Take-Two Interactive Software, Inc. (TTWO) gains on deep earnings anal
Take-Two Interactive Software, Inc. (TTWO) gains despite an EPS miss as revenue, bookings, and guidance held up. This deep-dive examines the earnings split, GTA VI optimism, NBA 2K strength, expense pressures, and why investors looked past the headline miss.
Take-Two Interactive Software (TTWO) reported a mixed quarter, with revenue of $1.53 billion beating estimates while EPS of $0.18 came in well below expectations. Investors looked past the earnings miss and bid the stock higher because net bookings topped guidance, Grand Theft Auto and NBA 2K remained strong, and management reaffirmed its fiscal 2027 outlook.
Take-Two Interactive Software, Inc. (TTWO) gains after earnings miss. The company reported EPS of $0.18, below the $0.327 estimate, but revenue of $1.53 billion topped the $1.36 billion consensus. Shares rose 4.69% to $243.38 during the Aug. 7 regular session as investors focused on Grand Theft Auto VI, strong bookings, and reaffirmed fiscal guidance.
Key Takeaways
TTWO earnings missed on EPS at $0.18 versus $0.327 expected, while revenue reached $1.53 billion against a $1.36 billion estimate.
First-quarter net bookings totaled $1.39 billion, slightly above the $1.32 billion to $1.37 billion guidance range.
NBA 2K and the Grand Theft Auto series led performance. NBA 2K recurrent consumer spending grew 7%, while the Grand Theft Auto series rose 3%.
Management reiterated fiscal 2027 net bookings guidance of $8 billion to $8.2 billion and expects operating cash flow above $1 billion.
CFO Lainie Goldstein cited a $43 million impairment charge tied to an unannounced third-party title, while operating expenses stayed flat at $918 million.
Analyst sentiment remains constructive. The consensus rating is Buy, Wells Fargo raised its target to $288, and BofA Securities carries a $368 high target.
Financial Performance: Revenue Beat, EPS Miss
This Take-Two Interactive Software, Inc. earnings analysis starts with a split result. Revenue of $1.53 billion exceeded the $1.36 billion consensus, giving the quarter a clear top-line beat. However, EPS of $0.18 fell short of the $0.327 estimate. That gap explains why the report was an earnings miss despite stronger-than-expected sales.
Revenue also moved below the prior three quarterly figures of $1.68 billion, $1.70 billion, and $1.77 billion. It remained above the $1.50 billion reported in the June 2025 quarter. The year-over-year comparison was positive, with CFO Lainie Goldstein stating that GAAP net revenue increased 2%.
The EPS result sits below the four prior earnings actuals listed in the surprise history: $0.80 in May 2026, $1.23 in February, $1.46 in November 2025, and $0.61 in August 2025. Therefore, the current quarter marks a sharp step down in per-share earnings, even though revenue surpassed estimates.
Expense lines added pressure. Cost of revenue increased 17% to $651 million and included a $43 million impairment charge connected to Take-Two's decision not to proceed with an unannounced title from a third-party developer. Operating expenses held at $918 million, while management-basis operating expenses declined 1% year-over-year because marketing costs shifted across labels.
The operating portfolio itself remained healthy. First-quarter net bookings reached $1.39 billion, slightly above the high end of guidance. Recurrent consumer spending declined 1%, better than the forecast for a 3% decline, and represented 84% of net bookings. NBA 2K recurrent consumer spending grew 7%, Grand Theft Auto rose 3%, and mobile declined 7%.
NBA 2K26 supplied the strongest franchise data point. The game has sold more than 12 million units, up 9% from NBA 2K25. Average daily active users increased 15%, MyCAREER daily active users rose 25%, and average games played per user grew 35%. Those figures show that Take-Two's live-service model is producing deeper engagement, not just one-time unit sales.
Grand Theft Auto remains the larger strategic asset. Grand Theft Auto V has sold more than 230 million units, and recurrent consumer spending for the series grew 3%. GTA+ continued to expand, supported by new content such as the Rockstar Mission Creator.
Market Reaction and Analyst Response
TTWO traded at $243.38 on Aug. 7, up 4.69% during the regular session. Volume reached 2,612,348 shares versus an average of 2,563,711. The gains show that investors gave more weight to the revenue beat, bookings performance, and Grand Theft Auto VI outlook than to the EPS shortfall.
The analyst consensus remains Buy, with 45 Buy ratings and 12 Hold ratings. The consensus contains no Sell ratings. That distribution gives TTWO a strong sentiment base heading into the most important product cycle in the company's history.
Wells Fargo provided the clearest recent positive action. On Aug. 1, the firm raised its price target to $288 from $277 and maintained an Overweight rating. Earlier, on July 7, Wells Fargo moved its target to $289 from $287, also keeping Overweight. BMO Capital raised its target to $285 from $280 and maintained Outperform, while BTIG maintained a $293 Buy target.
