Player stats, sales, and reception speculation thread

[user343744]

I'm not trying to spin it to positive, I'm trying to understand, corporate finances aren't my strongest area of expertise. If GAAP is not a single metric, how could you count a single number loss in it? As I understand GAAP includes things like MRR, recognized revenue, deferred revenue, and so on.

Every single metric in a corporate financial statement is derived from GAAP standards. Therefore, the loss of $377-$442m can't be dismissed by saying GAAP is just a standard and not a metric. GAAP is the standard which the metrics are derived from, it governs every single financial statement metric in the US.

 

[stealth_nsk]

Every single metric in a corporate financial statement is derived from GAAP standards. Therefore, the loss of $377-$442m can't be dismissed by saying GAAP is just a standard and not a metric. GAAP is the standard which the metrics are derived from, it governs every single financial statement metric in the US.

Again, I'm not dismissing, I'm trying to understand. How could you calculate loss in 10 different metrics, some of which are total, some of them are monthly and so on? There should be some formula and some more adequate name for this aggregated metric.

 

[Gorbles]

The GAAP loss of $377-$442m, please read carefully.

I read it! Please understand, I'm trying to understand the actual ramifications of this. What does it actually mean for the company? What do you gain by immediately accusing other posters of "spin"?

(or by suggesting folks aren't reading carefully enough )

 

[user343744]

Again, I'm not dismissing, I'm trying to understand. How could you calculate loss in 10 different metrics, some of which are total, some of them are monthly and so on? There should be some formula and some more adequate name for this aggregated metric.

That's what accountants do on a daily basis, their bread and butter is applying GAAP to every single transaction in the US. There's not one formula or rule, the entire accountancy field is applying different rules and formulas to a vast array of different financial transactions and conform to GAAP standards, which are meant to avoid willful misrepresentation of financial data such as those that led to the Enron collapse, among many others.

 

[stealth_nsk]

That's what accountants do on a daily basis, their bread and butter is applying GAAP to every single transaction in the US. There's not one formula or rule, the entire accountancy field is applying different rules and formulas to a vast array of different financial transactions and conform to GAAP standards, which are meant to avoid willful misrepresentation of financial data such as those that led to the Enron collapse, among many others.

You mean accountant just invent those numbers? Like "I have a bad day, let's show some drop"? I understand that there are metrics based on experts estimation, i.e. inflation, but I don't believe such things exist in accounting. If they show a number, they should have a strict math behind it. Besides, the whole point of GAAP is to provide unified approach to accounting. What do you mean there's no one formula or rule?

 

[stealth_nsk]

And just for the record, I've looked at the document and, of course, there's no such thing as GAAP metric. GAAP is a section with several metrics under it.

 

[user343744]

And just for the record, I've looked at the document and, of course, there's no such thing as GAAP metric. GAAP is a section with several metrics under it.

Exactly, GAAP is not a metric but the standard the metric is derived from. i.e the $377-$442m loss.

That loss is the sum total of values by which different sets of accounting rules and formulas were applied. Take for example, building depreciation expense, there are four methods of expensing this asset, each one would give you different number as an expense per month, each has their unique tax advantages. In this case judgement would dictate which expense method we could use, such as straight line method. This is just one asset, there are many asset/liability categories requiring their own methods, formulas and rules. There is strict math and judgement behind it.

 

[stealth_nsk]

Exactly, GAAP is not a metric but the standard the metric is derived from. i.e the $377-$442m loss.

That loss is the sum total of values by which different sets of accounting rules and formulas were applied. Take for example, building depreciation expense, there are four methods of expensing this asset, each one would give you different number as an expense per month, each has their unique tax advantages. In this case judgement would dictate which expense method we could use, such as straight line method. This is just one asset, there are many asset/liability categories requiring their own methods, formulas and rules. There is strict math and judgement behind it.

No, there's no loss in GAAP exactly for this reason - you can't calculate loss for something which isn't a metric. It's not in the documents and it looks like someone mispronounced some other metric or just made it up.

