Take‑Two Interactive Software (TTWO), Financial Analysis

1 Revenue & Business Model

• Storyline: net bookings fell 18% in Q2 FY2027 as RCS declined and the year earlier quarter held the releases of Borderlands 4, Mafia: The Old Country and NBA 2K26, while the outlook for the Dec 2026 quarter, the first with GTA VI, is roughly double the year earlier figure. Chapters 2 to 4 follow the revenue drivers: console and PC premium titles incl. GTA VI; recurrent consumer spending in GTA Online, NBA 2K and mobile games; and mobile, mostly Zynga.
• GAAP net revenue against net bookings. Net bookings is the operating metric Take‑Two guides to: the net amount of products and services sold digitally or sold in physically in the period. GAAP net revenue defers part of each sale over an estimated service period of 5 to 15 months, so the two differ by quarter: net bookings exceeded revenue by $104.3m in Q2 FY2027 and fell $148.0m short of it in Q1 FY2027 (Figure 5.4).
• Take‑Two reports one segment and three labels: Rockstar Games, 2K and Zynga (10-K). Filings split revenue by platform, content and channel, with no split by label. FY2026 GAAP net revenue $6.66bn, +18.2%: mobile $3.33bn (50.1%), console $2.60bn (39.0%), PC and other $726.1m (10.9%). Mobile became the largest platform after the Zynga acquisition of May 2022.
• Content and channel, FY2026: RCS $5.20bn (78.1% of revenue); digital online $6.46bn (97.0%, from 89.8% in FY2022); advertising $494.3m. Five customers, incl. Apple, Sony, Google and Microsoft at more than 10% each, took 80.6% of FY2026 revenue and 80.8% in H1 FY2027.
• Regions, FY2026: United States $3.94bn (59.2%), international $2.72bn. Employees 12,909 at 31 Mar 2026, of which 9,998 in development (10-K).

2 Console and PC Premium Titles: GTA VI Set for 19 Nov 2026

• Console net bookings $742.6m in Q2 FY2027, (18.2%); PC and other $151.1m, (35.6%). The year earlier quarter held the releases of Mafia: The Old Country (8 Aug 2025), NBA 2K26 (5 Sep 2025) and Borderlands 4 (12 Sep 2025). Full game and other net bookings $299.2m against $532.2m.
• FY2026 console GAAP net revenue $2.60bn, +23.7%; PC and other $726.1m, +22.5% (10-K). The FY2026 10-K credits NBA 2K (+$416.9m of revenue), Borderlands (+$210.3m) and GTA (+$115.1m) among the main contributors.
• GTA VI: set for 19 Nov 2026 on PS5 and Xbox Series X|S, with no PC date given; the outlook for the Dec 2026 quarter is $3.35bn to $3.5bn of net bookings against $1.76bn a year earlier. GTA series units sold in passed 475m by Sep 2026, GTA V more than 230m and Red Dead Redemption 2 more than 85m (10-Q). GTA products were 12.6% of H1 FY2027 net revenue.
• Investment ahead of launch (10-Q): capitalized software development costs and licenses $2.58bn at 30 Sep 2026 against $2.35bn at 31 Mar 2026; inventory $34.1m against $7.3m. NBA 2K27 was released 4 Sep 2026 on PS5, Xbox Series X|S, Switch 2 and PC.
• Xbox: a new long term Xbox Publisher License Agreement with Microsoft, signed 28 Sep 2026, replaced agreements that ran to 31 Mar 2027 (8-K of 30 Sep 2026).

