Why did TTWO's Q3 2025 earnings decline?

Take-Two Interactive Software Inc. (TTWO) experienced a decline in Q3 2025 earnings, with a GAAP net loss of $125.2 million and a diluted EPS of -$0.71. The factors contributing to this decline include:

1. **Cost of Revenue**: The cost of revenue decreased by 13% to $600 million. This reduction could indicate improved operational efficiency or a shift in cost structure, potentially contributing to the net loss.
2. **Operating Expenses**: Operating expenses increased by 10% to $892 million, with a management basis increase of 8% year-over-year. This increase in expenses, coupled with a decrease in revenue, can lead to a wider net loss.
3. **Mobile Segment Moderation**: While the mobile segment showed growth, it did not meet the company's guidance of low double-digit growth. This moderation in performance, especially when compared to the significant contributions from NBA 2K, could have impacted the overall profitability of the quarter.
4. **NBA 2K Performance**: Although NBA 2K delivered a phenomenal quarter with sales exceeding 7 million units and recurrent consumer spending up over 30%, the performance was expected and already accounted for in the guidance. The upside from NBA 2K, while significant, may not have been enough to offset the other factors contributing to the net loss.

In summary, the decline in TTWO's Q3 2025 earnings can be attributed to a combination of cost of revenue reduction, increased operating expenses, moderation in the mobile segment, and the expected performance from NBA 2K.

|code|Ticker|Name|Date|Total Revenue|Net Income|Diluted EPS|market_code|
|---|---|---|---|---|---|---|---|
|TTWO|TTWO.O|Take-Two Interactive|2024 Q4|1.3994E9|-2.903E9||185|
|TTWO|TTWO.O|Take-Two Interactive|2025 Q1|1.3382E9|-2.62E8|-1.52|185|
|TTWO|TTWO.O|Take-Two Interactive|2025 Q2|1.3531E9|-3.655E8|-2.08|185|
|TTWO|TTWO.O|Take-Two Interactive|2025 Q3|1.3598E9|-1.252E8|-0.71|185|