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Video game publisher Take-Two Interactive Software raised guidance despite lower than expected earnings Monday. $TTWO names NBA® 2K20, Grand Theft Auto® Online and Grand Theft Auto V, Red Dead Redemption 2 and Red Dead Online, Sid Meier’s Civilization® VI and Social Point’s mobile games helped raise guidance.

Grand Theft Auto

12pt;">TAKE-TWO INTERACTIVE SOFTWARE, INC - NASDAQ: TTWO

Reported Earnings After Close Monday

$0.77 Missed Exp $1.53 EPS and $996.30M Beat $824.06 Million Forecast in Revenue

The lockdown and ecurrent consumer spending (which is generated from ongoing consumer engagement and include s virtual currency, add-on content and in-game purchases) accounted for largest share of total GAAP net revenue.

Earnings

Take-Two Interactive Software Inc.(NASDAQ:TTWO) reported Take-Two announced earnings per share of $0.77 on revenue of $996.3M. Analysts polled by Investing.com anticipated EPS of $1.53 on revenue of $824.06M.

The largest contributors to GAAP net revenue were NBA® 2K20 and NBA 2K19, Grand Theft Auto® Online and Grand Theft Auto V, Red Dead Redemption 2 and Red Dead Online, Borderlands 3, Sid Meier’s Civilization® VI, Social Point’s mobile games, and WWE® SuperCard and WWE 2K20.

TAKE-TWO INTERACTIVE SOFTWARE, INC NASDAQ: TTWO

Market Reaction After hours $174.65 +6.96 (+4.15%) NEW ALL TIME HIGH

Highlights

  • Net bookings, the number of products and services sold digitally or sold-in physically, grew 136% to $996.2 million
  • Driven by sales of games such as Grand Theft Auto Online and Grand Theft Auto V; NBA 2K20; Red Dead Redemption 2 and Red Dead Online; Borderlands 3; Sid Meier’s Civilization VI; Social Point’s mobile offerings; the WWE series; and The Outer Worlds.AAP
  • Net revenue is expected to range from $750 to $800 million
  • Net Bookings (operational metric) for the full-year were expected to range from $2.80 to $2.90 billion.

Take Two Interactive Q1 2021 earnings.jpg

Last year Red Redemption was an instant hit which should come as a big relief for the firm to reduce its dependency on the Grand Theft Auto franchise. Within three months after launch, the company sold 23 million units, surpassing analyst lifetime estimates for the game.

NBA 2K franchise has also been getting good traction with gamers. Jointly owned with NBA, the game was launched in May 2018 on the lines of a sports league format. Take-Two has announced that next season would see 21 teams participating which would augur well to bump up its revenues. This also would help the firm to grow its esports business in the near future.

A gaming stock's guidance is affected by the games they produce and when and with Take Two the money tree, “Grand Theft Auto Online”. 

Red Dead Redemption 2

Outlook

“Looking ahead, Take-Two has the strongest development pipeline in its history, including sequels from our biggest franchises as well as exciting new IP. While fiscal 2021 will be a light new release year, we expect to deliver strong results, reflecting the diversity and strength of our catalog and live service offerings.

"We have an array of titles that we will begin to launch in fiscal 2022, which we expect to drive sequential growth that year. Our Company remains superbly positioned – creatively, operationally and financially – to capitalize on the many positive trends in our industry, and to deliver continued growth and returns for our shareholders over the long-term."

Outlook for Fiscal 2021

Take-Two (NASDAQ:TTWO) on Monday raised its outlook on full-year growth despite reporting mixed fiscal first-quarter results as earnings missed analysts' expectations. Looking ahead to the full-year, the company guided GAAP revenue in the range of $2.80 to $2.90 billion and GAAP net income between $349 and $380 million

“As a result of our better-than-expected first quarter operating results and increased forecast for the balance of the year, we are raising our fiscal 2021 outlook, which is poised to be another great year for Take-Two," the company said.

What is impressive with $TTWO is both Grand Theft Auto V and Grand Theft Auto Online remain among the company biggest contributors nearly four years after they were first launched for Playstation 3 and Xbox 360. NBA 2K18, WWE 2K18, WWE SuperCard and Mafia III all were top contributors Red Dead Redemption 2 was an exciting addition for fiscal year 2019.

Grand Theft Auto V includes access to Grand Theft Auto Online, which initially launched in 2013. Rockstar Games is also known for developing brands in other genres, including the LA Noire, Bully and Manhunt franchises. Rockstar Games continues to expand on the company’s established franchises by developing sequels, offering downloadable add-on episodes, content and virtual currency, and releasing titles for smartphones and tablets.

Software titles published by the company’s Rockstar Games label are primarily internally developed. It expects Rockstar Games, its wholly-owned publisher of the Grand Theft Auto, Max Payne, Midnight Club, Red Dead, and other franchises, to continue to operate in the action/adventure product category and create groundbreaking entertainment by utilizing its existing titles, as well as developing new brands.

TTWO’s 2K label has published various entertainment properties across all key platforms and across a range of genres, including shooter, action, role-playing, strategy, sports and family/casual entertainment.

2K's internally owned and developed franchises include the critically acclaimed, multi-million unit selling BioShock, Mafia, Sid Meier's Civilization and XCOM Enemy Unknown series. 2K also publishes highly externally developed franchises, such as Borderlands and Evolve. 2K's realistic sports simulation titles, including the company’s primary NBA 2K series.

Source: TTWO, Alphastreet,

From The TradersCommunity Research Desk

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