Take-Two Interactive Software, Inc.

Greetings and welcome to the Take-Two Interactive Software fourth quarter fiscal year 2019 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Hank Diamond, Senior Vice President of Investor Relations and Corporate Communications. Thank you, sir. You may begin.

Good afternoon. Welcome and thank you for joining Take-Two's conference call to discuss its results for the fourth quarter and fiscal year 2019, ended March 31st, 2019. Today's call will be led by Strauss-Zelnick, Take-Two's chairman and chief executive officer, Carl Slater, our president, and Leni Goldstein, our chief financial officer. We will be available to answer your questions during the Q&A session following our prepared remarks. Before we begin, I'd like to remind everyone that statements made during this call that are not historical facts are considered forward-looking statements under federal securities laws. These forward-looking statements are based on the beliefs of our management, as well as assumptions made by and information currently available to us. We have no obligation to update these forward-looking statements. Actual operating results may vary significantly from these forward-looking statements based on a variety of factors. These important factors are described in our findings with the SEC, including the company's most recent annual report on Form 10-K and quarterly report on Form 10-Q, including the risk summarized in the section entitled Risk Factors. I'd also like to note that, unless otherwise stated, all numbers we will be discussing today are GAAP, and all comparisons are year over year. Additional details regarding our actual results and outlook are contained in our press release, including the items that our management uses internally to adjust our GAAP financial results in order to evaluate our operating performance. In addition, we have posted to our website a slide deck that visually presents our results and financial outlook. Our press release and filings with the SEC may be obtained from our website at www.take2games.com. And now I'll turn the call over to Stuart.