EDIT: Just open the document and point there you think this loss in the GAAP is shown https://ir.take2games.com/static-files/83d82418-1bb0-4f4a-b767-c69ddef95f19

 

[uppi]

The correct term would be "GAAP net loss" and the figure of $442 - $377 million figure is not actual loss, but the loss predicted for FY2026.

It is probably related to the delay of GTA to FY2027. When games have a multi-year development cycle, it is fine to have a loss in one year if the next year makes up for it.

 

[stealth_nsk]

The correct term would be "GAAP net loss" and the figure of $442 - $377 million figure is not actual loss, but the loss predicted for FY2026.

It is probably related to the delay of GTA to FY2027. When games have a multi-year development cycle, it is fine to have a loss in one year if the next year makes up for it.

Yep, that seem to be one. It's "predicted net loss" metric from GAAP.

It surely depends on the particular releases, but I'm not sure if GTA is to blame significantly, because the biggest cash flow for Take Two is mobile and Zynga.

 

[Trav'ling Canuck]

GAAP (Generally Accepted Accounting Principles) is one of the two most commonly used accounting standards, and the one primarily used in the U.S. The other is IFRS (International Financial Reporting Standards). Take-Two flags that their numbers are GAAP in their presentations to let analysts and shareholders know which accounting principles they are using.

When they provide guidance that they expect Fiscal Year 2026 to result in a GAAP net loss of $442 to $377 million, what they mean is that when the 12-month period is over and they add up all their revenue attributed to that period under GAAP and they add up all their expenses attributed to that period under GAAP, they expect their expenses to exceed their revenues by $442 to $377 million. It's just a guess at this point, since this would include the known results for their first quarter plus expected results for the next three quarters. They will have an idea of what they expect to spend over the next nine months and they would have estimates from marketing of how much they hope to sell over the next nine months, but the expenses aren't set in stone and the revenues are still a projection. Typically companies will try to be conservative in their guidance, i.e. over-estimate what they will spend and under-estimate what they will sell, so that they can beat guidance. For example, Take-Two's guidance for the current quarter had been a loss of $139 to $115 million, but their actual results for the quarter was a loss of $12 million.

Civ 7 did end up being one of the four things they highlighted for the quarter in their presentation (I didn't listen to the call, I'm just reviewing the presentation materials):

• better-than-expected mobile sales from Toon Blast, Match Factory, NBA All-Stars, Color Block Jam, NBA 2K, and the Grand Theft Auto (GTA) series
• launch of Civ 7 on Meta QuestVR and the Switch 2
• better-than-expected sales overall from NBA 2K, mobile games overall, and the GTA series
• higher expenses than expected at Zynga, offset by delaying marketing spend in other areas

Later on they re-emphasize the launch of Civ 7 on Meta Quest VR and Switch 2, along with Borderlands 4 for Switch 2. Most likely they are highlighting an intent to increase their revenues from traditional PC games by getting them onto other platforms. They don't talk about the results from this effort, though, so we can assume that this is something they hope will drive future growth, but isn't yet.

 

[stealth_nsk]

GAAP (Generally Accepted Accounting Principles) is one of the two most commonly used accounting standards, and the one primarily used in the U.S. The other is IFRS (International Financial Reporting Standards). Take-Two flags that their numbers are GAAP in their presentations to let analysts and shareholders know which accounting principles they are using.

When they provide guidance that they expect Fiscal Year 2026 to result in a GAAP net loss of $442 to $377 million, what they mean is that when the 12-month period is over and they add up all their revenue attributed to that period under GAAP and they add up all their expenses attributed to that period under GAAP, they expect their expenses to exceed their revenues by $442 to $377 million. It's just a guess at this point, since this would include the known results for their first quarter plus expected results for the next three quarters. They will have an idea of what they expect to spend over the next nine months and they would have estimates from marketing of how much they hope to sell over the next nine months, but the expenses aren't set in stone and the revenues are still a projection. Typically companies will try to be conservative in their guidance, i.e. over-estimate what they will spend and under-estimate what they will sell, so that they can beat guidance. For example, Take-Two's guidance for the current quarter had been a loss of $139 to $115 million, but their actual results for the quarter was a loss of $12 million.

