Take-Two's earnings are on an upswing as GTA V continues to make money

Take-Two Interactive, publisher of games from 2K Games and Rockstar, has reported the financial results for the third quarter of its 2017 fiscal year, which ends in March.

This is an especially notable earnings report because it encompasses October through December of 2016, aka the holiday season, when Take-Two oversaw the launch of games like Hangar 13's Mafia III and Firaxis Games' Civilization VI.

During the three months ending December 31st, 2016, Take-Two reports (GAAP) it brought in $476.47 million in revenues, up from the $414.22 million it brought in during the same period a year prior. In terms of profits, it lost $29.84 million -- which is actually significantly better than the $42.41 million in profits it lost during the same three months of 2015.

According to Take-Two, the "largest drivers" of revenue during the holiday quarter were Grand Theft Auto V and its online component Grand Theft Auto Online, WWE 2K17, NBA 2K17, and Civilization VI. While Mafia III didn't make the top earners list, the company did say it has "sold in" (i.e. shipped to retailers) roughly 5 million copies.

Given that the company's top earner continues to be a game that came out in 2013, it's worth looking at Take-Two's reported earnings from "recurrent consumer spending" -- aka microtransactions, virtual currency buys and downloadable content purchases. According to Take-Two, these payments accounted for 20 percent of total net revenue for the quarter, driven primarily by spending in GTA V, GTA Online, Civilization VI and NBA 2K17. 

Looking ahead to the end of its fiscal year in March, Take-Two forecasts full-year revenues of $542 to $592 million and profits of $139 to $148 million.

We should also quickly point out this is the first earnings report in which Take-Two has chosen to report earnings in accordance with GAAP (generally accepted accounting principles); prior to now, the company has reported non-GAAP numbers. That means you can't fairly compare earlier non-GAAP reports of Take-Two earnings against these GAAP numbers, as the GAAP numbers reflect deferred revenue from Take-Two games with online components.