Thanks Hank. Good afternoon. Thank you for joining us today. Take-Two finished a stellar year with strong fourth quarter operating results highlighted by the outperformance of Grand Theft Auto and NBA 2K19. and significant ongoing sales of our blockbuster hit, Red Dead Redemption 2. For the full fiscal year, we generated record net bookings and adjusted operating cash flow, which exceeded our outlook at the start of the year, along with strong earnings growth driven by the record-breaking launch of Red Dead Redemption 2, the outstanding performance of NBA 2K, and better-than-expected results from Grand Theft Auto Online and Grand Theft Auto 5. Our industry-leading basketball series continues to expand its audience, and underscores that NBA 2K has been the perennial favorite among both basketball and pop culture fans for more than a decade. During the fourth quarter, net bookings growth from NBA 2K19 exceeded our expectations, driven primarily by strong recurrent consumer spending. To date, NBA 2K19 has sold in more than 9 million units. During the fourth quarter, recurrent consumer spending on NBA 2K grew 79%, and for the full fiscal year, it grew 45%. In both periods, recurrent consumer spending on NBA 2K reached a new record and was the single largest contributor to that part of our business. Over the past year, we've seen a substantial increase in average games played, with NBA 2K19 outperforming its predecessor by over 20%. In addition, during the fourth quarter, daily active users outpaced NBA 2K18 by 13%, due largely to a consistent and robust content schedule. We expect that lifetime net bookings from NBA 2K19 will be the highest ever for a 2K sports title, driven by record recurrent consumer spending. The NBA 2K brand continues to expand across a myriad of offerings, and we believe there remains a substantial worldwide growth opportunity for the series. Turning to Rockstar Games' phenomenal hit, Red Dead Redemption 2 continues to generate significant sales and, to date, has sold in more than 24 million units worldwide. The title remains tied with Grand Theft Auto V as the highest rated game on PlayStation 4 and Xbox One with a 97 Metacritic score. Furthermore, Red Dead Online is poised for success and net bookings grew sequentially in the fourth quarter. Rockstar Games continues to update the beta with a wide array of new content as well as gameplay balancing and bug fixes. We expect Red Dead Online to exit the beta period during the current quarter with significant new content to follow. were as excited as ever about the long-term opportunity for Red Dead Online. Nearly six years after their launch, both Grand Theft Auto Online and Grand Theft Auto 5 continue to be significant contributors to our results. During the fourth quarter, net bookings from Grand Theft Auto Online grew sequentially and exceeded our expectations. Sales of Grand Theft Auto 5 also outperformed, and the title is now sold in almost 110 million units. cementing further its standing as the must-have title of the current console generation. Throughout fiscal 2019, Rockstar Games supported Grand Theft Auto Online with an array of new content, highlighted by the After Hours and Arena War updates. It bears noting that Rockstar's flagship games continue to drive exceptional engagement and results. Grand Theft Auto V and Red Dead Redemption 2, including their online games, had almost 90 million unique player accounts in fiscal 2019 alone. Life to date, more than 200 million unique players' accounts have registered in Rockstar Games' social club platform as having played these games. Rockstar Games will continue to support both immersive online worlds with innovative content to keep players engaged and drive player growth over time. Our fiscal 2019 results were also enhanced by a variety of other offerings led by WWE 2K and WWE Supercard, Social Points Mobile Games, NBA 2K18, and Sid Meier's Civilization VI. In particular, Civilization VI significantly outperformed our expectations due to the popularity of the Nintendo Switch SKU and the title's expansion packs. Take-Two's core tenets are to be the most creative, innovative, and efficient enterprise in the entertainment industry. With respect to the first two, one of the key drivers of success is our proven ability to sustain long-term engagement with our titles well after their initial launch. As a result, we've generated strong growth in recurrent consumer spending over the past several years. In fiscal year 2019, recurrent consumer spending exceeded our expectations, growing 20% to a new record and accounting for 39% of total net bookings. In addition to virtual currency for MBA2K, Grand Theft Auto Online, and Red Dead Online, but current consumer spending was enhanced by a variety of other offerings. In the free-to-play category, Social Point remains a meaningful contributor to our results through its two biggest mobile titles, Dragon City and Monster Legends. During the fourth quarter, our Barcelona-based studio launched Tasty Town, a new game within the popular restaurant category, and just last week they launched Word Life, which Carl will discuss. Net bookings from SocialPoint grew sequentially in the fourth quarter. The studio is working hard on its exciting development pipeline, including more than 10 new games, and is focused on driving growth and expanding its audience. Recurrent consumer spending on WWE Supercard grew 13% and out of platform fees. During the past fiscal year, 2K released the fifth season of its popular card battle game and several content updates. WWE Supercard has now been downloaded more than 19 million times and remains 2K's highest-grossing mobile title. And recurrent consumer spending on NBA 2K Online in China exceeded our expectations, growing 74% driven by the launch of NBA 2K Online 2 last August. Total combined registered users for NBA 2K Online 2 and its predecessor currently stand at 45 million, and the franchise remains the number one PC online sports game in China. Asia, and China in particular, continues to be a significant long-term growth opportunity for our business. In fact, NBA 2K19 for PlayStation 4 was just approved for release in China. Lastly, add-on content was a meaningful contributor, led by offerings for Sid Meier's Civilization, XCOM 2, and WWE 2K19. During the fourth quarter, Firaxis Games released Sid Meier's Civilization VI, Gathering Storm, which is the largest and most successful add-on content in the history of the Sid Meier Civilization series. As we close one of our best years to date and look to the horizon, I'm extremely proud that Take-Two remains the home for our industry's most creative and passionate talent. Their vision and ability to captivate and engage audiences around the world across an array of platforms and offerings both redefines the possibilities of interactive entertainment, and forms the foundation for our continued success. This is an incredibly exciting time for our industry, with new technologies that enable our teams to advance interactive entertainment, emerging distribution and business models that expand our audience, and the proliferation of communities that participate in or watch connected play. Take-Two is exceedingly well-positioned creatively, strategically, and financially to capitalize on its vast opportunities and to continue to deliver growth and returns for our shareholders over the long term. I'll now turn the call over to Carl.