Take-Two Interactive Software, Inc.

Greetings and welcome to the Take-Two Interactive second quarter fiscal year 2024 earnings call. At this time, all participants are in 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. I would now like to turn the conference over to your host, Nicole Shebbins, Senior Vice President of Investor Relations and Corporate Communications.

Good afternoon. Thank you for joining our conference call to discuss our results for the second quarter of fiscal year 2024, ended September 30, 2023. Today's call will be led by Strauss Zelnick, Take Two's Chairman and Chief Executive Officer, Carl Sladoff, our President, and Lainey 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 expertise laws. These forward-looking statements depend 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 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. Our press release also contains a reconciliation of any non-GAAP financial measure to the most comparable GAAP measure. 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 TakeTwoGames.com. And now I'll turn the call over to Strass.

Thanks, Nicole. Good afternoon and thank you for joining us today. We delivered another consecutive quarter of excellent results highlighted by net bookings of $1.44 billion, which was at the high end of our guidance and management results that exceeded our plans. While we expect continued macroeconomic uncertainty, we believe that we're well positioned for the holiday season and are reiterating our fiscal 2024 net bookings guidance of $5.45 to $5.55 billion. Looking ahead, I'm exceedingly optimistic about our company's multi-year growth trajectory and our ability to deliver long-term value to our shareholders. Our development pipeline is robust and diverse. And we're getting closer to delivering the groundbreaking titles that our audiences throughout the world have been anticipating eagerly. Our unwavering commitment to being the most creative, the most innovative, and the most efficient entertainment company gives us great confidence that our offerings will surpass our players' expectations and set new standards of creative excellence in our industry. Now turning to the performance of our titles during the quarter. Grand Theft Auto 5 and Grand Theft Auto Online continue to surpass our expectations, an outstanding achievement for two titles celebrating their 10th anniversaries. To date, Grand Theft Auto 5 has sold in approximately 190 million units. Grand Theft Auto Online experienced continued momentum due to the rollout of new gameplay and items from the San Andreas Mercenaries update, with new seasonal events, vehicles, modes, clothes, and weapons driving sustained engagement and net bookings. Our GTA Plus membership program continued to grow, and we're deepening our relationships with our player communities through new offerings, which now include access to a rotating assortment of classic Rockstar Games titles. During the quarter, Rockstar Games announced that CitizenFX, the team behind the 5M and Red Ember role-playing communities for Grand Theft Auto V and Red Dead Redemption 2, officially joined the label. With their immense passion and creativity, CitizenFX has been pivotal in expanding the possibilities of user-generated content around Rockstar's leading titles. We're excited to see them continue to build these creative communities and help them thrive into the future. We're also thrilled by today's announcement from Rockstar Games founder, Sam Houser, that the eagerly anticipated first trailer for the next Grand Theft Auto will be revealed this coming December. As the label approaches its 25th anniversary next month, we congratulate Rockstar Games on their constant innovation in the pursuit of the highest quality interactive entertainment. Red Dead Redemption 2 surpassed our plans and has sold in more than 57 million units to date. Rockstar Games continues to support Red Dead Online with new content, including bonuses for the naturalist and bounty hunters, and new free roam missions and events. In addition, Rockstar Games expanded the audience for the franchise with the launch of Red Dead Redemption and Undead Nightmare for PlayStation 4 and Nintendo Switch. On September 8th, 2K and Visual Concepts once again redefined the number one NBA simulation experience in our industry with the successful worldwide launch of NBA 2K24. With exciting new features and next generation enhancements, the title is off to a great start and to date has sold in over 4.5 million units. NBA 2K24 features new season pass options that provide players with the opportunity to earn even more rewards as well as a new seasonal progression that tracks and combines my career and my team into one linear reward system. Engagement has been phenomenal with season pass and virtual currency bookings exceeding our plans and driving double-digit growth in ARPU compared to NBA 2K23. Our franchise extensions continue to perform extremely well, including NBA 2K Mobile, NBA 2K Online in China, and the recently launched NBA 2K24 Arcade Edition on Apple Arcade. I'd like to thank 2K and Visual Concepts for continuing to bring innovation and creativity consistently to our beloved franchise. 2K continued to support LEGO 2K Drive with its second Drive Pass season and the Creator's Hub and PGA Tour 2K23 with additional pros and gear. In addition, the label harnessed the power of our industry-leading catalog with the launch of the Borderlands Collection Pandora's Box, which bundles together all six acclaimed Borderlands games and their previously released add-on content into a single offering at an amazing value. We have great respect for the team at Gearbox and we value deeply our long-term relationship. Zynga once again delivered solid results during the quarter and we remain pleased with its ongoing performance. We continue to benefit from Zynga's ability to create engaging new games, which is a distinguishing capability of our mobile business. For example, Rollick successfully launched Power Slap, based on the world's first regulated and sanctioned slap fighting promotion. The title is highly entertaining, and to date has experienced more than one billion slaps across training and matches. With the launch of this new mobile game, Rollick has now had 22 titles reach the number one or two spot in the U.S. Apple App Store. We'd like to thank the entire team over at TKO, including Ari Emanuel and Dana White, for their strong partnership, as well as our colleagues at Rollick, who created this title from inception to release in just eight weeks. Zynga also recently launched Top Troops and Match Factory, both of which delivered excellent KPIs in soft launch and appear to have strong long-term potential for our portfolio. And Star Wars Hunters continues to hit important milestones as we approach its planned release date in calendar 2024. Carl will discuss these titles in greater detail. Other highlights from our mobile business this quarter include our advertising bookings grew year over year, driven by the addition of PopCore, contributions from strategic partnerships, and our efforts to increase ad inventory in many live games. We continue to make excellent progress in our profitability initiatives, including expanding the number of mobile games that leverage our direct-to-consumer platform. As we convert additional players, we're gaining new insights that we believe will better serve our players' preferences. We remain optimistic that over the next few years, most of our mobile games will leverage this highly accretive owned distribution channel. In addition, we continue to enhance the profitability and performance of our hyper-casual business, with multiple new games scaling rapidly and several games generating revenue from in-app purchases in addition to ads. Our live games portfolio also continued to deliver. Social Casino maintained steady performance coming off a great first quarter, driven by new bold beat features, which drove strong results, particularly in Zynga Poker. Additionally, we implemented new updates and events across many games, including Top Eleven and Dragon City, which drove audience growth as well as increased engagement in core systems, leading to better retention and monetization. We stand at an exciting time in our company's history, with numerous growth opportunities ahead of us. As we deliver on our strategic priorities, we have the potential to create unparalleled entertainment experiences engage broader audiences throughout the world, and ultimately enhance our scale and margin profile. I'd like to thank all of you for your continued support, and we look forward to delivering our next phase of growth. I'll now turn the call over to Carl.