Take-Two’s first quarter saw a mixed investor reaction, as stronger-than-expected sales growth was offset by a significant operating loss. Management credited robust performance to new releases, particularly within its 2K label, and ongoing momentum from major franchises like NBA 2K and Grand Theft Auto. CEO Strauss Zelnick highlighted, “Each of our labels contributed meaningfully to our performance,” citing the successful launches of Sid Meier’s Civilization VII, WWE 2K25, and PGA TOUR 2K25. However, the quarter was significantly impacted by higher operating expenses, largely due to non-cash charges related to acquired intangibles.

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While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions Take-Two’s Q1 Earnings Call

• Eric Handler (ROTH Capital): Asked about the decision to price Mafia: The Old Country below recent industry norms. CEO Strauss Zelnick emphasized value for consumers and variable pricing tailored to each release.
• Doug Creutz (TD Cowen): Queried whether Take-Two can return to historical operating margin levels. CFO Lainie Goldstein indicated that structural changes should enable margin recovery over time despite higher development costs.
• Colin Sebastian (Baird): Explored what drives Zynga’s mobile outperformance compared to industry peers. Zelnick credited creative talent and multi-studio collaboration, while Goldstein signaled that some moderation is expected as titles mature.
• Chris Schoell (UBS): Asked about long-term growth assumptions post-Grand Theft Auto VI. Zelnick expressed greater optimism but cautioned that the company avoids long-term targets far in advance.
• Andrew Marok (Raymond James): Inquired about expanding support for Nintendo’s new platform. Zelnick said the company will evaluate titles for each platform on a case-by-case basis but is optimistic about the Switch 2 partnership.

Catalysts in Upcoming Quarters

Over the next few quarters, the StockStory team will be watching (1) the performance of Take-Two’s major new releases such as Mafia: The Old Country and Borderlands 4, (2) the ability to sustain high engagement and monetization in core franchises like NBA 2K and Grand Theft Auto Online, and (3) progress on cost control as development and marketing spending ramp up. Execution on direct-to-consumer expansion and mobile game launches will also be key signals for future growth.

Take-Two currently trades at $240.86, up from $232.51 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).

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