Take-Two Interactive Software, Inc. Q2 FY2026 earnings call

• Delivered fantastic second quarter results with net bookings of $1.96 billion, the best second quarter in company history. • 2K launched major titles like NBA 2K26, Mafia: The Old Country, and Borderlands 4, with NBA 2K26 selling over 5 million units and strong in-game spending. • Mobile business outperformed with titles like Toon Blast, Color Block Jam, and Rollic's Color Block Jam achieving record net bookings. • Rockstar delayed Grand Theft Auto VI to November 19, 2026 to ensure polish. • Zynga's titles like Zynga Poker launched on Steam, and mobile direct-to-consumer business grew with new offers and personalization. • 2K and Visual Concepts continued to innovate with NBA 2K, and Gearbox addressed PC optimization issues with Borderlands 4.

Second quarter net bookings were $1.96 billion. GAAP net revenue increased 31% to $1.77 billion. Cost of revenue increased 27% to $793 million, and operating expenses increased 5% to $1.1 billion. Net bookings breakdown from labels is roughly 46% Zynga, 39% 2K, and 15% Rockstar Games. Recurrent consumer spending rose 20% for the period, accounting for 73% of net bookings, with NBA 2K growing 45%, mobile increasing mid-teens, and Grand Theft Auto Online declining as expected.

• Raised full fiscal year 2026 net bookings outlook to $6.4 billion to $6.5 billion, representing 14% growth over fiscal 2025 at the midpoint. • Projected recurrent consumer spending to grow approximately 11%, accounting for 77% of net bookings. • For fiscal third quarter, projected net bookings range from $1.55 billion to $1.6 billion. • Revised GAAP net revenue range to $6.38 billion to $6.48 billion, cost of revenue to $2.66 billion to $2.69 billion, and operating expenses to $3.98 billion to $4 billion.

• Potential challenges with third-party distribution costs and changes in the market. • Initial PC optimization issues with Borderlands 4. • Uncertainties related to consumer behavior and market conditions affecting game performance.

Q: On RCS performance and GTA delay, A: Strauss said there's no change in GTA Online support, GTA+ was up 20% year-over-year, and RCS strength is due to creative delivery.

Q: On being the last publicly traded stand-alone publisher, A: Strauss said they're always 'running scared', performing well creatively, and are well positioned.

Q: On mobile payment mechanisms, A: Strauss said the direct-to-consumer business is doing well, with new payment solutions benefiting margins.

Q: On NBA mobile performance, A: Karl said they're improving at bringing back players with room for growth, and higher premium SKU mix is helping.

Q: On Borderlands PC issues, A: Strauss said Gearbox is addressing challenges, and unit sales of Borderlands 4 will be solid in time.

Q: On mobile outperformance and M&A, A: Strauss said Zynga's success is due to leadership and execution, and they're selective with M&A.

Q: On AI in development, A: Strauss said AI can help with efficiency, freeing up creative people.

Q: On BioShock and ad revenue, A: Karl talked about Rod Fergusson leading BioShock, and ad revenue up across mobile, particularly Rollic.

Q: On GTA VI delay impact, A: Strauss said Rockstar is focused on perfection, and the culture at Rockstar is strong.

Q: On macro in game category, A: Strauss said there are tailwinds driven by quality.

Q: On mobile margin improvement, A: Strauss said it's due to better execution, aligned culture, and strong leadership.