Take-Two (TTWO) Q2 2026: Recurrent Consumer Spending Jumps 20% as Mobile, NBA 2K Drive Outperformance
Recurrent consumer spending surged 20%, propelling Take-Two to its strongest Q2 ever and driving a second consecutive guidance raise. Mobile and NBA 2K franchises delivered standout results, while GTA VI’s delayed launch was offset by deep engagement in legacy titles and robust pipeline visibility. Margin leverage and direct-to-consumer momentum signal structural improvements heading into a pivotal FY27.
Summary
- Mobile and Live Services Propel Upside: Direct-to-consumer and mobile innovation sharply boosted engagement and profitability.
- NBA 2K26 Sets Franchise Records: Premium SKUs, expanded features, and strong player retention redefined the annual sports launch dynamic.
- Guidance Raised on Pipeline Confidence: Management signals record FY27 bookings anchored by GTA VI and broad portfolio momentum.
Performance Analysis
Take-Two delivered its highest-ever second quarter net bookings, materially outpacing guidance on the strength of NBA 2K26, mobile, and a diversified portfolio. Net bookings reached $1.96B, up sharply from expectations, as NBA 2K26’s launch shattered prior franchise records with over 5 million units sold and a double-digit YoY volume increase. Notably, average selling prices hit new highs, aided by premium editions and embedded live service content.
Mobile performance was a standout, with Toon Blast up 26% YoY and Match Factory up 20%, reflecting successful new gameplay features and direct-to-consumer payment adoption. Recurrent consumer spending (RCS, defined as in-game and live service monetization) rose 20%, now comprising 73% of total net bookings. Margins benefited from both scale and improved efficiency in user acquisition, although incremental marketing investments were required to sustain mobile momentum. Borderlands 4’s PC launch was softer than hoped, but management expects lifetime unit sales to meet targets as post-launch support ramps.
- NBA 2K26 Drives Monetization Mix: Recurrent consumer spending grew 45% in NBA 2K, with daily active users up nearly 30% and MyCareer engagement up nearly 40%.
- Mobile Outperformance Broad-Based: Rollic, Peak, and Zynga titles delivered record downloads and bookings, with direct payment channels expanding margin and conversion.
- Margin Leverage Emerges: Operating expenses grew just 5% on a GAAP basis against 31% revenue growth, reflecting disciplined cost control and live service scale.
Take-Two’s model is increasingly anchored in live services and mobile direct-to-consumer channels, which are unlocking both higher conversion and operating leverage. GTA Online engagement remains resilient, with GTA+ membership up 20% YoY, positioning the franchise for a strong GTA VI launch in late 2026.
Executive Commentary
"We delivered fantastic second quarter results, including net bookings of $1.96 billion, which vastly exceeded our expectations and represent the best second quarter of net bookings in our company's history."
Strauss Zelnick, Chairman and Chief Executive Officer
"Our outperformance was driven by many of our key titles, which underscores the strength of our core franchises and the power of our diverse portfolio of owned intellectual property."
Rainey Goldstein, Chief Financial Officer
Strategic Positioning
1. Mobile Direct-to-Consumer Expansion
Take-Two’s mobile business, led by Zynga, Peak, and Rollic, is now a margin driver as new payment mechanisms and direct offers enable higher conversion and lower platform fees. Legislative and platform changes (notably iOS and Google Play) have enabled the rollout of alternative payment solutions, resulting in both higher net bookings and expanding margins. Management expects this channel to continue scaling, with direct-to-consumer now available across nearly the entire mobile portfolio.
2. Franchise Engagement and Live Services
NBA 2K26’s record launch demonstrates the compounding effect of deep engagement and live service monetization. Premium SKUs with early access and embedded season passes drove higher ASPs, while new features and international expansion are broadening the player base. GTA Online and GTA+ continue to deliver recurring revenue, even as anticipation builds for GTA VI.
