Take-Two rides catalog sales and live operations to $841.1 million in revenue for Q3 2020

Take-Two Interactive reported today that revenue for its second fiscal quarter (third calendar quarter ended September 30) fell 2% to $841.1 million. That’s pretty good for a quarter where the company launched NBA 2K21 but largely thrived on catalog sales and live updates for online games.

The company said the results exceeded its own outlook. The stock price is up 3.15% to $174 a share in after-hours trading.

Grand Theft Auto V from Take-Two’s Rockstar label has now grown to 135 million copies sold, while Red Dead Redemption 2 has sold 34 million copies. GTA released in 2013 — back on the PlayStation 3 and Xbox 360! — but continues to be an important earner for Take-Two thanks to GTA Online for PS4, Xbox One, and PC.

Take-Two said GAAP revenue was $841.1 million, compared to $857.8 million a year earlier. GAAP net income per share was 86 cents, or $99.3 million, compared to 63 cents a share, or $71.8 million a year earlier. Analysts expected non-GAAP earnings per share of $1.47 on revenue of $851.8 million.

The New York company said that recurrent consumer spending (from things like virtual currency, add-on content, and in-game purchases) was up 56% and accounted for 59% of GAAP net revenue.

The biggest contributors to revenue in the second fiscal quarter were NBA 2K20, NBA 2K21, Grand Theft Auto Online, Grand Theft Auto V, Red Dead Redemption 2, Red Dead Online, Borderlands 3, PGA Tour 2K21, Mafia: Definitive Editions, Mafia: Trilogy, Sid Meier’s Civilization VI, and the WWE series.

Digital revenue grew 16% to $711.3 million, compared to $615.8 million a year ago. Digital revenues are now 85% of all revenue.

Next week, NBA 2K21 will launch for next-generation consoles, said CEO Strauss Zelnik in a call with analysts. During the quarter, the company launched the Mafia: Definitive Edition remake.

The Outer Worlds has now sold more than 3 million copies.

Above: Red Dead Online

Zelnick said fiscal 2021 bookings are expected to be over $3 billion. During the quarter, Take-Two acquired mobile game maker Playdots, whose games like Two Dots have been downloaded more than 100 million times. The Rockstar label, meanwhile, acquired Ruffian Games in Dundee, Scotland.

Zelnick said the company is “prepared and thrilled” to launch games for the next-generation consoles debuting next week. Rockstar expects to launch Grand Theft Auto V and Grand Theft Auto Online on the PlayStation 5 and Xbox Series X/S in the second half of calendar 2021, while Kerbal Space Program 2 will be coming in the second half of 2022.

Next week, Take-Two is launching next-gen console versions of NBA 2K21 and Borderlands 3.

Meanwhile, both GTA Online and Red Dead Online expect to receive major updates later this year. Karl Slatoff, president of Take-Two Interactive, said in an analyst call that he was excited about The City, the open-world and social feature of NBA 2K21 this year.

For the third fiscal quarter (fourth calendar quarter) ending December 31, Take-Two said that GAAP revenue is expected to be $760 million to $810 million. Net income is expected to be $128 million to $140 million, or $1.10 a share to $1.21 a share. Net bookings are expected to be $675 million to $725 million.

For the full year ending March 31, 2021, Take-Two expects revenue to be $3.05 billion to $3.15 billion. Net income is expected to be $372 million to $403 million, or $3.22 a share to $3.49 a share. Net bookings are expected to be $3.15 billion to $3.25 billion.

In a statement, Zelnick said:

Our positive momentum continued in the fiscal second quarter with operating results that significantly exceeded our expectations. Our terrific results were highlighted by the outperformance of NBA 2K, PGA TOUR 2K21, and the Mafia: Definitive Editions and Mafia: Trilogy, reflecting our ability to deliver consistently the highest quality entertainment experiences to consumers.

As a result of our better-than-expected second-quarter operating results and increased forecast for the balance of the year, we are raising our fiscal 2021 outlook, and we now expect record net bookings of over $3 billion.

With the strongest development pipeline in the history of the company and our ongoing investment in emerging markets, platforms, and business models, Take-Two is exceedingly well-positioned to capitalize on the many positive trends in our industry and to generate growth and margin expansion over the long-term.

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