TTWO Q3 2022 Earnings

Call Details

• Call Title: Take-Two Interactive Q3 2022 Earnings Call
• Date: February 7, 2022 at 9:30 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

• Net bookings were $866M, which exceeded guidance and were up 6% year-over-year.
• GAAP net revenue increased 5% to $903M in the quarter.
• Cost of goods sold increased 1% to $350M in the quarter.
• Operating expenses increased 18% to $399M, driven primarily by higher personnel and stock-based compensation.
• GAAP net income was $145M, or $1.24 per share, versus $182M, or $1.57 per share, in the prior-year quarter.
• Digitally delivered net bookings increased 12% and accounted for 88% of total net bookings in the quarter.
• The company entered the quarter with approximately $2.5B of cash and short-term investments.

Guidance

• Full fiscal year net bookings guidance was raised to $3.37B to $3.42B from a prior range of $3.3B to $3.4B.
• The company now expects recurring consumer spending to decline by 5%, which is an improvement from its prior outlook for a 6% decline.
• Digitally delivered net bookings are forecast to decrease by approximately 3% compared to the prior outlook of a 4% decline.
• The company expects 90% of net bookings to be digital and assumes 69% of console game sales will be delivered digitally for the year.
• The company expects more than $400M in non-GAAP adjusted unrestricted operating cash flow and plans approximately $170M for capital expenditures.
• GAAP net revenue outlook was raised to $3.41B to $3.46B with COGS expected at $1.52B to $1.54B and total operating expenses at $1.48B to $1.49B.
• GAAP net income is expected to range from $361M to $373M, or $3.10 to $3.20 per share, and management expects a 16% tax rate for the remainder of fiscal 2022.