Take-Two Interactive Software (NASDAQ:TTWO) reported what management called an “outstanding” third quarter of fiscal 2026, highlighted by net bookings of $1.76 billion that exceeded the company’s guidance range of $1.55 billion to $1.6 billion. Executives pointed to broad-based outperformance across labels, continued strength in recurrent consumer spending, and improving momentum in mobile, which helped drive a raised outlook for the full fiscal year.
Quarterly results topped guidance
Chairman and CEO Strauss Zelnick said all of the company’s labels “outperformed substantially our expectations,” while CFO Lainie Goldstein said results reflected better-than-expected performance from NBA 2K, the Grand Theft Auto series, and several mobile titles including Toon Blast, Empires & Puzzles, and Top Eleven.
- Net bookings: $1.76 billion, above guidance
- Recurrent consumer spending (RCS): up 23% year-over-year, versus guidance of 8% growth; accounted for 76% of net bookings
- GAAP net revenue: up 25% to $1.7 billion
- Cost of revenue: up 26% to $754 million
- Operating expenses: up 10% to $984 million (13% on a management basis, which Goldstein said was in line with guidance and showed leverage)
During the quarter, the company launched WWE 2K Mobile for Netflix and expanded Red Dead Redemption and Undead Nightmare to several new platforms, which Zelnick later noted included PlayStation 5, Xbox Series X|S, Nintendo Switch 2, and iOS/Android for Netflix subscribers.
Key franchise performance: NBA 2K and GTA drove upside
Take-Two emphasized strong engagement and monetization trends in its largest console franchises. Zelnick said NBA 2K26 “delivered another stellar quarter,” with the title selling roughly 8 million units to date, representing a high single-digit percentage increase over NBA 2K25. He added that recurrent consumer spending, daily active users, and MyCareer daily active users each grew 30% year-over-year, and that the franchise is on track for its highest annual net bookings and RCS in history.
In Q&A, management attributed NBA 2K’s strength to ongoing iteration and what Zelnick described as “perpetual diligence” in responding to player behavior. He also highlighted “The Cruise” as a new social feature that has had an impact on the MyCAREER mode. Zelnick said there is “significant international expansion opportunity” as the NBA expands globally, while also seeing room to grow in North America.
On the Grand Theft Auto series, Zelnick said recurrent consumer spending grew 27%, helped by GTA Online’s A Safe House in the Hills update, which introduced mansion properties and brought back Michael De Santa. He also said Grand Theft Auto V has now sold more than 225 million units since launching in 2013, while GTA+ membership levels “nearly doubled” year-over-year.
When asked whether anticipation for Grand Theft Auto VI could reduce engagement in GTA Online, Zelnick said the opposite has occurred, arguing that “the anticipation is yielding even more engagement with GTA.” He added that Rockstar’s performance with content updates shows that “when you deliver great material, consumers show up,” and said he expects the company to continue supporting GTA Online.
Mobile growth, advertising, and direct-to-consumer momentum
Mobile was again a major focus, with Zelnick highlighting several Zynga and Peak titles. He said Peak’s Toon Blast grew 43% year-over-year and surpassed $3 billion in lifetime net bookings, while Match Factory grew roughly 17%. Zelnick also called Color Block Jam Rollic’s top-performing title and noted it was featured in Apple’s 2025 Free Games list in the U.S. He added that Empires & Puzzles and Words With Friends grew 11% and 6%, respectively.
Goldstein said mobile RCS increased 19% in the quarter, while advertising revenue grew 10% year-over-year, driven by higher average revenue per daily active user. In Q&A, Zelnick attributed advertising growth to selectively adding ad units across the portfolio after the Zynga acquisition, while emphasizing an approach that does not interfere with gameplay. He said the company sees an opportunity to monetize users who don’t pay, noting that in mobile games “fewer than 20% of your users actually engage with you to pay.”
Management also highlighted Take-Two’s mobile direct-to-consumer channel, which Zelnick said delivered its strongest quarter on record following enhancements such as more personalized offers, flexible pricing, reduced payment friction, and alternative payment methods. While the company did not provide a percentage of mobile spending coming from DTC, Zelnick called it “meaningful” and said the regulatory environment has become more favorable, with expectations that third-party take rates will decline over time and benefit margins.
Raised full-year outlook; GTA VI timing reiterated
Take-Two raised its full fiscal 2026 expectations, citing Q3 outperformance and higher expectations for several titles in Q4. The company now expects full-year net bookings of $6.65 billion to $6.7 billion, representing 18% growth versus fiscal 2025 at the midpoint. Zelnick said the updated midpoint is about $725 million above the initial outlook provided in May 2025.
Goldstein said the largest expected net bookings contributors for the year include NBA 2K, the Grand Theft Auto series, Toon Blast, Match Factory, Empires & Puzzles, Color Block Jam, Borderlands, the Red Dead Redemption series, and Words With Friends. She also projected the net bookings mix by label to be roughly 46% Zynga, 38% 2K, and 16% Rockstar Games.
The company raised its operating cash flow forecast to approximately $450 million from $250 million and reaffirmed an expectation to deploy about $180 million in capital expenditures. For the fiscal fourth quarter, Take-Two projected net bookings of $1.51 billion to $1.56 billion, compared with $1.58 billion in the prior year, with releases including Civilization VII for Apple Arcade, PGA TOUR 2K25 for Switch 2, and WWE 2K26.
Looking ahead, Zelnick said fiscal 2027 “promises to be groundbreaking,” led by the November 19 release of Grand Theft Auto VI, with Rockstar’s launch marketing set to begin in the summer. On marketing, Zelnick said the company will not “sit back and relax,” adding that investors should expect creativity from Rockstar’s marketing efforts in the coming months.
AI, capital allocation, and M&A approach
In response to questions about generative AI and investor concerns, Zelnick said the video game business has long been built on machine learning and AI, and that Take-Two is “actively embracing” generative AI with “hundreds of pilots and implementations” across the company. He framed AI as a tool to drive efficiency and reduce costs by automating mundane tasks, freeing creators to focus on innovation, while noting that the creative process remains central.
Asked about tools such as “Genie,” Zelnick said the technology is early and “not a game engine,” describing it as closer to “a procedurally generated interactive video” with limitations. He added that world creation is only a small component of game development, emphasizing the importance of story, emotional connection, mission structure, and other elements.
On capital allocation, Zelnick said priorities remain unchanged: supporting organic growth, pursuing selective and disciplined accretive acquisitions, and returning capital to shareholders, typically through opportunistic buybacks. On M&A, he said the decision is driven by talent, technology, and IP, and that Take-Two looks for opportunities that fit its strategy and culture on favorable terms.
About Take-Two Interactive Software (NASDAQ:TTWO)
Take-Two Interactive Software is an American video game publisher headquartered in New York City. Founded in 1993 by Ryan Brant, the company is publicly traded on the NASDAQ under the ticker TTWO and is led by Chairman and CEO Strauss Zelnick. Take-Two operates through distinct publishing labels that manage development, marketing and distribution of interactive entertainment for a global audience.
Take-Two’s publishing portfolio includes Rockstar Games and 2K, as well as the Private Division label, which supports independent and mid-size developers.