How console and PC publishing is changing

• Sony (6-K of 5 Nov 2026): Game & Network Services sales ¥1.21tn in the Sep 2026 quarter, +8.6%, with a segment operating margin of 18.2%; digital software and add on content ¥643.9bn, +13.3%. Sony raised its FY2026 G&NS sales forecast by ¥290bn to ¥4.83tn, citing higher sales of non first party software.
• Microsoft (10-Q of 28 Oct 2026): XBOX revenue $5.38bn in the Sep 2026 quarter, (2.3%); XBOX hardware down 14% on lower console volume; content and services down 2% on lower third party content and Game Pass.
• Electronic Arts (10-Q of 3 Aug 2026): full game net revenue $514.0m in the Jun 2026 quarter, +77.9%, on Battlefield 6; total net revenue $1.99bn, +19%. EA was acquired by an investor consortium and delisted on 4 Aug 2026, so no later quarter is filed.
• Nintendo files no reports with the SEC and is not included in the figures.

3 Recurrent Consumer Spending: 81% of Net Bookings, Down 9%

• RCS net bookings $1.30bn in Q2 FY2027 against $1.43bn, down 9% as stated in the release and (8.8%) on the dollar values; 81% of net bookings. RCS covers virtual currency, add on content, in game purchases and in game advertising in GTA Online, NBA 2K, WWE 2K and the mobile games. Q1 FY2027 RCS was $1.17bn, (1.2%).
• Trend: RCS growth was 20% in Q2 FY2026 and 23% in Q3 FY2026, then 7% in Q4 FY2026, (1%) in Q1 FY2027 and (9%) in Q2 FY2027 (8-K releases). FY2026 RCS GAAP net revenue $5.20bn, +16.1%, led by NBA 2K and Color Block Jam (10-K).
• GAAP view (10-Q): RCS net revenue $1.21bn, (5.1%), 80.8% of revenue; the decline was led by Color Block Jam and Match Factory!. In game advertising $121.0m, (9.0%). Current deferred revenue $1.02bn at 30 Sep 2026 against $1.16bn at 31 Mar 2026.
• Largest contributors to Q2 FY2027 net bookings (release order): NBA 2K, the GTA series, Toon Blast, Match Factory!, Empires & Puzzles, the Borderlands franchise, Words With Friends, the Red Dead Redemption series, Color Block Jam, WWE 2K and Zynga Poker.

How recurring player spending is changing

• Sony: network services sales (PlayStation Plus and related) ¥218.3bn in the Sep 2026 quarter, +19.5% (6-K).
• Microsoft: XBOX content and services revenue (2%) in the Sep 2026 quarter on lower third party content and Game Pass, partly offset by first party content (10-Q).
• Electronic Arts: live services and other net bookings $1.12bn in the Jun 2026 quarter, +3%; extra content over the twelve months to Jun 2026 $4.17bn against $4.29bn (10-Q).
• Roblox: bookings about $1.7bn in Q3 2026, (12%); daily active users 138m, down 9%; hours engaged nearly 34bn, down 15% (8-K Ex 99.1).
• Regulation (10-K FY2026): rules on loot boxes in Brazil (paid random items barred for players under 18) and Australia, bills in Spain (Mar 2025) and Portugal (Feb 2026), and FTC amendments to the COPPA Rule effective Apr 2026; NBA 2K and WWE 2K are named among games with mechanics that may be deemed loot boxes.

4 Mobile (Zynga): Half of FY2026 Revenue, Net Bookings (13.5%)

• Mobile net bookings $707.6m in Q2 FY2027, (13.5%), after (6.7%) in Q1 FY2027 and growth of 13.2% to 21.3% in Q2 to Q4 FY2026. Mobile net revenue $731.1m, (11.0%). Mobile was 44.2% of Q2 FY2027 net bookings.
• FY2026 mobile GAAP net revenue $3.33bn, +13.3%, 50.1% of revenue, led by Color Block Jam (+$206.6m) and Toon Blast (+$121.9m) (10-K). 91.0% of mobile revenue ran through the Apple and Google platforms against 92.9%.
• Costs: the 10-Q states that mobile carries a lower gross margin than console and PC because Apple and Google platform fees sit in cost of revenue, and that Take‑Two is expanding direct to consumer sales across its mobile portfolio. Selling and marketing was $444.9m in Q2 FY2027, (17.1%).
• Titles: Toon Blast, Match Factory!, Empires & Puzzles, Words With Friends, Color Block Jam and Zynga Poker are among the largest contributors to Q2 FY2027 net bookings; Top Goal and CSR 3 are announced without dates (8-K Ex 99.1).

