Q1 FY2027 results
| Metric | Result | Change |
|---|---|---|
| Net Bookings | $1.39 billion | Above guidance range of $1.32 billion to $1.37 billion |
| GAAP Net Revenue | $1.5 billion | Increased 2% |
| Cost of Revenue | $651 million | Rose 17% |
| Recurrent Consumer Spending | 84% of net bookings | Declined 1% |
Guidance and outlook
- Reiterating fiscal 2027 net bookings outlook of $8 billion to $8.2 billion.
- Projecting fiscal second quarter net bookings to range from $1.62 billion to $1.67 billion.
- Expect GAAP net revenue for the second quarter to range from $1.42 billion to $1.47 billion.
- Operating expenses for the second quarter are planned to range from $1.01 billion to $1.02 billion.
How management sounded
Positive (+6 on our -10 to +10 scale). Management expressed high confidence in the upcoming Grand Theft Auto VI launch and the company's robust pipeline, while noting record-setting preorder interest. Management sounded more upbeat than on 8% of the 190 calls we cover; most companies sound positive on their own calls, so the comparison says more than the label.
Q&A summary
Mobile Market Trends
Asked: Did you see a slowdown in the mobile market due to macro uncertainty?
Answer: No, the company is not seeing a consumer pullback; results were impacted by year-over-year comparisons for specific titles, but engagement remains strong.
GTA VI Marketing
Asked: Why choose Netflix for the extended trailer exclusivity?
Answer: It is a groundbreaking partnership with a close partner, and the trailer will be available on Rockstar's channels six hours after the Netflix launch.
Pricing Strategy
Asked: How do you decide on base game pricing, specifically regarding the $80 price point for GTA VI?
Answer: The goal is to deliver more value than the price charged, and the company believes GTA VI will be an incredible bargain given the experience provided.
AI Strategy
Asked: How are you deploying AI tools internally?
Answer: The company uses AI to enhance creativity and efficiency, but it will not replace the creative work of its 13,000 employees.
International Expansion
Asked: What are the opportunities for international expansion and M&A?
Answer: The company is focused on underrepresented markets like India and Africa and will continue to evaluate accretive M&A opportunities while maintaining a strong balance sheet.
What to watch before the next call
- The November 19 release of Grand Theft Auto VI.
- The performance of NBA 2K27 following its September 4 launch.
- The company's progress toward achieving a net cash position by the end of the fiscal year.