Civ 7 did end up being one of the four things they highlighted for the quarter in their presentation (I didn't listen to the call, I'm just reviewing the presentation materials):

• better-than-expected mobile sales from Toon Blast, Match Factory, NBA All-Stars, Color Block Jam, NBA 2K, and the Grand Theft Auto (GTA) series
• launch of Civ 7 on Meta QuestVR and the Switch 2
• better-than-expected sales overall from NBA 2K, mobile games overall, and the GTA series
• higher expenses than expected at Zynga, offset by delaying marketing spend in other areas

Later on they re-emphasize the launch of Civ 7 on Meta Quest VR and Switch 2, along with Borderlands 4 for Switch 2. Most likely they are highlighting an intent to increase their revenues from traditional PC games by getting them onto other platforms. They don't talk about the results from this effort, though, so we can assume that this is something they hope will drive future growth, but isn't yet.

Thanks!

As I understand from presentation (didn't watch the video), they just listed what they did in 3 months from April to June and launching Civ7 on 2 new platforms was just on the list. I don't think Civ7 mention has any correlation with finances - it looks like on Take Two scale it's just too small to focus on.

 

[Bug Repellent]

GAAP are a set of accounting practices that investors use to compare financial results and balance sheets for various companies, especially in the same sector. Non-GAAP figures are heavily gamed with all sorts of accounting tricks (all legal) that obfuscate and hide problems. Yes, I'm looking at you, IBM.

Take for example revaluations of intellectual properties. Say , hypothetically, that TTWO said "the value of our Civilization IP has increased by $2Bn". Then presto, TTWO's assets side of the ledger shows a $2Bn bump. Of course, nobody actually bought Civ from TTWO. You just have to take TTWO's "Trust me, bro" word for it. Such revaluation is not allowed under GAAP.

Regarding TTWO's numbers, their beat (smaller loss vs. a larger loss) was attributed to various games, none of which was Civ7. So if you read between the lines, I would say Civ7 had disappointing sales numbers (by Civ's standards). If it did better than expected, you can bet they'd hike guidance for it. That being said, there is not enough information in the Q1 release or conference call to definitively say how Civ7 is doing sales-wise. So I'm afraid we're just left with speculations, as before. As far as I'm concerned, I'd put Civ7's sales somewhere in the "very likely quite a bit of disappointment". But I might be biased quite a bit by the fact that I don't like what they did with it.

 

[Crashdummy]

GAAP (Generally Accepted Accounting Principles) is one of the two most commonly used accounting standards, and the one primarily used in the U.S. The other is IFRS (International Financial Reporting Standards). Take-Two flags that their numbers are GAAP in their presentations to let analysts and shareholders know which accounting principles they are using.

When they provide guidance that they expect Fiscal Year 2026 to result in a GAAP net loss of $442 to $377 million, what they mean is that when the 12-month period is over and they add up all their revenue attributed to that period under GAAP and they add up all their expenses attributed to that period under GAAP, they expect their expenses to exceed their revenues by $442 to $377 million. It's just a guess at this point, since this would include the known results for their first quarter plus expected results for the next three quarters. They will have an idea of what they expect to spend over the next nine months and they would have estimates from marketing of how much they hope to sell over the next nine months, but the expenses aren't set in stone and the revenues are still a projection. Typically companies will try to be conservative in their guidance, i.e. over-estimate what they will spend and under-estimate what they will sell, so that they can beat guidance. For example, Take-Two's guidance for the current quarter had been a loss of $139 to $115 million, but their actual results for the quarter was a loss of $12 million.

