What to look for when Take-Two Interactive Software (TTWO) reports Q4 2024 earnings results

Shares of Take-Two Interactive Software, Inc. (NASDAQ: TTWO) stayed red on Thursday. The stock has dropped 14% over the past three months. The gaming company is scheduled to report its fourth quarter 2024 earnings results on Thursday, May 16, after market close. Here’s a look at what to expect from the earnings report:

Revenue

Take-Two has guided for revenue of $1.32-1.37 billion for the fourth quarter of 2024. Analysts are projecting revenue of $1.30 billion. This compares to revenue of $1.45 billion reported in the fourth quarter of 2023. In the third quarter of 2024, revenues decreased 3% year-over-year to $1.37 billion.

Earnings

TTWO has projected a net loss of $0.90-1.00 for Q4 2024. Analysts are predicting earnings of $0.09 per share for Q4. This compares to a net loss of $3.62 per share reported in Q4 2023. In Q3 2024, net loss was $0.54 per share.

Points to note

Take-Two expects net bookings to range between $1.27-1.32 billion in the fourth quarter of 2024. This compares to net bookings of $1.4 billion reported in Q4 2023 and $1.34 billion reported in Q3 2024.

The largest contributors to net bookings are expected to be NBA 2K, Grand Theft Auto Online and Grand Theft Auto V, Toon Blast, the company’s hyper-casual mobile portfolio, Empires & Puzzles, WWE 2K24, Red Dead Redemption 2 and Red Dead Online, Words With Friends, and Match Factory.

Last quarter, TTWO benefited from strong performances by the Grand Theft Auto and Red Dead Redemption franchises along with Zynga’s titles such as Toon Blast. This momentum was partly offset by softness in mobile advertising and NBA 2K24.

The company projects recurrent consumer spending to decrease by approx. 5% in Q4, assuming flat results for Zynga and a decline for NBA 2K. In Q3, recurrent consumer spending decreased 7% and accounted for 76% of total revenue.

Take-Two also announced its decision to acquire The Gearbox Entertainment Company for $460 million. The deal is expected to close in TTWO’s Q1 2025 and will bring popular franchises such as Borderlands and Tiny Tina’s Wonderlands into its fold. It will also give TTWO access to titles such as Homeworld and Brothers in Arms along with Gearbox’s future pipeline, with the latter having six key projects in various stages of development. This acquisition gives Take-Two vast opportunity to expand its portfolio and revenue streams.