TTWO Q4 2024 Earnings

Call Details

• Call Title: Take-Two Interactive Q4 2024 Earnings Call
• Date: May 16, 2024 at 8:30 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

• Take-Two reported fiscal Q4 net bookings of $1.35B, which exceeded the high end of its prior guidance range of $1.27B to $1.32B.
• Fiscal 2024 net bookings were $5.33B, which was slightly above the revised guidance range of $5.25B to $5.3B.
• GAAP net revenue for Q4 decreased 3% to $1.4B, while GAAP net revenue for fiscal 2024 was flat at $5.35B year-over-year.
• Q4 cost of revenue declined 24% to $930M, which included an acquired intangible asset impairment of $304M.
• Q4 operating expenses increased 244% to $3.2B due to a goodwill impairment of $2.2B and $93M of business reorganization charges.
• On a management (non-GAAP) basis, operating expenses rose 20% year-over-year in Q4 and 15% year-over-year for fiscal 2024.
• Non-GAAP adjusted unrestricted operating cash flow was $42M for fiscal 2024 versus an internal outlook of approximately $100M, driven by higher external developer advances, cash taxes, and interest payments.

Guidance

• Fiscal 2025 consolidated net bookings are guided to $5.55B to $5.65B, representing 5% year-over-year growth versus fiscal 2024.
• Recurrent consumer spending is expected to be approximately 76% of net bookings in fiscal 2025, with recurrent consumer spending assumed to be up about 3% year-over-year.
• The fiscal 2025 label mix is expected to be roughly Zynga 50%, 2K 31%, Rockstar Games 17%, and Other 2%.
• Geographic net bookings are forecast at approximately 60% United States and 40% international for fiscal 2025.
• GAAP net revenue for fiscal 2025 is guided to $5.57B to $5.67B, with cost of revenue guided to $2.43B to $2.46B.
• Take-Two expects non-GAAP adjusted unrestricted operating cash flow to be an outflow of $200M in fiscal 2025 and plans about $140M of capital expenditures primarily for game technology and office build-out.
• The release window for Grand Theft Auto VI was narrowed from calendar 2025 to fall of calendar 2025, and no additional multi-year top-line guidance was provided beyond fiscal 2025.