Take-Two Interactive Software (NASDAQ:TTWO) is expected to report its first quarter earnings on August 8, Thursday. Investors will focus on its outlook and how it’s recently acquired, Zynga has performed.
The consensus EPS Estimate is $0.01 (+100.8% Y/Y) and the consensus Revenue Estimate is $1.25B (-2.3% Y/Y).
Earlier in May, the New York-based company had acquired Zynga in a $12.7 billion deal.
Zynga’s hyper-casual games, 2K sports releases, and upcoming game releases are expected to boost revenues by the end of 2025, said SA analyst Gytis Zizys.
“While Zynga is a high-growth business acquisition, the mobile market’s competitive nature and uncertainty will be a drag on Take-Two’s consolidated financial performance,” said SA analyst Kevin Anthony D. Arroyo.
Oppenheimer said it sees investor sentiment as neutral into TTWO’s Q1 earnings, mostly due to a lack of catalysts.
“While there has been more positive mobile gaming data favoring Zynga, we still expect at- or below-consensus Q1 results and Q2 guidance offset by weaker console and PC game bookings,” Oppenheimer added.
The Red Dead Redemption maker has been grappling with challenges, which include a top Hollywood union’s call for a strike of all video game work produced under its Interactive Media Agreement, over AI concerns. The video game publisher is also battling costs and game delays.
Earlier in the year, the company had laid out plans to reduce its workforce by about 5%, and said it would scrap several projects in development as part of a cost reduction program.
The firm, whose much awaited Grand Theft Auto VI is expected to launch next year, had gotten a bump from Jefferies, and was its top pick in interactive entertainment.
Investors will also be interested in getting more updates on the Grand Theft Auto VI.
“The loyal shareholders of the company may have very limited downside risk because of the GTA 6 effect, which keeps the shares from falling. I am expecting the company to go sideways for the next year or so, given that there aren’t any catalysts right now,” Zizys added.
Last quarter, the firm announced its bookings guidance for fiscal year 2025, which came well below forecasts.
Over the last 1 year, TTWO has beaten EPS estimates 0% of the time and has beaten revenue estimates 75% of the time.
Over the last 3 months, EPS estimates have seen 0 upward revisions and 10 downward. Revenue estimates have seen 5 upward revisions and 4 downward.
Shares in the company were down ~14.3% since the start of the year.
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