoff (President)
  • Lainie Goldstein (Chief Financial Officer)
  • Nicole Shevins (Senior Vice President of Investor Relations)

Call Summary

Financial Performance

• Net bookings were $1.2B in Q1, which was at the high end of the company's guidance range.
• GAAP net revenue increased 17% to $1.28B for the quarter.
• Cost of revenue increased 39% to $606M, driven by $187M of amortization of acquired intangibles.
• The company recorded an $18M impairment primarily related to capitalized software and development costs for an unreleased title.
• Operating expenses increased 25% to $883M on a GAAP basis.
• On a management basis, operating expenses grew 46% due primarily to a full quarter of Zynga and higher personnel and depreciation costs.
• Recurrent consumer spending rose 38% and accounted for 84% of net bookings in the quarter.

Guidance

• The company reiterated fiscal 2024 net bookings guidance of $5.45B to $5.55B.
• The company expects GAAP net revenue for fiscal 2024 to range from $5.37B to $5.47B.
• Management expects full-year net bookings breakdown by label of roughly 51% Zynga, 30% 2K, 17% Rockstar Games, and 2% other.
• The geographic net bookings split is forecast at about 65% United States and 35% international.
• For fiscal Q2, the company projects net bookings of $1.4B to $1.45B, compared to $1.5B in Q2 last year.
• The company projects recurring consumer spending to decline by approximately 7% in Q2 due to modest declines in mobile, changes to NBA 2K promotional cadence, and reduced DLC revenue vs prior-year releases.
• The company expects to generate approximately $100M in non-GAAP adjusted unrestricted operating cash flow for the year and plans to deploy approximately $180M in capital expenditures.
• On a management basis, total operating expenses are expected to grow approximately 15% year-over-year for the full year and around 5% year-over-year in Q2.