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Take-Two Interactive Software, Inc.

TTWO

Wall street consensus:

Ticker:

​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.

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