3. Portfolio Diversification and Pipeline Visibility
Take-Two’s model is less reliant on single-title risk, with 2K, Zynga, and Rockstar each contributing meaningfully to the outlook. Upcoming launches—GTA VI, Judas, Project Ethos, CSR3, Top Goal, and the next Bioshock—provide multi-year visibility. The recent hire of Rod Ferguson to lead Bioshock signals renewed focus on revitalizing key IP.
4. Operating Discipline and M&A Selectivity
Management continues to emphasize cost discipline and selective M&A, only pursuing acquisitions with clear strategic and cultural fit. Operating expense leverage was evident this quarter, with incremental marketing tied directly to user acquisition ROI in mobile.
5. Technology Adoption and AI Efficiency
AI is being deployed as an efficiency tool rather than a creative shortcut, freeing up talent for higher-value work but not driving immediate cost reduction. Management sees AI as a lever for productivity, not as a replacement for creative leadership.
Key Considerations
This quarter underscores Take-Two’s evolution from a cyclical, hit-driven publisher to a recurring-revenue, multi-platform entertainment company. The company’s operational and financial discipline, along with a strengthened pipeline, position it for both near-term upside and long-term resilience.
Key Considerations:
- Live Services Scale: With RCS at 73% of bookings and NBA 2K and GTA Online both growing, the business is less exposed to launch volatility.
- Mobile Margin Expansion: Direct payments and disciplined UA spend are structurally improving mobile profitability.
- Portfolio Risk Diversification: No single franchise dominates, with Zynga (46%), 2K (39%), and Rockstar (15%) projected as net bookings contributors.
- Pipeline Visibility: Announced launches through FY27 provide multi-year growth clarity, reducing dependence on any one release.
- Cost Discipline Maintained: OpEx growth remains well below top-line expansion, supporting margin improvement even as marketing ramps.
Risks
Execution risk remains around major launches, especially with high expectations for GTA VI and potential for further delays. Borderlands 4’s initial PC performance revealed operational gaps that, if repeated, could impact future launches. Mobile market cyclicality and regulatory shifts (notably in app store policies) could also affect margin and revenue predictability. Management’s optimism is high, but the business remains exposed to consumer demand shifts and competitive innovation.
Forward Outlook
For Q3 2026, Take-Two guided to:
- Net bookings of $1.55 to $1.6 billion
- Recurrent consumer spending growth of approximately 8%, led by mobile and NBA 2K
For full-year 2026, management raised guidance to:
- Net bookings of $6.4 to $6.5 billion (14% YoY growth at midpoint)
- Operating cash flow of $250 million
- Operating expenses of $3.98 to $4.0 billion (9% YoY growth, well below bookings growth)
Management highlighted several factors that will influence results:
- Continued ramp in mobile direct-to-consumer and live service monetization
- Post-launch support and content updates for recent and upcoming titles
Takeaways
Take-Two’s Q2 results affirm a structural shift toward recurring revenue, cost leverage, and multi-year pipeline visibility, reducing risk from single-title dependence and positioning the company for record FY27 performance.
- Recurring Revenue Anchors Model: RCS and mobile direct-to-consumer now drive the majority of bookings, improving predictability and margin.
- Execution on Portfolio and Pipeline: Strong launches and disciplined cost control support both near-term guidance and long-term confidence.
- Future Watchpoints: GTA VI execution, mobile payment adoption, and live service engagement will be critical for sustaining momentum into FY27 and beyond.
Conclusion
Take-Two delivered a breakout quarter, with mobile and live services propelling both top-line and margin upside. The business is structurally stronger, less hit-dependent, and entering FY27 with unprecedented pipeline visibility and financial discipline.
Industry Read-Through
Take-Two’s results highlight a broader shift in interactive entertainment toward live services and mobile direct-to-consumer monetization, with legislative changes accelerating margin expansion for publishers. The success of NBA 2K’s premium SKUs and embedded live content sets a new bar for annual sports franchises. Structural cost discipline and diversified pipelines are increasingly critical as the industry consolidates. Other publishers should note the rising importance of recurring revenue, cross-platform engagement, and operational agility in sustaining growth and defending margin in a rapidly evolving competitive landscape.