Take-Two Interactive Software, Inc.

Greetings and welcome to the Take-Two fourth quarter fiscal year of 2021 earnings column. At this time, all participants are on 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. Please note this conference is being recorded. I will now turn the conference over to your host, Nicole Chevins, Senior Vice President of IR and Corporate Communications. You may begin.

Good afternoon. Thank you for joining our conference call to discuss our results for the fourth quarter in fiscal year 2021 and in March 31st of 2021. Today's call will be led by Strauss Zelnick, Take-Two's Chairman and Chief Executive Officer, Carl Sladoff, our President, and Lanie Goldstein, our Chief Financial Officer. We will be available to answer your questions during the Q&A session following our prepared remarks. 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 filings with the SEC, including the company's most recent annual report on Form 10-K and quarterly report on Form 10-Q, including the risks 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 outcomes 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. Our press release also contains a reconciliation of any non-GAAP financial measure to the most comparable GAAP measure. 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 take2games.com. And now I'll turn the call over to Strauss.

Thanks, Nicole. Good afternoon, and thank you for joining us today. Our strong fourth quarter performance concluded an exceptional year for our organization. We delivered net bookings of approximately $3.6 billion. which grew nearly 20% from fiscal 2020 and were the highest ever in our company's history. On behalf of our entire management team, I'd like to thank all of our colleagues around the world for helping us achieve these results despite such significant, unforeseen, and prolonged challenges. It's truly a reflection of our collective resilience and singular commitment to excellence. Our thoughts are with those who have been and continue to be affected by COVID-19. We hope that better days and comfort will come to you soon. Throughout the pandemic, our creative teams have delivered consistently superlative entertainment experiences, giving players opportunities to have fun in the most difficult of times and stay connected with family and friends through shared experiences. We grew our online communities meaningfully, including new and returning players, which helped drive recurrent consumer spending growth of 48% to reach a record high and represent 63% of our total net bookings for fiscal 2021. During the year, we enhanced our organization for the long term. We bolstered the depth of our creative teams by hiring more than 700 new developers, including through the acquisition of several talented studios, which will help us expand our capabilities and grow our business. We also broadened our portfolio of offerings, capitalized on diverse business models, and made significant investments in our operations and infrastructure. Nearly all of our titles outperformed during the fourth quarter, including NBA 2K21, Grand Theft Auto Online and Grand Theft Auto 5, Red Dead Redemption 2, and Red Dead Online, and Sid Meier's Civilization VI. The NBA 2K series is known throughout the world for being the most authentic, the most realistic, and the most engaging basketball simulation experience in our industry. In addition to giving consumers the ability to step onto the court as their favorite NBA players or as themselves, 2K and visual concepts have created various game modes that offer interactive experiences and enable players to build deeper social connections. NBA 2K21 was our first offering built from the ground up for Gen 9 platforms. To date, the title has exceeded our expectations and sold in over 10 million units. During the fourth quarter, net bookings for the series grew 37% and recurrent consumer spending exceeded our expectations significantly, growing 32% and 73% in the period and fiscal year respectively. Excuse me. Consumer engagement with NBA 2K remains incredibly strong with more than 2.3 million users playing the game daily. We see a significant opportunity to grow the franchise further as we provide unique and innovative experiences throughout the game. Once again, Rockstar Games' iconic Grand Theft Auto series exceeded our expectations, expanded its audience, and set new benchmarks in fiscal 2021. Driven by an array of new free content updates and sustained interest in last holiday's Cayo Perico heists, Grand Theft Auto Online benefited from strong engagement trends during the fourth quarter, including a record number of active players and the second highest quarter of recurrent consumer spending on record. For the full year, participation levels reached an all-time high from both new and returning players, and recurrent consumer spending grew 31%, achieving a new annual record. Sales of Grand Theft Auto V also surpassed our expectations, and to date, the title has sold in more than 145 million units worldwide. Red Dead Online exceeded our expectations during the fourth quarter, with active players increasing significantly and recurrent consumer spending performing above our