How Would You Fix Take-Two?
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Take-Two Interactive Software (TTWO) needs a profit fix, not a sales fix. Revenue grew 15.3% over the four quarters to June 2026, yet the company still ran an operating loss. If you own the stock, it has been a frustrating year: the shares lost 21.1% over the past twelve months, while the S&P 500 returned 15.0%.
The games are selling, and the shares have not followed. So if you were handed the keys on Monday, where is the most money waiting?
If You Ran Take-Two, You Would Fix Margins First
The operating margin is the one lever with a clear dollar value. Take-Two lost 2.4 cents at the operating level on every dollar of revenue over the four quarters to June 2026, while the median of four peers, Microsoft, Roblox, Amazon.com and NVIDIA, kept 29.5 cents. That 31.9-point gap is worth about $2.13 billion a year on $6.69 billion of revenue, though NVIDIA and Microsoft lift that median. Against Take-Two’s own 21.4% margin of 2021, the gap is 23.8 points, worth about $1.59 billion a year.
That median sets a high bar, and Roblox, one of the four, also ran an operating loss. Take-Two’s own past offers a closer goal: the company kept 21.4% of revenue as operating profit over the four quarters to June 2021. If you ran the company, your first goal would be getting back toward that level.
NBA 2K And Grand Theft Auto Are Still Growing
Spending inside NBA 2K grew 7% from a year earlier in the June quarter, and spending inside the Grand Theft Auto series rose 3%, management said. By the August 7 call, NBA 2K26 had shipped over 12 million units, 9% more than NBA 2K25.
Grand Theft Auto VI is due on November 19, and management called its preorders “unprecedented and astonishing.” The company also said it does not know how those preorders will translate into sales. Even so, these two series are the part of Take-Two that is already working.
Mobile Is Where Take-Two Is Slipping
Management said spending inside its mobile games fell 7% from a year earlier in the June quarter, though several mobile titles still grew, Top Eleven among them. Management attributed the drop to the comparison with Color Block Jam, a new title a year earlier. It also said there is some pressure on the cost of winning new players.
Management expects Zynga, home of several of its mature mobile titles, to bring in roughly 34% of fiscal 2027 net bookings, a sales measure the company uses. If you ran Take-Two, you would keep spending on new players only where each game earns it back over its life, as management says it already does.
Take-Two’s Hardest Call Is What To Do With Cash
One part needs protecting before any cash decision: spending inside games players already own. Management said this spending made up 84% of net bookings in the June quarter.
The hardest call is cash. Take-Two carried $2.95 billion of debt in June 2026, against $188 million five years earlier. The company pays no dividend and buys back no shares. Management expects operating cash flow of more than $1 billion in fiscal 2027 and says it is on track to hold more cash than debt by the end of that year, after which it would be more likely to consider an acquisition. If you ran Take-Two, clearing the debt would come before buybacks or an acquisition.
Despite the operating loss, investors pay 5.6 times sales for the stock, against 3.2 times for the S&P 500. That price looks like a bet on management’s fiscal 2027 outlook of $8 billion to $8.2 billion in net bookings, which the company ties to the Grand Theft Auto VI release.
The first fix is still the margin. Take-Two’s operating margin, a loss of 2.3% of revenue in the June quarter, is the number to watch when the company reports in November 2026.
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