Take-Two Interactive Software (TTWO) Q1 2023 Earnings Results

By Amit Chowdhry ● Aug 9, 2022
  • Take-Two Interactive Software (TTWO) recently announced its Q1 2023 earnings results. These are the details.

Take-Two Interactive Software, Inc. (TTWO) recently reported strong results for the first quarter of its fiscal year 2023, which ended June 30, 2022. And the company revised its outlook for the fiscal year 2023, ending March 31, 2023, to include its combination with Zynga and provided its initial outlook for the second quarter of the fiscal year 2023, ending September 30, 2022.

Below are some of the highlights:

Note: The company completed its combination with Zynga on May 23, 2022; first quarter results include Zynga for 39 days of the quarter

– GAAP net revenue increased 36% to $1.1 billion

– GAAP net loss per share was $0.76

– GAAP net cash provided by operating activities for the three months ended June 30, 2022, was $100.8 million

– Adjusted Unrestricted Operating Cash Flow (Non-GAAP) for the three months ended June 30, 2022, was $(14.4) million

– Net Bookings grew 41% to $1.0 billion

– Company updates outlook to include combination with Zynga from the date of acquisition, including the fiscal year 2023 Net Bookings of $5.8 billion to $5.9 billion

Outlook for Fiscal 2023

Take-Two is revising its outlook for the fiscal year ending March 31, 2023, to include its combination with Zynga (which closed on May 23, 2022), and is providing its initial outlook for its fiscal second quarter ending September 30, 2022:

Fiscal Year Ending March 31, 2023

– GAAP net revenue is expected to range from $5.73 to $5.83 billion

– GAAP net loss is expected to range from $438 to $398 million

– GAAP net loss per share is expected to range from $2.75 to $2.50

– Share count used to calculate GAAP net loss per share is expected to be 159.2 million

– Share count used to calculate management reporting diluted net income per share is expected to be 161.0 million(1)

– Net cash provided by operating activities is expected to be over $710 million

– Adjusted Unrestricted Operating Cash Flow (Non-GAAP) is expected to be over $700 million (2)

– Capital expenditures are expected to be approximately $135 million

– Net Bookings (operational metric) are expected to range from $5.8 to $5.9 billion

– EBITDA (Non-GAAP) is expected to range from $499 to $548 million

KEY QUOTES:

“Our Fiscal 2023 is off to a strong start, as demonstrated by our first quarter Net Bookings of $1 billion. On a pre-combination basis, our Net Bookings were approximately $731 million, and our operating results were above our expectations, as we launched engaging new games and content updates, all while navigating various macroeconomic and geopolitical factors.”

“We remain exceedingly optimistic about the long-term growth potential for the mobile industry, as well as our ability to create greater shareholder value as a combined entity with Zynga. Our creative teams are actively discussing potential new projects and we remain committed to delivering over $500 million of annual Net Bookings opportunities over time. At the same time, we continue to believe that we can achieve approximately $100 million of annual cost synergies within the first two years post-close, with the potential for upside.”

“For Fiscal Year 2023, we now expect to deliver Net Bookings of $5.8 billion to $5.9 billion when including our combination with Zynga. Our pipeline for the year continues to look very strong, and we are excited to expand significantly our mobile presence with a best-in-class platform. Our new forecast takes into account some movement in our release slate for the year, foreign currency pressures, and macroeconomic and geopolitical uncertainty. As we look to the future, our long-term vision is clearer than ever, and we believe that our combination with Zynga will enable us to better capitalize on the evolving dynamics of the interactive entertainment industry. As we deliver our expansive, diverse pipeline and pursue the vast opportunities that we have identified through our combination with Zynga, we see a path to engage even greater audiences around the world, grow our scale, and enhance our margins.”

– Strauss Zelnick, Chairman and CEO of Take-Two