uploads///TTWO_net Bookings

Recurrent Consumer Spending Improving Take-Two’s Outlook

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Mar. 27 2018, Updated 10:31 a.m. ET

Fiscal 4Q18 outlook

Leading video game company Take-Two Interactive Software (TSS) has provided encouraging net booking estimates for fiscal 4Q18 and fiscal 2018. In fiscal 4Q18, it expects net bookings of $410 million–$460 million (an average of $440.5 million), representing 7% growth from 4Q17.

Take-Two based its projections on high recurrent consumer spending being reported for Grand Theft Auto Online and NBA 2K18, coupled with solid demand for Grand Theft Auto V and the successful launch of WWE 2K18.

The graph above shows Take-Two’s net bookings in the last five quarters. During the period, they have decreased at a compound annual rate of 1.8%. Between 3Q17 and 3Q18, its net bookings fell 12.2% to $653.9 million, and its book-to-bill ratio fell to 1.4 from 1.6.

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Fiscal 2018 outlook

Take-Two has provided strong guidance for fiscal 2018, buoyed by encouraging 4Q18 expectations and solid 3Q18 performance. The launch of new games on Sony’s (SNE) PS4, Microsoft’s (MSFT) Xbox One, and Nintendo Switch may also have contributed to the company’s optimism.

In fiscal 2018, the company expects net bookings of $1.99 billion–$2.04 billion. The new guidance is higher than its previous outlook of $1.93 billion–$2.03 billion.

In fiscal 2018, the company expects net bookings from its consumer spending and digital distribution channel to grow 50% and 25% year-over-year, respectively. Take-Two expects 2K Games, Rockstar Games, and Social Point to contribute 50%, 45%, and 5% of its net bookings, respectively.

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