Civ 7 did end up being one of the four things they highlighted for the quarter in their presentation (I didn't listen to the call, I'm just reviewing the presentation materials):

• better-than-expected mobile sales from Toon Blast, Match Factory, NBA All-Stars, Color Block Jam, NBA 2K, and the Grand Theft Auto (GTA) series
• launch of Civ 7 on Meta QuestVR and the Switch 2
• better-than-expected sales overall from NBA 2K, mobile games overall, and the GTA series
• higher expenses than expected at Zynga, offset by delaying marketing spend in other areas

Later on they re-emphasize the launch of Civ 7 on Meta Quest VR and Switch 2, along with Borderlands 4 for Switch 2. Most likely they are highlighting an intent to increase their revenues from traditional PC games by getting them onto other platforms. They don't talk about the results from this effort, though, so we can assume that this is something they hope will drive future growth, but isn't yet.

I dont understand any of the accountant stuff, but when i see the 4 highlighted things, i see 3 with the words higher than expected or higher expenses and only one that isnt quantified

If they highlighted every higher than expected result on their games, and they havent highlighted such thing for Civ 7, that means something in my opinion, which as i stated is the opinion of someone that has no clue about accountant stuff

Surely if Civ 7 would have done well, it would have been included on the list on any of the other 3 points, right?

 

[itix]

I listened to the conference call live and no, things are not good. Perhaps not as bad as before, but definitely not good. A lot of corporate BS speak with enough sugar coating to give you diabetes.

TTWO posted another quarter of NEGATIVE cash flow ($12m, or a $0.07/share loss) and for FY2026 they're expecting a GAAP loss between $377-$442m ($2.02-$2.4 loss per share), slightly better than previous guidance of $439-499$m loss. In other words, if you put $100 in TTWO today, they promise to lose $1 in FY26 for you. Quite the investment! But yes, the CEO said is was an "outstanding quarter".

Only 11% of TTWO's revenue comes from PC games. ALL PC games. Mobile is 51%, Consoles 38%. United States accounted for 60% of their revenue, 40% international.

Nothing new here. 2k making a loss is a norm, while the mobile is the best revenue source and the Civ franchise is an oddball in their arcade portfolio.

 

[reyaik]

This discussion went the wrong way, but just to add on the quarterly results of Take Two:

- The net loss (and negative cash flow) is narrowing, so the health of the company on a GAAP earnings (and cash) basis is getting better.
- The GAAP net loss is largely driven by amortisation of acquisitions, which is a non-cash item, which some market participants ignore (discussing anything else here is a corporate finance debate).
- Bookings and user engagement are improving and have been updated to be better than previously estimated by management.
- Also, the balance sheet net debt position of the firm is solid; hence, any GAAP losses are easily digestible.
- Share price in anticipation of GTA also up hugely (vs. the S&P 500, for instance), meaning the window to any sort of financing is widely open for the company.
- CIV7 and Firaxis are really a small part of the overall business (NBA, GTA, Mobile are far more important).
- There was a reference in the earnings call towards updates for Civ7 coming out, and that it's a strong proposition of Take Two's further partnership with Nintendo (this seems pretty important to them).

You cannot make a judgement about Firaxis within Take Two on the basis of that. It seems also unlikely to me that anything like studio reorganisation/closure would be discussed during an earnings call. Also note that this is no financial advise on Take-Two common equity.

 

[Maiq]

Nothing new here. 2k making a loss is a norm, while the mobile is the best revenue source and the Civ franchise is an oddball in their arcade portfolio.

Right? GTA6 is going to make billions, they are fine.

 

[itix]

I dont understand any of the accountant stuff, but when i see the 4 highlighted things, i see 3 with the words higher than expected or higher expenses and only one that isnt quantified

If they highlighted every higher than expected result on their games, and they havent highlighted such thing for Civ 7, that means something in my opinion, which as i stated is the opinion of someone that has no clue about accountant stuff

Surely if Civ 7 would have done well, it would have been included on the list on any of the other 3 points, right?

If Civ 7 had done better than expected, they would say it.

 

[itix]

Right? GTA6 is going to make billions, they are fine.

We don't know that. It could be a colossal flop.

 

[GeneralZift]

We don't know that. It could be a colossal flop.

Hell no bro they got everything riding on it. Also my money