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Take-Two Interactive (TTWO) Q1 2022 earnings results beat expectations

The maker of the Grand Theft Auto series and many more awesome games is out with their Q1 2022 financial results. Here's all the details from Take-Two's latest earnings release.
Captain Business
Captain Business
1

Take-Two Interactive is out with their latest Q1 2022 earnings release this afternoon. The company reported $1.30/share of earnings versus expecatations of $0.89/share and a loftier whisper number of $1.04/share. Revenues came in at $813 million compared to Wall Street expecations of $688.97 million. Both numbers are substantial beats, but the stock is currently down in afterhours trading.

Many Take-Two shareholders are waiting for some news about GTA 6.
Many Take-Two shareholders are waiting for some news about GTA 6.

Take-Two Interactive (TTWO) revenues decreased 2% from the prior year, which is still above their guidance. Recurrent consumer spending accounted for 70% of total revenue during the quarter, with the largest contributors being NBA 2K21, NBA 2K20, GTA 5, and GTA Online. 

Check out the Management Comments from today's TTWO Q1 2022 earnings release:

The company reiterated it's conserative outlook for this fiscal year and the next quarter, which has lead to a substantial share price drop in afterhours trading. 

Take-Two Interactive's stock fell over 5% in afterhours trading on disappointing guidance.
Take-Two Interactive's stock fell over 5% in afterhours trading on disappointing guidance.

Please take a look at Take-Two Interactive's Outlook for Fiscal 2022:

Take-Two is reiterating its outlook for the fiscal year ending March 31, 2022 and providing its initial outlook for its fiscal second quarter ending September 30, 2021:

Fiscal Year Ending March 31, 2022

  • GAAP net revenue is expected to range from $3.14 to $3.24 billion
  • GAAP net income is expected to range from $229 to $259 million
  • GAAP diluted net income per share is expected to range from $1.95 to $2.20
  • Share count used to calculate both GAAP and management reporting diluted net income per share is expected to be 117.4 million
  • Net cash provided by operating activities is expected to be over $380 million
  • Adjusted Unrestricted Operating Cash Flow (Non-GAAP) is expected to be over $400 million (2)
  • Capital expenditures are expected to be approximately $170 million
  • Net Bookings (operational metric) are expected to range from $3.2 to $3.3 billion

Wall Street appears to be focusing on the disappointing Q2 2022 guidance and management's assertion that this is going to be a tough year for top-line revenue growth. Despite the better-than-expected Q1 2022, Take-Two shareholders are receiving some afterhours pain. This tends to happen after massive runs like the company's stock saw in 2020. Shares have already materailly fallen from the all-time high of $214.91/share that was reached back in February 2021, and it seems likely that there will be more pain ahead. Many video game companies face very difficult year-over-year comparisons after a banner 2020, and Take-Two appears to be falling victim to their past success. 

This is good news for folks who don't own the stock yet and want to invest before GTA 6 releases. Any day now, right? 

This article is only meant for educational purposes, and should not be taken as investment advice. Please consider your own investment time horizon, risk tolerance, and consult with a financial advisor before acting on this information.

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