Episode Details

Take-Two Interactive Software (TTWO) Q1 FY2027 — Q1 FY2027 (quarter ended June 30, 2026): net bookings $1,385.9M, DOWN 2.6% y/y, above the $1,320-1,370M guide. GAAP net revenue $1,533.9M (+2.0%). GAAP EPS -$0.18 vs a -$0.21 consensus. Management-basis EPS $0.35, computed off the company's own reconciliation. Gross margin 57.5%, down from 62.8%, including a $43.4M title impairment. Operating cash flow -$168.8M. Mobile bookings -6.7%, console +10.7%, PC -22.3%. FY2027 net bookings guide reiterated at $8.0-8.2B; EBITDA guide cut $18.5M at the midpoint; capex guide raised from ~$200M to ~$290M. GTA VI reaffirmed for November 19, 2026. Print was BMO (8-K accepted 07:37 ET); the stock opened $240.05, faded to $228.20, and sat at $232.47, -1.04%. Take-Two reported fiscal Q1 2027 before the open on August 7 and nearly every screen showed the same thing: GAAP net revenue of $1,533.9M against a consensus of about $1,357.8M, a 13% beat. That comparison is a metric mismatch. Take-Two is guided and modelled on NET BOOKINGS, and net bookings were $1,385.9M - down 2.6% year on year. The proof is one line off the company's own May outlook: it guided GAAP revenue to $1,450-1,500M, so a $1,357.8M figure cannot be a revenue estimate; it sits inside the $1,320-1,370M bookings guide. Like for like the beat is 2.1%, and the $148.0M gap between revenue and bookings is deferred revenue released, with the deferred balance down $171.5M in ninety days. Underneath, the full-year bookings guide was reiterated at $8.0-8.2B while the EBITDA guide was quietly cut $18.5M at the midpoint and capital spending was raised 45%, from about $200M to about $290M. THE CALL: SELL (3/5, A REAL GAME AT A PRICE THAT NEEDS TWO OF THEM) — base-case value ~$167.0 vs ~$232.47 today. KEY METRICS: - CALL: SELL 3/5, fair value ~$167 vs $232.47 (-28%). Bull $215, base $178, bear $95. Street: Buy, 57 analysts, avg target $291. - Net bookings $1,385.9M, DOWN 2.6% (guide $1,320-1,370M). GAAP revenue $1,533.9M. GAAP EPS -$0.18 vs -$0.21 consensus. Mgmt-basis EPS $0.35. - But: the $1.36B 'consensus' was a BOOKINGS bar, not revenue. Real beat +2.1%. FY27 EBITDA guide cut $18.5M; capex +45%. H2 must grow 52%. What to watch: UP: an actual GTA VI pre-order unit figure disclosed on the record; mobile net bookings returning to growth; a December quarter that beats the back-half run rate the full-year guide implies; the capital spending guide coming back down; free cash flow turning positive earlier than guided. DOWN: any movement at all on the November 19 launch date; the full-year net bookings guide finally coming down; mobile bookings falling faster than 7%; another quarter where the headline guide is reiterated while the cash guidance is trimmed underneath it; gross margin below 57%. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.