TTWO Q4 Deep Dive: Mobile and Franchise Momentum Outpace Analyst Expectations

Video game publisher Take Two (NASDAQ:TTWO) reported Q4 CY2025 results exceeding the market’s revenue expectations, with sales up 24.9% year on year to $1.70 billion. On top of that, next quarter’s revenue guidance ($1.60 billion at the midpoint) was surprisingly good and 5.2% above what analysts were expecting. Its GAAP loss of $0.50 per share was 28.6% below analysts’ consensus estimates.

Is now the time to buy TTWO? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

Take-Two’s fourth quarter saw a positive market reaction, as revenue growth and performance in key franchises exceeded Wall Street’s expectations. Management attributed the outperformance to strong results from its mobile business—including notable gains from TuneBlast, Match Factory, and Empires and Puzzles—alongside robust engagement in NBA 2K and Grand Theft Auto. CEO Strauss Zelnick called out the contributions of both new and established titles, stating, “All of our labels outperformed substantially our expectations and contributed to our ongoing success.”

Looking ahead, Take-Two’s guidance reflects continued confidence in both new releases and live service engagement across its portfolio. Management highlighted the upcoming launch of Grand Theft Auto VI and a robust release pipeline as main drivers of future growth. CFO Lainie Goldstein emphasized, “With Grand Theft Auto VI and other eagerly anticipated titles on the horizon, we believe that we will generate higher earnings power, strengthen our balance sheet, and deliver sustainable shareholder returns.”

Key Insights from Management’s Remarks

Management pointed to product diversity, live service momentum, and strategic investments in technology as the main reasons for exceeding analyst expectations in the quarter.

• Mobile portfolio outperformance: The mobile segment, led by Zynga titles such as TuneBlast and Match Factory, delivered strong year-on-year growth. Management credited recent feature enhancements and direct-to-consumer initiatives, which improved engagement and margins.
• NBA 2K engagement surge: NBA 2K saw significant increases in both unit sales and in-game spending, with daily active users and MyCareer participation up 30%. President Karl Slatoff linked this to constant game refinement and new social gameplay features.
• Grand Theft Auto Online sustained relevance: Despite speculation that anticipation for Grand Theft Auto VI would result in declining engagement for Grand Theft Auto Online, the opposite occurred. Content updates like Safe House in the Hills drove a 27% increase in recurrent spending, according to management.
• Advertising revenue growth: Advertising within mobile games rose 10% year over year as management selectively added new ad units without harming the user experience. CEO Strauss Zelnick noted this strategy aims to monetize a broader segment of players.
• AI and operational efficiency: Take-Two is actively piloting generative AI across development studios to increase efficiency and reduce costs. Zelnick described AI as “already moving into the category of efficiency,” with expectations for further productivity gains.

Drivers of Future Performance

Take-Two’s outlook is anchored by upcoming major releases, continued live service engagement, and technology-driven cost efficiencies.

• Major franchise launches: The scheduled release of Grand Theft Auto VI and continued updates for NBA 2K and WWE 2K are expected to drive both sales and sustained player engagement. Management sees these launches as foundational for establishing a new earnings baseline.
• Direct-to-consumer expansion: The company’s push into direct-to-consumer mobile revenue, supported by a more favorable regulatory environment and reduced third-party platform fees, is anticipated to boost margins and profitability over time.
• AI integration and margin impact: Ongoing investments in AI are expected to streamline development and operational processes, although management noted that new technology adoption and higher marketing expenses could weigh on margins in the near term.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will closely monitor (1) the scale and reception of Grand Theft Auto VI’s launch and its impact on overall franchise momentum, (2) the effectiveness of new direct-to-consumer initiatives in expanding margins, and (3) the pace at which AI-driven efficiencies translate to tangible cost savings. Further developments in mobile engagement and player monetization will also be key indicators of execution.

Take-Two currently trades at $222.68, up from $212.17 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).

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