TTWO · 10-Q · 2026Q2 · Full report
Gross Margin Drivers
TAKE TWO INTERACTIVE SOFTWARE INC · 2026-08-07 · Importance 57 · Surprise 64 · No source text
Gross profit decreased $62.5 million, or 6.6%, to $882.5 million despite the $30.1 million increase in revenue. Gross margin declined to 57.5% from 62.9%, a 5.4-percentage-point decrease. Cost of revenue increased $92.6 million, or 16.6%, to $651.4 million, primarily because software development costs and royalties increased $105.0 million, or 348.8%, and licenses increased $28.6 million, or 40.3%. Management attributed the gross-margin decline primarily to the prior-year reversal of expense related to forfeited awards.
Key facts
- Cost of revenue for the three months ended June 30, 2026: $651.4 (42.5%); for the three months ended June 30, 2025: $558.8 (37.1%); increase $92.6 (16.6%). source
- Gross profit for the three months ended June 30, 2026: $882.5 (57.5%); for the three months ended June 30, 2025: $945.0 (62.9%); decrease $62.5 (6.6%). source
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| margin | negative | realized | -5.4% | Gross profit for the three months ended June 30, 2026: $882.5 (57.5%); for the three months ended June 30, 2025: $945.0 (62.9%); decrease… |