Take-Two Interactive Software on Wednesday beat analyst estimates for quarterly adjusted sales on strong demand from legacy titles NBA 2K and Grand Theft Auto, sending the video game publisher’s shares up 8 percent in extended trading.
The company also said it expects to deliver 36 video game titles through 2025 and 2026, and forecast $8 billion (roughly Rs. 65,975 crore) in 2025 net bookings and over $1 billion (roughly Rs. 8,250 crore) in operating cash flow.
Wedbush analyst Michael Pachter said “that’s enough to send the stock higher”.
Take-Two, however, did not make any announcements about its highly anticipated title Grand Theft Auto VI.
Its results follow an upbeat performance from peer Electronic Arts and Call of Duty maker Activision Blizzard, confirming signs of the video gaming industry rebounding from a sluggish 2022 due to decades-high inflation.
Take-Two has established itself as one of the dominant players in the US with strong sales from its successful video game franchises and a solid pipeline including titles like Star Wars Hunters.
Its fourth-quarter adjusted sales grew 65 percent to $1.39 billion (roughly Rs. 11,467 crore), compared with Wall Street’s estimate of $1.34 billion (roughly Rs. 11,055 crore), according to Refinitiv data. But the company missed profit estimates, on acquisition-related charges.
During an earnings call with analysts, Chief Executive Strauss Zelnick said Take-Two was assuming a continuation of the current challenging consumer backdrop within its forecast.
Its annual adjusted revenue forecast between $5.45 billion (roughly Rs. 44,965 crore) and $5.55 billion (roughly Rs. 45,790 crore) came below Street’s estimate of $6.07 billion (roughly Rs. 50,090 crore).
“Additionally, the development time lines of some of our titles lengthened especially as we strive to redefine the creative standards of excellence of our industry, which affect our release slate for the year,” Zelnick added.
© Thomson Reuters 2023