Take Two Interactive Software Inc., known for the Grand Theft Auto video-game franchise, soared in extended trading after beating quarterly sales estimates and hinting of a release date for a new version of its wildly popular action-adventure title.
The company is forecasting a tough current year — its fiscal 2024. But Chief Executive Officer Strauss Zelnick projects a big rebound after that, with $8 billion in revenue and cash flow exceeding $1 billion in fiscal 2025, the year starting next April. That fueled speculation Grand Theft Auto VI would be out in that window.
The forecast reflects “our confidence in the pipeline,” Zelnick said in an interview, without commenting on the next version of Grand Theft Auto. “We also expect sequential growth from there.”
The New York-based game developer posted fourth-quarter adjusted revenue of $1.39 billion, according to a statement Wednesday. That beat analysts’ forecasts of $1.34 billion. Profit came to 59 cents a share, excluding some items, in the quarter ended March 31, missing the 68-cent average of estimates. Take-Two cited costs related to canceled or unreleased titles.
Sales for fiscal year just getting underway will be about $5.5 billion on an adjusted basis, Take-Two said. That’s below the $5.89 billion average of analysts’ estimates. Projections for adjusted profit, forecast at about $3.15 a share, also fell short.
“Our forecast reflects the challenging consumer backdrop, as well as an extension of the development timelines for several high-profile, long-awaited titles in our pipeline,” Zelnick said in the statement. “We believe that we will enter our next phase of growth in fiscal 2025.”
Shares of Take-Two soared as much as 12% to $139.99 in extended trading after the results were announced. The stock had gained 20% this year through the close Wednesday in New York.
The leap in Take-Two shares could be a result of speculation about Grand Theft Auto VI’s release date, according to Michael Pachter, an analyst at Wedbush Securities.
Take-Two’s release calendar has been thin, aside from annual entries to its 2K sports games, including the successful NBA 2K franchise.
Mobile-game publisher Zynga, which Take-Two purchased for about $12 billion in 2022, has slowed its release schedule. The company is working on Star Wars: Hunters and several other unannounced projects, Zelnick said. Headwinds in the economy impacted mobile-game revenue, he said, adding that advertising will continue to grow.
Grand Theft Auto 5, released in 2013, is one of the highest-grossing entertainment franchises of all time, selling nearly 200 million units. The next version, Grand Theft Auto VI, is highly anticipated. Aspects of the game leaked in late 2022, Bloomberg reported.
The company plans to deliver its annual entries in the NBA 2K and WWE 2K series this year, as well as 14 other releases.