Take-Two Interactive Software Completed Merger with Zynga and Posted Lukewarm Quarterly Results

Take-Two Interactive Software announced reporting for the 1st quarter of the fiscal year 2023 ending June 30, 2022. Take-Two Interactive Software (TTWO) shares fell as much as 3.6% in premarket trading on Tuesday, August 9, following the company's fiscal Q1 earnings, where bookings fell short and the company guided to the low side on the metric for the current quarter and the full year.

Take-Two said that for its current quarter, it's forecasting bookings of $1.5 billion to $1.55 billion, which comes below consensus estimates for $1.73 billion. The company also said it still expects to report a loss of between 86 cents and 96 cents a share, on revenue in a range of $1.37 billion to $1.42 billion for the quarter.

For its 2023 fiscal year, Take-Two is forecasting bookings of $5.8 billion to $5.9 billion, while the consensus estimate forecasted $6.4 billion in bookings. The company also expects to report a FY net loss of $2.50 to $2.75 a share, on revenue of $5.73 billion to $5.83 billion.

Take-Two Interactive Software is an U.S. video game company in partnership with the publishers Rockstar Games and 2K. Take-Two's portfolio includes many successful video game series including BioShock, Borderlands, Civilization, Grand Theft Auto, NBA 2K, Red Dead and XCOM.

Key events and results of the company:

Company closed merger with Zynga on May 23, 2022; first quarter results include Zynga's results for the 39 days of the quarter. The company updated its forecast to include the potential to merge with Zynga as its acquisition grows, with FY 2023 net orders growth projected to be between $5.8 billion and $5.9 billion.

GAAP net revenue increased by 36% to $1.1 billion.

GAAP net loss per share of $0.76.

GAAP net cash flow for the 3 months ended June 30, 2022 was $100.8 million.

Adjusted non-GAAP operating cash and cash equivalents for operating activity for 3 months ended June 30, 2022 was -$14.4 million.

Net orders rose 41% to $1.0 billion.

Key takeaway: Although current results were obviously less than impressive and given the fact that all tech companies more or less suffer from Fed monetary hawkishness, the fiscal year 2023 proved the $1 billion orders are very attainable. Also, operating results exceeded Take-Two Interactive's own guidance as new active games and updates were launched. The company is actively developing the mobile video game industry.