plans, due in part to the success of the recently released standalone version of the game. Throughout the period, Rockstar Games released new content updates for Red Dead Online, including brand new missions for solo players, the Outlaw Pass number 5 and its new rewards, and more. Red Dead Redemption 2 continued to perform very well and to date has sold in over 37 million units worldwide. During the fourth quarter, 2K announced our acquisition of HB Studios, the developers of our highly successful golf game, PGA Tour 2K21, which to date has sold in more than 2 million units. We're very excited about the growth potential for the PGA Tour 2K series, especially as 2K has entered into an exclusive long-term agreement with golf legend and icon Tiger Woods to serve as its executive director and consultant, which we believe will enhance the series' ongoing innovation and authenticity. During the period, 2K and Firaxis Games released the Vietnam and Kublai Khan and Portugal packs for Sid Meier's Civilization VI that were the final offerings for the game's incredibly successful new frontier pass. Civilization VI's daily active users have grown steadily since the game's release more than five years ago, and to date, the title has sold in over 11 million units. As a result of the engagement from the past, as well as the success of XCOM Chimera Squad and XCOM 2 on Switch, Firaxis Games had one of its best years ever. We expect this growth to continue as the studio has several exciting projects in development that will be revealed this year. During the fourth quarter, Private Division released Murder on Eridanos, the final add-on for their highly successful game, The Outer Worlds, which has sold in more than 3 million units. The add-on will also be coming to Switch later this year. Private Division's 2019 release, The Humankind Odyssey, has now sold in over 1 million units, marking the third title from the label to achieve the million-unit milestone, joining the Outer Worlds and Kerbal Space Program. Providing new and innovative ways for audiences to stay engaged with our titles after their initial launch is a key strategic priority of our organization and represents an important long-term growth and margin opportunity. Our record levels of recurring consumer spending were largely driven by NBA 2K and Grand Theft Auto Online during the fourth quarter, and were enhanced by the following offerings. Social Points live games led by Dragon City and Monster Legends exceeded our expectations. Strong seasonal content and features, as well as increased marketing investments, helped drive Netbooking's growth of nearly 30% for the period and 44% for the year. The studio is planning to release three new titles during the second half of fiscal 2022. PlayDots had a strong fourth quarter driven by the outstanding performance of TwoDots, which achieved sequential growth over the third quarter. We expect PlayDots to be a significant contributor to our results over the long term and look forward to its new release plan for the fall. WWE Supercard also outperformed, growing 24% during the fourth quarter and 28% during the year. The title has now been downloaded more than 23 million times and remains 2K's highest-grossing mobile title. NBA 2K Online in China grew 6% and 9% during the fourth quarter and year, respectively, and remains a significant contributor to our results. The title is the number one PC online sports game in China with more than 52 million registered users. Turning to our outlook, we believe that the pandemic initiated a transformational shift in entertainment consumption, revealing the possibilities of interactive entertainment to a much broader market, with interactive entertainment becoming the number one entertainment vertical. We anticipate that the overall addressable market for our industry will be notably larger going forward than it was pre-pandemic. However, as the world returns to a new normal, we expect a moderation of the trends that benefited our industry over the past year. We currently expect our fiscal 2022 net bookings to range from $3.2 to $3.3 billion, marking the second year in a row with net bookings in excess of $3 billion. We expect to achieve sequential growth in fiscal 2023, and over the next few years, we believe that we will establish new records of operating results even above the spectacular performance we delivered this past year. Lainey will share more details about our outlook. As Carl will discuss in greater detail, in fiscal 2022, we plan to deliver an exciting array of offerings, including four immersive core releases from proven and new franchises. With the strongest pipeline in our company's history, including many new releases planned for fiscal 2023 and 2024, we're highly optimistic about our growth trajectory and will be making significant investments this year to enhance our enterprise in key areas, such as creative talent, IT, and other infrastructure. In closing, we remain confident in our proven strategy and talented teams around the world As we continue to grow our business, we believe that Take-Two is exceedingly well positioned to deliver long-term growth for our shareholders. I now turn the call over to Carl.