How mobile gaming is changing

• Playtika (8-K Ex 99.1 of 5 Nov 2026): revenue $673.8m in Q3 2026, (0.1%), while its direct to consumer platform revenue rose 31.4% to $275.1m; average daily active users 7.1m against 8.2m.
• Unity (8-K Ex 99.1 of 5 Nov 2026): Grow Solutions revenue $457m, +44%, on growth in the Unity Ads Network driven by Vector, which grew 126%; the ironSource Ads network was sunset in Q2 2026.
• Roblox: revenue $1.57bn in Q3 2026, +15.6%, with bookings down 12%.
• Platform fees: 91.0% of Take‑Two's FY2026 mobile revenue ran through Apple and Google; Playtika reports direct to consumer platform revenue up 31.4%, and Take‑Two states it is expanding direct to consumer sales across its mobile portfolio.

5 Financial Analysis & Ratios

• FY2026 GAAP net revenue $6.66bn, +18.2%, and net bookings $6.72bn, +19.0%; GAAP operating loss $104.2m against $4.39bn in FY2025, which included Zynga related goodwill impairments of $3.55bn (FY2024: $2.34bn). Gross margin 57.2% in FY2026 against 54.4%, on lower amortization of intangibles after the impairments (10-K).
• TTM to 30 Sep 2026: GAAP net revenue $6.41bn, net bookings $6.32bn, operating loss $180.8m, operating margin (2.8%), net loss $240.5m. Amortization and impairment of intangibles $725.7m in FY2026; the FY2027 outlook includes $623m of amortization of acquired intangibles and $462m of stock based compensation.
• Cash flow: operating cash flow $624.3m in FY2026 after $45.2m of outflow in FY2025; H1 FY2027 operating cash flow ($173.5m) against $83.7m, after $372.4m of capitalized software spend and $147.3m lower deferred revenue (10-Q). The FY2027 outlook calls for operating cash flow above $1bn.
• Balance sheet at 30 Sep 2026: cash and short term investments $1.67bn, of which $945.0m held outside the US; book debt $2.52bn (face value $2.53bn); net debt $846.2m; the $1bn revolver is undrawn with $997.9m available. Equity $3.67bn; goodwill $1.06bn.
• Capital return and equity: no buybacks since FY2022 ($200.0m); 10.0m shares remain under the authorization; no dividend has been paid. In May 2025 Take‑Two sold 5.5m shares at $225.00 for $1.19bn net and repaid the $600m 2025 notes and $550m 2026 notes (10-K).
• Tax: a full valuation allowance covers US net deferred tax assets; FY2026 effective rate (50.8%). Q2 FY2027 had a tax benefit of $57.9m at a 51.7% rate. A reorganization of certain intangible assets in November 2026 will change the jurisdictional mix of earnings; its effect is under evaluation (10-Q subsequent event).

Cost structure and profitability

• Costs and expenses (GAAP net revenue less operating income) $1.61bn in Q2 FY2027, (13.7%), against revenue (15.6%); operating margin (7.8%) against (5.5%).
• Cost of revenue $636.6m, 42.5% of revenue, against 44.7% a year earlier; it includes platform fees on mobile, royalties, amortization of capitalized software and amortization of acquired intangibles.
• Operating expenses $977.9m, 65.3% of revenue; selling and marketing $444.9m, (17.1%).
• EBITDA (non GAAP) $92.2m against $116.7m; it adds back depreciation and amortization of acquired intangibles and keeps stock based compensation as an expense.
• Net bookings against revenue: the deferral effect swung from ($148.0m) in Q1 FY2027 to $104.3m in Q2 FY2027; the Q3 FY2027 outlook adds $80m of deferral to revenue and the FY2027 outlook $20m.

