Take-Two Interactive Software, Inc.

Ladies and gentlemen, thank you for standing by. My name is Abby and I will be your conference operator today. At this time, I would like to welcome everyone to the take two third quarter fiscal year 2025 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press the star key followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one a second time. Thank you. And I would now like to turn the call over to Nicole Shevins, Senior Vice President of Investor Relations and Corporate Communications. You may begin.

Good afternoon. Thank you for joining our conference call to discuss our results for the third quarter of fiscal year 2025 and in December 31st, 2024. 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 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 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. 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.

I'm pleased to report that we achieved solid results during the holiday season. Our net bookings of $1.37 billion were within our guidance range, as significant outperformance in NBA 2K helped to offset moderation in some of our mobile franchises. At the same time, our operating results surpassed expectations from NBA 2K, as well as a shift in timing of expenses that benefited the quarter. We're reiterating our fiscal 2025 net bookings guidance of $5.55 to $5.65 billion and our outlook for full year operating performance. While third quarter operating results exceeded expectations, we expect the fourth quarter to be affected by a continuation of current mobile trends, as well as the shift of some operating expenses into the period. Looking at this calendar year shaping up to be one of the strongest ever for Take-Two, as Sid Meier's Civilization VII launched in Early Access today with the official launch on February 11th. And we also plan to release Mafia, The Old Country in the summer, Grand Theft Auto VI in the fall, and Borderlands 4 before year end. We also remain confident in Zynga's ability to create new mobile forever franchises as demonstrated by their ongoing success with Match Factory. We're exceedingly optimistic about the commercial potential of our titles and believe it'll have a transformative effect on our business and our industry over the long term. As we execute on our mission to create our industry's most innovative and engaging entertainment experiences, we remain highly confident that we'll achieve sequential increases in and record levels of net bookings in fiscal 2026 and 2027. Now turning to our business highlights from the period. NBA2K delivered a phenomenal quarter, yielding significant upside to our forecast. To date, the title has sold in over 7 million units, and engagement was extremely strong compared to last year, with recurrent consumer spending up over 30%, daily active users up nearly 20%, and monthly active users up nearly 10%. With community-inspired enhancements to gameplay, major technological updates, and the addition of new game modes, the team at Visual Concepts has once again demonstrated their ability to deliver innovation to this beloved series while also solidifying its position at the center of basketball culture. Additionally, 2K continues to expand our industry-leading basketball franchise with NBA 2K Arcade Edition, MyTeam, NBA 2K Mobile, and NBA 2K Online in China, all of which contributed to another highly successful year for the NBA 2K franchise as a whole. The Grand Theft Auto series remains our industry's standard bearer for excellence, and to date, Grand Theft Auto V has sold in over 210 million units worldwide. GTA Online delivered a strong quarter, led by its holiday update, Agents of Sabotage, which players praised for its depth, new upgrades, and a rave content. Moreover, GTA Plus continues to grow its reach, with membership for the quarter increasing 10% year over year. Rockstar Games continued to expand the audience for Red Dead Redemption 2, which has sold in more than 70 million units to date. The title is currently enjoying its highest level of concurrent players on Steam. In addition, Red Dead Online engaged its audience further during the period with the release of the fan-favorite Halloween Pass, featuring seasonal themed bonuses and rewards. Turning to mobile, recurrent consumer spending grew mid-single digits. While this was somewhat below our plan, we remain highly optimistic about Zynga's future. Toon Blast and Toy Blast both deliver double-digit growth, led by engaging features including new event types, improved player profiles, and enhanced tuning. Match Factory is performing very well and remains on track to become Zynga's second-largest title by the end of this fiscal year in terms of net bookings. we'd like to thank Team Peak for their strong execution and for creating one of the top-grossing titles in the puzzle genre. While Empires and Puzzles performed below our expectations in the quarter, we're confident in the future of this highly profitable forever franchise. Our team is launching new event types and corresponding heroes, as well as increasing in-game rewards. Zynga continued to leverage the zeitgeist of pop culture and broadened its partnerships with leading entertainment brands and personalities including Words with Friends with Bravo's Real Housewives, Zynga Poker with actor-comedian Rob Riggle, and Power Slap with TKO. Our teams are growing our direct consumer offerings and deploying key learnings across our portfolio. During the holiday season, we achieved strong double-digit D2C conversion in several major titles, and we're taking action to maintain this momentum. We are confident in Zynga's continued ability to launch successful new titles as well as brand extensions for some of our console IP. In the quarters ahead, we look forward to launching new HIT Mobile experiences, including the latest installment of Zynga's highly successful racing franchise, CSR3. In closing, we're forecasting calendar year 2025 to be an inflection point for Take-Two, from the groundbreaking release of Grand Theft Auto VI to the unmatched pipeline that 2K is set to deliver. As we introduce HIT products to our passionate communities of fans, We're confident that we'll offer in a new period of growth and returns for our shareholders. I'll now turn the call over to Carl.