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Take-Two Revenue Exceeds Expectations, But Dips Due To Thin Release Schedule In Q2 FY15

by Mike Futter on Oct 29, 2014 at 10:19 AM

Take-Two will likely have some good news for its investors after the current quarter, but the most recently completed period was a bit sluggish despite beating expectations. The publisher has hit October running, but without console or PC titles from June to August, it was reliant exclusively on catalog titles.

The company did release three mobile titles in the quarter. Civilization Revolution 2, WWE SuperCard, and BioShock were all released on iOS, with SuperCard also arriving on Android.

Revenue for the quarter was $126.3 million against performance last year of $148.8 million. Take-Two is still showing a loss, though the numbers are improving. In second quarter FY15, net loss amounted to $41.4 million. The company posted losses totaling $124.1 million a year ago.

When looking at things on a non-GAAP basis (financial calculations used internally to reflect performance in combination with those that adhere to generally accepted accounting principles), the impact of Grand Theft Auto V's release last year is made clearer. Non-GAAP net revenue in this quarter was $135.4 million versus last year's Rockstar-fueled $1.27 billion performance.

Take-Two also received $22 million in this quarter as a result of its previous investment in Twitch. The streaming platform was sold to Amazon in September.

The publisher is increasing its financial forecast for the year ending March 31, 2015. The company expects to reach $1.4 to $1.5 billion in Non-GAAP revenue for the year. 

Despite its vacant second quarter, Take-Two doesn’t have an empty lineup. October saw the release of Borderlands: The Pre-Sequel, Civilization: Beyond Earth, and the last-gen versions of WWE 2K15. November holds Grand Theft Auto V and WWE 2K15 on Xbox One and PlayStation 4.

This leads the company into the end of the fiscal year, with a lot riding on Grand Theft Auto V’s PC debut and Evolve. DLC and in-game transactions for those titles will also carry the publisher through the end of the fiscal year in March.

 

Our Take
Take-Two has a strong back catalog of titles to carry it through periods thinner on major releases. I expect that GTA V will perform exceedingly well on new-gen and PC despite it being a double-dip for many players. Borderlands, Civilization, NBA 2K15, and WWE 2K15 will all be big performers in Q3 and through the end of the year.