Debt, cash and capital return

• Senior notes $2.5bn at 30 Sep 2026, plus the $29.4m Zynga convertible due 15 Dec 2026; the $600m 3.70% notes due 14 Apr 2027 sit in short term debt. Interest paid in H1 FY2027 was $57.4m; TTM interest expense $135.7m.
• Net debt $846.2m at 30 Sep 2026 against $528.7m at 31 Mar 2026 and $2.20bn at 31 Mar 2025.
• No share repurchases in the quarter; the last buyback was in FY2022 and 10.0m shares remain authorized (10-Q).

6 MD&A & Management Commentary

Q2 FY2027 results, Form 10-Q and earnings release

• Q2 FY2027 (10-Q and 8-K of 9 Nov 2026): net bookings $1.60bn, (18.3%); GAAP net revenue $1.50bn, (15.6%); gross margin 57.5% against 55.3%; operating loss $117.5m; net loss $54.0m against $133.9m; EBITDA (non GAAP) $92.2m against $116.7m.
• 10-Q revenue analysis: net revenue fell $276.8m, mainly Borderlands ($128.0m lower), Mafia ($56.3m), Color Block Jam ($31.4m) and Match Factory! ($21.9m); net bookings fell $359.2m, with the GTA series higher. Console was 41.4% of H1 FY2027 net revenue; digital online 97.9%.
• 10-Q costs: gross margin rose on lower amortization of capitalized software; selling and marketing $444.9m against $536.7m on lower Borderlands marketing, partly offset by GTA marketing. Q1 FY2027 cost of revenue included a $43.4m impairment for an unannounced third party title that was stopped.
• GTA VI preparation (10-Q): capitalized software development costs and licenses $2.58bn at 30 Sep 2026 against $2.35bn at 31 Mar 2026; inventory $34.1m against $7.3m, ahead of the physical launch; preorders began in June 2026 and the 10-Q states that initial demand outpaced historical benchmarks for the series.

Management and CFO commentary

• CEO Strauss Zelnick, Q2 FY2027 release (9 Nov 2026): the GTA VI launch is ten days away with preorders at unprecedented levels; FY2027 net bookings outlook of $8bn to $8.2bn reiterated; next steps named are new hits, emerging business opportunities, geographic expansion and accretive M&A.
• Q1 FY2027 release (7 Aug 2026): FY2027 net bookings outlook reiterated at $8.0bn to $8.2bn with reference to the 19 Nov 2026 GTA VI launch; capex outlook raised to about $290m.
• Q4 FY2026 release (21 May 2026): FY2026 above initial expectations at every label; FY2027 expected to set record operating levels on the GTA VI launch.
• Q3 FY2026 release (3 Feb 2026): FY2026 net bookings outlook raised for the third time; record net bookings expected in FY2027.
• CFO commentary: Take‑Two files no separate CFO commentary document; financial detail and the outlook tables come from the releases. Earnings call remarks are left out.

7 Peer Valuation & Sector Summary

• Sector: video game publishing on console, PC and mobile. Peers with comparable SEC filings: Electronic Arts, Roblox and Playtika. Electronic Arts was taken private and delisted on 4 Aug 2026; its last filed quarter is Jun 2026. Sony and Microsoft report gaming within larger groups and appear in the driver chapters. Nintendo files no reports with the SEC.
• Growth (latest quarter year on year; EA Jun 2026 quarter, others Sep 2026 quarter): EA 18.9%, RBLX 15.6%, PLTK (0.1%), TTWO (15.6%). TTWO net bookings fell 18.3% in the same quarter.
• Margins TTM (EA to Jun 2026, others to Sep 2026): operating margin EA 17.9%, TTWO (2.8%), PLTK (2.8%), RBLX (19.8%); gross margin EA 79.9%, RBLX 79.3%, PLTK 73.6%, TTWO 56.6%; FCF margin RBLX 26.6%, EA 26.3%, PLTK 17.0%, TTWO 1.5%. TTWO gross margin includes amortization of acquired intangibles and capitalized software in cost of revenue.
• Valuation: EV/Sales TTWO 6.42x, RBLX 5.38x, PLTK 0.98x; net cash TTWO ($0.85bn), RBLX $5.23bn incl. long term investments, PLTK ($1.79bn).