BofA Securities remains the most aggressive named analyst, with a $368 target and Buy rating after lifting its target from $320. A separate analyst snapshot showed an average target of $284.14 across 29 analysts. The range between that average and BofA's target reflects a familiar tension: GTA VI offers major earnings power, but much of that potential already shapes the valuation debate.
Public analyst commentary centers on three issues. First, GTA VI is the main valuation catalyst. Second, analysts are focused on launch timing and how bookings convert into reported results. Third, the debate turns on whether management's guidance leaves room for upside. The Aug. 7 price action favors the bullish interpretation, but the EPS miss keeps execution firmly in focus.
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Management Commentary: GTA VI Anchors the Fiscal 2027 Story
"Fiscal 2027 is off to an excellent start, led by the power of our diverse portfolio and the strong consistent execution of our strategy at all of our labels." - Strauss Zelnick, Chairman and CEO, TTWO earnings call
CEO Strauss Zelnick framed the quarter as evidence that Take-Two can grow from several franchises at once. NBA 2K and Grand Theft Auto produced the strongest current-quarter booking trends, while Zynga's mature mobile portfolio continued to provide scale. That mix matters because it reduces reliance on a single launch before GTA VI arrives on Nov. 19.
"We believe that fiscal 2027 will be an inflection point for Take-Two, one that will write an exciting new chapter in our history and provide the foundation for new levels of success and the creation of groundbreaking entertainment experiences." - Strauss Zelnick, Chairman and CEO, TTWO earnings call
That strategic claim rests on a specific calendar. Rockstar Games plans an extended look at GTA VI on Aug. 27, and the game launches Nov. 19. NBA 2K27 arrives on Sept. 4, giving Take-Two another major franchise event before the Grand Theft Auto cycle reaches its peak.
"With the ongoing positive trends in our business and excitement around the November 19 release of Grand Theft Auto VI, we are reiterating our fiscal 2027 net bookings outlook range of $8 billion to $8.2 billion." - Lainie Goldstein, CFO, TTWO earnings call
CFO Lainie Goldstein supplied the numerical anchor for the bullish narrative. Take-Two kept its fiscal 2027 net bookings range of $8 billion to $8.2 billion, representing approximately 20% growth at the midpoint. The company also kept GAAP net revenue guidance at $7.9 billion to $8.1 billion and expects operating cash flow above $1 billion.
"We continue to expect GAAP net revenue to range from $7.9 billion to $8.1 billion, while we now expect cost of revenue to range from $3.54 billion to $3.66 billion." - Lainie Goldstein, CFO, TTWO earnings call
Goldstein also raised planned capital expenditures to approximately $290 million because of a planned real estate purchase. Total operating expenses are now forecast at $4.15 billion to $4.17 billion, while management-basis operating expense growth is expected at approximately 7% year-over-year. The company remains on track to reach a net cash position by the end of fiscal 2027.
Second-quarter guidance calls for net bookings of $1.62 billion to $1.67 billion, compared with $1.96 billion in the same quarter last year. GAAP net revenue is projected at $1.42 billion to $1.47 billion. Recurrent consumer spending is expected to decline approximately 5%, while management-basis operating expenses are expected to decline approximately 5% because the prior-year period included significant Borderlands 4 marketing costs.
Bottom Line
TTWO earnings delivered a revenue and bookings beat but missed on EPS, with a $43 million impairment charge adding pressure to the quarter. The stock's gains show that the market is prioritizing the Nov. 19 GTA VI launch and $8 billion to $8.2 billion fiscal bookings outlook. For investors, execution on that pipeline now matters more than the headline quarterly miss.
+Why did Take-Two Interactive stock rise after an earnings miss?
Take-Two Interactive Software (TTWO) rose 4.69% to $243.38 because investors focused on the revenue beat, strong net bookings, and the long-term GTA VI opportunity. The company also reaffirmed fiscal 2027 net bookings guidance of $8 billion to $8.2 billion, which helped offset the EPS miss.
+Did Take-Two Interactive beat revenue in its latest quarter?
Yes. Take-Two reported revenue of $1.53 billion, above the $1.36 billion consensus estimate. Management also said GAAP net revenue increased 2% year over year.
+How bad was TTWO's EPS miss in the latest earnings report?
TTWO reported EPS of $0.18, below the $0.327 estimate. The miss was driven in part by a $43 million impairment charge tied to an unannounced third-party title and higher cost of revenue.
+What did Take-Two say about bookings and future guidance?
First-quarter net bookings were $1.39 billion, slightly above the company's guidance range of $1.32 billion to $1.37 billion. Take-Two reiterated fiscal 2027 net bookings guidance of $8 billion to $8.2 billion and expects operating cash flow above $1 billion.
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