Take-Two Interactive Software, Inc. TTWO reported strong F1Q17 results. Management’s full-year guidance appears conservative, Baird’s Colin Sebastian said in a report. He maintained a Neutral rating on the company, while raising the price target from $37 to $43.
Take-Two reported its non-GAAP revenues at $272.6 million, ahead of the Baird estimate of $255.6 million. The beat was driven by continued strong performance of GTA V, which included record bookings for GTA Online, as well as NBA 2K, analyst Colin Sebastian mentioned. Growth in recurrent consumer spending also boosted the company’s quarterly performance.
EPS came in at ($0.34), marginally missing the Baird estimate, partly due to higher marketing expenses for Battleborn.
Digital Performance
Digital revenue grew 12 percent y/y to $172.1 million, while recurrent spending was up 18 percent y/y and represented 57 percent of digital net revenues. The performance was driven by continued strength in GTA Online, NBA2K16, and XCOM 2, Sebastian noted.
Guidance Conservative
Management announced its GAAP net revenue guidance for FY17 at $1.75-$1.85 billion. Sebastian believes that the outlook reflects moderating GTA V performance and “somewhat modest unit expectations for upcoming releases NBA 2K17 (9/20 release) and Mafia III (10/7 release).”
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