8 Material Events & Contracts

• Seven Forms 8-K from 6 Nov 2025 to 9 Nov 2026: five earnings releases (Ex 99.1), the annual meeting results with the officer exculpation charter amendment (Ex 3.1) and the Xbox Publisher License Agreement (Item 1.01); no Form 8-K/A.
• Xbox Publisher License Agreement (8-K of 30 Sep 2026, Item 1.01): signed 28 Sep 2026 and effective 17 Sep 2026; grants rights to develop, publish, make, market and sell Xbox compatible products for all Xbox devices and supersedes the prior Xbox publisher agreements, which ran to 31 Mar 2027. Microsoft pays the wholesale price or an agreed revenue share on digital sales through its store, approves game concepts and final builds and charges fees and royalties per physical unit. The 10-Q of 9 Nov 2026 files the redacted text as Ex 10.1; term lengths and economics are redacted.
• London building (10-Q): the building where Take‑Two previously leased office space in London was bought on 10 Aug 2026 and recorded as an asset acquisition at $91.8m, of which $82.9m land. The FY2027 capex outlook was raised to about $290m from about $200m on 7 Aug 2026.
• GTA VI dates as filed: the 10-Q of 8 Feb 2024 states a first trailer in Dec 2023 and release in 2025; the Q4 FY2024 release of 16 May 2024 narrowed the calendar 2025 window to Fall 2025; the 8-K of 2 May 2025 set 26 May 2026; the Q2 FY2026 release of 6 Nov 2025 set 19 Nov 2026, repeated in every release since.

9 Ownership, Voting Power & Annual Meeting

• Ownership: one class of common stock with one vote per share and no controlling holder; directors and officers as a group 1.12%. Holders of 5% or more at 15 Jul 2026: Vanguard 7.02%, BlackRock 6.81%, State Street 6.43% and the Public Investment Fund of Saudi Arabia 6.10%, held through Savvy Games, a company the 10-K names as a competitor (2026 proxy). Shares outstanding 187,213,488 at 26 Oct 2026 (10-Q cover).
• 2026 annual meeting (17 Sep 2026, 8-K of 22 Sep 2026): 159.2m of 187.0m shares represented. All 10 directors elected, with support from 93.1% (Roland Hernandez) to 99.8%; say on pay 95.3%. The charter amendment limiting the liability of certain officers under Delaware law received 120.4m votes for and 23.6m against (83.6% of votes cast), the largest against vote of the meeting; the certificate of amendment was filed 18 Sep 2026 (Ex 3.1).
• Insiders, 12 months to 10 Nov 2026: no open market purchases; sales about $117.6m, of which about $77.8m on filings flagged as Rule 10b5‑1 plans. ZMC sold 208,969 shares at weighted average prices of $224.44 to $231.01 (about $47.5m) on 1 Jun 2026 under a Rule 10b5‑1 plan to cover partner taxes after 418,774 ZMC units vested; it is reported on the Forms 4 of both Zelnick and Slatoff and counted once.
• Other sellers: CEO Strauss Zelnick about $38.5m in Mar, May and Aug 2026 outside the ZMC sale; President Karl Slatoff about $8.7m (3 Jun 2026); Chief Legal Officer Daniel Emerson about $9.7m; CFO Lainie Goldstein about $7.8m. Six directors sold a combined $5.4m.

Annual meeting remarks

• The Form 8-K reports vote counts only; management remarks and shareholder questions from the virtual meeting of 17 Sep 2026 were not filed and are left out.

