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Take-Two Interactive Software, Inc.


Wall street consensus:


​Recent Conference Call

### Summary of Take-Two Interactive Software, Inc. FQ3 2024 Earnings Call

#### Insightful Quote:
Lainie Goldstein, CFO, stated, **"We're currently working on a significant cost reduction program across our entire business to maximize our margins while still investing for growth."** This quote highlights the company's focus on balancing growth with operational efficiency and margin enhancement amidst changing business dynamics.

#### Key Quarterly Business Trends:
1. **Increased Focus on Cost Efficiency:** Take-Two is undertaking a significant cost reduction program to enhance margins while continuing to invest in growth. This reflects a strategic pivot towards operational efficiency amid a challenging macroeconomic environment.
2. **Softness in Mobile Advertising and NBA 2K24:** The period experienced weaknesses in mobile advertising revenues and sales for NBA 2K24. This trend indicates shifting consumer preferences and possibly a saturated market affecting specific segments of Take-Two's portfolio.
3. **Strong Performance from Key Franchises:** Despite some challenges, franchises like Grand Theft Auto V, Grand Theft Auto Online, and the Red Dead Redemption series performed well, highlighting the enduring appeal of Take-Two’s core properties amid evolving market conditions.

#### Analysts' Questions and Management Responses:

1. **Eric Owen Handler (ROTH MKM):** Asked about specifics of the cost-cutting program and potential savings.
- **Response:** Lainie Goldstein mentioned ongoing efforts leading to significant savings, with details to be provided in the next quarter, indicating an ongoing commitment to operational efficiency.

2. **David Karnovsky (JPMorgan):** Inquired about the impact of the aforementioned game delay on fiscal 2025 or 2026 forecasts.
- **Response:** Lainie Goldstein projected numbers tracking above $7 billion for net bookings in fiscal 2025, emphasizing the robustness of their development pipeline despite scheduling shifts.

3. **Douglas Lippl Creutz (TD Cowen):** Questioned the allocation of the guidance cut across various factors.
- **Response:** Lainie Goldstein clarified that the primary reasons were increased marketing for Match Factory! and softness in mobile advertising and NBA 2K24, along with a title delay, emphasizing a focus on scaling potential hit mobile titles.

#### Outlook or Guidance:
Take-Two is lowering its full-year outlook due to challenges in mobile advertising, NBA 2K24 sales, and strategic shifts, with an emphasis on long-term growth through a significant cost reduction program and investment in potential hit titles like Match Factory!. The adjusted outlook reflects a cautious yet optimistic stance towards future profitability and scaling opportunities, aligning with prior strategic insights into the company's focus on efficiency and leveraging its strong franchise portfolio.

Key Questions to follow

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