10 Risk Factors

• Item 1A of the FY2026 Form 10-K holds 48 risk factors, as in FY2025 (25,049 words against 23,777): 1 added (limits on net operating loss and tax credit carryforwards after an ownership change), 1 removed (growth of mobile devices as game platforms, folded into the digital sales factor) and 3 materially reworded (AI, competition for retailer promotional support, tax); 11 more kept their wording but carry new facts. The Forms 10-Q for Q1 and Q2 FY2027 state no material changes. GTA VI is not named in Item 1A.

How risk factors changed

• Comparison: 10-K FY2026 (year to 31 Mar 2026) filed 21 May 2026 acc 0001628280-26-037434 against 10-K FY2025 (year to 31 Mar 2025) filed 20 May 2025 acc 0001628280-25-026694.
• Word count rose 5.4% to 25,049 from 23,777 while the number of factors stayed at 48.
• AI is mentioned in 7 risk factors against 4 a year earlier, and the abbreviation AI appears 22 times against 13; the dedicated AI factor doubled to 510 words.
• Every reference to the Israel‑Hamas war (6 factors) was replaced by 'the war in the Middle East'.
• Child safety and age assurance rules (COPPA amendments, Brazil, Australia, EU Digital Fairness Act, under 16 social media proposals) account for most of the 219 word growth in the privacy factor and the new detail in the loot box factor.
• Tariff text moved from Canada, China and Mexico negotiations to 2026 US court rulings and the 10% global tariff; tariffs are mentioned in 6 factors in both years.

11 Stock Price, Scenarios & Sensitivity

• TTWO traded at $215.20 on 10 Nov 2026, the session after the Q2 FY2027 results (prior close $207.40); the price is 19.1% below the 52 week high of $265.94 and 17.0% above the low of $183.86.
• Valuation: market value $40.29bn on 187.21m shares; enterprise value $41.14bn after net debt of $846.2m; EV/Sales 6.4x TTM GAAP net revenue, 6.5x TTM net bookings and 5.1x the FY2027 net bookings outlook midpoint of $8.1bn. No P/E: TTM GAAP net income is a loss of $240.5m.
• Scenario basis: exit EV/Sales on GAAP net revenue, as GAAP losses rule out a P/E. FY2029 revenue (year to 31 Mar 2029) grows from FY2026 GAAP net revenue of $6.66bn; implied price equals FY2029 revenue times the exit multiple, less net debt of $846.2m held flat, divided by 189.5m shares, the FY2027 diluted share count in the outlook. Base multiple 5.0x is close to the current 5.1x on the FY2027 outlook midpoint; best 6.5x is close to the current 6.4x on TTM revenue.

Critical factors and core assumptions

• Revenue base: FY2026 GAAP net revenue $6.66bn; FY2027 GAAP net revenue outlook $7.98bn to $8.18bn and net bookings outlook $8.0bn to $8.2bn.
• Best case: 18% revenue CAGR to $10.9bn in FY2029, with GTA VI sales above plan, GTA VI online content building in FY2028 and FY2029 and mobile growing again; exit 6.5x EV/Sales.
• Base case: 12.5% revenue CAGR to $9.5bn, with FY2027 at the outlook and FY2028 holding near that level on GTA VI catalog sales; exit 5.0x EV/Sales.
• Worst case: 6% revenue CAGR to $7.9bn, with GTA VI below plan, RCS falling as in Q2 FY2027 and mobile net bookings declining as in Q2 FY2027, (13.5%); exit 3.0x EV/Sales.
• Shares 189.5m held flat with no buybacks; net debt $846.2m held flat; no dividend. These are model assumptions; the company outlook covers FY2027 only.

Scenarios, three years forward

Sensitivity analysis

Disclaimer

This analysis is for information only and is not financial advice. It is derived from public SEC filings retrieved via sec-api.io and is not a publication of the U.S. Securities and Exchange Commission. Scenario values are model outputs under stated assumptions and are not forecasts. Data as of 10 November 2026.

Sources

All company and peer figures are read from SEC filings retrieved through the sec-api.io MCP server. Nintendo files no reports with the SEC and is not included in the figures.